Brockman Resources Limited (ASX: BRM) ? ASX/Media Release: 21 April 2010
BROCKMAN SIGNS LANDMARK MOU WITH SINOSTEEL FOR IRON ORE OFF-TAKE FROM THE MARILLANA PROJECT
MOU ALSO CONTEMPLATES BROADER STRATEGIC INVESTMENT OPTIONS
4 MOU signed with Sinosteel, China?s largest importer of iron ore (40Mt of imports in 2009)
4 The MOU contemplates the purchase of up to 50% of forecast total production, to a maximum of 10Mtpa, from Brockman?s flagship Marillana Project
4 MOU confirms the marketability of Marillana?s product and further underpins the Project?s successful DFS completion during Q3 2010
4 MOU also contemplates the parties discussing wider strategic project investment options by Sinosteel in the development of the Marillana Project
Brockman Resources Limited (ASX: BRM ? ?Brockman? or ?the Company?) has taken another key step towards becoming a leading Australian mid-tier iron ore producer after signing a landmark MOU with China?s largest iron ore importer, Sinosteel Australia Pty Ltd (?Sinosteel?), for the purchase of up to 50% of future production from its flagship Marillana Iron Ore Project (?Marillana Project?) in the Pilbara region of Western Australia.
Brockman today signed a non-binding Memorandum of Understanding (?MOU?) with Sinosteel for the purchase of a maximum of 10Mtpa of production over an initial 5-year off-take period. Significantly, the MOU also contemplates the parties discussing wider strategic investment options by Sinosteel in the Marillana Project.
Sinosteel Corporation is one of China?s largest State-owned enterprises and its Australian subsidiary, Sinosteel Australia Pty Ltd, has played a key role in the Pilbara iron ore industry since entering the Channar Mining Joint Venture with Rio Tinto in 1987. Sinosteel was China?s leading importer of iron ore in 2009, importing over 40 million tonnes for Chinese steel-making markets.
The landmark MOU ? the first agreement signed by Brockman in respect of off-take from the Marillana Project ? provides a strong foundation for completion of the Definitive Feasibility Study (?DFS?) and project development. The DFS is currently more than 60% complete and is scheduled to be completed during Q3 2010.
The signing of the MOU confirms the technical acceptance of Marillana Project ore, following the recent release of key metallurgical test work results confirming that the Marillana detrital ore can be upgraded to a final product grade of between 60.5% and 61.5% Fe. The final product specification is comparable with direct shipping hematite ore being mined from other significant Pilbara iron ore projects.
?We are delighted to have signed this MOU with such a well-known and credible off-take partner for the Marillana Project,? said Brockman?s Managing Director, Mr Wayne Richards.
This provides strong evidence, not only of the technical acceptance of Marillana Project ore, but also the growing level of support from key global groups for the successful development of the Marillana Project.
?We expect this to be the start of a very positive strategic alliance for the Company, as it aligns Brockman with an extremely experienced and well resourced group with a long track history in Western Australia of successful trading and investment,? he added.
?The MOU, while assisting Brockman greatly with the completion of our impending DFS and providing a framework for the finalisation of an off-take agreement for a significant proportion of the Marillana Project?s planned production, also allows for wider strategic investment discussions between the two groups, without limiting the possibility of other corporate or joint venture scenarios,? said Mr Richards.
?We are pleased to have signed this MOU with Brockman and look forward to finalising the final off-take agreement,? said Sinosteel Australia?s Managing Director, Mr Li Ying. ?Our company is keen to cooperate and partner with Australian companies with credible projects seeking to leverage our capability to supply raw materials for China?s steel industry, whether this is iron ore, manganese, chrome ore or coal.?
ABOUT SINOSTEEL CORPORATION
Sinosteel is a subsidiary of Sinosteel Corporation based in Beijing, which is one of China?s largest state owned enterprises. Sinosteel Corporation is involved in developing and processing of metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, related engineering technical services and equipment manufacturing.
Sinosteel first became actively involved in the Australian resources sector with the signing of the Channar Mining Joint Venture agreement in 1987. The Channar Mining Joint Venture Project is a joint venture between Sinosteel and Hamersley Iron. This project was one of the largest Chinese overseas investment projects at the time.
Sinosteel is one of the first state-owned enterprises that took on a global approach by launching a successful mineral resource project overseas. It has successfully established iron ore and chrome ore resource based in Australia and South Africa.
It is a raw material supplier and sales-agent for major Chinese steel mills, some of which Sinosteel has entered into long-term strategic partnerships with. It is among the leading traders in China for iron ore, chrome ore, DRI, fluorspar, coke, manganese ore, scrap, steel products, magnetite and rare earths.
Sinosteel Corporation is a comprehensive raw materials supplier to the burgeoning Chinese steel industry, sourcing iron ore, chrome, manganese, scrap steel and coking coal from around the world. Besides the numerous strategic alliances in the steel industry, Sinosteel Corporation has also established alliances to source raw materials for selected downstream processing clients in the base metals, mineral sands and nuclear industries in China.
www.sinosteel.com
About Brockman Resources
Brockman is an ASX300 listed Company with its principal project, the Marillana Iron Ore Project, located 100km north-west of Newman in the Pilbara region of Western Australia and lying close to existing rail, road and port infrastructure. The Marillana Project will potentially be the largest ?junior? iron ore (hematite) project within Australia.
The DFS associated with the development of the Marillana Project is more than 60% complete and is scheduled for release in Q3 2010.
With cash reserves of approximately $85 million, Brockman is well positioned to complete this DFS, commence Front End Engineering Design (?FEED?) and long-lead item procurement, while reviewing its financial investment options associated with the funding and development of the Marillana Project.
Today?s announcement follows recent progress reports on metallurgical verification and detrital upgradability at the Marillana Project and the recent Marillana Resource Upgrade, which confirmed a resource of 1.63 billion tonnes including 173Mt of Measured Mineral Resources, 1,238Mt of Indicated Mineral Resources and 219Mt Inferred Mineral Resources.
The two releases confirmed the uniformity of the detrital mineralisation across the deposit and highlight the technical robustness, resource upgradability, and simplicity of the beneficiation process to be adopted to produce a direct shipping ore quality product.
Brockman is finalising all remaining activities associated with the Marillana environmental management plan to support its Public Environmental Review (?PER?) process, which is scheduled to be advertised in Q2 2010.
As a strategic shareholder in North West Iron Ore Alliance Ops Pty Ltd (?NWIOA?), the Port development plans were confirmed by a favourable Pre-Feasibility Study as announced by Brockman in March this year. The DFS on the Port has commenced.
The Port Development, and the recent Australian Competition and Consumer Commission (?ACCC?) conditional approval to the NWIOA to collectively bargain for rail haulage services and track access in Western Australia?s Pilbara region, will provide a vital framework for the future development and export of Brockman iron ore from the Marillana Project.
Brockman has commenced the process of determining the ultimate financing process and program for the Marillana Project. This program was underpinned by a recent global roadshow undertaken by the Managing Director and supporting executives to New York, Toronto, Singapore, Hong Kong and Beijing.
www.brockman.com.au
Wayne Richards
Managing Director
?ENDS?
Released by:
Nicholas Read
Read Corporate
Phone: +61 8 9388 1474 |
On behalf of:
Wayne Richards
Managing Director
Brockman Resources Limited
Phone: +61 8 9389 3000 |
Competent Person?s Statement
The information in this report that relates to Mineral Resources is based on information compiled by Mr J Farrell and Mr A Zhang.
Mr J Farrell, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Golder Associates Pty Ltd, produced the Mineral Resource estimates based on the data and geological interpretations provided by Brockman. Mr Farrell has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ?Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves?. Mr Farrell consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.
Mr A Zhang, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Brockman Resources Limited, provided the geological interpretations and the drill hole data used for the Mineral Resource estimation. Mr Zhang has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ?Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves?. Mr Zhang consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.