BCI Minerals Limited

Section 1: Company Overview and Fundamentals Insights

1.1 Company Overview

BCI Minerals Limited (ASX: BCI) is a mining company that offers the development and exploration of mineral properties. The company offers exploration and development of iron ore deposits in the Pilbara region of Western Australia.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~48.84% of the total shareholding. Wroxby Pty Ltd and AustralianSuper are holding a maximum stake in the company at ~19.54% and ~13.94%, respectively.

1.4 Key Metrics: The company reported low debt-to-equity ratio in FY22, around 0.05x, compared to the industry median of 0.18x. Further, BCI reported growth in total assets during FY22 to AUD 538.4mn relative to AUD 227.8mn during FY21. Below is captured the trend of the asset-to-equity ratio and current ratio:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Results Highlights of FY22: During FY22, the company reported the receipts from customers or around AUD 102.94mn while during FY21 it was around AUD 120.822mn. Further, during FY22, the company reported a net increase in cash and cash equivalent by AUD 152.58mn, increased from AUD 37.88mn as of FY21.

2.3 Project Update: The company is well funded for future construction programs during FY23, with AUD 188mn in cash as of September 30, 2022, and access to AUD 100mn of convertible notes subject to shareholders' approval. In addition, with the support from ongoing Valley royalty earnings.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 7, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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