Marillana Project

The 100% owned Marillana Iron Ore Project (Marillana or the Project) is Brockman's flagship project located in the Hamersley Iron Province, within the Pilbara region of Western Australia, approximately 100 km north-west of the township of Newman. The Project is located within mining lease M47/1414.

Figure 1: Location of Marillana tenements

The Project area covers 82 km2 bordering the Hamersley Range, where extensive areas of supergene iron ore mineralisation have developed within the dissected Brockman Iron Formation that caps the Range.

The ultimate delivery of Marillana's first commercial production is dependent upon securing, funding, and developing suitable rail and port infrastructure. The Company will provide guidance on the timing for delivery of the Project once the infrastructure solution is secured.

Marillana is surrounded by world-class deposits owned by major iron ore players including BHP Billiton (BHPB), Rio Tinto (Rio) and Fortescue Metals Group (FMG). Marillana is in close proximity to existing infrastructure, with BHPB's railway traversing the lease, Rio's Yandicoogina mine 40 km to the south and FMG's Cloud Break mine approximately 35 km to the north-east. The Marillana tenement is also bisected by a gazetted road. Brockman will export its ore through the Port of Port Hedland - the largest bulk commodity (iron ore) facility in Australia.

Project benefits

Australia is the world's largest exporter and is the world's third largest producer of iron ore after China and Brazil. Although iron ore resources occur in all Australian States and Territories, almost 90% of identified resources occur in Western Australia.

Western Australia's economy is heavily dependent on mineral resources, and its future growth and development rely on the continued viability of resource development projects. The nearby town of Newman has developed as a result of mineral exploitation, and requires ongoing resource projects to provide future revenue to the community. The development of the Project will provide financial and social benefits for the area through employment and flow-on effects to the non-mining sector.

The Project will also have a significant beneficial impact on the Pilbara region, bringing revenue and jobs to the area.

Resources and Reserves

This information on Resources and Reserves for the Marillana Project was prepared and first disclosed under guidelines of the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves" ("The JORC Code 2004"). It has not been updated since to comply with the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the'JORC Code 2012) on the basis that the information has not materially changed since it was last reported.

Marillana has a significant Mineral Resource estimate of 1.63 Bt of hematite Detrital (DID) and channel iron deposit (CID) mineralisation, comprising 173 Mt of Measured Mineral Resources, 1,238 Mt of Indicated Mineral Resources and 219 Mt of Inferred Mineral Resources (see Tables 1 and 2). In accordance with the requirements of the JORC Code 2004, the Marillana Ore Reserves are based solely on the Measured and Indicated Mineral Resources at Marillana.

The 201 Mt of Inferred Mineral Resources (Non CID) is based on wide-spaced drilling to the north of the Indicated Mineral Resource boundary, which has demonstrated continuity of the detrital mineralisation in this area. In addition the mineralisation remains open to the north of the Inferred Mineral Resource boundary.

Table 1: Marillana Project – Beneficiation Feed Mineral Resource Summary (cut-off grade: 38% Fe)
Mineralisation type Resource classification Tonnes (Mt) Grade (% Fe)
Detrital Measured 173 41.6
Indicated 1,036 42.5
Inferred 201 40.7
Pisolite Indicated 117 47.4
Total Measured 173 41.6
Indicated 1,154 43.0
Inferred 201 40.7
GRAND TOTAL   1,528 42.6

Total tonnes may not add up due to rounding

Table 2: Marillana Project – Direct Ship CID Mineral Resource Summary (cut-off grade: 52% Fe)
Resource classification Tonnes
Indicated 84.2 55.8 61.9 3.6 5.0 0.097 9.8
Inferred 17.7 54.4 60.0 4.3 6.6 0.080 9.3
TOTAL 101.9 55.6 61.5 3.7 5.3 0.094 9.7

CaFe represents calcined Fe and is calculated by Brockman using the formula CaFe = Fe% / ((100-LOI)/100)

As part of the Definitive Feasibility Study (DFS), mining studies by Perth-based Golder Associates have demonstrated that the Marillana Project contains Proven and Probable Beneficiation Feed Ore Reserves, within the optimal pit design, in excess of one billion tonnes as indicated in Table 3.

Table 3: Marillana Beneficiation Feed Ore Reserves*
Reserve classification Tonnes (Mt) Fe (%)
Proved 133 41.6
Probable 868 42.5
TOTAL 1,001 42.4

* Reserves are included within Resources

Additionally, the Marillana Direct Ship CID Ore Reserves, within the optimal pit design, are estimated to be in excess of 48 Mt as shown in Table 4.

Table 4: Marillana CID Ore Reserves*
Reserve classification Tonnes (Mt) Fe (%) CaFe (%) AI2O3 (%) SiO2 (%) P (%) LOI (%)
Probable 48.5 55.5 61.5 3.7 5.3 0.09 9.7
TOTAL 48.5 55.5 61.5 3.7 5.3 0.09 9.7

* Reserves are included within Resources

Based on extensive beneficiation testwork, the Beneficiation Feed Ore Reserves are expected to produce 378 Mt of final product grading 60.5-61.5% Fe, with impurity levels comparable with other West Australian direct shipping hematite ore (DSO) iron ore producers. The CID Ore is a DSO product which would be prepared for export as a separate product, resulting in the Marillana Project producing in excess of 426 Mt of export product (beneficiated detritals plus CID)

Metallurgical testwork, undertaken since publication of the Ore Reserve, investigated improvements in the product yield from beneficiation feed by recovering additional -1 mm fines material at +60% Fe, could add a further 30 Mt of product over the life of the mine. This material has been considered waste in earlier studies.

This Project represents one of the largest published hematite Ore Reserve positions in the Pilbara, outside of the three major producers (BHPB, Rio and FMG). The Detrital Ore is upgraded to a high-quality, sinter feed product via simple beneficiation, which is supported by low-cost mining, low waste ore ratios and large continuous ore zones.

Based on existing Reserves and Resources, the Marillana Project will support over 20 years of mining operations, producing at a forecast production rate of up to 20 Mtpa of beneficiated ore grading from 60.5% to 61.5% Fe, and DSO ore grading 55.5%.

The Mineral Resource and Reserve estimation (see Tables 1 to 4) for Marillana has been classified by Golder Associates Pty Ltd in accordance with the guidelines of the 2004 Edition of the "Australasian Code for Reporting of Mineral Resources and Reserves" JORC Code1. It has been estimated within geological boundaries using a 38% Fe cut-off grade for beneficiation feed mineralisation and a 52% Fe cut-off grade for CID mineralisation. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.