re: Ann: Positive Pre-Feasibility Study for M...
Usually see a rise on good press - remember there's not that many shares on offer. http://www.theaustralian.news.com.au/business/story/0,28124,25910720-36418,00.html
Brockman Resources 'on track' to be major
Sarah-Jane Tasker | August 11, 2009
IRON ore hopeful Brockman Resources is on track to become the fourth-largest producer in the Pilbara, after a positive review of its billion-dollar project.
The Perth-based company released a pre-feasibility study on its West Australian project yesterday that suggests it could become a substantial producer in the vibrant iron ore region, with the fourth quarter in 2012 targeted for first production.
The study of its Marillana iron ore project shows that Brockman will be targeting 17 million tonnes a year, making it the fourth-largest producer in the sector dominated by the majors, Rio Tinto, BHP Billiton and Fortescue Metals Group.
The study also found that the upfront capital costs are forecast to range from $705 million to $1.35 billion.
"The pre-feasibility study shows that the Marillana project stands to be a financially rewarding project, with robust operating margins, strong rates of return and simple mining and processing technologies," managing director Wayne Richards said.
"The findings of the study pave the way for the execution of a definitive feasibility study to get under way later this quarter, putting Brockman firmly on track to become a major iron ore producer within the Pilbara."
A variety of rail and port infrastructure logistics and construction programs were reviewed for the project, including using BHP's rail or connecting to Fortescue's rail.
The most effective and efficient option for the junior would be to push BHP to finally lift its refusal to open its infrastructure to others and offer a haulage agreement on its line, because it runs directly through the Marillana project.
Petra Capital resources analyst John Veldhuizen said while Brockman's ore needed to be upgraded to a salable product, its resource was a sufficient size, which separated it from some of the other juniors in the sector.
"For them the critical thing is tying up a logistics solution," Mr Veldhuizen said. "They (the majors) have the footprint and command the region because a lot of these projects will never be able to sustain significant capital expenditure, particularly on infrastructure. If Brockman can arrange something with a third party on logistics, it could become a reality."
BRM Price at posting:
$1.23 Sentiment: Hold Disclosure: Held
