BCI Minerals : Appendix 4D and 31 December 2021 Half-Year Financial Report

ASX Release

25 February 2022

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DIRECTORS' REPORT

DIRECTORS' REPORT

The Directors present their report on the results of the Consolidated Entity (referred to hereafter as 'BCI' or the 'Company') consisting of BCI Minerals Limited and the entities it controlled at the end of, or during the half-year ended

only31 December 2021.

PRINCIPAL ACTIVITY

The principal activities of the Company during the course of the half-year were the development of assets in the Pilbara region of Western Australia, including the Mardie Salt & Potash Project. The Company also receives iron ore royalty earnings from the Iron Valley Mine.

There has been no significant change in the nature of the Company's activities during the half-year.

DIRECTORS

The names of directors of the Company in office during the half-year and up to the date of this report unless otherwise

DIVIDENDS

No dividends have been declared in relation to the half-year ended 31 December 2021 (June 2021: Nil).

ROUNDING OF AMOUNTS

The Company is of the kind referred to in ASIC Corporations (Rounding in Financials/Directors' Reports) Instrument 2016/191, and in accordance with that Corporations Instrument, amounts in the directors' report and half-year report are rounded off to the nearest thousand dollars, unless otherwise indicated.

REVIEW OF OPERATIONS

ForBCI is an Australian-based resources company that is developing the Mardie salt and potash project in the Pilbara region f Western Australia, supported by iron ore royalty earnings from the Iron Valley mine.

The operations and results of the Company for the half-year ended 31 December 2021 are reviewed below. This review includes information on the financial position of the Company, its business strategies and prospects for the remainder of the current financial year and for future financial years. It is recommended that this report is read in conjunction with the annual report for the year ended 30 June 2021 and considered together with any public announcements made by the Company during or since the half-year ended 31 December 2021 in accordance with the continuous disclosure requirements of the Australian Securities Exchange ('ASX') Listing Rules.

The previous corresponding period for profit or loss and cash flow is the half-year ended 31 December 2020.

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DIRECTORS' REPORT

Safety performance

BCI is committed to providing a safe working environment for all staff and contractors and has been focused on incident prevention programs including critical control implementation. No lost time injuries (LTIs) have been recorded for more than 6 years and the lost time injury frequency rate (LTIFR) at 31 December 2021 was zero (December 2020: 0.0). onlyDuring the half-year period, there was 1 recordable injury and the total recordable injury frequency rate (TRIFR) for the

ha f year is 5.1 (June 2021: 7.3).

Mi eral Resources Limited (ASX:MIN) is responsible for Occupational Health and Safety matters at Iron Valley and therefore BCI does not report safety performance for the Iron Valley Mine.

Mardie Salt & Potash Project

During the half year, BCI continued to progress the 100% owned Mardie Salt & Potash Project with the focus for the usep riod on achieving a Final Investment Decision (FID) via the completion of funding arrangements, trialling of construction methodologies, contracting for and establishing infrastructure, and advancing Project approvals and

tenure.

The Optimised Feasibility Study (OFS) findings announced on 21 April 2021 demonstrated that Mardie can become a Tier 1 salt and SOP operation producing 5.35Mtpa of high purity salt and 140ktpa of premium SOP fertiliser, generating a pre-tax NPV7 of approximately $1.6B and annual EBITDA of nearly $260M.

Toward that end, BCI achieved key milestones during the period including securing the final components of the ~$1.2B personalfunding required to develop the Mardie Salt & Potash Project:

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On site at Mardie, commissioning of the expanded 200-bed camp is underway including a new reverse osmosis water supply and water treatment plant. A further 200 beds will be added in the coming months to accommodate peak

Forconstruction workforce.

Investigative works continued in the second half of 2021 to provide confidence about key assumptions, including materials availability, construction methodology, pond wall settlement, pumping rates, pond floor water retention, and cost and schedule assumptions. The northern embankment trial was successfully completed, and key learnings from the embankment trial were applied to the construction of the southern trial pond (Pond 0) adjacent to the primary seawater intake station.

A contract for the seawater pump structure was awarded to Ertech Geomarine in 2H2021 and involves the design, procurement, construction, and commissioning of all the detailed earthworks, piling, structural steel, concrete, mechanical and electrical installations required to accommodate and operate six 3,000 litres per second pumps within the pump structure. Manufacturing and factory acceptance testing of the pumps is complete and delivery to site is imminent.

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