BRM - Brockman Resources

[psychic]

I need my sleep at night, or else I get grumpy, so I had to find a stock that would allow me peace of mind. Thankyou BRM

With so many stocks going into voluntary administration and collapsing it is essential in times likes these ALL TRADERS OF STOCKS FIND SAFE AND SECURE PLACES TO PARK THEIR MONEY.

After plenty of hours research I have found BRM to be very much undervalued, based on cash on hand, no debt, and a high grade large iron ore deposit.

Cash on hand $105 million
No Debt
1.6 billion tonnes of iron ore (currently valued at ZERO $$)

The current market is valuing BRM at $ 70 million. Now given this I have come to the conclusion that BRM is very much undervalued just on the cash component of the company alone. Got to love this financial crisis, it creates amazing opportunites

 

[Sean K]

I need my sleep at night, or else I get grumpy, so I had to find a stock that would allow me peace of mind. Thankyou BRM

With so many stocks going into voluntary administration and collapsing it is essential in times likes these ALL TRADERS OF STOCKS FIND SAFE AND SECURE PLACES TO PARK THEIR MONEY.

After plenty of hours research I have found BRM to be very much undervalued, based on cash on hand, no debt, and a high grade large iron ore deposit.

Cash on hand $105 million
No Debt
1.6 billion tonnes of iron ore (currently valued at ZERO $$)

The current market is valuing BRM at $ 70 million. Now given this I have come to the conclusion that BRM is very much undervalued just on the cash component of the company alone. Got to love this financial crisis, it creates amazing opportunites

I have to agree. As a long term play this looks very good. The recession/depression will resolve at some point. Once the US starts buying cars and building houses again etc, China should continue on it's merry way. Or, we have to wait for enough Chinese middle class to make up the deficit. Whatever the case, it's probably going to be a waiting game and further falls could eventuate, but long term looks good. Would be very surprised if a BHP, RIO or FMG aren't considering scraping up the pieces. MC $70m with $110 in the bank!! The world's gone crazy..

 

[aussiger]

Has BRM any productive mines? If not, is there a roadmap available where i/we can see when the first mines are going productive?

This sounds very interesting:

Cash on hand $105 million
No Debt
1.6 billion tonnes of iron ore (currently valued at ZERO $$)

Thanks for help!

 

[psychic]

No mines in production as of yet, looking at late 2009 for this to occur, with a 40 year mine life.

Try their webiste for more information

http://www.brockman.com.au

 

[Sean K]

No mines in production as of yet, looking at late 2009 for this to occur, with a 40 year mine life.

I think the differencial in the EV and MC may be explained that the market thinks it's not going to get into production as planned. With the decrease in steel output, stockpiling, and the majors still pumping IO out, perhaps there will be a significant delay in start up?

Is sure to get off the ground eventually imo, but when?

Any other ideas on the value difference?

Can't just be because it's being overlooked...

 

[psychic]

The key is forward thinking, stockmarkets work in a forward thinking process. At this stage the stockmarket is pricing in an Australian recession. Hopefully it will be brief, if at all.

The most positive aspects of BRM is a high level of cash in hand, earning very high rates of interest. This will allow BRM to continue its business with NO need to raise cash. A very big bonus under current econiomic conditions. Raising capital would cripple its share price.

Secondly a very large high grade resource valued at zero, why? Future thinking again suggests a negative climate ahead.

Glad markets work in a forward motion, as this seems to be as bad as its going to get, and when bargain stocks emerge investors must take advantage of these with plenty of research. Use your skills as a savy investors and spot value buys, based on hard solid facts.

 

[basilio]

Yes BRM does look really great with all that money in their bank. Not to mention the 1.6 billion tonnes of iron ore.

However there are probably many other companies that look similarly strong and looking back over the forums one can see many people "assuming" that a rational/sensible market would not allow an underpriced asset to be missed. But the prices still keeping falling.

So when has the market ever been "rational and sensible" ? We are all aware that much of the trading is smaller stocks is highly speculative, and in some cases sheer BS. But if see a potential profit I suppose we go along for the ride.

At the higher end we see companies like BNB, Macquarie et al create elaborate and complex stories which in a nutshell are designed to extract as much money from participants as is humanly possible and then justify their take on their revaluations of the value of the assets. And all the while an army of financial advisers and stock brokers steer the sheeple to the yard..(Do the lucky ones only get fleeced?)

Anyway the point I'm making is that for very good reasons many investors have lost faith in the market and want to see any money they have left in their bank account not a company with many other interests.

And of course with the loss of confidence the belief is that many bargains will still be around and the economic crisis is just beginning.

 

[YELNATS]

Any other ideas on the value difference?

Can't just be because it's being overlooked...

The costs and arrangements to transport the ore from mine to port. In this regard I understand they are part of a consortium with other IO up-and-comers like Atlas Iron, but these arrangements don't seem to be finalised for BRM yet. Please correct me if I'm wrong.

 

[psychic]

The question still remains, which stock is more recession proof?


Stock 1 JJJ - 1.6 billion tonnes of iron ore with a grade of 58% and no cash

Stock 2 CCC - 1.6 billion tonnes of iron ore with a grade of 58% and cash

Stock 2 CCC is bound to be more recession proof. Cash is king


By the way I slept very well last night..ZZZzzzZZZzzzzZZZ

 

[alex arigo]

i know the iron ore market is weak and a lot of the smaller explores wont make it but brockman stands out to me i am self shocked to think how much there undervalued i own shares and i like there long term story management said there could be an up grade in the coming months of resources 1 billon tones of ore they think add the 1.6 billion tones you have a company that would have close to 3 billon tones of iron ore worth nothing and 110 million are there any chinese steel mills that note this or am i the the only one 15 to 25 mtpa in 2011 and a 45 year old mine life 60 x 15 million tones =1 billion in sales after cost profit of 15 dollors a tone =225 million add the rest up huge growth a head for a long term holder in this great iron ore company to be

 

[grace]

Good to see a bit of chat on this one (compared to some of my other holdings where I have been just talking to myself for it seems ages).

Haven't deserted this one yet. Well, I sold half at $2.50. Bought UMC with that money! eeek!

Holding BRM, FRS, GIR, UMC, and a very little holding in DMM. I guess I should mention MMX as well (oops, I think I have some in my super fund.....lucky I have now gone out and got a job! Saving for that bottom....).

Some of these stocks are 10% of what they used to be. eeek. Am I an idiot or what? One should always follow their trading plan! Mine was to sell after the last round of iron ore increases. Idea was good. Just not disciplined enough to follow it. Learning all of the time.

 

[Sean K]

Hi Grace. You'd think with $105m ish in the kitty, these guys will last out the recession and downturn in IO prices for now. They could effectively wait for the world to flush itself out over the next 2 years, recovery and growth restart with China continuing on it's merry way and be one of the few IO juniors to be left to take advantage of the upswing. Maybe there'll be some consolidation and with their balance sheet, who's to say they don't snap up some of the others and turn into a mid size player. At this rate, they may be able to pick up FMG....LOL. If long term IO prices stabilise and turn around with the inevitable world recovery (6mths - 5yrs ??) then BRM will be in a good position. It's just what happens between now and the recovery. Maybe some more downside with the market. Hopefully the 45-50c support holds.

 

[basilio]

What does one do in BRM's position with $105m in bank but no forseeable way of profitably exploiting the iron ore market?

In theory one could put the company into mothballs until the the market turns around and save the substantial cost of staff, directors fees, wages ect . But then it would not be easy to find the talent again when you want to start. In a sense it looks as if most of the people involved will be twiddling their thumbs, painting rocks and otherwise getting bored. Which is very destructive of morale.

I will be interested to see how management plans to occupy its time and energy profitably in the next 2 years.

Of course it could be worse .... they might not have the money in the bank ... but most other miners..

 

[JTLP]

Why don't BRM look to flog off there other assets or at least do something about them. I'm sure everyone likes money in the bank but if they can at least define another resource base and get it on the brink of mining/production they may be able to sell it or at least bring it into production if and when the market turns...

 

[Sean K]

Golly, cash backing .75 cents ish, now trading at .41...

Broken that .48 ish support level.

I thought the cash backing would hold them up....

Why wouldn't a BHP dip into the entertainment budget a buy them? Bamboozling.

 

[eric35]

It will happen, mate.

Somebody will take it over or the s/p will just have to rise as the bottom will be hit soon.

Be an optimist

 

[bas]

I doubt anyone could take them over- would you accept a 60 cent bid when there is 70+ cents cash in the bank? Directors would never accept a bid anywhere near these levels.

However, i'm buying this stock. When the dust settles BRM and the like will be amongst the first to recover IMO- its not often you get to buy $1 for 60 cents

 

[TheAbyss]

Unless of course your cash in the bank will be burnt up for the next few years paying overheads, exploring etc with no prospect of a turn around in the price of IO in the for seeable future.

Then you would be pretty keen to sell your far from completed project to the highest bidder who has pockets deep enough to ride out the low period. That would be BHP or Rio who have other things on their mind at the moment so the SP will take a while to go again imo.

This isnt to say that BRM do not have a quality tenement which they clearly do. Times like these are for companies that have a revenue stream not explorers. Get out and come back when credit is available and manufacturing and growth are talking points then the price of IO and coal will rebound and the explorers will see some growth but only after the large and mid tiers have first.

 

[eric35]

Bas, no takeover bid would be at 60 cents. They would be loved out of the data room, or not even let in.

No. I am sure there would have to be a good premium.

Happy trading

 

[alex arigo]

take over target for shore who cares about the money they have in the bank they need more money then that if they are going to produce a 15 to 25 million tone operation by 2011 bhp or fmg or the chinese steel mills will be hungry to eat them up they have 1 .6 billion tones of good iron ore and much more to come they will still have to pay around 6 dollers if they want the company and thats about 600 mill thats a bargain price considering they have billions of dollers of iron ore hold on till next year and ride it out