Making news again today....shame the DOW decided to take a dump last night....
Article from: The Australian
IRON ore hopeful Brockman Resources has appointed UBS as adviser to develop a long-term company plan amid the current market downturn.
The move is partly defensive, as the junior sits with $103 million in uncommitted cash reserves and an undeveloped iron ore mine project with 1.6billion tonnes of iron ore resource.
At its current share price, Brockman's market value is less than its cash position, at just $96million.
"At a time of volatile international capital markets and low commodity prices, prudent management of our strong uncommitted cash position remains a priority for the Brockman board," managing director Wayne Richards said.
Mr Richards said UBS had the capacity to both assist with the Marillana iron ore project in the Pilbara and the company's broader strategic corporate development.
In November, Brockman abandoned an early-stage development of Marillana that would have mined 2 million tonnes of iron ore a year.
Instead, it said it would concentrate on the more ambitious Stage 2 plan, which includes an operation of 15-25 million tonnes a year.
The early-stage development was cancelled because of the global financial crisis and difficulty in securing port and rail access agreements. The cancellation left Brockman with the hefty cash balance.
Brockman said yesterday that it was in a unique position in the Australian junior iron ore sector with its cash reserves and a big resource close to existing rail, road and port infrastructure.
In coming months, Brockman said it would work with UBS to develop a plan to optimise long-term value for shareholders.
Brockman shares rose 4c, or 6 per cent, to 76c yesterday.
BRM Price at posting:
76.0¢ Sentiment: Buy Disclosure: Held
