pilbara iron ore concept play

From latest Southern Cross Research:

"Brockman Resources (BRM)
Pilbara iron ore concept play

Seeking to leverage off large low grade resource. BRM is developing the Marillana iron ore deposit in the Pilbara. It has completed a scoping study on a 10Mtpa project returning favourable economics, and has recently upgraded its resource to 1.1Bt, by inclusion of lower grade detrital ore. This ore, though requiring additional processing, could support a higher level of production. The Marillana project will require port allocation and access to the BHP or FMG rail line. BRM appears undervalued compared to its peers, however progress towards a transport solution has the potential to help narrow this discount over time.

Cheap on basis metrics With one of the largest Hematitic resources, albeit low grade, of an ASX listed iron ore junior, BRM appears undervalued compared to some of its peers. BRM is trading at $0.43/t of shippable ore (550Mt) compared to the sector average of $6.29/t. Clearly the uncertainty over infrastructure and the ability to successfully beneficiate what amounts to 95% of the resource is justification for a discount. However, further resource upgrades, successful test work, and progress with an infrastructure agreement should de-risk the concept and potentially support a re-rating. BRM is a speculative high risk/high reward situation."