BRM 0.00% $2.53 brockman resources limited

offshore buyers lift brockman

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    Offshore buyers lift Brockman

    Kevin Andrusiak | March 06, 2008
    OFFSHORE buying of scrip in junior iron ore hopeful Brockman Resources lifted the Perth-based company's share price 165 per cent yesterday.

    Demand for Brockman shares surged immediately after it released an updated resource of 1.1billion tonnes for its key Marillana project in the Pilbara with an indicated resource of 338 million tonnes.

    The project borders tenements controlled by BHP Billiton and Fortescue Metals, and contains the relatively lower-grade Brockman mineral hematite resource.

    Previously an unloved style of mineralisation, Fortescue and Rio Tinto have made recent noise about the size of Brockman-style ore they control as Chinese steel mills look to get their hands on Australian iron ore.

    According to Brockman Resources, its hematite ore could be upgraded through beneficiation to about 59 per cent, although analysts noted the high amounts of alumina in the ore and the high mining and processing costs of about $36 a tonne double that of what Fortescue and BHP Billiton face.

    Managing director Wayne Richards said Marillana had the potential to deliver 550 million tonnes of iron ore over a project life of up to 50 years.

    But the company is yet to agree to any agreements on how it will get its product to port, although Marillana is close to BHP Billiton's Newman railway. Mr Richards said that although a New York-based fund had been scooping up as many shares on issue, so too had a "well known" Australian identity.

    Brockman shares lifted $1.87 in trading yesterday to close at $3.

    "This person is someone who partook in the placement we had in November and is a very good person to have on the share register," Mr Richards said.

    Brockman is expected to begin a pre-feasibility study for Marillana in June and is likely to combine that with a feasibility study.

    The company is eyeing a start-up date around late 2011 and may upgrade its studies to include a production rate above the 10 million tonnes a year it has already mooted.

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