A gain of 35%, page-62

31 December 2020 is a critical date for Min Resources to meet its obligations under the Joint Venture Agreement. Basically, Min Resources is getting half of Marillana's 400 MT of ore to build a railway and port facilities. It needs to have commenced the rail and port elements by this date.

The most recent information from Min Resources is that it won't be rail but trucks for haulage and there's no sign of approval from the WA government for Min Resources to get a port berth at Port Hedland's South West Creek development. Reading the terms of the agreement, it would appear that Min Resources has failed to meet its obligations. Brockman Mining has the right to terminate the JV and resume full ownership of the Marillana. See below.

So, is Brockman going to extend the dates again; accept compromised haulage and port options; or terminate and look for an alternative solution given Min Resources doesn't seem to be anywhere near where it needs to be at this point in time?

I have no idea why the SP is going up because it sure doesn't seem like there's any actual solution to Brockman's stranded ore at this point in time.

The Farm-in and Joint Venture (FJV) Agreement entered into by Brockman Iron (a wholly-owned subsidiary of the Company) and Polaris (a wholly-owned subsidiary of Mineral Resources Limited (MRL)) on 26 July 2018 in relation to the Marillana Project became unconditional on 21 January 2019. On that date, the Farm-in Period commenced and upon Polaris satisfying the Farm-in Obligations on or before expiry of the Farm-in Period, the Joint Venture shall be established and the Farm-in Interest will be transferred to Polaris.

As of today’s date, both Brockman Iron and Polaris have agreed that the Farm-in Obligations may take up to a further 12 months to complete (31 July 2020) and therefore the parties have agreed to extend certain key dates under the FJV. Those dates are:

1. Construction commencement of the Rail and Port System is to be extended from ‘on or before 31 December 2019’ to ‘on or before 31 December 2020’; and

2. Operation commencement of the Rail and Port System is to be extended from ‘on or before 31 December 2021’ to ‘on or before 31 December 2022’.

Despite the extension of the construction commencement date and operation commencement date of the Rail and Port System, Brockman Iron maintain its right that it may (within 30 days) give notice to Polaris to acquire the whole of Polaris’ JV Interest either with an immediate acquisition or a delayed acquisition (the Buy-Out) if either of the revised extended target dates pertaining to the Rail and Port System have not been met.

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Consequently the Mine to Ship Services Agreement (MSA) that was entered by Brockman Iron, Polaris, MRL and SPV (a wholly-owned subsidiary of MRL) on 21 January 2019 has to be amended also. The parties have therefore agreed that:

• The satisfaction of the Conditions Precedent for the MSA are now extended from 31 December 2019 to 31 December 2020;