BRM 0.00% $2.53 brockman resources limited

2004 story with similar tonnage

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    This is an extract from the Australian Journal of Mining back in oct 2004. The tonnage and gradings are remarkedly similar. Good luck to all holders....
    Quote
    "NEWS

    2ND CONTRACT AND FUNDING FOR FORTESCUE - 15 October 2004

    Fortescue Metals Group Limited has announced its second binding contract within a week to supply China with iron ore from the company's emerging Pilbara Iron Ore and Infrastructure Project in Western Australia.

    Provisions in the contract provide a capital injection of A$35 million into Fortescue Metals, more than half of which will be paid by mid next year.

    According to Fortescue Metals, the latest contract also means that, based on today's general pricing levels for seaborne traded iron ore, the company has now secured more than $3 billion in firm sales for the supply of at least six million tonnes of Pilbara iron ore a year over a 20- year period.

    Announcing a series of binding contracts with major Chinese steel group, Jiangsu Fengli Group Co. Ltd – including provisions for the A$35 million capital injection - Fortescue Metals said on Wednesday:

    • It had signed a binding 20-year contract with Jiangsu Fengli Group Co. Ltd near Shanghai, to supply the Chinese steel group with four million tonnes of iron ore per annum.

    • The contract includes a prepayment of US$20 million of which US$10 million is payable at the commencement of construction early in 2005 and the balance of US$10 million payable on first shipments of iron ore to Fengli.

    • Fengli has injected an immediate A$7 million in equity capital into Fortescue Metals, settled on Wednesday, through the placement of 7 million shares at A$1.00 per share.

    • The share placement price represents a 47% premium to the 68 cents closing price for Fortescue Metals shares on the ASX on Tuesday.

    The Fengli contract follows last week's announcement by Fortescue Metals that it had signed a binding 20-year contract to supply two million tonnes of iron ore per year to China's Hebei Wenfeng Iron & Steel Co. Ltd.

    Fengli has an asset base of A$600 million with over 1,300 employees and fifteen major operating subsidiaries, says Fortescue. Each operation has received ISO9001:2000 quality certification.

    Fengli owns and operates the US$80m Zhangjiagang Yongheng Wharf and is expanding its capacity with a further US$180m investment. This will allow increased domestic and foreign shipments into its privately owned 4.3 square kilometer industrial precincts.

    “The desire by Fengli to develop a relationship combining direct equity, product offtake and prepayment undertakings, is clear evidence of the high level of engagement that China's steel industry is seeking with our company,” Fortescue Metals' Chief Executive Officer, Mr Andrew Forrest, said on Wednesday.

    “It says to historic global iron ore supply chains that China, Indian and even South East Asia's steel industry and steel mills are insistent on broadening their supply base and are prepared to commit at strong financial levels to secure such a supply relationship,” Mr Forrest said.

    “For Fortescue Metals, it adds credence to our expectation that with an increasing level of JORC-confirmed resources within our Pilbara tenements, there will be an escalation in the conversion rate to binding contracts, of our many current signed Memoranda of Understanding.

    “We are also encouraged by the desire of these sectors of the overseas steel industry to reach binding purchase agreements after their own independent quantitative and qualitative assessment of Fortescue Metals' rapidly expanding resource base.

    “That is a very large and objective tick against the multiple project Chichester iron ore tenements owned and controlled by Fortescue Metals.”

    Mr Forrest said the company's commercial negotiators were driving the conversion process with vigour and where possible, would incorporate prepayment conditions to facilitate the overall project funding process.

    Fortescue Metals recently announced its first JORC-endorsed resource definition of 744 million tonnes of Pilbara Marra Mamba mineralization from its current three key iron ore projects in the Chichester Ranges – giving the Company more than 1.1 billion tonnes of JORC-classified iron ore resources in the Pilbara.

    The mineralization returned an average iron ore grade of 56.4% Fe in ground, with independent tests indicating the material can readily beneficiate to grades close to 65% Fe, and with low phosphorous impurities. " End Quote.

    FMG at this time was .37 cents. Congrats to those on the wagon and good luck to those that seize the opportunity on any ill wind that may blow our way.

 
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