morning schueym, the potential upside with BRM at these current prices is unquestionable. The cash backing has ultimately kept us in the game and will allow the board to continue progressing to some level of production.
You make a very valid point that even with a diminished IO price our NPV should remain robust. I dont have the details with me but I believe the scoping study report projected costs of between A$29 - A$36 a tonne. This could well change in time but possible profit margins appear good!
The problem is people are literally crapping themselves and are pessimistic (as you put it) with good reason. If my weighted average BRM SP was over my current 85c I would be crapping myself to!
In todays AGE, UBS has revised its IO benchmark price to now drop by 40%! Mount Gibson MD Luke Tonkin was quoted to say "I dont want to go into details as to whether were making money or not" referring to their new offtake agreements required because previous customers failed to honor contracts! Then to top the article off Atlas MD DF revealed "if your not selling caviar, you wont get caviar prices" regarding their initial shipment deals!
There are plenty of reasons to doubt juniors like Brockman at present and I personally understand this. If I had no IO investments there is no real need to buy in now. So much risk and uncertainty makes people cautious and so it should. All WR can do now is to keep ticking boxes and conserve as much cash as possible. I believe things will improve but the funding that BRM would require in the future to reach 10mt annual output may not be justified in the years to come? I for one will continue to hold long term but understand why people wont. Certainly at these prices there is less risk of SP reduction . Cash is king for companies in the current market climate but IO juniors will need to hold onto their hats IMO.
BRM Price at posting:
58.0¢ Sentiment: None Disclosure: Held
