Brockman raises A$112.5 million to underpin early production

July 7, 2008

July 7th (Mineweb) – Western Australian iron ore company, Brockman Resources Limited (ASX Code: BRM), has achieved a significant milestone in its strategy of targeting first iron ore production by late next year after today receiving shareholder approval for its recently announced A$112.5 million capital raising.

Shareholders in the Perth-based Company today approved the second tranche of the recently announced placement, comprising 32.6 million shares at A$2.50 to raise A$81.5 million, to international and domestic institutional and sophisticated investors, as well as ratifying the first tranche of the placement, comprising 12.4 million shares at A$2.50 to raise A$31.0 million. 

The first tranche of the placement was completed on 12 June 2008 under the Company’s 15% placement capacity and in accordance with ASX Listing Rules. Australian stockbroking firm Patersons Securities Limited acted as lead manager to the placement.

The substantial raising will be used accelerate the development of Brockman’s flagship Marillana Iron Ore Project, located 100km north of Newman in Western Australia, to achieve first ore production through a 2 million tonne per annum (Mtpa) mining and trucking operation commencing in late 2009.  The funds will also be utilised to develop exploration programs for several of the other 100%-owned tenements within the Company’s portfolio. 

“This is a significant milestone in the Company’s history, marking the culmination of our efforts over the past year to establish the Marillana Project as the core of a long-term iron ore business for Brockman,” said the Company’s Managing Director, Mr Wayne Richards.

“We are delighted to welcome a number of new major long-term institutional and strategic investors to Brockman’s share register, resulting in a significant expansion of our investor base,” Mr Richards commented. “The second tranche of this capital raising completes the funding required by Brockman to fast-track our production plans at Marillana to take advantage of strong iron ore prices. 

“The recently announced iron ore price settlements of up to 95% for 2008 has reinforced the very favourable market environment for the development of new iron ore projects in the Pilbara region,” he said. “We believe that Marillana, together with our portfolio of other projects, has the potential to re-rate Brockman in the months and years ahead as we deliver on our production strategy.”

In March 2008, Brockman announced a major upgrade in the JORC Code Compliant Mineral Resource estimate for the Marillana Project to 1.1 billion tonnes.  The expanded Indicated and Inferred Mineral Resource estimate encompasses an Indicated Resource of 47.2Mt @ 57.6% Fe of Channel Iron Deposit (CID) mineralisation, an Inferred Resource of 9.0Mt @ 56.5% Fe of CID and detrital mineralisation, an Indicated Resource of 291Mt @ 43.9% Fe of CID and detrital beneficiation feed mineralisation and Inferred Resource of 771Mt @ 44.3% Fe of CID and detrital beneficiation feed mineralisation. 

Brockman recently announced positive metallurgical results confirming improved beneficiation recoveries of the detrital ore mineralisation. With an increase in recoveries of greater than 25%, (i.e. from 47% – 59% – post beneficiation) the Marillana Project now has the potential for +680 Mt of DSO and beneficiated haematite ore available for marketing.

Brockman also completed a positive Scoping Study for the Marillana Project in April which indicated a potential A$1 billion Net Present Value (NPV) for a 10Mtpa project development.  The Scoping Study was commissioned prior to the recent resource upgrade, and was based on the previously announced conceptual exploration target of 100 million tonnes of Direct Shipping Ore.  

The Marillana Project is located 100km north of Newman between the Hamersley Ranges and Fortescue River Valley in Western Australia‘s world-class Pilbara iron ore region.  The tenements surrounding the Marillana licence area, E 47/1408, are held by high-profile iron ore producers and developers Rio Tinto, BHP Billiton, Hancock Mining and Fortescue Metals Group.

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