BRM - Brockman Resources

[shinobi346]

I'm searching for the next BRM, sold off on panic with a great long term asset that will deliver a 500%+ gain.

I did the same thing as you Kennas. I made a little profit however felt bad soon afterward and bought back in. Unfortunately I couldnt aquire the same number of shares as I first had so my gain now isn't as large as it would have been. I'm searching for the next BRM too, in the time being however, this move by Wam Nam gives me the confidence to leave the "money" parked here.

 

[YELNATS]

BRM up massively again today to as high as $4.80 on continued low volume and no official news.

It does look as if something's in the wind.

BRM has been a terrific earner for my SMSF, not sure when and if to take profits, however.

 

[barney]

BRM up massively again today to as high as $4.80 on continued low volume and no official news.

It does look as if something's in the wind.

BRM has been a terrific earner for my SMSF, not sure when and if to take profits, however.

I'm searching for the next BRM too,

I don't hold any BRM unfortunately, but well done to you guys. I do have its (hopefully) little brother from next door, DMA .... Not sure whether it will be the next BRM, but there are quite a few parallels between the two, and the comparative market caps of $630+ million verses $22 million makes it look very interesting.
Cheers.

 

[Sean K]

This and GIR (amongst others of course) have been absolutely champions post GFC panick sell off. Amazing gains for those that held on, or took the chance. This was an absolute no brainer when it was trading under cash, and I thought had run it's course back around 2 bucks. LOL

 

[grace]

This and GIR (amongst others of course) have been absolutely champions post GFC panick sell off. Amazing gains for those that held on, or took the chance. This was an absolute no brainer when it was trading under cash, and I thought had run it's course back around 2 bucks. LOL

I did a too early sell too. I just can't work out why GIR and BRM are going great guns, but FRS is not. Of course, that is the one I kept.

FRS has such a nice deposit and location. Last time I looked, FRS had a very low $ per tonne of DSO compared to others, and they just keep increasing the size. Have I missed something???

 

[shag]

I did a too early sell too. I just can't work out why GIR and BRM are going great guns, but FRS is not. Of course, that is the one I kept.

FRS has such a nice deposit and location. Last time I looked, FRS had a very low $ per tonne of DSO compared to others, and they just keep increasing the size. Have I missed something???

i have gir n frs, the only difference i know of is gir is a margin loaner, like brm
tho the increasing desposit gir has with its grt depths/thicknesses looks like its a company maker.
i think i've actually lost money on frs.....

 

[countryboy]

Im also struggling to understand why FRS is sitting at mid 80c and BRM continues to rise. Hold both but sold off half of BRM at 2.80...like kennas thought it had run its course and needed that rail deal to go to where it is now.

With a nickel target in its back pocket i am now going to sit and watch BRM as a rail deal should see it spike if it is someone elses capital

IO and coal takeovers have dug me out of the GFC

 

[gordon2007]

Very interesting. News out this morning.

ASX Release: 11 November 2010
TAKEOVER OFFER FROM WAH NAM
Brockman Resources Limited (ASX: BRM – “Brockman” or “the Company”) advises that it has received a
conditional off-market takeover offer for all the shares in the Company that it does not already own from its major
shareholder, Hong Kong Stock Exchange-listed Wah Nam International Limited, through its wholly owned
Australian subsidiary Wah Nam International Australia Pty Ltd.

 

[enigmatic]

wow i didn't actually see that coming, is there anyone with a little bit more knowledge if this is a good thing, will it bring some of the big aussies to the table.

 

[happytown]

yes, 30 wah nam shares for every brm share

note that wah nam have also ann'd a t/o offer for FRS this morning at 6 wah nam shares per frs share

 

[basilio]

It looks like a very creative deal from wah nams point of view. By amalgamating the 2 junior miners they can create enough size to warrant either another train line or real access to the BHP/RIO facilities. Look out for the other junior miners Atlas and co

On first looks the price offered for FRS is skinny. I think Grace's analysis suggests it is worth a tidy bit more than the nominal $1.30 a share.

Of course given that shareholders will be getting shares in the takeover company they should gain value from the overall development. Shouldn't they ?

In theory of course yes. But is there a risk of transfer pricing deals which shift the profits to other players? Not suggesting there is but I think it is a question worth asking.

Unfortunately I can't see how there will be any competition for the companies. Who else will put their hand up ? Maybe BHP will put in a spoiler bid ? (Crazy idea...)

 

[YELNATS]

Unfortunately I can't see how there will be any competition for the companies. Who else will put their hand up ? Maybe BHP will put in a spoiler bid ? (Crazy idea...)

Can you expand a little on this Bas? What do mean by a spoiler bid?

Are you thinking that someone like BHP would put in a bid with the sole purpose of making Wah Nam ultimately pay a higher price. Afterall if Wah Nam are to become a long term competitor of BHP, it would serve BHP's interests to hurt them as much as possible. And if Wah Nam didn't match or better BHP's price, BHP could always withdraw their offer if they were not serious about the takeover.

 

[Sean K]

I do have to question this Wa Nam mob. When I saw them come up on the register ages ago and did a little research to see their main investment was hiring cars out, I just didn't get it. How are they really going to do everything required to start mining iron ore in Australia?

Maybe it's just an 'investment' and they are waiting for someone else to offer something so they can sell out having pumped the price a little?

 

[grace]

I do have to question this Wa Nam mob. When I saw them come up on the register ages ago and did a little research to see their main investment was hiring cars out, I just didn't get it. How are they really going to do everything required to start mining iron ore in Australia?

Maybe it's just an 'investment' and they are waiting for someone else to offer something so they can sell out having pumped the price a little?

One of their main activities is investing in equities I thought, although I don't know too much about their transport business. They say they will list over here on the ASX if the takeover is successful (well that is in the fine print of FRS).

Like you, I think they are a short-term investor and have other motives. BRM's Managing Director Wayne Richards is the ex-chief of BHP's iron ore division (didn't he do well after BHP!).

It would really surprise me if this is the only 'activity' on BRM and FRS. FRS have other substancial shareholders other than Wah Nam. Can't see them agreeing to it. Well I hope not anyway.

This is a really bad time to receive a takeover offer for FRS as their PFS is just about to go out, and a new jorc upgrade any day (recent drills around that 60% Fe, sweet). I think FRS would have been re-rated after that in any case. BRM took off after PFS.

Anyway, fingers crossed for better times.

I think BRM is trading at about 60c per tonne at a guess, but this is average 40% Fe (a few costs there to upgrade). FRS at about 50c but at about 55%+ Fe (only minimal costs there, all DSO). BRM have their PFS and DFS, FRS are just about to. It is all a timing thing unfortunately.

 

[basilio]

Can you expand a little on this Bas? What do mean by a spoiler bid?

Are you thinking that someone like BHP would put in a bid with the sole purpose of making Wah Nam ultimately pay a higher price. Afterall if Wah Nam are to become a long term competitor of BHP, it would serve BHP's interests to hurt them as much as possible. And if Wah Nam didn't match or better BHP's price, BHP could always withdraw their offer if they were not serious about the takeover.

Certainly makes sense doesn't it ? In another field for example we saw Channel 9 put in a very big bid for AFL footy rights which effectively forced 7 and 10 to go that much higher. It is easily possible to pay too much for an asset and go broke in the process of developing it.

In industrial fields companies will pay a handsome price to buy out up and coming competitors to protect their margins. They might let the new company stay in business but it won't be a serious competitor any more.

The rise of competing iron ore sellers in Australia is not in BHP/RIO's interest unless they can come to some *agreement* about market share and prices with the other players

It would be very interesting to know more about Wah nams origins. For instance how closely is it associated with the Chinese government or steel companies ? From either of of those perspectives having a direct interest in Australian iron ore development would be immeasurably valuable.

 

[kpas]

BRM management rejected the bid today - so either WN have to come back with a higher (maybe cash) offer.

I consider their offer very serious considering the 500 odd pages of documentation that they prepared.

Quite speculatively I suspect WN will resubmit with cash and higher price, then BRM will be looking to put pressure on BHP for a Rail JV or suffer the consequence of a Chinese iron ore exported capable of pushing 50mpta with the current port infrastructure.

We all remember what happened to UMC (with a much lower iron ore contract price) - BRM has to be worth more then $6.50/share on that basis alone.

 

[shinobi346]

I hope wah nam fails on this and in getting FRS. I have no intention of holding shares in a limosine company and if in the event they succeed I will be cashing out my shares at the first chance. Having said this, I am glad wah nam has put in this offer because if BHP decides to come and play they will have no choice but to beat wah nams offer. And I would be surprised if BHP doesnt because their track is right there and resource at Milbarra continues into their land.

 

[TheAbyss]

I hope wah nam fails on this and in getting FRS. I have no intention of holding shares in a limosine company and if in the event they succeed I will be cashing out my shares at the first chance. Having said this, I am glad wah nam has put in this offer because if BHP decides to come and play they will have no choice but to beat wah nams offer. And I would be surprised if BHP doesnt because their track is right there and resource at Milbarra continues into their land.

Why would BHP buy BRM when they can earn a dollar (and maybe a % of the resource?) by renting out train and rail access to BRM without buying their resource? Same applies to AGO and FRS. Company making for BRM, AGO and FRS in that they are guaranteeing delivery to port for land locked assets but see no reason for BHP to buy them.

 

[kpas]

Why would BHP buy BRM when they can earn a dollar (and maybe a % of the resource?) by renting out train and rail access to BRM without buying their resource? Same applies to AGO and FRS. Company making for BRM, AGO and FRS in that they are guaranteeing delivery to port for land locked assets but see no reason for BHP to buy them.

Surely their motivation would be simply to maintain control over the duopoly that is iron ore in australia?

 

[shinobi346]

Why would BHP buy BRM when they can earn a dollar (and maybe a % of the resource?) by renting out train and rail access to BRM without buying their resource? Same applies to AGO and FRS. Company making for BRM, AGO and FRS in that they are guaranteeing delivery to port for land locked assets but see no reason for BHP to buy them.

I don't think BHP likes renting out rail and track.

With AGO, BHP has no choice since the ACCC forced them in the middle of the year to open up the Goldsworthy railway line to third parties.

With FRS, BHP is playing hardball and threatening to take them to court if they try to force BHP's hand in opening up their railway line so no, I dont think BHP is more interested in renting out train and track than buying new assets. I'm not too familiar with where AGO and FRS' tenements are located but I think BRM being right next to and sharing BHPs iron ore resource would make it very attractive to them. If BHP were to build a spur line deeper into BRM territory it wouldnt cost them all that much and when BHP finishes mining their existing ore they could keep on going into BRMs land, without having to set up another mine, get in the labour/equipment etc. so theres a lot of synergy BHP could have by buying BRM.

I think the recent potash and rio tinto business has been kept BHP very busy or at least distracted from the juniors. Now with those things out of the way I think BHP will be more focused on this pesky alliance that dares to duplicate/barge into their rail line.