Brockman welcomes Pilbara consolidation

Perth-based iron ore junior Brockman Resources says industry consolidation could benefit the development of its Marillana project in the Pilbara.

Borckman managing director Wayne Richards said the potential merger of Atlas Iron and FerrAus, both North West Infrastructure (NWI) members, could simplify the development port and rail infrastructure solutions for all companies involved.

"To this end, we are continuing negotiations with rail infrastructure providers in order to conclude a rail agreement to transport the Marillana ore to the port of Port Hedland," Mr Richards said.

"Additionally the NWI's port development studies in conjunction with dredging approvals, native title and heritage and leasing arrangements are being expeditiously progressed."

Brockman's major shareholder is Wah Nam International, the Hong Kong-based company that withdrew from the bidding for FerrAus after Atlas tabled its offer.

Mr Richards said Wah Nam had reaffirmed its support for the rapid development of the Marillana project.

Brockman is expecting Marillana to generate quality grade iron ore fines at 61 per cent ferrous at a production rate of 1.5 million to 20 million tonnes per year.

Mr Richards said the project had the potential to generate $2.4 billion in sales revenue per annum, making it one of the largest single-site projects in the Pilbara.

"With the most recent research on Brockman providing valuations significantly above current prices, and a recent share price high of $6.25, combined with a tight share register of only 145 million shares, it is not surprising that we could see significant value upside potential for our shareholders," Mr Richards said.

Brockman's stock was up 11.4 per cent on the news, closing trade today at $2.90.