BC Iron managing director Morgan Ball is confident the iron ore price will remain between $US90 ($96) and $US110 a tonne for the next 18 months, but longer-term he tips the supply surge by the majors will constrain it to between $US85 and $US95 a tonne.
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"The important thing is people don't overreact ... we've seen it tick down below $US90 a tonne before and come back," Mr Ball says.
BC Iron has reached nameplate production and as such is a play on the iron ore price.
Citi says BC Iron will generate just $38 million in operating cash flow this financial year, a dramatic fall from the $155 million posted in financial 2014.
Citi has bearish forecasts on the iron ore price, which is languishing at about $US89 a tonne.
On Wednesday, BC posted underlying net profit after tax of $79.2 million, in line with unaudited figures it released earlier this month when it unveiled an off-market takeover offer for fellow Pilbara junior Iron Ore Holdings.
Mr Ball says he is confident the merger will not drive BC Iron's prices up. The costs of IOH's two long-life mines, when they come online, will be "comparable to our cost position", he says.
"So overall we wouldn't see ourselves moving up the cost curve," he says.
Citi expects BC's net cash to be at $120 million after the IOH takeover.
BC offers less clarity on costs than many other Pilbara juniors. Its so-called C1 cash costs – which exclude significant charges such as royalties, native title payments, marketing costs and exploration – rose to $52 a tonne for the year, from $49. For financial 2015, BC has provided guidance for cash costs of $49 to $53.
BC Iron received a discount to the benchmark 62 per cent iron ore price "a bit below" the 15 per cent to 20 per cent taken by other Pilbara producers in the June half.
The offer for IOH closes on September, with the target's shareholders offered 10¢ in cash, and 0.44 BC shares for every IOH share they own.
