BCI Minerals Limited (ASX: BCI) (BCI or the Company) is pleased to announce that it is offering all eligible shareholders the opportunity to acquire New Shares through a fully underwritten, accelerated and nonrenounceable entitlement offer of one (1) New Share for every two (2) Shares (Entitlement Offer) held on the Record Date, which under the indicative timetable is 5:00pm (WST), Wednesday, 16 September 2020.
At the issue price of $0.24 per New Share, the issue will raise gross proceeds of approximately $48 million. The Entitlement Offer will comprise an accelerated institutional component and a retail component.
The Company's major shareholder Wroxby Pty Ltd (Wroxby), which currently has a voting power of approximately 29%, has committed to taking up its full pro rata entitlement of approximately $14 million. Wroxby has also provided sub-underwriting for up to a further $19.3 million, being approximately 70% of any shortfall of the Entitlement Offer. Other large shareholders with a combined voting power of approximately 13% have also committed to taking up their full pro rata entitlements, totalling $6.2 million, plus providing additional sub-underwriting commitments for the remaining 30% potential shortfall.
The Entitlement Offer price of $0.24 per New Share (Offer Price) represents a discount of 8% to the 15-day volume weighted average price of $0.261 per Share up to and including 10 September 2020.
BCI's Managing Director, Alwyn Vorster, said: 'Funds from the entitlement offer will enable BCI to commence early construction works and order long lead items which will result in an accelerated development schedule for the Mardie Salt & Potash Project. We are pleased with the level of support received from existing shareholders, providing further confidence for the larger funding task ahead for BCI in 2021.'
CAPITAL RAISING RATIONALE
BCI is focused on developing its 100% owned Mardie Salt & Potash Project, a potential Tier 1 project located on the West Pilbara coast in the centre of Australia's key salt production region. The Mardie Definitive Feasibility Study (DFS) was completed in July 2020 and BCI is rapidly moving the Project towards development. The funds raised through the Entitlement Offer (after capital raising costs) will allow the Company to facilitate early construction works, to ensure that the required infrastructure is in place prior to full project construction commencing, which is anticipated to be in the second quarter of 2021, subject to the BCI Board having made a Final Investment Decision and all remaining funding being in place. BCI is undertaking the equity issue by way of an Entitlement Offer, so as to provide all eligible shareholders with the opportunity to participate in the issue, and thereby retain their existing pro rata exposure to the Company's emerging salt and potash business and iron ore royalty earnings.
USE OF FUNDS
The proceeds of the Entitlement Offer will be used for early construction works, which are expected to include the trial pond, seawater pump station, major roads, accommodation village, initial power supply facilities, as well as for ordering of long lead time items (e.g. pumps) and capital raising costs.
UNDERWRITING AND SUB-UNDERWRITING
The Entitlement Offer is fully underwritten by Canaccord Genuity (Australia) Limited (AFSL 234666) (Canaccord) and Bell Potter Securities Limited (AFSL 243480) (Bell Potter) (the Joint Lead Managers) on the terms and conditions of an Underwriting Agreement with the Company. Material terms of the Underwriting Agreement are disclosed in Annexure A of this announcement.
The Joint Lead Managers have entered into sub-underwriting agreements in respect of the Entitlement Offer with Wroxby, Sandon Capital and Ryder Capital (collectively, the Sub-underwriters). The arrangements between the Joint Lead Managers and the sub-underwriters are as follows: Wroxby will sub-underwrite up to a further 80.5 million New Shares with a value of up to $19.3 million, being up to approximately 70% of any shortfall of the Entitlement Offer. As such, in the unlikely event that no other existing shareholders take up their entitlement (other than those that have already provided commitments to the Company), then Wroxby's voting power could increase from its current voting power of approximately 29% up to approximately 43%. Material terms of the sub-underwriting agreement are disclosed in Annexure A of this announcement.
Sandon Capital has committed to taking up its entitlement and will sub-underwrite up to a further 2.8 million New Shares with a value of up to $0.7 million, being approximately 2% of any shortfall of the Entitlement Offer. The maximum voting power Sandon Capital could hold under this arrangement is approximately 6%.
Ryder Capital has committed to taking up its entitlement and will sub-underwrite up to a further 32.2 million New Shares with a value of up to $7.7 million, being approximately 28% of any shortfall of the Entitlement Offer. The maximum voting power Ryder Capital could hold under this arrangement is approximately 9%.
ELIGIBLE SHAREHOLDERS
Eligible institutional shareholders will be invited to participate in the institutional component of the Entitlement Offer (Institutional Offer). Eligible institutional shareholders can choose to take up all, part, or none of their entitlement. Eligible retail shareholders with a registered address on the Company's share register in Australia, New Zealand and any permitted jurisdiction nominated by the Joint Lead Managers and agreed by the Company (Permitted Jurisdictions), as at the Record Date (being 5:00pm (WST) on Wednesday, 16 September 2020) have the opportunity to invest in New Shares at the Offer Price on the terms and conditions outlined in the Offer Booklet to be sent to eligible retail shareholders on Friday, 18 September 2020 (Retail Offer).
WST means Western Standard Time. The Entitlement Offer timetable is subject to variation. The Company reserves the right to alter the timetable at its discretion and without notice, subject to ASX Listing Rules and the Corporations Act and other applicable law. In particular, the Company reserves the right to either, generally or in particular cases, extend the closing date of the institutional or retail components of the Entitlement Offer, to accept late applications or to withdraw the Entitlement Offer prior to the issue of the relevant securities without prior notice. The commencement of quotation of New Shares is subject to confirmation from ASX.
For those shareholders who have elected to receive documents from the Company via email, they will receive the Entitlement Offer documents and their personal entitlement and acceptance form directly to their nominated email address. As a consequence, these shareholders will not be sent a hard copy of the documents by mail. Gilbert + Tobin is acting as Australian legal advisor to BCI on the Entitlement Offer.
FURTHER INFORMATION
Further details of the Entitlement Offer are set out in the investor presentation also provided to the ASX today. The investor presentation contains important information including key risks and foreign selling restrictions with respect to the Entitlement Offer.
Contact:
Alwyn Vorster
Tel: +61 8 6311 3400
ABOUT BCI MINERALS
BCI Minerals Limited (ASX:BCI) is an Australian-based company that is developing a salt and potash business supported by iron ore royalty earnings. BCI is rapidly advancing its 100% owned Mardie Salt & Potash Project, a potential Tier 1 project located on the West Pilbara coast in the centre of Australia's key salt production region. A Definitive Feasibility Study (DFS) on the Mardie Project was completed in July 2020.
Mardie aims to produce 4.4Mtpa of high-purity salt (>99.5% NaCl) and 120ktpa of sulphate of potash (SOP) (>52% K2O) via solar evaporation of seawater. Using an inexhaustible seawater resource and a production process driven mainly by natural solar and wind energy, Mardie is a sustainable opportunity to supply the salt and potash growth markets in Asia over many decades. BCI recently acquired adjacent tenement rights which provide capacity to optimise and expand the project beyond the DFS production levels. With a Final Investment Decision targeted in early 2021 and construction start by mid-2021, first salt sales can be achieved by mid-2024 and first SOP sales by mid-2025. BCI receives quarterly royalty earnings from Iron Valley, an iron ore mine located in the Central Pilbara region of Western Australia which is operated by Mineral Resources Limited (ASX:MIN). BCI's EBITDA from Iron Valley for FY20 was A$23.0M.
DISCLAIMER
This announcement has been prepared for publication in Australia and may not be released or distributed to US wire services in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.
FORWARD LOOKING STATEMENTS
This document may include forward-looking statements. Forward-looking statements include, but are not necessarily limited to, statements concerning BCI's planned exploration program and other statements that are not historic facts. When used in this document, the words such as 'could', 'plan', 'estimate' 'expect', 'intend', 'may', 'potential', 'should' and similar expressions are forward-looking statements. Although BCI believes that its expectations reflected in these are reasonable, such statements involve risks and uncertainties, and no assurance can be given that actual results will be consistent with these forwardlooking statements.
BCI MINERALS LIMITED 
