Not sure how BCI post IOH acquisition becomes a growth style...

Not sure how BCI post IOH acquisition becomes a growth style stock.

BCI have maintained their commitment to the dividend payout ratio.

71m new shares issued. Assume a 30c dividend per share equates to $21m in dividends.

Iron Valley is expected to bring in 20-30m a year in NPAT on say around a $100 FOB price. So cant see why BCI post IOH acquisition is now a growth style stock when they have a steady cash flow to soak up the additional issue. This is also ignoring the $60m in cash that IOH has. What other junior not in production has that amount of cash in the bank?

The critical piece here is development of Bucklands and funding this. But BCI have some really strategic options here and you can see why this deal was so attractive to them. They can go it alone and rely on project financing to get the deal done, with bankable revenue streams from other juniors looking for port access helping with project financing.

We know Bucklands is a contiguous ore body to AQAs ore body and that joint development talks have taken place in the past. Would the new owners be interested in joint funding Bucklands as an early to market development to generate cashflow while they pursue the Port Hedland expansion option which is going to cost a lot more and be a lot longer in development timeframe. Aurizons involvement may complicate matters.

Further they could reduce capex by incorporating a IV type deal at Bucklands with MIN through a mine gate sale with MIN taking on development risk for the mine component.

You can see the option whirling around here. And no doubt having BCI come into the dealing table with the resources they bring must be helping at the negotiation table.

For all long term IOHers Bucklands was always seen as the jewel in the crown. It will be very interesting to see how the combined group take forward development but the IOH deposits are very well located indeed. Also given BCIs connection with FMG and lets also note that Iron Valley is also contiguous to FMGs Nyidinghu deposit and rail access was always a potential value creater at Iron Valley given MIN just truck the stuff atm.