BCl Minerals is considering making additional design amendments at its Mardie Salt and Potash Project to improve its long-term resilience to extreme weather events, which have resulted in significant cost increases at the site.
In addition, BCI expects some aspects of the project design to change, in order to comply with third party approvals, and will continue to assess further value engineering opportunities, conduct reviews of design assumptions and advance design maturity of all packages to reduce risk and partially offset the cost increases.
BCI managing director Alwyn Vorster said the company would confirm the projected net impact of market conditions, design changes, remaining approvals and cost-saving initiatives when the reviews have been sufficiently advanced to produce a reliable cost estimate.
“We expect a combination of time to complete these reviews, delays to secondary approvals, delays due to weather effects year to date, impact of COVID protocols and other factors, is likely to result in the first salt-on-ship date being extended, indicatively to 2H 2025,” he said.
BCI has current cash reserves of $209 million plus other financial assets including the $100m convertible notes issued in December 2021, which will enable it to continue construction work according to the new schedule in a balanced and responsible manner for the remainder of the current financial year.
“Once a reliable cost estimate has been established, BCI will discuss funding solutions (which may include asset sales) with shareholders and lenders,” Vorster said.
BCI is developing the potential Tier 1 project located on the Pilbara coast in the centre of Western Australia’s key salt production region. Mardie has been designed to produce about 5.3 million tonnes per annum of high-purity salt and about 140ktpa of Sulphate of Potash (SOP) via solar evaporation of seawater.
BCI receives quarterly royalty earnings from Iron Valley, an iron ore mine operated by Mineral Resources. BCl’s other assets include substantial shareholdings in Agrimin and Highfield Resources, and potential royalties and/or deferred payments from iron ore projects at Koodaideri South, Bungaroo South, Kumina and Nullagine.
