INTERVIEW WITH WAYNE RICHARDS, MANAGING DIRECTOR OF BROCKMAN RESOURCES LIMITED (BRM)

“40% Resource Increase to 1.6 Billion Tonnes”

http://www.brr.com.au/event/49782

THURSDAY, AUGUST 21, 2008, 6:00 PM.

            BRR    Today we are joined by the Managing Director of Brockman Resources, Mr. Wayne Richards. Wayne, great to have you back on Boardrooms Radio.

10        BRM    Thanks, Joel, and it is a pleasure to be with you again.

            BRR    Brockman has an announcement out today outlining a major increase in the resource estimate for the Marillana Iron Ore Project up in the Pilbara. Wayne, could you give our listeners a bit of an overview first up?

15        BRM    Yes, Joel. We are very pleased at the moment to unveil a 40% increase in our resource at Marillana. Previously, we announced a 1.1 billion tonne resource and now that has been upgraded to 1.6 billion tonnes and that is all at the Marillana tenement. We have now drilled out the section called Abalone and Abalone East and got good continuous mineralisation including

20                    Rockhole Bore and North-West Sector across the entire 15-kilometre strike. So we now know the quantum of the resource estimate at Marillana, some wide-spaced drilling, inferred and indicated resources up to the 1.6, and now the rigs will move back into Rockhole Bore and the sections of Abalone or North-West Sector to do tighter infill drilling to convert more of the inferred

25                    resource into indicated resource and allow the drilling to support our first pit designs for both of DFS and the feasibility study as we go forward with the project.

            BRR    So what does the resource estimate increase mean for Brockman as a

30                    company?

            BRM    The resource estimate, apart from being probably the biggest resource of the iron ore juniors in Australia and of the quantum now that is reported by the three majors being the BHP, FMG, and Rio, we now have 952 million tonnes of product inventory grading 57.4% to 60% of all haematite material. So that

35                    stands as a line from all other iron ore companies within Western Australia and allows us to go forward with justifying a feasibility study and eventually the bankable feasibility study for 15 to 25 million tonne project. So have great confidence now in the mineralisation. The drilling is supporting the metallurgical testwork and we can pare on with the feasibility and the DFS for

40                    the 2 million tonne case as well.

            BRR    Now the bulk of the Marillana resource would require beneficiation. Could you perhaps take our listeners through this process and explain how it works?

            BRM    Yes, Joel. Beneficiation is a simple process of separating the haematite

45                    dense material in the form of iron ore from the siliceous material that surrounds the ore in the deposit. It works by gravity separation which is simply just separating the good material from the poor material based on density and specific gravity. In equipment terms, that is achieved by breaking up the ore in the form of MMD sizer rather than a crusher because we do not have hard-kept rock. We just break the material up from the free dig. The material then goes over screens to separate lumps and fines and then the minus 1-millimetre material is treated through cyclones, sparrows and jigs just to separate the good haematite material from the siliceous waste. So it is very

5                      simple. It is well acknowledged in the industry. There have been beneficiation plants operated in the Pilbara for up to 25 years. They persist in all the major companies. By simple gravity separation, you separate the good ore from the waste. As I said, this technology is well proven. It has low technical risk and adds minimal capital and operating costs to the process.

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            BRR    Now there is a definitive feasibility study currently underway for Marillana. Could you outline the scope and the expected timing on the report?

            BRM    Yes, we have awarded the definitive feasibility study and that is being fast-tracked at the moment for 2 million tonne per annum operation. At the present

15                    time, we are completing all the requirements for the flora and fauna surveys and they have proceeded extremely well especially with regard to the troglofauna and stygofauna microvertebrates within the ore and in the water table. That has gone well as has the native title discussions and arrangements as well as the definition of the mineral ore body and the

20                    metallurgical testwork. We have had the project director on for three-and-a-half months, and as of last night, we have also put out an offer to a project manager come construction manager to lead the 2 million tonne per annum DFS, from study now right through to construction. So we are well on track proceeding in accordance with the project management plans for that 2

25                    million tonne DFS. We hope to be putting in the mining proposal in the December quarter, receiving that from the government in the later half of the June period next year and then going on site in the second half of 2009 to be mining by the end of 2009 at a production rate of 2 million tonnes or a potential mining rate slightly higher than that.

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            BRR    Wayne, turning to the exploration front, what are the current plans at Marillana given today’s resources upgrade?

            BRM    Having now defined the quantity of ore at Marillana, drilling to this point now will be done on the basis of supporting the DFS and the feasibility study for

35                    the 2 and the 15 come 25 million tonne per annum project. So we have moved the rigs back into the areas where we wish to mine initially. We will do tighter infill drilling to get detailed continuity maps of the area to help us develop the mine plan and obviously support the requirements of a feasibility and a bankable feasibility study. So that is where the RC grade controlled rigs

40                    will go and we will continue to work this year. We have just finished the Caldwell rig which takes a 1-metre diameter core of the material for metallurgical testwork and we have in excess of 30 tonnes of material now being brought down to Perth for both bench and continuous testwork requirements. The sonic rig has been there for three-and-a-half months as

45                    well and that sonic rig takes in situ 6-inch core samples right down to the basement. We will use that ore as well to do some of the physical characterization testwork of both the detrital, the pisolites and the channel iron at the depths.

            BRR    So finally, Wayne, what are some of key upcoming milestones that our listeners can expect from Brockman?

            BRM    We will continue to do the drilling and define the resource to support the studies. We are working towards the mining proposal, and as previously

5                      announced, that is all proceeding well. We will work diligently and effectively towards the port, having heard the recent statement from the Alliance, Brockman and the government that we have been allocated two berths potentially in the inner harbour of Port Hedland with the capacity of 50 million tonnes. That accompanying with all the rail access and haulage regimes and

10                    public reviews. We have responded both as Brockman and the Alliance to the various declarations, haulage regimes and the recent TPI/FMG haulage regimes. So we are now working diligently on seeking and obtaining rail access. We have the port allocation and reservation and we now have the resource. So between port, rail and mine, we are moving the project forward

15                    very quickly and diligently. In that sense, Brockman is very well positioned now technically, financially and structurally to bring the Marillana project into development. I conclude by saying I believe Brockman’s strategic advantages and competitive edge over the other groups is at its four L’s, as I call it, lithology, location, longevity, and logistics. We have good ore and good

20                    upgradeable ore and simple processing, i.e. lithology. We have a location. We are in the prime Pilbara area surrounded by all major players in the iron ore industry. We have logistics. We have road and rail access lines either in our tenement or within 30 kilometres. We now have longevity on the basis that we have a 25- to 30-year life of mine potential now at a 25 million tonne

25                    rate. So between those four L’s, we have a project of significance and world-class.

            BRR    Wayne, congratulations on the resource upgrade. It is a great story. Thank you for your time today and we look forward to catching up again soon.

30        BRM    Thank you. Thank you, listeners.

INTERVIEW CONCLUDED

Contact brr@brr.com.au for more information

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