Brockman Mining Limited

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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 Mar 2018

QUARTERLY ACTIVITIES REPORT 31 March 2018

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1.	HIGHLIGHTS ................................................................................................................... 3
2.	MARILLANA IRON ORE PROJECT................................................................................................... 4
3.	CORPORATE REVIEW……………………………………………………………………….4
4.	TENEMENTS .................................................................................................................... 6
5.	CORPORATE PROFILE ................................................................................................... 7
6.	GLOSSARY…………………………………………………………………………………...8
7.	APPENDIX 5B………………..…………..…………………..…………...………………….9

QUARTERLY ACTIVITIES REPORT 31 March 2018

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1. HIGHLIGHTS

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On 6 December 2017, the Company entered into two Subscription Agreements pursuant to which the Company agreed to issue and the Subscribers agreed to subscribe for an aggregate of 130,000,000 shares at an aggregate consideration of HK$13,000,000. In addition the Company entered into a Subscription Agreement with Ocean Line Holdings Limited(“Ocean Line”), the single largest shareholder of the Company, whereby Ocean Line agreed to subscribe for 650,000,000 shares for an aggregate consideration of HK$65,000,000. The Ocean Line consideration will be settled by a combination of cash and offset of existing loans and accrued interest payable to Ocean Line.
The Special General Meeting is scheduled on Friday, 27 April 2018 in Hong Kong for independent shareholders to consider and approve the Subscription Agreements.
On 17 November 2017, Brockman executed a termsheet with BBI Group Pty Ltd (‘BBIG’) for Marillana Farm-in and Join Venture and Ophthalmia Pre-emptive Right (the ‘Term Sheet’). Pursuant to the cooperation arrangements with BBIG, which are contemplated by the Term Sheet and to be formalised by executed Transaction Documents, Brockman and BBIG intend to investigate production capacity of around 30 to 40Mtpa from Marillana to be commensurate with BBIG’s future rail and port infrastructure (as Marillana’s transport and logistics solution).
• Presently BBIG and the Company is progressing the discussions and drafting of the Transaction Documents.
Work continued with PCF Capital Group to assess the expressions of interest received from parties in relation to divestment of the Company’s interest in the Irwin Hills – Coglia Well lateritic Ni-Co deposit.

QUARTERLY ACTIVITIES REPORT 31 March 2018

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2. MARILLANA IRON ORE PROJECT

2.1 Marillana Development

The Company and BBIG executed a Term Sheet in relation to a Proposed Transaction whereby, subject to execution of the Transaction Documents. BBIG will undertake to prepare a definitive feasibility study (‘DFS’) in respect of the construction and development of the Marillana Project, following which if determined to be feasible, the parties would establish a Joint Venture to carry out the development of the Marillana Project.

The Proposed Transaction offers a means to unlocking the value of Brockman’s iron ore assets, which relies on securing a rail and port infrastructure solution and funding. BBIG is developing the Balla Balla Infrastructure project (‘BBI Infrastructure’), a rail and port project, which when constructed will comprise an integrated port and rail infrastructure system that will provide a new gateway to the iron ore rich Pilbara region in Western Australia.

The Proposed Transaction represents an opportunity for Brockman to partner with BBIG to develop the Marillana Project, which shall utilise the rail and port infrastructure under the BBI Infrastructure and at the same time secure funding to develop the Marillana Project.

The Proposed Transaction

Under the Proposed Transaction, BBIG will undertake to prepare a DFS in respect of the construction and development of the Marillana project within 3 years from satisfaction of the Conditions Precedent.

BBIG will fund the costs of preparing the DFS up to an aggregate amount of A$10 million. Any further costs exceeding such threshold will be borne by the Company and BBIG as at 50% each.

The DFS will be of a standard that would be sufficient to support a project financing by a major international bank and be based on the assumption that the Marillana Project will utilise the BBI Infrastructure.

Within 2 years from the completion of the DFS, BBIG may notify the Company of its intention to

make Financial Investment Decision (‘FID’) in relation to the development of the Marillana Project (‘FID Proposal’), which must satisfy certain criterion (refer to the ASX announcement 20 November 2017).

By issuing the FID Proposal, BBIG would have confirmed its commitment to fund 75% of the equity component and completion support for the Marillana Project (‘BBIG Commitment’) (refer to page 3 ASX announcement 20 November 2017).

Conditions Precedent

The transaction documents are subject to the satisfaction or waiver of the following Conditions Precedent: (i) any required regulatory approvals, including FIRB;

(ii) any board or shareholder approvals of the Company and BBIG (if necessary); and
(iii) the conduct of due diligence by, and satisfactory to, BBIG in respect of the Marillana Project.

3. CORPORATE REVIEW

Cash position

The consolidated cash position of the Group as at 31 March 2018 was HK$10.9 million.

There were no mining operations carried during the quarter, the payment of production expense was mainly for the settlement of other payables in the previous periods.

On 6 December 2017, the Company entered into a Subscription Agreement with Ocean Lines Holdings Limited, the major shareholder of the Company, whereby Ocean Line agreed to subscribe for 650,000,000 shares for an aggregate consideration of HK$65,000,000. The Ocean Line consideration will be settled by cash and offset of existing loans and accrued interest payable to Ocean Line.

Additionally, the Company entered into two other Subscription Agreements pursuant to which the Company agreed to issue and the Subscribers agreed to subscribe for an

QUARTERLY ACTIVITIES REPORT 31 March 2018

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aggregate of 130,000,000 shares for an aggregate consideration of HK$13,000,000.

Subsequent to the end of the quarter, the Company has issued a circular (including letters of advice from the independent financial advisor and the Independent Board Committee in relation to the Ocean Line Subscription), setting out the details of the Subscriptions. A Special General Meeting is scheduled for Friday, 27 April 2018 in Hong Kong for independent shareholders to consider and approve the Subscription Agreement.

On 28 March 2018, the Company received a loan of HK$6 million granted from an individual shareholder which is unsecured, bears interest at 12% per annum and is repayable on 30 October 2018.

Work continued with PCF Capital Group to assess the expressions of interest received from parties in relation to divestment of the Company’s interest in the Irwin Hills – Coglia Well lateritic Ni-Co deposit.

QUARTERLY ACTIVITIES REPORT 31 March 2018

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4. TENEMENTS

	Tenements disposed ofduringthe Quarter	Tenements disposed ofduringthe Quarter	Tenements disposed ofduringthe Quarter	Tenements disposed ofduringthe Quarter	Tenements disposed ofduringthe Quarter		Interest held Interest held Interest held 100% 100% 100% 100% 100% 100% 100% 40% 40% 40% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Project	Location	Tenement type	Tenement		Commodity	Status	Interest held
			number

	Tenements acquired duringthe Quarter
Project	Location	Tenement type	Tenement		Commodity	Status	Interest held
			number

	Tenementsheld atend of			Quarter
Project	Location	Tenement type	Tenement number	Commodity		Status	Interest held
Coolawanyah	West Pilbara	E	47/3491	Iron Ore		Granted	100%
Duck Creek	West Pilbara	E	47/1725	Iron Ore		Granted	100%
Duck Creek	West Pilbara	E	47/3152	Iron Ore		Granted	100%
Duck Creek East	West Pilbara	E	47/2215	Iron Ore		Granted	100%
Duck Creek East	West Pilbara	E	47/2994	Iron Ore		Granted	100%
Fig Tree	East Pilbara	E	47/3025	Iron Ore		Granted	100%
Innawally Pool	West Pilbara	E	46/1087	Iron Ore		Granted	100%
Irwin Hills	Goldfields	L	39/0232	Nickel/Cobalt		Granted	40%
Irwin Hills	Goldfields	L	39/0163	Nickel/Cobalt		Granted	40%
Irwin Hills	Goldfields	M	39/1088	Nickel/Cobalt		Granted	40%
Juna Downs	West Pilbara	E	47/3363	Iron Ore		Granted	100%
Juna Downs	West Pilbara	E	47/3364	Iron Ore		Granted	100%
Madala Bore	West Pilbara	E	47/3285	Iron Ore		Granted	100%
Marandoo	West Pilbara	E	47/3105	Iron Ore		Granted	100%
Marillana	East Pilbara	L	45/0238	Iron Ore		Application	100%
Marillana	East Pilbara	M	47/1414	Iron Ore		Granted	100%
Marillana	East Pilbara	E	47/3170	Iron Ore		Application	100%
Marillana	East Pilbara	E	47/3532	Iron Ore		Application	100%
Mindy	West Pilbara	E	47/3585	Iron Ore		Application	100%
Mt Grant	East Pilbara	E	45/4496	Iron Ore		Granted	100%
Mt King	West Pilbara	E	47/3446	Iron Ore		Application	100%
Ophthalmia	East Pilbara	E	47/1598	IronOre		Granted	100%
Ophthalmia	East Pilbara	E	47/2280	Iron Ore		Granted	100%
Ophthalmia	East Pilbara	E	47/2291	Iron Ore		Granted	100%
Ophthalmia	East Pilbara	E	47/3549	Iron Ore		Granted	100%
Ophthalmia	East Pilbara	R	47/0013	Iron Ore		Granted	100%
Ophthalmia	East Pilbara	R	47/0015	Iron Ore		Granted	100%
Ophthalmia	East Pilbara	R	47/0016	Iron Ore		Granted	100%
Parson George	East Pilbara	E	47/3217	Iron Ore		Granted	100%
Phils Bore	West Pilbara	E	47/2905	Iron Ore		Application	100%
Punda Springs	West Pilbara	E	47/3575	Iron Ore		Application	100%
Tom Price	West Pilbara	E	47/3565	Iron Ore		Granted	100%

QUARTERLY ACTIVITIES REPORT 31 March 2018

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5. 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

Securities on issue at 31 Mar 2018 Quoted securities

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

Unquoted securities

65,000,000 unlisted options granted — 62,000,000 share options, expiring 31 December 2020 EX HK$0.124

— 3,000,000 share options, expiring 31 December 2020 EX HK$0.162

There were no shares and share option issued during the period.

Registrars

Principal Share Registrars and Transfer Office

MUFG Fund Services (Bermuda) Limited The Belvedere Building 69 Pitts Bay Road Pembroke HM 08 Bermuda

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

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

QUARTERLY ACTIVITIES REPORT 31 March 2018

6. 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
“Group”	Brockman Mining Limited, its associates and subsidiaries
“Marillana Project”	The 100% owned Marillana iron ore project is Brockman’s flagship project
	located in the Hamersley Iron Province
“SEHK”	The Stock Exchange of Hong Kong Limited

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

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, 01/05/13, 01/09/16

Name of entity

ABN Quarter ended (“current quarter”) ARBN 143 211 867 31 MARCH 2018

Consolidated statement of cash flows	Current quarter HK$’000	Year to date (9 months) HK$’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (provide details if material) (a) Advanced from related party	— (648) — (28) (3,994) (1,720) — 8 — — — —	— (4,488) — (143) (15,434) (8,176) — 24 — — — —
1.9 Net cash from / (used in) operating activities	(6,382)	(28,217)

See chapter 19 for defined terms. 1 September 2016

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

Consolidated statement of cash flows	Current quarter HK$’000	Year to date (9 months) HK$’000
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material)	(128) — — — 3,119 — — — — — —	(128) — — — 3,195 — — — — — —
2.6 Net cash from / (used in) investing activities	2,991	3,067

3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) - Performance bond cash backing	— — — — 6,062 — — — (279)	— — — — 12,320 — — — (279)
3.10 Net cash from / (used in) financing activities	5,783	12,041

See chapter 19 for defined terms. 1 September 2016

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

Consolidated statement of cash flows	Current quarter HK$’000	Year to date (9 months) HK$’000
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held	8,616 (6,382) 2,991 5,783 (60)	23,995 (28,217) 3,067 12,041 62
4.6 Cash and cash equivalents at end of period	10,948	10,948

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter HK$’000	Previous quarter HK$’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details)	10,948 — — —	8,616 — — —
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	10,948	8,616

6. Payments to directors of the entity and their associates	Current quarter HK$'000
6.1 Aggregate amount of payments to these parties included in item 1.2	1,616
6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3	—
6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2 6.1 Being payment of executive directors’ salary and non-executive directors’ fees.

See chapter 19 for defined terms. 1 September 2016

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

7. Payments to related entities of the entity and their associates	Current quarter HK$'000
7.1 Aggregate amount of payments to these parties included in item 1.2	—
7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3	—
7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

8. Financing facilities available Add notes as necessary for an understanding of the position	Total facility amount at quarter end HK$’000	Amount drawn at quarter end HK$’000
8.1 Loan facilities	(A)39,793 (B) 5,000 (C) 6,000	(A) 39,793 (B) 5,000 (C) 6,000
8.2 Credit standby arrangements	120,000	—
8.3 Other (please specify)	—	—
8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well. 8.1 (A-B) Two loans were granted by a substantial shareholder (Ocean Line Holdings Ltd) and is unsecured, bears interest of 12% per annum and is repayable on 30 April 2019. (C)Such loan is also grantedby a substantial shareholder (Ocean Line Holdings Ltd). The loan is unsecured, bears interest of 12% per annum and is repayable on 30 Oct 2018. 8.2 On 21 September 2016, a shareholder has undertaken to grant a loan facility of up to HK$60,000,000 to the Company, which was subsequently increased to HKD120,000,000 on 21 February 2018, of which HK$85,000,000 can only be drawn down for purposed of financial the payment to settle liabilities in respect of the mine in the PRC when necessary. The remaining portion of the loan facility of HK$35,000,000 will be automatically cancelled upon the completion of the Share Placement. Such loan will be unsecured and bear interest of 15% per annum. The last draw down date and repayment date is 30 April 2019.

See chapter 19 for defined terms. 1 September 2016

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

9. Estimated cash outflows for next quarter	HK$’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other (provide details if material)	(603) — — (3,877) (2,138) —
9.7 Total estimated cash outflows	(6,618)

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced
10.2 Interests in mining tenements and petroleum tenements acquired or increased

Compliance statement

1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters disclosed.

Sign here: (Company secretary) Print name: Chan Kam Kwan, Jason

Date: 27 April 2018

Notes

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 that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.
If this quarterly report has been prepared in accordance with Australian Accounting Standards, 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. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the
See chapter 19 for defined terms. 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

corresponding equivalent standards apply to this report.

Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.
See chapter 19 for defined terms. 1 September 2016

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AI assistant

Brockman Mining Limited Interim / Quarterly Report 2018

48994_rns_2018-04-29_7c6df68f-a06a-4d35-b240-9592b07714fe.pdf

— 2— QUARTERLY REPORT For the quarter ended 31 Mar 2018

Table of Contents

1. HIGHLIGHTS

2. MARILLANA IRON ORE PROJECT

2.1 Marillana Development

The Proposed Transaction

Conditions Precedent

3. CORPORATE REVIEW

Cash position

4. TENEMENTS

5. CORPORATE PROFILE

Securities on issue at 31 Mar 2018 Quoted securities

Unquoted securities

Registrars

Principal Share Registrars and Transfer Office

Branch Share Registrars and Transfer

Office —Hong Kong

Branch Share Registrars and Transfer

6. GLOSSARY

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