facts from fiction

OK – Now that the dust has settled, and the hangover has kicked in it’s time to actually look at the announcement and distil fact from fiction and dreams from inevitability.

Many of the news,posts and articles released have adopted polar opposite views, so what does it all mean? Here's my 2c worth.

• The 1.1 billion tonnes certainly sounds good, but in reality Marillana has 550MT of DSO product. It is worth noting however that further drilling is underway and the resource estimate is likely to be upgraded further.

• The 550MT is not as good as your “standard” 550 MT DSO deposit because it is costly to extract (being mostly subsurface) and costly to benefit to reach those levels – not so good. (although economies of scale are certainly there)

• The style of Fe, however is very good. Pisolite is craved by the Chinese – and that is good. Not much of it, but many other juniors would love to have it!

• The layout of the deposit is also very good. All uniform along a 14km length of the tenement boundary – great for logistics and plant design

• Impurities are not so crash hot, but are they material? I don’t think so. WR has discussed this at length and I think he should know. He use to sell the stuff to the Chinese for BHP, and has sold them this identical type of ore with similar impurity levels.

• Sensational grades are one thing, but unless your deposit is close to transport you are stuffed. This to me is the killer for BRM. Whilst many other juniors may have better grades and lower impurities, and will be cheaper to extract, very few are likely to have transportation costs potentially as cheap as BRM. BHP railline runs over the deposit and Cloudbreak is just 35km away.

• Mine life attracts investment. BRM has 50 years + of mine life.

• Other prospective tenements. BRM has 11 more in the region, meaning that any plant investment is likely to reap long-term benefits

• Fe price – the mine was viable before the 70% price rise. This goes straight to the bottom line next year

• Knowledge and experience. Without doubt this is the key enabler. WR has both the technical knowledge and experience to make this happen. He has worked for both BHP and Twiggy, so anyone who says he isn’t talking to those guys is simply fooling themselves. He has continued to tick every box he has put up at each stage, and exceed expectations. I see no reason why this will not continue.

• What is it worth?… this is a huge question, but I maintain that with all the risks taken into account 80c/tonne would be hard to argue with.. and that equates to around $4.80 a share. A transport deal propels this valuation into the dollars/tonne level and that to me indicates that there is potentially still massive upside to come.

Of course DYOR, but I have owned this stock since 2004 and can testify to the integrity of this company. Hype is not in their mantra. I’m not selling as I now see production as inevitability. Good luck to all the buyers today.