At the moment hysteria has set in. The herd are falling over themselves to get out. I've always said that I'm in BRM for the long haul until production - which will be this time next year. I made a good call a few weeks ago selling my blue chips to pay off most of my margin loan and then top up some more on BRM. Unfortunately it was at 85cents - little did I know it would take such a savaging.
The fundamentals for investing very heavily in BRM are still there and improving. If iron ore does increase as forecast - BRM can easily get a mine gate sale agreement with BHP (as BHP have stated they're happy for this type of arrangement) and still make a reasoanble profit per tonne. They can aim for 8MT minegate sales and perhaps 2MT by road to FMG (if it's more lucrative). They can make good money in the couple of years that iron ore prices are forecast to be exceptionally high - compared to other juniors which are at least 12-18 months behind.
This carange may benefit me in other ways. Money will move from the stockmarket to the housing sector, therefore creating a bit of a bubble there for 12 months. I'm in the process of fixing our house for sale so that we can move into our rental property once the tenant's lease expires. Timing's perfect for the sale and come the end of the year, I'll be able to look at picking up some bluechips at what appears to be significantly reduced prices. I'll still be holding BRM even if it drops to 20cents because the upside is just too good to ignore (and I don't want to pay any more CGT for this FY).
Good luck all and let's hope that a few of us remain as holders once the dust settles.
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