The TIME

• Landmark infrastructure JV agreement in place with FMG: Provides end-to-end rail haulage and port operations ~ production to commence in 2010
• US$50m project finance and 20Mt off-take deal secured with Hong Kong-based industrial and trading company  
• Fast-track production strategy ~ start-up DSO operation of 3Mtpa via dedicated private haul road to Christmas Creek expanding to +5Mtpa based on increased port capacity
• Shift by steel mills to high-quality iron ore products with low impurities of the type that BC Iron will produce
• Feasibility Study confirms the economic and technical viability of the Nullagine Project
  

• 1,500km² consolidated landholding in WA's iron-rich Pilbara region
• High-quality, low-cost operation with forecast operating costs of approximately A$43/tonne over the life of the project
• Mine life of over 8 years with potential to be extended through regional exploration and joint venture opportunities
• Capital project development costs of approximately A$43m, with payback of capital expected to take less than 2 years from the start of production
• Trial mining confirms viability of low capital cost surface mining technique ~ primary crushing not required

• Ore reserve of 36 million tonnes at 56.9% Fe with a waste-to-ore ratio of 1:1
• Total  CID resource of 89.1Mt @ 54.1% Fe (61.9% CaFe)
• BC Iron’s ore considered “first class” with low impurities and ultra-low Phosphorus
• Sintering qualities greatly enhance marketability of BC Iron's ore as a ‘Premium fines sinter feed
• No beneficiation required - simple mining, crushing and screening and transport operation

BC Iron's competitive edge over other iron ore juniors in the Pilbara is that our Nullagine resource comprises an outcropping, low contaminant ‘First Class' sinter feed that is located close to accessible transport infrastructure. These attributes position BC Iron favourably to rapidly transform the project into production and cashflow. 

Company Overview

BC Iron Limited (ASX: BCI) is an emerging iron ore producer focused on Western Australia's world-class Pilbara region. The Company was formed by combining the iron ore interests of Alkane Resources Ltd and Consolidated Minerals Ltd - which are now both major shareholders in BC Iron.

BC Iron formalised a landmark JV (Nullagine Joint Venture) with Fortescue Metals Group (FMG) in August 2009 and with a US$50m financing and off-take arrangement recently secured with a Hong Kong based Industrial Company, BC Iron is on track to become Australia's newest iron ore producer in 2010.

Nullagine Project

The Company's core asset is the Nullagine Iron Ore Project, an extensive tenement portfolio which is located 140km north of Newman in Western Australia's Pilbara region and proximal to Fortescue Metals' Chichester operation.

The 100%-owned Nullagine Project currently hosts a Direct Shipping Ore (DSO) Reserve of 36 million tonnes at 56.9% Fe within a DSO resource of 50.7Mt at 57% Fe (64.8% CaFe) and an overall Channel Iron Deposit (CID) resource of 89.1Mt @ 54.1%Fe. Importantly, the resource occurs at surface, resulting in low stripping ratios, and is very low in contaminants.

The Company completed a successful Scoping Study on a start-up DSO operation at Nullagine and, on the strength of this, moved quickly into a Feasibility Study. The Feasibility Study subsequently confirmed the technical and economic viability of the Nullagine Project as a viable stand alone project.

Nullagine Joint Venture (NJV)

In June 2009, BC Iron Limited and Fortescue Metals Group (FMG) signed a landmark agreement that saw the two companies establish a joint venture to develop BC Iron's Nullagine Iron Ore Project.

The Nullagine Joint Venture (NJV) will unlock the substantial value contained in the high-quality but remote East Pilbara project and under the terms of the agreement, BC Iron and Chichester Metals Pty Ltd (a wholly owned subsidiary of FMG), will each contribute equity up to A$10 million to the project, with the remaining development costs expected to be funded through project finance.

BC Iron will manage the NJV, including responsibility for all operations, road haulage, marketing and ore sales. FMG subsidiary, The Pilbara Infrastructure (TPI), will manage all rail and port operations, taking product from the project stockpile at FMG's Chichester operation to ships in Port Hedland.

The NJV will benefit significantly from synergies arising from the proximity to FMG's operations, including access to existing infrastructure, systems and facilities such as the David Forrest airstrip, which will expedite the logistics of the new mine development.

The Feasibility Study results have provided BC Iron an excellent road-map for achieving its production targets, starting at 3 million tonnes per annum next year and ramping up to +5 million tonnes per annum based on increased port capacity at Port Hedland..

Mine Development

BC Iron's estimated capital expenditure requirement for the mine development is approximately A$43 million with a forecast operating cost of approximately A$43/tonne. The operation is scheduled for commissioning in late 2010.

The proposed mining operation will be relatively simple and low-cost. In particular, the outcropping nature of the resource will result in a low waste-to-ore strip ratio of 1:1

The Company recently investigated innovative mining techniques in the first phase of trial mining at Nullagine, which was a key recommendation of the Nullagine Project Feasibility Study. The results from trial mining have supported the key technical assumptions of the Project, including the confirmation of surface mining and in-pit, portable crushing as the preferred mining method. This will allow highly selective mining.

Project Financing and Off-take Agreement

An off-take and financing deal was signed with a Hong Kong based industrial company in November 2009 which will see 20 million tonnes of iron ore supplied over the next 8.5 years from the Nullagine Project.

The agreement has also facilitated a US$50 financing arrangement which will be used for project development, with the first tranche of US$15 million scheduled to be drawn down in December this year and the rest spread throughout the first half of 2010.

Iron ore pricing under the off-take agreements is related to the annual benchmark iron ore reference price and if there is no benchmark in place, ore will be priced according to a pre-agreed index system.

Management

The Company's Directors have a wide range of technical and corporate skills including a strong background in exploration, economic assessment, and iron ore development and mining. Importantly, the Board also has experience in exploration and assessment of CID mineralisation.