Brockman Resources (ASX: BRM)

Western Australian Iron Ore Company, Brockman Resources Ltd (ASX Code: BRM), is pleased to provide the following update on the development of its 100%-owned Marillana Iron Ore Project located 100km north west of Newman, in Western Australia�s Pilbara region.

In light of the current uncertainty and volatility in global equity markets and the Iron Ore Sector, as well as the delays experienced to date in securing binding rail and port access agreements, the Company�s Board has decided that shareholders� interests are best served by concentrating its efforts on the much larger Stage 2 development Project at Marillana.

This will allow the Company to focus future cash expenditures on the development of a long-term, sustainable Project capable of delivering strong long-term returns to shareholders, while at the same time reviewing new growth opportunities both within and outside of the organisation.  

The Stage 2 Marillana Project comprises a 15 - 25Mtpa mining operation with a forecast mine life of up to 40 years, incorporating the production of two high-grade iron ore products. Both channel iron deposit (CID) and beneficiated haematite ores will be mined and exported from the Stage 2 Project.

Brockman is in a unique position in the Australian junior iron ore sector with a world-class JORC compliant resource of 1.6 billion tonnes, uncommitted cash reserves of $105 million and close proximity to existing rail, road and port infrastructure.

�After taking into consideration the impact of the global financial crisis on the development and marketing strategies of the emerging iron ore sector, the Brockman Board has concluded that the most prudent strategy for the Company is to progress the Marillana Project as a long-life, world-scale operation supported by sustainable rail and port infrastructure and off-take agreements,� said Brockman�s Managing Director, Wayne Richards.

Stage 1 comprised a 2Mtpa early start-up operating scenario with a maximum life of two to three years, designed to achieve early production while environmental approvals, long-term infrastructure solutions and Stage 2 construction were being implemented. 

Despite continued discussions and negotiations with State Government authorities, the Port Hedland Port Authority and third party infrastructure owners/operators (i.e. FMG/TPI and BHPBIO) over the past 12 months, Brockman has been unable to formalise an agreement that gives the Company certainty in relation to port and rail infrastructure access in a suitable timeframe for Stage 1.

In addition, a number of recent developments have convinced the Company that it should concentrate on a long-term infrastructure solution for the Marillana Project. These include recent developments surrounding third party access to rail infrastructure (eg, High Court decision confirming the BHPBIO railways are a �service� and Federal Treasurer Wayne Swan�s recent Declaration of the Robe, Hamersley and Goldsworthy rail lines within the Pilbara) as well as the allocation of two berths within the Inner Harbour at Port Hedland to the North West Iron Ore Alliance (NWIOA), of which Brockman is a founding member.

The majority of the work completed to date on the Stage 1 Project will support and complement the development of the Stage 2 Project. Ongoing detailed design and engineering studies not directly applicable to the Stage 2 development will be suspended until Brockman has a greater degree of certainty in relation to rail infrastructure, port access and off-take agreements.

Principle activities going forward will focus on the following aspects of the Marillana Project:

�         Environmental approvals for the Stage 2 Project (all environmental surveys required for Stage 1 are complete and are complementary to Stage 2);

�         Progress engineering and design inputs for the Stage 2 Feasibility Study, in line with the current Project Development Schedule;

�         Negotiation of a Mining Access Agreement with the Nyiyaparli Native Title Claimant Group to progress the grant of the Mining Lease (an agreement has been signed with the Martu Idja Banyjima � MIB Group);

�         Finalisation of negotiations with third party rail infrastructure owners/operators for access and/or haulage agreements in accordance with regulatory processes;

�         Progression of the Scoping Study on the development of the port berths and associated facilities at Port Hedland (as part of the NWIOA);

�         Confirmatory metallurgical testwork to support the process flow design for Stage 2 (sonic and calweld drilling programmes to provide the required samples for this work have been completed); and

�         Progressing negotiations with long term partners for off-take, equity and/or Joint Venture arrangements.

The Company believes that it is prudent to minimise expenditure in the current financial climate, while moving forward on the key development aspects of the Marillana Project that will generate long-term value for shareholders.

�ENDS�

Competent Person�s Statement

The information in this report that relates to Mineral Resources is based on information compiled by Mr M Nimmo and Mr A Zhang.              

Mr M Nimmo, who is a Member of the Australasian Institute of Geoscientists and a full-time employee of Snowden Mining Industry Consultants Pty Ltd produced the Mineral Resource estimate based on the data and geological interpretations provided by Brockman.  Mr Nimmo 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 Nimmo 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 Ltd provided the geological interpretations and the drillhole 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.

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