Broker Shaw and Partners has recently initiated coverage of ASX resources company BCI Minerals Ltd (ASX: BCI) and believes the company could more than double in value.
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Major resources project nearing completion
BCI, the Shaw team says, is on the cusp of becoming Australia's largest solar salt operation and the third largest globally via its 100%-owned Mardie Salt and Potash Project on the Pilbara coast.
In its most recent update for the March quarter, BCI said that overall construction of the Mardie project was 81% complete.
The company is expecting its first salt harvest in the coming months, with the first harvest washed and stockpiled towards the end of the year.
As of March 31, the company had invested $1.37 billion in the project, compared to its then market capitalisation of $1.1 billion, and it had liquidity of $522 million, which was about 1.6 times its further anticipated construction costs.
The company was forecasting positive operating cash flow from FY28.
Shaw and Partners said the project was progressing well.
The Mardie Project uses seawater pumped into nine sequential evaporation ponds across 115sq km of Pilbara mudflats, 80km south of Karratha. Solar and wind evaporation concentrate brine to produce 5.35mtpa of high-purity industrial salt. Residual bitterns feed a secondary potash process targeting 140ktpa of Sulphate of Potash, a premium, chloride-free fertiliser used on high-value crops. A significant milestone was reached in March 2026 when Pond 9 hit operational brine density, marking the transition from construction project to operating asset. Two tropical cyclones temporarily diluted pond densities earlier this year, but BCI reported no material infrastructure damage. We model first salt sales from early CY27.
The Shaw and Partners analysts said the most difficult elements of the project were now complete, which were approvals, pond construction, jetty commissioning, and project finance.
Shares looking cheap
They said the company was undervalued at the current share price.
They said:
With a market cap below the replacement cost of already-built infrastructure, BCI shares are too cheap for a project with a 60yr mine life, binding customer agreements covering 62% of initial output, and infrastructure-scale cash flows approaching.
The Shaw and Partners team said BCI's high purity product was exactly what customers were after, and the primary risk from here on in was execution.
They said:
Further delays to First Salt on Ship or a disappointing production ramp-up in FY27 would erode confidence in the Project. A sustained period of weak industrial salt prices, or underperformance at the SOP pilot, could also reduce long-term earnings upside.
Shaw and Partners has a price target of 75 cents on BCI shares compared to 37 cents currently.
BCI is valued at $1.07 billion.
