Steve Fewster: Then we are probably going to start to see that tension, that price tension coming in as salt prices start to rise above where they are today.
Moderator: Thank you, Steve. Then another question on the pricing. When is BCI expected to set the costs of pricing?
Steve Fewster: Well, we are looking at the moment, but we are working fairly actively with Japanese customers, and I would expect over the coming months we will start to be in a position where we set those prices. For the remaining two offtake agreements, we will start talking to. At the moment, we are talking to one around pricing, so I expect that will probably get settled around January or February next year. Similarly, with the offtake agreement with the Shanghai, that is really early in the next calendar year.
Moderator: Thank you, Steve. Dawid, a question here for you on conditions. What are the foreseeable effects, if any, of cyclonic conditions, extreme weather, or extreme weather events on productivity and product security? Is there any mitigation strategies in place?
David Boshoff: Well, I think I will point to the last couple of seasons we have had. The high risk, in my view, of a salt operation is during ramp-up period, construction, and early ramp-up stages for weather. We have had four cyclones, and the last most severe one was actually just last season. So, we have been thoroughly tested on whether these assets have been built to withstand these conditions, and as we have reported in a number of quarters so far, I am really happy with the results.
David Boshoff: The assets, both the ponds, the pumps, the jetty, and all those constructed assets, beach included, have stood those tests that we have been through. During the ramp-up, the challenge with weather is not so much the wind. In fact, wind is great because wind improves evaporation, but it is more the rainfall.
David Boshoff: The effect that rain has had in previous events is dilution, and it is the same for any other salt operation. The good news for us is the amount of evaporation we have had, or the amount of dilution we have had, was exactly in line with the amount of rain we have had. What that means is we had no rainwater flowing into our ponds from other catchments. Only the water that has fallen on the ponds has created the dilution, and that is just part and parcel of running a salt operation, and those assumptions have been included in our modeling and production forecasts.
Moderator: Thank you, Dawid. Now another operational question. Are you expecting to contract further salt volumes? A follow-up, what is the potential timing of further offtake?
Steve Fewster: Yeah. I mentioned earlier we were in China, southern China in particular, earlier in the quarter. I think the discussions there are progressing well. We have got 2.3 million tons, about 5.3 million tons of capacity contracted to date. We are certainly working at the moment towards putting some additional term sheets in place, and that will then be a precursor to offtake agreements. So, we will steadily work on those over the next coming 12 months as we work through ramp-up.
Moderator: Thank you, Steve. Now, Dawid, I've got a question here on the crystallizers. As you mentioned, we've completed about 12 crystallizers, and there's about 16 left. This would appear to leave an additional 8 crystallizers unlined. Can you let us know what the plan is for these?
David Boshoff: Well, there's 2 trains of crystallizers that we're not intending to line at this stage. Our modeling is indicating that those additional crystallizers can be used for additional capacity, but this does require the nameplate capacity, and that is at average weather conditions. Of course, in warmer months, more hotter months, we produce more, and in cooler seasons, we produce less. My view is that in the future, we can look to use those crystallizers as what we call thickening ponds to accelerate volume, but that'll be part of our debottlenecking work down the track.
Moderator: Thank you, Dawid. Now, onto the port. We've previously spoken about excess port capacity. Are discussions still continuing with potential users?
Steve Fewster: Yeah, the last update we gave, we talked about the need to work through the approvals process to be able to export iron ore through our port. That's certainly the major precursor to being able to formalize any type of agreement with a third party. Pleasingly, the work on the approvals process has continued positively, and we'll get that firstly in place. We'll continue to have discussions with interested parties, but that will be a precursor. Completing that is a precursor to putting in place any agreements for access.
Moderator: Thank you, Steve. I have a question here on the sulphate of potash plant. Assuming the SOP trial goes well and then moves into full-scale production, will there be a need to raise more capital, or will this be fully sourced from the existing funding?
Steve Fewster: Well, we have been pretty consistent on this point. Given the timing of when we are likely to make an investment decision on a commercial-scale plant, the salt business itself will be generating positive operating cash flow. That gives us the ability to make some decisions on how we apply that cash, whether it is used to pay down our debt, or whether it can be directed towards the investment in SOP.
Steve Fewster: There is a lot of discussion in almost every country globally about securing a supply of fertilizers. We already have two leading government agencies in our debt facilities, so I feel confident that between the cash we generate and our very supportive lender group, that we certainly would not be looking at a capital raise. That has been our position for the last two years, that we would not be raising capital, would not be issuing any new shares to fund SOP.
Moderator: Thanks, Steve. I just have a follow-up question for that. In the near term, as you go through ramp-up, what is your view in terms of your working capital position, and is there any risk thereof of a capital raise?
Steve Fewster: Well, we finished the quarter with AUD 316 million of available funding, and CapEx to spend of around AUD 178 million. That leaves around AUD 138 million to support the business before revenue kicks in. On the expected use of funds for operations, that probably takes us towards the back end of next year, assuming no revenue. So we feel pretty comfortable that given the sort of FSOS timing that Dawid talked about, then we are well and truly funded from a working capital position.
David Boshoff: And just to clarify, that is end of calendar year for that.
Steve Fewster: Yes.
David Boshoff: So, buffer.
Moderator: Thank you, Steve. Just on that FSOS timing, Dawid, we have a bit of feedback here that it was difficult to hear you in that first question. Can you just reiterate, when is the first shipment of salt from Mardie now expected?
David Boshoff: Yeah, no problem. Apologies for the audio. Hopefully, you can hear me now clearer. I mentioned during the presentation that the weather drives the production process. All indications from the Bureau of Meteorology are that we will have a hotter-than-usual summer. If that turns out to be the case and we have minimal rain being the key indicator, we expect first salt on ship to be earlier in the next H2 of this financial year.
David Boshoff: If we have a very wet summer or multiple cyclones that dumps a lot of rain on the operations, then that will push to the right. Modeling indicates that there is a range of plus/minus 6 months in that, and that remains to be seen. I am very satisfied with the salt crystallization process so far, but the summer period really determines how fast we are going to grow.
David Boshoff: What we don't want to do is put our crystallizers at risk. I mentioned during the presentation the 200 mm of pavement. We are really keen to stick to that, to ensure that we can safely and productively ramp up and not incur additional costs.
Moderator: Thank you, Dawid. Now we have got time for two more questions. I have got one here. Given the current increased cost of diesel, has BCI considered installation of solar power as an alternative for its operations?
David Boshoff: Yeah, I can answer that. Certainly, the increased diesel is something that we are definitely monitoring. Steve and Doug too have done some really positive or good hedging processes to ensure that we minimize the downside risk of the diesel price escalation, and I will let Steve talk to that in a minute. Certainly, the requirement for efficient power supply is something that has been on our radar for a little while.
David Boshoff: My view is that once you have the SOP plant, which will be a key, almost half, I thought about demand will be from the SOP plant, but that is the ideal timing to add a renewable source for a power station that provides a power station light supply to both the port facilities, the salt wash plant, the SOP plant, and potentially also the village. That is still our objective, and that is in our forecast to do so. At that point in time, we expect it will improve power costs. I will let Steve just talk about the hedging on diesel ones.
Steve Fewster: Yeah. I would like to first start with, we actually do not use a lot of diesel. Yes, we have the diesel pumps. We have the pumps around site, which will allow the use of diesel, but we do not actually consume a lot of diesel. Having said that, we did see an opportunity early this year when oil prices were much lower than what they were or what they are today, and we did put a number of forward contracts, hedging contracts in place, which means we are paying.
Steve Fewster: Our diesel price is substantially below what you would see at the pumps today. That has been a real positive strategy. It has meant our budget assumptions around diesel prices have held all the way through, despite what has happened with oil prices and how that has then flowed into diesel prices.
Moderator: Thank you both. Then we have a final question here on the port, just on a follow-up on what you shared earlier, Steve. In regard to the port, when are the approvals expected to be received?
Steve Fewster: Yeah. In all likelihood, it will be sometime during the course of the next calendar year. Approvals generally take a little bit of time. But we are actively in discussions with the regulators. But I think realistically, it will be during the course of the next calendar year.
Moderator: Wonderful. Thank you so much, Steve and Dawid, and thank you to everyone who has dialed in today. That wraps this session up.
Steve Fewster: Thank you.
David Boshoff: Thank you. Good morning, everyone, and welcome. I am Dawid Boshoff, and with me is our CFO, Steve Fewster. We are pleased to be joining you today for our September 2026 quarterly update. Before we begin, please note that this presentation should be read together with our September quarterly report, which is now available on our website. If you have any questions, please type those into the live Q&A tab.
David Boshoff: That will be on the right-hand side of your screen, and we will answer those questions at the end of the session. Our values define who we are, and they guide every decision we make. This quarter, our values of "We are as one team" and "We do what we say" were again on full display. This was led by our projects team. We have completed the dredging and the marine packages for the Mardie port on time and on budget, as promised.
David Boshoff: This is a massive milestone that significantly de-risks the construction schedule and the cost of delivering Mardie Salt business. It has been achieved through collaboration with BCI and with our contractors across all the teams. I do want to thank everyone involved in making that happen. That values-driven approach supports the business we are building at Mardie. Mardie is on its way to becoming Australia's largest solar salt operation and the third-largest in the world.
David Boshoff: After years of construction, we are now just months away from completing that work. Despite much of the heavy lifting being done so far, we remain laser-focused on delivering the construction of Mardie Salt business on budget and on schedule.
