BC Iron Ltd (ASX: BCI)

 Nullagine Iron Ore Jv - First Project Funding Installment Received

The Nullagine Iron Ore Joint Venture (BC Iron 50% / Fortescue Metals 50%) is pleased to confirm that it has today received the US$15 million, first tranche of funding under the US$50 million off-take, pre-payment agreement signed recently with a Hong Kong-based industrial and trading company (refer ASX Release dated 10 November 2009).

This first US$15 million payment will be used for project development activities as the Joint Venture commences construction in early 2010.

- ENDS -

RELEASED BY:                                                                                           ON BEHALF OF:

NICHOLAS READ/JASON CUNNINGHAM                                                      MR MIKE YOUNG / MORGAN BALL

READ CORPORATE                                                                                                      MANAGING DIRECTOR / CHIEF FINANCIAL OFFICER

TELEPHONE: +618 9388 1474                                              BC IRON LIMITED

TELEPHONE: +618 6311 3400

About BC Iron Limited

BC Iron Limited (ASX: BCI) is an emerging iron ore producer focused on Western Australia's worldclass Pilbara region. The Company's core asset is the Nullagine Iron Ore Project, an extensive tenement portfolio which is strategically located 140km north of Newman proximal to Fortescue Metals' Chichester operation. The Company has entered into a Joint Venture with FMG (earning up to 50%) who will provide port and rail infrastructure access for the life of the mining operation. The Nullagine Iron Ore Project comprises a Direct Shipping Ore (DSO) Probable Reserve of 36Mt @ 57% Fe. The total mineral resource at Nullagine is 89Mt @ 54.1% Fe. BC Iron's competitive advantage is that the Nullagine DSO comprises an outcropping, low contaminant "first grade" sinter feed that is very attractive to steel producers.

Key Statistics

Shares on Issue: 83.7 million

Cash & equivalents: September 30, 2009 - $22.2m

Board and Management: Tony Kiernan - Chairman and non-executive director

Mike Young - Managing Director

Garth Higgo - Non-Executive Director

Terry Ransted - Non-Executive Director

Steven Chadwick - Non-Executive Director

Morgan Ball - Chief Financial Officer & Company Secretary

Blair Duncan - Chief Operating Officer

Major Shareholders: Consolidated Minerals 22%

Regent Pacific Group 16%

Qualifying Statement

This release may include forward-looking statements. These forward-looking statements are based on BC Iron's expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks,

uncertainties and other factors, many of which are outside the control of BC Iron Limited, which could cause actual results to differ materially from such statements. BC Iron Limited makes no undertaking to subsequently update or revise the

forward-looking statements made in this release to reflect events or circumstances after the date of this release. JORC Competent Persons Statement The information that relates to the drilling data and geological interpretations is based on information compiled byMichael Young who is a Member of The Australian Institute of Geoscientists and a Director of the Company. The information that relates to the Mineral Resource Estimate at Outcamp, Warrigal Well, and Coongan Well has been compiled by Mr Richard Gaze who is a member of the Australasian Institute of Mining and Metallurgy and an employee of Golder Associates. Both Mr Young and Mr Gaze have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Gaze and Mr Young consent to the inclusion in their names in the matters based on their information in the form and context in which it appears. The information that relates to the Mineral Resource  Estimate at Bonnie East has been compiled by Mr Greg Hudson who is a member of the Australian Institute of Geoscientists and an employee of BC iron, and Mr Mike Young who is a member of the Australian Institute of Geoscientists and an employee BC Iron. Both Mr Young and Mr Hudson have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Hudson and Mr Young consent to the inclusion in their names in the matters based on their information in the form and context in which it appears. The information that relates to the Ore Reserve has been compiled by Mr Blair Duncan who is an employee of the Company and a member of the Australasian Institute of Mining and Metallurgy, and Mr Pieter Doelman who is a member of the Australasian Institute of Mining and Metallurgy and an employee of Coffey Mining Pty Ltd. Both Mr Duncan and Mr Doelman have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Duncan and Mr Doelman consent to the inclusion in their names in the matters based on their information in the form and context in which it appears.

Note:

?   The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to

produce the Ore Reserves.

?   DSO (Direct Shipping Ore) is a subset of the CID (Channel iron deposit)

?   Calcined Fe (CaFe) = Fe / (100-LOI) * 10

?   LOI measured at 1000?C

?   Mbcm - million bank cubic metres

?  W:O - waste to ore ratio

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READ CORPORATE
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