Brockman Mining Limited — Interim / Quarterly Report 2016

Apr 28, 2016

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Incorporated in Bermuda with limited liability SEHK Stock Code: 159 ASX Stock Code: BCK

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— 2— QUARTERLY REPORT For the quarter ended 31 March 2016

QUARTERLY ACTIVITIES REPORT 31 March 2016

Table of Content

1.	HIGHLIGHTS.. ................................................................................................................................................ 3
2.	CORPORATE REVIEW............................................................................................................................4
3.	MARILLANA IRON ORE PROJECT .............................................................................................................. 4
4.	OPTHALMIA ....................................................................................................................................... 5
5.	TENEMENTS ....................................................................................................................................... 6
6.	DAMAJIANSHAN MINE ............................................................................................................................... 8
7.	CORPORATE PROFILE ................................................................................................................................. 9
8.	GLOSSARY ..................................................................................................................................... 10
9.	Appendix 5B ..................................................................................................................................... 11

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QUARTERLY ACTIVITIES REPORT 31 March 2016

1. HIGHLIGHTS

• Brockman has entered into a Heads of Agreement with Qube Bulk Pty Ltd to facilitate an infrastructure solution for an initial small scale (2.5Mtpa) mining operation at the Company’s 100% owned Marillana iron ore deposit (the Maverick Project).

 Brockman was successful in having the appeal by TPI against the original Supreme Court finding regarding the validity of Brockman’s Access Proposal dismissed. On 29 February 2016, the Court of Appeal handed down its decision upholding Edelman J’s decision of 26 September 2014, finding that the Access Proposal complied with the requirements of s8 of the Access Code. TPI’s appeal was wholly dismissed, with TPI ordered to pay Brockman’s costs of the appeal.  Revised mine planning studies at Marillana are demonstrating that reduced stripping ratios, haul distances and waste rehandle can all be achieved, whilst still maximising product yield in the first ten years of mine life.

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QUARTERLY ACTIVITIES REPORT 31 March 2016

2. CORPORATE REVIEW

Cash position

The consolidated cash position of the Group as at 31 March 2016 was HK$36 million.

Corporate

The Company has implemented significant cost saving measures to cope with the challenges brought about by the current iron ore price environment.

3. MARILLANA IRON ORE PROJECT

3.1 Marillana Development

Brockman has entered into a Non-Binding Heads of Agreement (‘HOA’) with Qube Bulk Pty Ltd (Qube) to facilitate an infrastructure solution for an initial small scale (2.5Mtpa) mining operation at the 100% owned Marillana iron ore deposit (the Maverick Project).

Subject to the completion of final feasibility studies and the receipt of any required approvals, Brockman and Qube will enter into a Logistics Service Agreement for the provision of logistics services for the transportation and export of Brockman’s product through the Utah Point Port Facility (‘UPF’) at Port Hedland for a minimum of five years. Qube is an integrated logistics services provider which provides bulk ore haulage services in the Pilbara and port services at the UPF.

The key enabler for this HOA has been the recent Western Australian State Government initiative in approving the use of performance based standard road trains on prescribed roads in the Pilbara (following a successful trial). These new road trains with increased payloads have provided significant cost savings in road haulage and result in fewer vehicle movements on the State’s roads. Qube is currently undertaking an approved trial to further increase vehicle payloads on designated routes in the Pilbara that have the potential to provide additional benefits to the Maverick Project.

The Maverick Project relates to a very small portion of the total mineralisation at Marillana and has been restricted to above water table material, optimised for the first five years of the project. The majority of mineralisation is sourced from the Rockhole Bore area, which has been subject to extensive pilot scale metallurgical test work.

The pit design involves the mining of 29.4Mt of ore and 8.9Mt of waste over the initial 5 year period, for a stripping ratio of 0.3:1. The ore will be beneficiated to produce 2.5Mtpa (wet) of final product grading between 60.5% Fe and 61.5% Fe, which will be trucked to the UPF at Port Hedland for loading onto ships. The estimated C1 FOB operating cost is US$35/t (based on a USD:AUD exchange rate of 0.70). Costs are based on contractor estimates for the construction and operation of the project.

Brockman is targeting Q1 calendar year 2017 for commencement of construction with commissioning late in calendar year 2017.

3.2 Marillana Infrastructure

The proposed development of the Maverick Project is an interim solution to establish Brockman and the high quality Marillana product in the market place. It will also be a major step forward in commercialising the infrastructure solution for the larger scale operations at Marillana (up to 20Mtpa). This development remains dependent on securing access to a rail infrastructure solution.

Rail

On 15 May 2013, Brockman submitted a proposal for access, under section 8(1) of the Railways (Access) Code 2000 (WA) (Code), to gain access to part of the below-rail infrastructure owned by The Pilbara Infrastructure (TPI) (Access Proposal). On 4 October 2013, TPI commenced legal proceedings in the Supreme Court of Western Australia challenging the validity of Brockman’s Access Proposal. On 26 September 2014, Edelman J determined that the Access Proposal was valid and complied with the requirements of section 8 of the

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QUARTERLY ACTIVITIES REPORT 31 March 2016

Code. TPI’s claim was wholly dismissed and TPI was ordered to pay Brockman’s costs of the proceedings.

Subsequently, TPI lodged an appeal in the Court of Appeal which was heard on 20 August 2015, by Buss JA, Murphy JA and Beech J. The Court of Appeal handed down its decision upholding Edelman J’s decision of 26 September 2014, finding that the Access Proposal was valid and complied with the requirements of section 8 of the Code. TPI’s appeal was wholly dismissed, and TPI was ordered to pay Brockman’s cost of appeal.

On 24 March 2016, TPI made an application for special leave to appeal the Court of Appeal’s judgment to the High Court of Australia. This is an interlocutory procedure which will determine whether TPI will be allowed to appeal to the High Court. Special leave will only be granted when an appeal is considered to meet certain criteria. The timeframes to progress a special leave application are short and specified, and the hearing usually takes place within a reasonably short time thereafter. Accordingly, a decision on whether TPI will be granted special leave to appeal to the High Court should be determined by late 2016. If TPI is successful in its application for special leave, then it will have its appeal heard by the High Court. If TPI is unsuccessful, it has no further avenue of appeal.

Port

Brockman, as a foundation member of the North West Infrastructure joint venture (NWI), has a potential port solution through NWI’s 50Mtpa export capacity conferral from the Western Australian State Government and the related potential port stock yards and berth locations (SP3 and SP4 in South West Creek in the Port Hedland inner harbour) set aside by the Pilbara Ports Authority. The NWI opportunity is reliant on securing a viable rail solution to connect potential users mines with the port.

Brockman remains focussed on protecting its foundation shareholding position in NWI and remains vigilant to the opportunity for other aspirant Pilbara based junior developers and miners to support the future port development.

4. OPTHALMIA

Following the completion of the positive sintering testwork programme by China Iron & Steel Research Institute Group (CISRI), Brockman has commissioned a value-in-use study to determine the likely pricing for the Sirius fines product.

Brockman is not surprised that TPI has pursued this course of action as it will further delay its obligation to negotiate with Brockman as required under the Code.

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QUARTERLY ACTIVITIES REPORT 31 March 2016

5. TENEMENTS

	**Tenements disposed **	**Tenements disposed **	**of during the **	**Quarter **
Project	Location	Tenement **type **	Tenement	Commodity	Status	Interest held
			number
	Tenements acquired during the Quarter
Project	Location	Tenement **type **	Tenement	Commodity	Status	Interest held
			**number **
Juna Downs	West Pilbara	E	47/3452	Iron Ore	Application	100%
Hamersley Downs	West Pilbara	E	47/3457	Iron Ore	Application	100%
Jeerinah Range	West Pilbara	E	47/3441	Iron Ore	Application	100%
Mt King	West Pilbara	E	47/3446	Iron Ore	Application	100%

	**Tenements held at end of Quarter **	**Tenements held at end of Quarter **	**Tenements held at end of Quarter **	**Tenements held at end of Quarter **
Project	Location	Tenement type	Tenement number	Commodity	Status	Interest held
DuckCreek	West Pilbara	E	47/1725	IronOre	Granted	100%
DuckCreek	West Pilbara	E	47/3151	IronOre	Granted	100%
DuckCreek	West Pilbara	E	47/3152	IronOre	Granted	100%
EaglePool North	West Pilbara	E	47/3418	IronOre	Application	100%
EnterpriseBore	West Pilbara	E	47/3452	IronOre	Application	100%
FigTree	East Pilbara	E	47/3025	IronOre	Application	100%
HamersleyRange	West Pilbara	E	47/3457	IronOre	Application	100%
InnawallyPool	West Pilbara	E	46/1087	IronOre	Application	100%
InnawallyPool	West Pilbara	E	52/3356	Iron Ore	Application	100%
Irwin Hills	Goldfields	L	39/0232	Nickel/ Cobalt	Application	40%
Irwin Hills	Goldfields	L	39/0163	Nickel/ Cobalt	Granted	40%
Irwin Hills	Goldfields	M	39/1088	Nickel/ Cobalt	Granted	40%
Jeerinah East	West Pilbara	E	47/3441	IronOre	Application	100%
JunaDowns	West Pilbara	E	47/3363	IronOre	Application	100%
JunaDowns	West Pilbara	E	47/3364	IronOre	Application	100%
MadalaBore	West Pilbara	E	47/3285	IronOre	Application	100%
Marandoo	West Pilbara	E	47/3105	IronOre	Granted	100%
Marillana	East Pilbara	L	45/0238	IronOre	Application	100%
Marillana	East Pilbara	M	47/1414	Iron Ore	Granted	100%
Marillana	East Pilbara	E	47/3170	IronOre	Application	100%
Mindy	West Pilbara	E	47/3310	IronOre	Application	100%
Mt Goldsworthy	North Pilbara	E	45/3931	Iron Ore	Granted	100%
MtGrant	East Pilbara	E	45/4496	IronOre	Application	100%
Mt King	West Pilbara	E	47/3446	IronOre	Application	100%
MtStuart	West Pilbara	E	47/1850	IronOre	Granted	100%
MtStuart	West Pilbara	E	47/2215	IronOre	Granted	100%
MtStuart	West Pilbara	E	47/2994	IronOre	Application	100%
Mt Truchanas	West Pilbara	E	47/3420	IronOre	Application	100%
Mt Truchanas	West Pilbara	E	47/3421	IronOre	Application	100%
Ophthalmia	East Pilbara	E	47/1598	IronOre	Granted	100%
Ophthalmia	East Pilbara	E	47/1599	IronOre	Granted	100%
Ophthalmia	East Pilbara	E	47/2280	IronOre	Granted	100%
Ophthalmia	East Pilbara	E	47/2291	IronOre	Granted	100%
Ophthalmia	East Pilbara	E	47/2594	IronOre	Granted	100%
Ophthalmia	East Pilbara	E	47/3323	Iron Ore	Application	100%

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QUARTERLY ACTIVITIES REPORT 31 March 2016

Project	Location	Tenement type	Tenement **number **	Commodity	Status	Interest held
Ophthalmia	East Pilbara	P	47/1715	IronOre	Granted	100%
PhilsBore	West Pilbara	E	47/2904	IronOre	Granted	100%
PhilsBore	West Pilbara	E	47/2905	IronOre	Application	100%
ParsonGeorge	East Pilbara	E	47/3217	IronOre	Granted	100%
Port Hedland	North Pilbara	L	45/0296	IronOre	Application	100%
Shovelanna	East Pilbara	E	46/0781	IronOre	Granted	100%
Tom Price	West Pilbara	E	47/2098	IronOre	Granted	100%
Tom Price	West Pilbara	E	47/2455	IronOre	Granted	100%
Tom Price	West Pilbara	E	47/2699	IronOre	Application	100%
Tom Price	West Pilbara	E	47/3216	IronOre	Application	100%
Tom Price	West Pilbara	E	47/1767	IronOre	Application	100%
West Hamersley	West Pilbara	E	47/1603	IronOre	Granted	100%
Windell Pool	West Pilbara	E	52/3381	IronOre	Application	100%

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QUARTERLY ACTIVITIES REPORT 31 March 2016

6. DAMAJIANSHAN MINE

The Company continued to review its mine plan under current market conditions to ensure that this product would maximise shareholders’ return in the long run. During the quarter, concerns about the growth of the Chinese economy continues to weigh on copper prices. After careful consideration, the Company put on halt the production under the current prolonged low copper price environment. The cash payments for exploration activities and development was zero (RMB3.8 million, December 2015 quarter).

During the quarter ended 30 March 2016, cash receipts from product sales of approximately RMB0.05 million (cash refund to customer at RMB0.24 million was recorded, December 2015 quarter).

Cash payments for production associated with mining operations during the quarter amounted to approximately RMB1.0 million (RMB1.1 million, December 2015 quarter).

	Mar’ 16	Dec’ 15
	Quarter	Quarter	Variance
			%
	(Tonnes)	(Tonnes)
Ore mined and delivered to stockpile	-	32,073	(100)
Ore processed	-	38,504	(100)
Concentrate produced (metal tonnes)	-	210	(100)
Concentrate sold (metal tonnes)	-	210	(100)

Note:

Recognition of copper concentrate metal tonnes is based on the most recent available information with a subsequent adjustment made upon final determination.

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QUARTERLY ACTIVITIES REPORT 31 March 2016

7. CORPORATE PROFILE

Brockman Mining Limited ARBN 143 211 867

Non-executive Directors:

Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard

Executive Directors:

Chan Kam Kwan Jason (Company Secretary) Kwai Kwun Lawrence Colin Paterson

Independent Non-executive Directors:

Uwe Henke Von Parpart Yap Henry Fat Suan Choi Yue Chun Eugene

Registrars

Principal Share Registrars and Transfer Office MUFG Fund Services (Bermuda) Limited The Belvedere Building 69 Pitts Bay Road Pembroke HM 08 Bermuda

Unquoted securities

153,200,000 unlisted options granted — 72,600,000 share options, expiring 20 May 2016 EX HK$0.717

— 72,600,000 share options, expiring 20 May 2016 EX HK$0.967

— 8,000,000 share options, expiring 18 January 2018 EX HK$0.45

There were no shares or options issued during the period.

The following Unlisted Employee share options lapsed during the period:

— 43,000,000 share options, expiring 14 January 2016 EX HK$0.717

— 43,000,000 share options, expiring 14 January 2016 EX HK$0.967

— 1,100,000 share options, expiring 28 February 2016 EX HK$0.717

— 1,100,000 share options, expiring 28 February 2016 EX HK$0.967

Branch Share Registrars and Transfer Office — Hong Kong

Tricor Secretaries Limited Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong

Branch Share Registrars and Transfer Office — Australia

Computershare Investor Services Pty Limited Reserve Bank Building Level 2, 45 St George’s Terrace Perth, Western Australia, 6000

Securities on issue at 31 March 2016 Quoted securities

8,381,982,131 fully paid shares on issue

By order of the Board of Directors of Brockman Mining Limited Chan Kam Kwan, Jason Company Secretary, Hong Kong

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QUARTERLY ACTIVITIES REPORT 31 March 2016

8. GLOSSARY

“ASX”	ASX Limited ABN 98 008 624 691
“Board”	the Board of Directors
“Brockman” or “Company”	Brockman Mining Limited ARBN 143 211 867, a company listed on the SEHK
	and ASX
“Damajianshan Mine”	The 100% owned copper mine held by the Company in the Yunnan Province,
	PRC
“Group”	Brockman Mining Limited, its associates and subsidiaries
“m”	Metre(s)
“Marillana Project”	The 100% owned Marillana iron ore project is Brockman’s flagship project
	located in the Hamersley Iron Province
“Mtpa”	million tonnes per annum
“NWI”	North West Infrastructure, the joint venture company which represents
	the interests of its three shareholder companies: Brockman Mining Australia
	Pty Ltd; Atlas Iron Limited and FerrAus Limited, to facilitate the construction of a port
	facility capable of annually exporting 50 million tonnes of iron ore from the
	South- West Creek location at the Inner Harbour at Port Hedland, Western
	Australia
“Ophthalmia Project”	The 100% owned Ophthalmia iron ore project is located 80 km south of
	the Marillana Project
“SEHK”	The Stock Exchange of Hong Kong Limited

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013

Name of entity

BROCKMAN MINING LIMITED

ABN Quarter ended (“current quarter”) ARBN 143 211 867 31 March 2016	ABN Quarter ended (“current quarter”) ARBN 143 211 867 31 March 2016
ARBN 143 211 867	31 March 2016

Consolidated statement of cash flows

Consolidated statement of cash flows
Cash flows related to operating activities	Current quarter HK$’000	Year to date (9 months) HK$’000
1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) (a) Net advance from/(repayment to) related parties (b) Refund to customer for over-prepayment	60 (2,015) — (1,154) (8,123) — 91 — — — 232 —	5,778 (17,540) — (8,081) (27,296) — 328 — — — 36 (290)
Net operating cash flows	(10,909)	(47,065)
Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) (a) Stamp duty tax payment on acquisition	— — (9) — 146 — — — (25,986)	— — (481) — 146 — — — (25,986)
Net investing cash flows	(25,849)	(26,321)

• See chapter 19 for defined terms.

Appendix 5B Page 11

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

1.13 Total operating and investing cash flows (carried forward)	(36,758)	(73,386)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) a) cash backed performance bond guarantee of BRM	— — 1,129 — — —	— — 11,234 — — 668
Net financing cash flows	1,129	11,902
Net decrease in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter	(35,629) 72,021 4	(61,484) 98,297 (417)
	36,396	36,396

Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities

1.23 Aggregate amount of payments to the parties included in item 1.2 1.24 Aggregate amount of loans to the parties included in item 1.10	Current quarter HK$’000
	1,540
	—

• 1.25 Explanation necessary for an understanding of the transactions

1.23 Being payment of executive directors’ salary and non-executive directors’ fees.

• See chapter 19 for defined terms. Appendix 5B Page 12

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Nil

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Nil

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1 Loan facilities 3.2 Credit standbyarrangements	Amount available HK$’000	Amount used HK$’000
	—	—
	—	—

Estimated cash outflows for next quarter

4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration	HK$’000
	(4,747)
	—
	—
	(6,483)
Total	(11,230)

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter HK$’000	Previous quarter HK$’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other(provide details)	17,004	15,391
	19,392	56,630
Total: cash at end ofquarter (item 1.22)	36,396	72,021

• See chapter 19 for defined terms.

Appendix 5B Page 13

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Changes in interests in mining tenements and petroleum tenements

6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased	Tenement reference and location E47/3452 E47/3457 E47/3441 E47/3446	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter 100% 100% 100% 100%
		Application lodged Application lodged Application lodged Application lodged	0% 0% 0% 0%

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	8,381,982,131	8,381,982,131

• See chapter 19 for defined terms.

Appendix 5B Page 14

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

7.5 +Convertible debt securities(description)
7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	145,200,000 8,000,000		Exercise price HK$0.717-HK$0.967 HK$0.45	Expiry date 20 May 2016 18 January 2018
	86,000,000 2,200,000		HK$0.717-HK$0.967 HK$0.717-HK$0.967	14 January 2016 28 February 2016
7.11Debentures (totals only)
7.12Unsecured notes (totals only)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).

• 2 This statement does / ~~does not* (delete one)~~ give a true and fair view of the matters disclosed.

Sign here: Date: 29 April 2016 (Company secretary) Print name: Chan Kam Kwan, Jason

• See chapter 19 for defined terms.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Notes

• 1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.

• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107 : Statement of Cash Flows apply to this report.

• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

Appendix 5B Page 16

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