Brockman Mining Limited — M&A Activity 2010

Dec 15, 2010

==> picture [123 x 104] intentionally omitted <==

This is an important document and requires your immediate attention. If you are in any doubt about how to deal with this document, you should contact your broker, financial adviser or legal adviser immediately.

Brockman Resources Limited (ABN 73 009 372 150)

Target’s Statement

The directors of Brockman Resources Limited unanimously recommend you REJECT the takeover offer from Wah Nam International Australia Pty Ltd

This Target’s Statement has been issued in response to the off market takeover bid made by Wah Nam International Australia Pty Ltd (ACN 134 696 727) a wholly owned subsidiary of Wah Nam International Holdings Limited (ARBN 143 211 867), a company incorporated in Bermuda for all the ordinary shares in Brockman Resources Limited.

LEGAL ADVISOR

FINANCIAL ADVISOR

Important Notices

Nature of this document

This document is a Target’s Statement issued by Brockman Resources Limited (ABN 73 009 372 150) under Part 6.5 Division 3 of the Corporations Act in response to the off-market takeover bid made by Wah Nam International Australia Pty Ltd (ACN 134 696 727), a wholly-owned subsidiary of Wah Nam International Holdings Limited (ARBN 143 211 867), a company incorporated in Bermuda and listed on The Stock Exchange of Hong Kong, for all the ordinary shares in Brockman not already held by Wah Nam.

A copy of this Target’s Statement was lodged with ASIC and given to ASX on 16 December 2010. Neither ASIC nor ASX nor any of their respective officers take any responsibility for the content of this Target’s Statement.

Key dates

==> picture [468 x 68] intentionally omitted <==

----- Start of picture text -----

Date of Wah Nam’s Offer 15 December 2010
Date of this Target’s Statement 16 December 2010
Close of Wah Nam’s Offer Period 4:00pm Western Standard Time (WST) on 17 January 2011
(unless extended or withdrawn)
----- End of picture text -----

BrocKmaN shareholder iNformatioN

Brockman has established a shareholder information line which Brockman shareholders may call if they have any queries in relation to Wah Nam’s Offer. The telephone number for the shareholder information line is 1300 134 857 (for calls made from within Australia) or (03) 9415 4216 (for calls made from outside Australia).

Further information relating to Wah Nam’s Offer can be obtained from Brockman’s website at brockman.com.au.

defined terms

A number of defined terms are used in this Target’s Statement. These terms are explained in section 9 of this Target’s Statement. In addition, unless the contrary intention appears or the context requires otherwise, words and phrases used in the Corporations Act have the same meaning and interpretation as in the Corporations Act.

No account of personal circumstances

This Target’s Statement does not take into account your individual objectives, financial situation or particular needs. It does not contain personal advice. Your directors encourage you to seek independent financial and taxation advice before making a decision as to whether or not to accept the Offer.

disclaimer as to forward looking statements

Some of the statements appearing in this Target’s Statement may be in the nature of forward looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the industry in which Brockman operates as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement. None of Brockman, Brockman’s officers and employees, any persons named in this Target’s Statement with their consent or any person involved in the preparation of this Target’s Statement, makes any representation or warranty (express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement, except to the extent required by law. You are cautioned not to place undue reliance on any forward looking statement. The forward looking statements in this Target’s Statement reflect views held only as at the date of this Target’s Statement.

1

BROCKMAN RESOURCES Target’s Statement

Important Notices

disclaimer as to information

The information on Wah Nam, Wah Nam Australia, Wah Nam Group and Wah Nam’s securities contained in this Target’s Statement has been prepared by Brockman using publicly available information. The information in this Target’s Statement concerning Wah Nam, Wah Nam Australia and Wah Nam Group and the companies’ assets and liabilities, financial position and performance, profits and losses and prospects, has not been independently verified by Brockman. Accordingly Brockman does not, subject to the Corporations Act, make any representation or warranty, express or implied, as to the accuracy or completeness of such information.

foreign jurisdictions

The release, publication or distribution of this Target’s Statement in jurisdictions other than Australia may be restricted by law or regulation in such other jurisdictions and persons who come into possession of it should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable laws or regulations. This Target’s Statement has been prepared in accordance with Australian law and the information contained in this Target’s Statement may not be the same as that which would have been disclosed if this Target’s Statement had been prepared in accordance with the laws and regulations outside Australia.

foreign currency

Unless otherwise stated, the exchange rate used in this Target’s Statement for the conversion of HK$ to A$ is HK$7.7928:A$1, being the exchange rate at 11.30pm Western Standard Time on 10 November 2010, the Announcement Date.

maps and diagrams

Any diagrams, charts, maps, graphs and tables appearing in this Target’s Statement are illustrative only and may not be drawn to scale. Unless stated otherwise, all data contained in diagrams, charts, maps, graphs and tables is based on information available at the date of this Target’s Statement.

Privacy

Brockman has collected your information from the Brockman register of shareholders and option holders for the purpose of providing you with this Target’s Statement. The type of information Brockman has collected about you includes your name, contact details and information on your shareholding or option holding (as applicable) in Brockman. Without this information, Brockman would be hindered in its ability to issue this Target’s Statement. The Corporations Act requires the name and address of shareholders and option holders to be held in a public register. Your information may be disclosed on a confidential basis to Brockman’s related bodies corporate and external service providers (such as the share registry of Brockman and print and mail service providers) and may be required to be disclosed to regulators such as ASIC. If you would like details of information about your holdings held by Brockman, please contact Computershare Investor Services Pty Limited by post at GPO Box 242, Melbourne, Victoria, 3001, or by telephone on 1300 850 505 (for calls within Australia) and (03) 9415 4000 (for international calls). Brockman’s privacy policy is available at brockman.com.au. The registered address of Brockman is Level 1, 117 Stirling Highway, Nedlands, Western Australia, 6009.

2 BROCKMAN RESOURCES Target’s Statement

16 December 2010

==> picture [103 x 86] intentionally omitted <==

Dear Shareholders

reJect Wah Nam’s UNsolicited, UNcertaiN aNd hiGhly coNditioNal taKeoVer offer for BrocKmaN

Wah Nam, a Hong Kong based investment holding company which is Brockman’s major shareholder, has made an unsolicited and highly conditional offer to acquire your Brockman Shares on the basis of 30 Wah Nam Shares for every one Brockman Share you own.

after careful consideration of the Wah Nam offer, your directors unanimously recommend that you reJect the Wah Nam offer for the following key reasons:

• (i) Brockman has serious concerns over the underlying value and liquidity of Wah Nam shares: The underlying value of Wah Nam Shares is unsubstantiated and may be significantly less than the implied value of A$6.47 indicated in Wah Nam’s Bidder’s Statement. The implied Offer premiums can only be realised by Brockman Shareholders if there is sufficient liquidity in Wah Nam Shares after the Offer;

• (ii) Wah Nam’s bid is uncertain, highly conditional and does not tell Brockman shareholders the full story: The Offer is subject to 13 conditions and there is no guarantee Wah Nam will be able to acquire 100% of both Brockman and FerrAus. At the request of Brockman, Wah Nam has issued a replacement bidder’s statement that includes a range of disclosures in addition to those Wah Nam made in its original bidder’s statement. However, in Brockman’s view, there are still a number of matters regarding Wah Nam’s Offer that Brockman Shareholders should be aware of that are not clear from Wah Nam’s replacement bidder’s statement; and

• (iii) Brockman does not need Wah Nam: Brockman has created significant value for Brockman Shareholders over the past two years and has clearly articulated its plan to bring the Marillana Iron Ore Project into production. This includes completion of a high-quality Definitive Feasibility Study, the commencement of front end engineering and design and advanced negotiations underway in relation to rail and port infrastructure. Brockman does not need Wah Nam to bring the Marillana Project into production or to fund its development. Brockman does not need Wah Nam to gain access to Hong Kong investors.

A full discussion of each of these key reasons is set out in section 1 of this Target’s Statement. I urge you to read that section and the rest of this document in its entirety.

to reJect the Wah Nam offer, simply do nothing and disregard all documents that you receive from Wah Nam.

The Board of Brockman appreciates your support to date and we look forward to your continued support as we move ahead with the development of a world-class iron ore project at Marillana. Marillana already has a published 1.05 billion tonne hematite Ore Reserve in the Pilbara region and we are confident that our development plans will see this project transform Brockman into one of the largest emerging iron ore companies in Australia outside of the majors, with annual production of 17-20 Mtpa.

Level 1, 117 Stirling Highway Nedlands WA 6009 PO Box 141 Nedlands WA 6909 Address +61 8 9389 3000 +61 8 9389 3033 Tel Fax brockman@brockman.com.au Email brockman.com.au Web 73 009 372 150 ABN

3

BROCKMAN RESOURCES Target’s Statement

==> picture [103 x 86] intentionally omitted <==

As a result of the work undertaken by Brockman over the past three years, development of the Marillana Project is well advanced towards bankable feasibility and your Board is confident that this asset, together with our other promising Pilbara iron ore projects, will deliver you value and healthy returns on your investment. This Target’s Statement contains the formal response of the Brockman Board to the Wah Nam Offer. I encourage you to read all information contained in this Target’s Statement carefully and to seek independent advice.

If you have any queries in relation to the Wah Nam Offer, you can call 1300 134 857 (for calls made from inside Australia) or (03) 9415 4216 (for calls made from outside Australia). We will also post updates on our website at brockman.com.au.

Yours sincerely

==> picture [116 x 48] intentionally omitted <==

Barry Cusack chairman Brockman Resources Limited

Level 1, 117 Stirling Highway Nedlands WA 6009 PO Box 141 Nedlands WA 6909 Address +61 8 9389 3000 +61 8 9389 3033 Tel Fax brockman@brockman.com.au Email brockman.com.au Web 73 009 372 150 ABN

4

BROCKMAN RESOURCES Target’s Statement

Contents of this Target’s Statement

sectioN	title	PaGe
1	Why you should REJECT the Offer	7
2	Profle of Brockman	25
3	Frequently asked questions	33
4	Brockman Directors’ recommendations	37
5	Your choices as a Brockman Shareholder	39
6	Information about Wah Nam and key features of Wah Nam’s Offer	41
7	Information relating to your Directors	53
8	Additional information	57
9	Glossary and interpretation	63
10	Authorisation	67

5

BROCKMAN RESOURCES Target’s Statement

This page was left blank intentionally

6

BROCKMAN RESOURCES Target’s Statement

1. Why you should REJECT the Offer

Why you should REJECT the Offer

Why you should reJect Wah Nam’s offer …

Brockman has concerns over the underlying value and liquidity of Wah Nam shares

• the underlying value of the Wah Nam shares being offered in exchange for your Brockman shares is unsubstantiated and we consider could be significantly less than the implied value

• 1 of a$6.47 shown in Wah Nam’s Bidder’s statement

2 sufficient liquidity in Wah Nam shares after the offerthe implied offer premiums will only be captured by Brockman shareholders if there is

Wah Nam’s bid is uncertain, highly conditional and does not tell you the full story

• 3 Wah Nam’s offer is subject to 13 conditions including Wah Nam shareholder approval for any improvement to the offer and asX listing approval

• Wah Nam’s strategy depends on it acquiring both a minimum of 50% of Brockman and greater than 90% of ferraus to form the Wah Nam-Brockman-ferraus Group and there is no

• 4 guarantee that it will be able to do so. even if it does, Wah Nam has not demonstrated that by combining Brockman and ferraus it will be able to achieve an end-to-end solution

• 5 including tax, funding and the potential outcomes of the offerWah Nam’s Bidder’s statement does not tell you the full story in relation to certain matters

Brockman does not need Wah Nam

• Brockman does not need Wah Nam to develop marillana and has a clearly articulated plan to

• 6 bring marillana into production, and is in advanced negotiations on infrastructure

• Wah Nam’s expertise does not appear to add value for Brockman shareholders

• 7

• Brockman does not need Wah Nam to fund marillana

• 8

9

• Brockman does not need Wah Nam to gain access to hong Kong investors

10

• Brockman has added significant value for shareholders over the past two years and will continue to deliver enhanced value without Wah Nam

doN’t sUrreNder yoUr BrocKmaN shares at this imPlied Price

8

BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

the underlying value of the Wah Nam shares being offered in exchange for your Brockman shares is unsubstantiated and we consider could be significantly less than the implied value of a$6.47 shown in Wah Nam’s Bidder’s statement ~~1~~ Wah Nam is offering 30 Wah Nam Shares for every 1 Brockman Share. This implies a value of approximately A$6.47 per Brockman Share, based on the two day VWAP of Wah Nam Shares up until 9 November 2010 converted to A$ from HK$.

Although this appears to be a 36% premium to the Brockman Share price immediately prior to the announcement of the Offer of A$4.74, this value will only be captured by Brockman shareholders where the underlying value in Wah Nam’s business supports the trading value of its shares which are being offered as consideration for your Brockman shares . If that is not the case, it may result in a lower value (than the pre-bid price of A$4.74) being ascribed to Wah Nam Shares once they begin trading after the Offer closes.

Wah Nam has not provided adequate information in the Bidder’s Statement to allow Brockman Shareholders to make a fully informed assessment of the underlying value of Wah Nam’s key business units. Brockman has concerns over the apparent differential between the trading value of Wah Nam’s shares and the value attributable to Wah Nam’s assets. In other words, the fundamentals of Wah Nam’s business do not appear to justify the value at which Wah Nam’s shares are trading on the Hong Kong Stock Exchange and Wah Nam’s market capitalisation.

The following table shows each business unit and the adequacy of disclosure in the Bidder’s Statement in relation to underlying value.

figure 1

==> picture [469 x 333] intentionally omitted <==

----- Start of picture text -----

sufficient
disclosure
Business unit description in Bidder’s comments
statement to
assess value
minedamajianshan Contains copper, zinc and lead metals and 7 • No future production plans presented to allow a meaningful valuation
located in the People’s
• No formal mining conducted in 2008 and
Republic of China
2009 and the mine is not currently operating
(PRC)
profitably
• The impaired accounting fair value shown in
Wah Nam’s Interim Report has been used as a
valuation proxy
limousine / shuttle Limousine and Airport Shuttle services in 7 • Inadequate detail on strategy, intentions and contracts has been presented to perform a
services Hong Kong and the meaningful valuation
PRC
• Current profits are low
• The impaired accounting fair value shown in
Wah Nam’s Interim Report has been used as a
valuation proxy
investments The equity stakes in 3 • Able to be valued at the market price of
Brockman and FerrAus Brockman and FerrAus shares
----- End of picture text -----

9

BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

Wah Nam has an equity market value of A$843 million. Assuming the Brockman and FerrAus stakes held by Wah Nam are valued at the pre-Offer trading price of A$188 million and the Damajianshan base metals business and limousine and shuttle businesses are valued at their 30 June 2010 fair values of A$114 million and A$17 million respectively, a large percentage (61%) and value (A$514 million) of the implied consideration you would be receiving for your Brockman Shares is unsubstantiated. Refer to the notes under Figure 2 for details of the calculation of these values.

Inadequate disclosure in the Bidder’s Statement about Wah Nam’s business units makes it difficult to perform meaningful valuation analysis. This unsubstantiated value is depicted in Figure 2.

figure 2

Wah Nam valuation build-up [8]

==> picture [469 x 295] intentionally omitted <==

----- Start of picture text -----

$7.00 7
$3.95 $6.47
$6.00
$5.00
?
$4.00
$3.00 $0.08 $2.52
$0.87 $0.12
$2.00
$0.27
$1.18
$1.00
$0.00
Equity value (A$ million) A$153 1 A$35 2 A$114 3 A$17 4 A$10 5 A$329 A$514 A$843 6
Offer value (A$/share)
Net cash
Brockman (23% stake) FerrAus (19% stake) shuttle business Known value value gap scrip
Damajianshan Limousine and Unsubstantiated Implied value of
----- End of picture text -----

Notes:

1. Brockman stake value calculated as Wah Nam holding in Brockman as at 10 November 2010 of 32,347,405 shares multiplied by the undisturbed share price as at 10 November 2010 close of A$4.74.

2. FerrAus stake value calculated as Wah Nam holding in FerrAus as at 10 November 2010 of 40,934,400 shares multiplied by the undisturbed share price as at 10 November 2010 close of A$0.86.

3. Damajianshan mine value calculated as Wah Nam 30 June 2010 Interim Report’s fair value of the asset of HK$885 million.

1. Limousine and shuttle business value based on the Wah Nam Annual Financial Statements for the interim period ended 30 June 2010 which included an impairment to fair value for the limousine and airport shuttle businesses to HK$130 million or A$17 million.

1. Net cash value of HK$77.2 calculated as the Wah Nam 30 June 2010 Interim Report’s cash balance of HK$124m, less bank borrowings of HK$43 million and obligations under finance leases of HK$3.8m. Wah Nam is proposing to raise approximately A$100 million at a price of no less than HK$1.30 (A$0.17) per share.

2. Wah Nam’s equity value of A$843 million calculated using Wah Nam’s 2 day VWAP up to and including 9 November 2010 of A$6.47 multiplied by total number of Wah Nam shares outstanding as at 10 November 2010.

3. Implied Offer Value of A$6.47 based on Wah Nam’s 2 day VWAP (converted from HK$ to A$) up to and including 9 November 2010 (as shown in Wah Nam’s Bidder’s Statement).

4. Valuation build-up chart excludes unallocated assets and all liabilities other than borrowings and obligations under finance leases.

10 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

Brockman also has several concerns regarding the viability of the Damajianshan mine, including:

• the mine is currently not in commercial scale production – no formal mining was conducted in 2008 and 2009;

• a significant portion of the defined mineral resource is outside of Wah Nam’s mining permit. Wah Nam has applied to expand its mining permit to cover the full mineral resource but there is no guarantee this will be granted;

• there are significant levels of arsenic in the orebody; and

• the mining permit expires in 2012 with no guarantee that this will be renewed or extended.

For further information on each of the Wah Nam business units see section 6.1 of this Target’s Statement.

Finally, Brockman Shareholders should be aware that if they accept Wah Nam’s Offer, and Wah Nam’s bid is declared unconditional, they will be diluting their “pure play” exposure to Pilbara iron ore in exchange for gaining exposure to the Wah Nam assets described above (and depending on the outcome of Wah Nam’s Offer for FerrAus, FerrAus’ assets). For example, if Wah Nam is successful in acquiring 100% of Brockman and FerrAus, then Brockman Shareholders will hold only approximately 40% of the Combined Group.

11

BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

the implied offer premiums will only be captured by Brockman shareholders if there is sufficient liquidity in Wah Nam shares after the offer ~~2~~

The value implied by the Offer depends on the trading price of Wah Nam Shares after the Offer. There is no guarantee that the implied Offer Price and resulting premiums as outlined in the Bidder’s Statement will be captured by accepting Brockman Shareholders after they receive Wah Nam Shares in exchange for their Brockman Shares.

In particular, the risk of selling pressure post the Offer closing having a negative impact on the Wah Nam Share price is increased as a result of the low level of liquidity of Wah Nam’s shares (see Figure 3 below). In addition, low levels of liquidity may increase the likelihood of Wah Nam’s shares being “mispriced” by the market.

Wah Nam’s stock has historically had very low levels of trading liquidity and the Bidder’s Statement acknowledges that Wah Nam shares are comparatively thinly traded. This may result in a fall in the post-Offer Wah Nam Share price due to investors looking to “profit take” and the lack of market depth to support the implied Offer Price.

figure 3

Brockman and Wah Nam liquidity analysis – Daily volume from December 2008 to December 2010[1]

==> picture [469 x 230] intentionally omitted <==

----- Start of picture text -----

4.0
average volume (a$/day)
3.5
24 months 12 months
3.0 Brockman 1,078,401 1,401,189
2.5 Wah Nam 144,862 134,657
2.0
1.5
1.0
0.5
0.0
20 per. Mov. Avg. (Brockman Volume) 20 per. Mov. Avg. (Wah Nam Volume)
20 per. Mov. Avg. (Brockman Volume) 20 per. Mov. Avg. (Wah Nam Volume)
A$m
Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10
----- End of picture text -----

Source: Datastream as at 7 December 2010 Note:

1. Wah Nam and Brockman trading volumes shown excluding capital raisings

12 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

~~3~~

Wah Nam’s offer is subject to 13 conditions including Wah Nam shareholder approval for any improvement to the offer and asX listing approval

The Wah Nam Offer is highly conditional and uncertain, to the benefit of Wah Nam.

The bid is subject to 13 conditions which provide Wah Nam with a broad range of grounds upon which it may decline to proceed. Although Wah Nam shareholders approved the Offer on 13 December 2010, any improvements to the Offer will require further Wah Nam shareholder approval, and the Offer remains subject to 12 other conditions. Those conditions will need to be satisfied or waived before Wah Nam is obliged to complete the Offer.

In addition, as Wah Nam is not obliged to pay accepting Brockman Shareholders for their Brockman Shares until after the offer becomes unconditional, it may be some time until accepting Brockman Shareholders receive Wah Nam Shares in exchange for their Brockman Shares. In the meantime, Brockman Shareholders who accept Wah Nam’s conditional offer will be unable to trade with their Brockman Shares, such as selling them on-market (subject to the right to withdraw their acceptance if Wah Nam extends its offer for more than 1 month while it remains conditional).

~~4~~

Wah Nam’s strategy depends on it acquiring both a minimum of 50% of Brockman and greater than 90% of ferraus to form the Wah Nam-Brockman-ferraus Group and there is no guarantee that it will be able to do so. even if it does, Wah Nam has not demonstrated that by combining Brockman and ferraus it will be able to achieve an end-to-end solution

Wah Nam’s Bidder’s Statement indicates that the rationale for the transaction is that it intends to acquire both Brockman and FerrAus to gain scale in the Pilbara and provide a combined infrastructure solution. The structure of Wah Nam’s Offer is not entirely consistent with this strategy.

• Firstly, the offers for Brockman and FerrAus are not interconditional. That is, Wah Nam has not specified that it must gain control of both Brockman and FerrAus before its offer will proceed. This could mean that if you accept the Offer and Wah Nam’s offer for FerrAus does not complete, you will be left in a position where you hold shares in Wah Nam, but do not gain exposure to FerrAus’ assets. If this occurs the purported benefits of the transaction from the combination of Brockman and FerrAus will not be realised. You will only be gaining exposure to Wah Nam’s Damajianshan mine, limousine and airport shuttle business and investment business in exchange for the dilution of your interest in Brockman.

• Secondly, the offer for your Brockman Shares is subject to a 50% minimum acceptance condition. This means that Wah Nam may, at its option, complete the transaction where it holds less than 100% of Brockman. Brockman’s view is that it may be difficult for Wah Nam to implement its plans unless it holds 100% of Brockman and FerrAus. For example, one of the key assertions made by Wah Nam in its Bidder’s Statement is that the Wah Nam-Brockman-FerrAus Group may be in a better position to develop an end-to end infrastructure solution. While Wah Nam may be in a better position to advance this aim if it obtains 100% control of both Brockman and FerrAus, in the more likely scenario that it does not obtain this level of control it may be complex for combined access to be managed by separate corporate groups. This extends from the capacity for project finance to be raised across sibling entities to the complexities of dealing with minority shareholder rights across up to three entities.

13

BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

• Further, Wah Nam has not clearly articulated its intentions in relation to Brockman, a matter which is of paramount importance to Brockman Shareholders. In section 8 of the Bidder’s Statement, Wah Nam has only made vague statements about its intentions, stating that it intends to continue Brockman’s current operations and conduct a review of all operation and strategic matters. The limited disclosure on Wah Nam’s intentions also does not adequately address the different permutations resulting from the fact that Wah Nam’s offers for Brockman and FerrAus are not interconditional and are each highly conditional.

Wah Nam’s Bidder’s statement does not tell you the full story in relation to certain matters including tax, funding and the potential outcomes of the offer ~~5~~

Upon receiving the original version of the Bidder’s Statement which was lodged with ASIC and ASX on 10 November 2010, Brockman identified a number of inadequate disclosures and potentially misleading statements. Brockman raised its concerns regarding the level and quality of disclosure in the original bidder’s statement with Wah Nam and, following discussions, Wah Nam agreed to make a range of additional disclosures and correct the items that, in Brockman’s view, could potentially mislead Brockman shareholders. As a result, Wah Nam issued a replacement bidder’s statement on 6 December 2010, which addressed some of Brockman’s concerns. However, there are still certain matters Brockman Shareholders should be aware of that are not clear from the Bidder’s Statement.

1 By accepting the offer you may incur capital gains tax and franking credits will not be available

Capital gains tax roll-over relief will not be available to Brockman Shareholders who hold their Brockman Shares on capital account if Wah Nam fails to own 80% of Brockman Shares by the end of the Offer Period.

Given the significant increase in the Brockman Share price over recent times, Brockman believes that the majority of Brockman Shareholders purchased their Brockman Shares at prices significantly below the current Brockman Share price or the price implied by the Wah Nam Offer. If you are an Australian resident for tax purposes and stand to make a capital gain, then in the absence of scrip for scrip roll-over relief you may be required to pay a substantial amount (in cash) of tax on your gains.

In addition, franking credits will not be available to Wah Nam as a non-Australian entity. This may impact the income tax payable by Brockman Shareholders who accept Wah Nam’s Offer and hold Wah Nam Shares at a time in the future when Brockman records a profit and becomes an Australian tax payer.

2 Wah Nam is a Bermudan incorporated company listed on the hong Kong stock exchange and your rights as a shareholder will be different to those as a shareholder in an australian company

Brockman Shareholders who accept Wah Nam’s Offer will receive Wah Nam Shares in exchange for their Brockman Shares. Section 4.7 of Wah Nam’s Bidder’s Statement does not provide a definitive statement of the rights and liabilities attaching to Wah Nam Shares because this involves “complex questions of law” and suggests Brockman Shareholders should seek their own advice. This is an inadequate explanation for Brockman Shareholders.

14 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

Brockman Shareholders should note that the Bidder’s Statement highlights certain matters relating to Wah Nam that raise corporate governance concerns:

• Wah Nam has indicated that the current strategy dictates there will be no independent Chairman and the Chief Executive Officer will hold the chairmanship. This is in contrast to the ASX’s Corporate Governance Principles which require an independent chairman; and

• Wah Nam has indicated that it does not intend to follow the corporate governance guidelines of the Hong Kong Stock Exchange for the convening of meetings. This means that meetings may be convened on as little as 14 days notice. This is in contrast to the 28 days required under the Australian Corporations Act, which gives shareholders a greater opportunity to understand the business proposed for the meeting, determine how they wish to vote and submit proxies.

3 Wah Nam’s Bidder’s statement does not adequately explain how it intends to fund an end-to-end rail solution

Wah Nam’s Bidder’s Statement suggests that if Wah Nam is successful in combining Brockman and FerrAus the scale of the projects will be such that an independent, end-to-end infrastructure solution is likely to be economically viable and “the Wah Nam International-Brockman Resources-FerrAus Group will be well positioned to obtain the funding to do so”. That is, Wah Nam has suggested that the Wah Nam-BrockmanFerrAus Group may be able to build its own rail infrastructure, necessary to transport iron ore to port.

However, the Bidder’s Statement does not provide any economic evidence to that effect, nor does it provide any details explaining how Wah Nam intends to secure that funding. Critically, Wah Nam has not presented evidence of a solution to facilitate funding of an independent ‘end-to-end’ infrastructure solution.

4 Wah Nam’s Bidder’s statement does not adequately explain how the different outcomes of Wah Nam’s offer could affect the prospects of the combined Group

The offers for Brockman and FerrAus are not interconditional and have different minimum acceptance thresholds (90% in the case of FerrAus, and 50% for Brockman). This means that there are a series of different potential outcomes for the Combined Group, which have not been properly articulated in the Bidder’s Statement.

Of most concern is that the Bidder’s Statement fails to clearly explain how the different outcomes will affect Wah Nam’s ability to implement its strategies and intentions for the Combined Group and access the benefits of Wah Nam’s Offer. For example, the Bidder’s Statement does not include any disclosure on the prospects of the Combined Group in circumstances where Wah Nam waives the minimum acceptance conditions and only obtains increased minority stakes (less than 50%) in both Brockman and FerrAus.

This information is vital for Brockman shareholders to decide whether to accept the Offer, because Brockman Shareholders must understand that there is a significant risk that the offers will not result in Wah Nam’s ideal scenario of 100% control of both of Brockman and FerrAus and that this will have serious implications for the benefits of the combination highlighted by Wah Nam.

15

BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

~~6~~

Brockman does not need Wah Nam to develop marillana and has a clearly articulated plan to bring marillana into production, and is in advanced negotiations on infrastructure

Brockman has made significant progress independently in the development of the Marillana Project (see section 2 of this Target’s Statement for further information) and recently delivered a positive Definitive Feasibility Study, further de-risking the Marillana Project. As part of this development, Brockman has been actively assessing alternatives for rail haulage/ access, port development and independent infrastructure development. Brockman has also recently completed an international road show, to assess financial markets, in preparation for future project funding requirements.

rail

Brockman’s Marillana Project is strategically located in the Pilbara in close proximity to a number of existing third party rail networks and to other developers looking for rail and port co-operation agreements.

figure 4

Brockman tenement holding in the Pilbara

==> picture [391 x 280] intentionally omitted <==

Source: Brockman Company Filings

Brockman is in advanced negotiations with Fortescue Metals Group Ltd regarding a potential agreement for infrastructure access for the development of the Marillana Project.

A term sheet reflecting the key principles for a binding heads of agreement is currently being negotiated. If the negotiations with Fortescue ultimately result in a binding agreement, the implementation of that transaction will provide a comprehensive infrastructure solution for Brockman involving agreements relating to rail haulage, port access and marketing.

16 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

Whilst Brockman is pleased with the progress of negotiations to date, there can be no guarantee that the current negotiations with Fortescue will result in a binding agreement, and any agreement is likely to be subject to the satisfaction of a number of conditions.

In addition to the advanced negotiations with Fortescue, Brockman has also held confidential discussions with existing Pilbara infrastructure owners that have the potential to achieve a rail solution in the necessary timeframe to meet the current production targets.

In Wah Nam’s Bidder’s Statement it has identified that one alternative rail infrastructure solution is for the Wah NamBrockman-FerrAus Group to produce an independent end-to-end infrastructure solution.

Brockman believes that in order for independent rail infrastructure development to be viable, ‘critical mass’ in terms of production output is required. In Brockman’s view, it is not clear that if it were to combine with FerrAus the entities would together have sufficient projected production levels to secure adequate funding for the development of independent rail infrastructure.

However, as demonstrated by Brockman’s current discussions with Pilbara infrastructure owners, Brockman is of the view that third party rail haulage infrastructure options exist such that Brockman should be able to successfully develop the Marillana Project independent of FerrAus and Wah Nam.

Port

Brockman is a founding member of the North West Iron Ore Alliance (NWIOA) along with other Pilbara iron ore companies Atlas Iron Limited and FerrAus. Together the Alliance members have a combined port allocation of 50Mtpa at the South West Creek development at Port Hedland. The Definitive Feasibility Study in relation to the port development is to be completed in the first quarter of 2011.

figure 5

Port Hedland aerial photograph

==> picture [469 x 267] intentionally omitted <==

----- Start of picture text -----

PROPOSED NWIOA
SOUTH-WEST CREEK
BERTH BASIN
NWIOA BERTH SP4
NWIOA BERTH SP3
FMG BERTHS AP1 & AP2 BHPBIO BERTHS FIA & FIB
UTAH POINT
FINUCANE ISLAND
BHPBIO BERTHS NPA & NPB
PORT HEDLAND
----- End of picture text -----

Source: Brockman Company Filings

In contrast, Wah Nam has not substantiated in the Bidder’s Statement how it will improve Brockman’s development prospects beyond potentially making independent infrastructure viable as a result of a merger with FerrAus.

17

BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

Wah Nam’s expertise does not appear to add value for Brockman shareholders ~~7~~

Brockman’s management team is highly experienced in the iron ore sector with a substantial depth of knowledge in exploration, financing, developing and bringing projects to fruition. This depth of experience has resulted in the generation of significant shareholder value over the past two years during a time of macro-economic uncertainty.

overview of the experience of Board and senior management

==> picture [34 x 52] intentionally omitted <==

Non-executive chairman – Barry cusack. Mr Cusack is one of Australia’s most accomplished mining executives, with over 40 years of experience in the minerals industry including a lengthy and distinguished career spanning several decades with the Rio Tinto (previously CRA Limited) group.

==> picture [34 x 52] intentionally omitted <==

managing director – Wayne richards. Mr Richards has over 24 years experience in the mining and mineral processing industry, with extensive experience in the development and operation of iron ore and nickel/cobalt businesses. Prior to joining the Company Mr Richards held senior executive roles within BHP Billiton Iron Ore.

==> picture [34 x 52] intentionally omitted <==

deputy Non-executive chairman – ross Norgard. Mr Norgard is a chartered accountant and former managing partner of KMG Hungerfords and its successor firms in Perth, Western Australia. For the past 30 years he has worked extensively in the fields of raising venture capital and the financial reorganisation of businesses.

==> picture [34 x 52] intentionally omitted <==

Non-executive director – david Nixon. Mr Nixon was the Project Director for the MPDJV, a Fluor/ SKM joint venture responsible for the A$1.0 billion BHP Billiton Iron Ore Asset Development projects and has previously held the role of Non-Executive Chairman of Atlas Iron Limited, where he had significant input into that company’s development and production strategy and the achievement of targets for the mining and shipping of iron ore from Atlas’ Pardoo tenements.

==> picture [34 x 52] intentionally omitted <==

Non-executive director – ross ashton. Mr Ashton has been involved in the exploration, consulting, financing and development of international resource projects since 1972. Mr Ashton is also a director of PMI Gold Corporation and was a director of GB Energy Ltd (2004-2010).

==> picture [34 x 52] intentionally omitted <==

executive director – colin Paterson. Mr Paterson has over 25 years experience in the resources sector principally in iron ore, gold and nickel exploration in the Pre-Cambrian of Western Australia. He was Principal Geologist with Asarco Australia Ltd and held a similar position with Mining Project Investors Pty Ltd (subsequently MPI Mines Limited).

18 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

==> picture [33 x 52] intentionally omitted <==

chief financial officer – derek humphry. Mr Humphry is a qualified Chartered Accountant with over 20 years accounting and industry experience, more recently focussing in the areas of corporate consolidation, mineral project evaluation, and joint venture, debt and equity financing. He started his career with an international Chartered Accounting firm and has since worked with industrial minerals, gold, and nickel producers.

==> picture [33 x 52] intentionally omitted <==

company secretary – tara robson. Ms Robson was appointed to the position of Company Secretary in 2005. For the previous eight years, Ms Robson has held the role of Company Secretary for two additional ASX listed entities. Prior to that Ms. Robson was a Senior Audit Manager with Deloitte Touche Tohmatsu.

==> picture [33 x 52] intentionally omitted <==

General manager – Project development – Paul Bartlett. Mr Bartlett has over 35 years experience in engineering, construction and mining operations in the resource sector, and joins Brockman from a senior role with project management, engineering and construction specialists, Calibre Projects Pty Ltd. He has extensive experience in the Western Australian iron ore industry, having played key project management roles for Calibre Projects.

==> picture [33 x 52] intentionally omitted <==

General manager – operations – Jason Greive. Mr Greive has held a wide range of senior operational roles within the mining industry in Australia, and internationally in Scandinavia and Africa. He brings a significant depth of experience in the management of mine site operations, power generation, production plants, extractive metallurgy, business management systems, environmental management and project evaluation and analysis.

In contrast, Wah Nam has not demonstrated in its Bidder’s Statement how its management team will be able to add value for Brockman’s shareholders given the lack of mining development expertise and operational experience amongst the directors and key management of Wah Nam.

Based on the information provided, only Luk King Peter Joseph and the very recently appointed Warren Beckwith have any mining experience. Mr Beckwith was, in fact, appointed after Wah Nam released its original Bidder’s Statement. The Bidder’s Statement does not adequately disclose the extent of their mining expertise (particularly in relation to the development of major mining projects and managing a producing mine) or demonstrate Wah Nam’s capacity to accelerate the rapid development of the Marillana Project beyond mere assertion. The only example Brockman Shareholders have of Wah Nam’s ability to develop a mining project is the Damajianshan mine, which does not appear to have progressed since its acquisition in September 2008. In fact, very little progress has been made in the last 2 years relative to the progress at the Marillana Project. For a comparison of the progress in developing the Marillana Project and the Damajianshan mine, see Figure 9.

As acknowledged in section 7.3(g) of the Bidder’s Statement, Wah Nam’s management team has limited Australian mining experience and may not have all the necessary knowledge to manage the Marillana Project. The Bidder’s Statement also acknowledges in sections 7.2(h) and 7.3(g) that the corporate and staff culture of Brockman may be significantly different from that of Wah Nam and Wah Nam may not be able to retain key technical and managerial personnel from Brockman.

The Bidder’s Statement also indicates that Wah Nam intends to “keep some, or possibly all of the members of the Brockman board” and “does not intend to make significant changes to Brockman Resources management or operational activities”. However, these statements are vague and pose the risk that the existing highly experienced management team which has created significant shareholder value for Brockman Shareholders over the past 2 years is changed.

BROCKMAN RESOURCES Target’s Statement 19

Why you should REJECT the Offer

Brockman does not need Wah Nam to fund marillana ~~8~~ The Bidder’s Statement suggests that a reason to accept the Offer is that the Combined Group may have the ability to attract financing for the Marillana Project and its ability to do so may be better than that of an independent Brockman. The focus of Wah Nam’s ability to attract finance appears to be its ability to raise finance on the equity markets in Hong Kong.

The statements regarding the Combined Group’s ability to attract financing are misleading because:

• if Wah Nam is going to be in a position to attract the estimated A$5.5 billion required funding for the continued development of Brockman and FerrAus’ mining projects and providing the end-to-end infrastructure solution, it will need to attract a significant level of debt finance. Wah Nam has not explained in its Bidder’s Statement where and how it intends to obtain such debt funding;

• Although Wah Nam has carried out 7 capital raisings, it has raised approximately HK$992 million (A$127 million) over a period of more than three years. As acknowledged in section 7.2(i) of the Bidder’s Statement, these amounts are not in the range required for the development of the assets of Brockman and FerrAus and are similar to the amount raised by Brockman in a single raising in July 2008; and

• it is ultimately the quality of the Marillana Project and other Brockman assets that will determine whether it is able to obtain finance to develop those assets. The quality of these assets is not affected by their ownership by Wah Nam instead of Brockman.

Brockman has a range of funding alternatives which include debt and equity funding from public markets or from private sources, including downstream companies. Brockman has strong relationships with a number of downstream companies that could provide attractive access to funding (e.g. Brockman already has a non-binding memorandum of understanding in place with Sinosteel in relation to possible off-take arrangements). As shown in Figure 6 below, in the last 3 years there have been a large number of funding arrangements between downstream companies and ASX listed mining companies, the majority of these stemming from asset level and/or corporate level investment.

figure 6

Selected Asian downstream investments in Australian resources

==> picture [470 x 221] intentionally omitted <==

----- Start of picture text -----

asset /
downstream investment stake
date country target corporate comment
partner (a$million) [1] (%) [2]
level
Jul-10 POSCO AMCI Corporate 185 49.0% Asset/corporate stake
Nov-09 Baosteel Aquila Corporate 286 15.0% Placement
Feb-09 Hunan Valin Fortescue Corporate 645 17.4% Placement
Dec-08 WISCO Centrex Asset 190 50.0% Asset/corporate stake
Dec-08 Zhongjin Perilya Corporate 46 50.1% Placement
Nov-08 Ansteel Gindalbie Corporate 162 (plus 27.0% Placement
US$1.2 billion
of debt funding)
Jul-08 Mitsubishi Murchison Corporate 1,874 50.0% Infrastructure JV
(OPR)
Oct-07 Sinosteel Mid West Corporate 1,364 100.0% Takeover
----- End of picture text -----

Notes:

1 Mitsubishi investment amount calculated as 50% of Total OPR Capital costs (per BFS on 30 March 2010)

• 2 WISCO investment of A$190 million for 50% stake in Centrex’s Southern and South Central Eyre Peninsula magnetite deposits and 13% placement to Wuhan

20 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

The Bidder’s Statement also asserts that the Combined Group will be a more financially secure company. However, apart from stating that the Combined Group will be larger, the Bidder’s Statement contains no evidence or information to support the suggestion that the Combined Group will be more financially secure than Brockman. In fact, based on the cash and cash equivalents shown in Wah Nam’s Bidder’s Statement, a majority of the cash that would be held by the Combined Group would be contributed by Brockman.

Brockman does not need Wah Nam to gain access to hong Kong investors ~~9~~

Wah Nam intends to dual list its shares (i.e. the proposed Combined Group) on both the ASX and the HKSE. Three out of Wah Nam’s eight reasons for you to accept into the Wah Nam bid relate to the supposed benefits of becoming a dual listed HKSE / ASX company, and in particular the ability to access capital markets via a listing in Hong Kong.

Brockman is constantly reviewing alternative ways to maximise shareholder value through access to capital for development of existing projects and expansion. One of the options which has been considered to access new pools of capital is the possibility of a dual listing on an international exchange such as the HKSE. Should Brockman feel that a dual listing is of particular value to Brockman shareholders it would be able to do so independently, being able to satisfy the requirements for a Hong Kong listing (see below), without the need for Wah Nam or the need for Brockman Shareholders to share their exposure to Brockman’s assets with Wah Nam shareholders.

figure 7

==> picture [469 x 276] intentionally omitted <==

----- Start of picture text -----

listing requirement Brockman
Meaningful portfolio of Contingent or Indicated Resources 3
Plans to proceed to production with indicative dates and costs supported by a scoping/ feasibility 3
study
Available working capital for 125% of the group’s present requirements, that is for the next twelve 3
months
Directors and senior managers, taken together, have sufficient experience relevant to the exploration 3
and/or extraction activity that the mineral company is pursuing
At least 25% public float 3
Diversified shareholder base—(i) at least 300 shareholders; and (ii) the three largest public 3
shareholders collectively shall not hold more than 50% of the issued share capital
Trading record of the most recent three financial years under substantially the same management. 3
The company shall have:
• the same management for at least three latest financial years; and
• the same ownership and control for the most recent audited financial year
Accepted place of incorporation 3
----- End of picture text -----

BROCKMAN RESOURCES Target’s Statement 21

Why you should REJECT the Offer

Brockman has added significant value for shareholders over the past two years and will continue to deliver enhanced value without Wah Nam ~~10~~

A shareholder who invested $100 in Brockman Shares on 5 December 2008 would now hold an investment valued at $1,016, which represents a total return of 916% over the two year period or a compound annual growth rate of 218%.

figure 8

Significant Shareholder Value Creation A$ (Rebased to Brockman)

==> picture [469 x 233] intentionally omitted <==

----- Start of picture text -----

10 Nov 2010
Wah Nam
7.00 take over offer
announced
3 May 2010
24 month
6.00 Resources Super Profits Tax announced return
5.00 10 Aug 2009 +916%
PFS released
4.00
3.00
29 Sep 2010
2.00 DFS released 24 month
return
1.00
+73%
-
Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Brockman Resources Wah Nam
Brockman share price (A$/share, rebased)
----- End of picture text -----

Source: Datastream and company filings

This extraordinary share price growth has been driven by Brockman’s Board and management team, who have been successful in delivering a number of key milestones on the Marillana Project over this period. Chief among these achievements are the delivery on time and on budget of the Pre-Feasibility Study (PFS) in August 2009 and the Definitive Feasibility Study (DFS) more recently in September 2010.

The thirteen month DFS was lead by principal engineering group Ausenco Limited, and incorporated a full study on the Marillana mine and processing plant and confirmed that the Marillana Project is an economically robust, long-life iron ore project that is expected to generate substantial returns for the Company and its shareholders – paving the way for the commencement of a Bankable Feasibility Study (BFS) as the next stage of project development.

The Marillana DFS significantly enhanced the key outcomes of the PFS completed in August 2009, confirming that the project has the potential to underpin a world-scale iron ore business for Brockman, with projected average production of 17 million tonnes per annum (Mtpa) over a mine life of 25 years.

22 BROCKMAN RESOURCES Target’s Statement

Why you should REJECT the Offer

figure 9

Capable project developers

Brockman vs. Wah Nam project development timetables

marillana project development

==> picture [41 x 432] intentionally omitted <==

April 2008

Scoping Study completed, indicating 10Mtpa production

Aug 2009

Pre-Feasibility study completed, indicating 17Mtpa production over 20 year life of mine

Dec 2009

Mining right granted for 21 year life of mine (renewable)

Sep 2010

Definitive Feasibility Study completed, indicating a 25 year life of mine at annual 17Mtpa production

Q1 2011

Port DFS targeted completion for North West Iron Ore Alliance

Q3 2011

Expected date for Final Investment Decision / financing of Port

Late 2013

Targeted mine commissioning

Early 2014

Target date for first ore on ship

damajianshan mine development

==> picture [41 x 432] intentionally omitted <==

Jan 2005

Mining right certificate granted from Dept. of Land and Resources of the Yunnan Province

Sep 2007

Mining right certificate renewed for 5 year period

Sep 2008

Wah Nam acquires Damajianshan Mine Wah Nam acquires damajianshan mine through acquisition of Smart Year through acquisition of Smart Year subsidiary for H$1,055msubsidiary for HK$1,055m

Jun 2010

Wah Nam records H1 2009 Wah Nam records H1 2010 asset asset impairment of H$153mimpairment of hK$153m on Damajianshan on Damajianshan following independent valuationfollowing independent valuation

Sep 2012

Current expiry date of mining right certificate

Source: Company filings

23

BROCKMAN RESOURCES Target’s Statement

This page was left blank intentionally

24

BROCKMAN RESOURCES Target’s Statement

2. Profile of Brockman

25

BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

Brockman is an ASX listed Australian hematite iron-ore company with its principal project, the 100% owned Marillana iron ore project (Marillana Project), located in the Pilbara region of Western Australia.

In addition to the Marillana Project, Brockman holds a number of iron ore tenements throughout the Pilbara (predominantly in the West Pilbara region) that aim to assist Brockman to develop a pipeline of future projects and expansions.

2.1 Key ProJects aNd oPeratioNs

(a) marillana Project

• (i) Overview

Brockman’s primary project is its 100% owned Marillana Project located 100km North-West of Newman in the Pilbara region of Western Australia. The Marillana Project is located close to world-class deposits owned by major Australian iron ore players, and it is this proximity to existing rail, road and port infrastructure which gives the Marillana Project the opportunity to be a significant iron ore producer, in the heart of the Australian iron ore province – The Pilbara. Brockman holds a number of additional prospective iron ore tenements throughout the Pilbara region, providing a further value enhancement potential to its shareholders.

The Marillana Project contains JORC Code compliant Proved and Probable Ore Reserves of 1.05 billion tonnes (as detailed in ASX release dated 9 September 2010). This Ore Reserve includes 1.001 billion tonnes of detrital ore grading 42.36% Fe, and 48.5 million tonnes of channel iron deposit ore grading 55.5% Fe.

The Marillana Project is scheduled to commence production in early 2014 at a nominal rate of 17-20 million tonnes per annum (Mtpa). Brockman is currently focused on concluding mine planning and scheduling, has awarded the front end engineering and design (FEED) contracts, is finalising the optimal financing methodology and models, and establishing rail and port infrastructure operating terms and conditions. The Marillana Project is proposed to operate on a schedule of two shifts, twelve hours per shift all year round with the exception of scheduled maintenance periods.

• (ii) Definitive Feasibility Study

Brockman completed its Definitive Feasibility Study (DFS) on the Marillana Project in September 2010, which confirmed that the Marillana Project can sustain a nominal production (output) rate of 17 Mtpa for a mine life of approximately 25 years with peak production in excess of 20 Mtpa.

Key outcomes of the Marillana DFS include:

• 1.6 billion tonne Mineral Resource (as detailed in ASX release dated 9 February 2010) was converted to a Proved and Probable Ore Reserve totalling 1.05 billion tonnes;

• an improved waste to ore stripping ratio of 0.87 (compared to 1.4 in the pre-feasibility study) was confirmed following the development of the definitive mine plan and pit design and confirmation of the capacity to upgrade the ore (at a 38% Fe head grade cut-off) to a marketable final product quality;

• the Ore Reserve (post-beneficiation) supports the production of over 419 million tonnes of final product at an average grade of 60.5%-61.5% Fe, with impurity levels comparable with other direct shipping ores exported from the Pilbara;

• a ‘Fines’ only (-8mm) product will be produced;

26 BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

• both the beneficiated detrital iron deposit ore and the Channel Iron Deposit (CID) – direct shipping ore will be blended to produce a single product at various times within the mine’s life; and

• the life-of-mine average production rate for the Marillana Project will be 17 Mtpa, but will peak to a maximum of 21 Mtpa in various years of the mine plan.

Further information relating to the DFS can be found in Brockman’s ASX announcement of 29 September 2010.

(iii) Project development

Brockman is focused on the development of infrastructure and commercial arrangements for the transport and export of product from the Marillana Project. This is consistent with its intention to secure third party infrastructure agreements with existing or developing iron ore producers in the Pilbara region to develop an optimal business model for future project ownership and financing, including potential off-take agreements.

Brockman has adopted an early contractor involvement process that has been structured by the Company with the aim of providing increased certainty over the project cost and schedule for the bankable feasibility study (BFS) for the Marillana Project.

Stage 1 of the early contractor involvement process comprises the delivery of FEED services for the process plant, stockyards, train load-out and associated site infrastructure. As announced on 3 December 2010, Brockman recently awarded the FEED contract to UGL Resources Pty Ltd, a wholly owned subsidiary of UGL Limited, one of Australia’s leading providers of project delivery services in the mining and mineral processing, oil and gas, chemicals and industrial processing industries.

A stage 2 contract, which will be based on the detailed design, procurement, construction, commissioning and hand over-criteria finalised at the conclusion of stage 1 will then be entered.

• (iv) Membership of the North West Iron Ore Alliance

Brockman is also a founding member of the North West Iron Ore Alliance (Alliance), a body of mining companies formed to develop key infrastructure required to maximise the export potential of the Pilbara region.

The Alliance is currently completing studies into the development of two inner harbour berths and associated material handling infrastructure at Port Hedland to accommodate the Alliance’s 50 Mtpa export capacity allocation.

The pre-feasibility study on the Port concluded that the development is viable and could be in operation during the latter part of 2013. The project will incorporate train unloading and stockpiling facilities as well as new berths and ship-loading facilities for the export of up to 50 Mtpa of iron ore.

The Port DFS, under the management of the Alliance, is currently being undertaken by Sinclair Knight Merz and Coffey Environmental, and is due to be completed in Q1 of calendar 2011. A Final Investment Decision and financing package for the development is expected to be completed by Q3 of calendar 2011, which complements the contemplated completion date for the Marillana BFS.

27

BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

(v) Native Title Agreements

The Marillana mining lease covers two native title claimant areas, however Brockman has negotiated Native Title Agreements with both the Martu Idja Banjima and the Nyiyaparli groups. Brockman is confident that it has strong relationships with both groups and the agreements address the claimants’ interests regarding the management of cultural heritage, protection of the project lands as well as providing the groups with the opportunities to participate in the project through employment, training and contracting opportunities.

(b) West Pilbara Project ‘hub’

The Company’s West Pilbara project hub comprises the Duck Creek, Mt Stuart and West Hamersley tenements. The hub is located:

• only 30km from the proposed West Pilbara railway to be constructed by API Management Pty Ltd to service its West Pilbara operations;

• within 60km of the Rio Tinto Iron Ore Robe River Railway, which was recently declared open for rail access by the Australian Competition Tribunal; and

• in close proximity to Fortescue Metals Group Ltd’s (FMG) planned Western Hub rail spur extension of its Pilbara rail system to Port Hedland and Anketell Port.

This proximity to existing infrastructure provides Brockman with an excellent opportunity to fast-track the development of its West Pilbara projects.

(i) Duck Creek

The Duck Creek iron ore project is located about 115km West-North-West of Paraburdoo in the West Pilbara region of Western Australia. Assessment of results received from helicoptersupported surface rockchip sampling has highlighted exploration targets at Duck Creek with a combined potential for 30–50 million tonnes (Mt) of iron ore grading 56–59% Fe.

The Duck Creek results are highly encouraging, with the tenement shaping up as part of a potential second operation for Brockman (after its Marillana Project) in the West Pilbara region of Western Australia. Brockman has recently completed confirmatory drill testing of the mesas with results anticipated in late 2010.

(ii) West Hamersley

The West Hamersley Project comprises one granted exploration licence covering 51km2 and contains extensive areas of outcropping Brockman Iron Formation. Recently completed helicopter-supported reconnaissance mapping and sampling over the project has identified significant new hematite mineralisation in addition to previous West Hamersley target areas identified in late 2008. Five new zones of hematite mineralisation grading 56-64% Fe have been identified.

Recent work supports an Exploration Target of 20-30 Mt grading 58-61% Fe for the West Hamersley tenement. Brockman has recently completed confirmatory drill testing of targets with results anticipated in late 2010.

(iii) Mt Stuart

The Mt Stuart Project consists of two exploration licences granted early in 2010. Previous reconnaissance sampling by Brockman in the area has identified direct shipping grade CID iron ore mineralisation with four samples from a CID mesa within the licence averaging 58% Fe, with low contaminants.

28 BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

Brockman has continued to make applications for ground considered prospective for iron ore mineralisation when it becomes available, although most of these applications are subject to a ballot with competing applications.

(c) other tenement holdings

• (i) Mt Florance

Brockman also holds one granted exploration licence at Mount Florance, located approximately 60km east of FMG’s Marra Mamba-hosted Flinders deposit. The licence contains a 20km strike extent of Marra Mamba Iron Formation.

• (ii) Ophthalmia

Brockman’s 100% owned Ophthalmia Project consists of two granted exploration licences located 10-20km north of Newman and adjacent to the East Angeles prospects of the Hope Downs Joint Venture (Rio Tinto Iron Ore and Hancock Prospecting Pty Ltd).

The Ophthalmia Project is also located in close proximity to existing infrastructure.

• (iii) Irwin-Coglia Ni-Co and Ni-Cu Prospects

Brockman has a 40% interest in the Irwin-Coglia nickel project joint venture, located about 150km south-east of Laverton in Western Australia. The project comprises two adjoining tenement blocks, namely Irwin Hills, and Coglia Well. The remaining 60% joint venture interest is held by Murrin Murrin Holdings Pty Ltd and Glenmurrin Pty Ltd, the owners of the Murrin Murrin Ni-Co laterite mine and high pressure acid leach treatment plant near Laverton.

2.2 fiNaNcial iNformatioN aNd related matters

As at 30 September 2010 Brockman held $78,227,000 in cash and was debt free. Brockman’s full consolidated financial statements for the period ended 30 June 2010 can be found in its 2010 Annual Report which is available at brockman.com.au and asx.com.au (ASX code: BRM).

There has not been any matter or circumstance, other than those referred to in Brockman’s consolidated statements, its 2010 Annual Report and this Target’s Statement that has significantly affected, or may significantly affect the operations of the Brockman Group, the results of those operations, or the state of affairs of the Brockman Group in future financial years.

2.3 risK factors

Brockman is currently exposed to a number of risks that Brockman Shareholders should be aware of. While there are general risks affecting the operation of Brockman, Brockman is also subject to various risks affecting companies operating in the mining industry. A brief outline of these risks is contained below. Brockman Shareholders should consider these risks, as well as those disclosed in accordance with Brockman’s continuous disclosure obligations under the ASX Listing Rules when evaluating the Offer.

• (a) General risks

• (i) Economic conditions: Economic conditions, both domestic and global, may affect Brockman’s financial performance. Adverse changes in matters such as the level of inflation, interest rates, exchange rates, government policy (including fiscal, monetary and regulatory policies), consumer spending, employment rates, supply and demand and industrial disruption, amongst others, are outside the control of Brockman and may result in material adverse impacts on its business and operating results. Accordingly, the future performance of Brockman or any return on an investment in Brockman is uncertain.

29

BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

(ii) Market conditions: As Brockman is listed on the ASX, its share price is subject to the numerous influences that may affect both the trends in the share market and the share prices of individual companies, including movements in international and local stock markets, inflation, interest rates, general economic conditions and changes in government, fiscal, monetary and regulatory policies. Therefore, regardless of Brockman’s performance, these influences may cause Brockman Shares to trade below current prices and may affect the income and expenses of Brockman.

The share prices of many companies have, in recent times, been subject to large fluctuations which in many cases may reflect a diverse range of non-company specific influences such as global hostilities and tensions, acts of terrorism and the general state of the economy. Such market fluctuations may materially adversely affect the market price of Brockman Shares.

• (iii) Changes in legislation and government regulation: Government legislation, both within Australia and internationally, including changes to the taxation system and government policy may affect the future earnings and performance of Brockman.

(b) specific risks

• (i) Exploration risks: Despite the positive prospects at Brockman’s Marillana Project, Brockman Shareholders should understand that mineral exploration and development are speculative undertakings. There can be no assurance that exploration of project areas, or tenements that may be acquired in the future will result in the discovery of further economic ore deposits. Even if an apparently viable deposit is identified, there is no certainty that it can be commercially developed.

• (ii) Mineral Resources Rent Tax: Prior to the Australian Federal election on 21 August 2010, the Australian Labor Party announced that it would seek to implement a Resource Super Profits Tax (RSPT) should it win the election. Shortly after this announcement, the RSPT was amended and reclassified as the Minerals Resources Rent Tax (MRRT).

The government has established a policy transition group to review the implementation of the proposed tax. Given Brockman’s iron ore interests, should the MRRT be implemented, it is likely that Brockman will be affected by this tax. Until the terms of the MRRT are finalised, it is not possible to advise Brockman Shareholders as to the extent of this effect.

• (iii) Development and infrastructure risk: In order for Brockman to progress to mineral production, it will need to develop, construct and commission mines. There is a risk that difficulties may be encountered in this process that may adversely impact Brockman’s financial performance. In addition, while Brockman is confident that it can access existing mining infrastructure in close proximity to its projects at cost effective rates, this is not guaranteed and Brockman may be required to construct its own infrastructure, which may affect the financial performance of Brockman. As demonstrated by the recent changes to BHP Billiton Iron Ore’s and Rio Tinto’s state agreements, there is also the potential for legislative change to affect the use of development of infrastructure.

• (iv) Operating risks: The operations of Brockman may be affected by various factors including, without limitation, failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown.

There is a risk of inadequate water supplies, unanticipated metallurgical problems which may affect extraction costs, inability to obtain, or retain satisfactory joint venture partners when required, adverse weather conditions, industrial and environmental accidents, industrial disputes, unexpected shortages or increases in costs of consumables, spare parts, plant and equipment.

30 BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

• (v) Rising energy and commodity costs: Brockman will have significant commodity requirements and it relies on being able to fulfil those requirements at a cost which does not negatively impact on its cash flows. A number of factors (such as rising oil prices, macro-economic factors such as inflationary expectations, interest rates, currency exchange rates (particularly the strength of the United States dollar), as well as general global economic conditions and political trends) may lead to an increase in commodity and energy costs which may materially adversely affect Brockman’s earnings.

• (vi) Key personnel: The success of Brockman will depend to a significant extent upon key management and technical personnel, including those employed on a contractual basis. The loss of services of certain personnel or contractors could adversely affect Brockman and its activities.

• (vii) Shortages of skilled personnel: The tight labour market, an ageing population and a current skills shortage present challenging conditions in which to recruit staff for Brockman’s operations. The success of Brockman’s operations relies on Brockman being able to recruit skilled staff. Not being able to access skilled staff may impact the implementation of Brockman’s business plans and Brockman’s ability to achieve production targets within budgetary constraints.

• (viii) Commodity price volatility and exchange rate risks: Any revenue derived by Brockman’s projects will be subject to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of Brockman. Such factors include supply and demand fluctuations for precious and base metals, technological advancements, forward selling activities and micro and macro-economic factors.

Furthermore, international prices of various commodities are largely denominated in United States dollars, whereas the income and expenditure of Brockman, whilst operating on Australian projects, are and will be taken into account in Australian currency, which will expose Brockman to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar.

• (ix) Tenement title risks: Interests in exploration and mining tenements in Australia are governed by State or Territory legislation, which covers the granting of leases and licences. Each lease or licence is for a specific term and carries with it annual expenditure, reporting, compliance or compulsory reduction conditions. Consequently, Brockman could lose its title to its interests in tenements if licence conditions are not met or if insufficient funds are available to meet expenditure requirements. If a tenement is not renewed for any reason, Brockman may suffer significant damage through loss of opportunity to discover and develop any material resources on that tenement.

• (x) Native title: The Native Title Act 1993 (Cth) recognises and protects the rights and interests in Australia of Aboriginal and Torres Strait Islander people in land and waters, according to their traditional laws and customs.

Currently, the Marillana mining lease covers two native title claimant areas and Brockman has established strong relationships with groups and has negotiated Native Title Mining Agreements. However, in relation to other tenements in which Brockman has an interest, or in the future may acquire such an interest, and land that may be required for the establishment of infrastructure, there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of Brockman to obtain the consent of any relevant landowner or to progress from the exploration phase to the development and mining phases may be adversely affected.

It is possible that there will exist on some or all of Brockman’s tenements, areas containing sacred sites or sites of significance to Aboriginal people, subject to the Native Title Act . As a result, land within the mining tenements may be subject to exploration, mining or other restrictions emanating from claims of Aboriginal heritage sites or native title.

31

BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

Uncertainty associated with native title issues may affect Brockman’s plans but the Brockman Board considers that clearances, consents and approval are not materially different to those confronting any entity conducting mining and exploration in Australia.

• (xi) Environmental risks: The operations and proposed activities of Brockman are subject to State and Federal laws and regulations concerning the environment. As with most exploration projects and mining operations, Brockman’s activities are expected to have an impact on the environment, particularly mine development activities. It is the intention of Brockman to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws.

• (xii) Insurance: Insurance against all risks associated with mineral exploration production is not always available or affordable. Brockman will maintain insurances where it is considered appropriate for its needs, however it will not be insured against all risks either because appropriate cover is not available or because the Brockman Directors consider the required premiums to be excessive having regard to the benefits that would accrue.

• (xiii) Liquidity and future financings: The development of the various mineral projects in which Brockman holds interests depend upon Brockman’s ability to obtain financing through operational cash flows, joint ventures, debt financing, equity financing or other means. There is no assurance that Brockman will be successful in obtaining the financing required as and when needed. Volatile markets for mineral commodities may make it difficult or impossible for Brockman to obtain debt financing or equity financing on favourable terms or at all. Failure to obtain additional financing on a timely basis may cause Brockman to postpone its development plans, forfeit rights in some or all of its properties or joint ventures or reduce or terminate some or all of its operations.

• (xiv) Potential acquisitions: As part of its business strategy, Brockman may make acquisitions of or significant investments in companies, products, technologies or resource projects. Any such future transactions would be accompanied by the risks commonly encountered in making acquisitions of companies, products, technologies or resource projects.

• (xv) Litigation risk: Legal proceedings may arise from time to time in the course of Brockman’s business and Brockman cannot preclude the possibility that litigation may be brought against it.

• (xvi) Force majeure: Force majeure describes events including acts of God, fire, flood, earthquakes, war and strikes beyond the control of a party claiming the occurrence of any such event. To the extent that force majeure events occur they may have a detrimental effect on the ability of Brockman to operate, its financial performance and the value and price of Brockman Shares.

32 BROCKMAN RESOURCES Target’s Statement

3. Frequently asked questions

Frequently asked questions

This section answers some commonly asked questions about the Offer. It is not intended to address all relevant issues for Brockman Shareholders. This section should be read together with all other parts of this Target’s Statement.

==> picture [470 x 414] intentionally omitted <==

----- Start of picture text -----

Question answer
What is Wah Wah Nam Australia is offering 30 Wah Nam Shares for each Brockman Share held by you.
Nam’s offer for my
Brockman shares?
What choices As a Brockman Shareholder, you have the following choices in respect of your shares:
do i have as
• reject the Offer by doing nothing;
a Brockman
shareholder? • sell your shares on the ASX (unless you have previously accepted the Offer and you
have not validly withdrawn your acceptance); or
• accept the Offer.
There are several implications in relation to each of the above choices. A summary of
these implications is set out in section 5 of this Target’s Statement.
What are the Each director recommends that you reject the offer . In order to do so you should do
directors of nothing and not respond to any correspondence from Wah Nam.
Brockman
recommending?
What are the If you accept the Offer, unless withdrawal rights are available (see below), you will give up
consequences of your right to sell your Brockman Shares on the ASX or otherwise deal with your Brockman
accepting the offer Shares while the Offer remains open.
now?
if i accept the offer, You may withdraw your acceptance if Wah Nam Australia varies the Offer in a way that
can i withdraw my postpones the time when Wah Nam Australia is required to satisfy its obligations by more
acceptance? than one month. (See section 6.10 of this Target’s Statement for further details.)
When does the The Offer is presently scheduled to close at 4:00pm WST on 17 January 2011, but the
offer close? Offer Period can be extended in certain circumstances.
(See section 6.7 of this Target’s Statement for details of the circumstances in which the
Offer Period can be extended.)
----- End of picture text -----

34 BROCKMAN RESOURCES Target’s Statement

Frequently asked questions

==> picture [469 x 639] intentionally omitted <==

----- Start of picture text -----

Question answer
What are the In summary, the conditions to the Offer are:
conditions to the
• approval of the requisite majority of Wah Nam shareholders to acquire all of the
offer?
Brockman Shares and to allot and issue the Consideration Shares. This approval was
granted on 13 December 2010. A further Wah Nam shareholder approval is required if
Wah Nam increases its offer;
• approval of the HKex for the listing of the Consideration Shares;
• approval of the ASX for Wah Nam to be admitted to the ASX and for the quotation of
Wah Nam Shares on the ASX;
• at the end of the Offer Period, Wah Nam Australia having a relevant interest in more than
50% of Brockman Shares;
• between the Announcement Date and the end of the Offer Period:
– none of the ‘prescribed occurrences’ set out in s652C of the Corporations Act
occurring;
– no regulatory actions in consequence of or in connection with the Offer occurring;
– none of Brockman nor any Subsidiary of Brockman entering into, or completing
any ‘material transactions’ to acquire or dispose, or enter into or announce any
agreement to acquire or dispose, any material asset or business;
– no material adverse changes occurs or is announced in the business, financial or
trading position, assets or liabilities, profitability or prospects of Brockman or any of
its Subsidiaries;
– Brockman not declaring, distributing or resolving to pay or provide any dividend,
bonus or other share of its profits or assets;
– Brockman not entering into, or becoming a party to a transaction with a related party
or related entity (as defined in the Corporations Act);
– the S&P/ASX300 index not falling more than 15% from the closing level of that index
on the day before the Announcement Date at any time on any ASX trading day;
– the exchange rate of A$ to HK$ not appreciating more than 10% from the closing
level of that rate on the day before the Announcement Date;
– Wah Nam Australia not becoming aware that any document filed by or on behalf of
Brockman with the ASX or ASIC contains an incorrect or misleading statement or has
a material omission; and
• no person (other than a member of the Wah Nam Group) having a right as a result of the
Offer to acquire, require disposal of, or require Brockman or its Subsidiaries to offer to
dispose of, any material asset of Brockman or any of its Subsidiaries or terminating, or
varying the terms of performance of, any material agreement of Brockman or any of its
Subsidiaries.
(See section 6.3 of this Target’s Statement for further details.)
What happens If the conditions are not satisfied or waived before the Offer closes, the Offer will lapse.
if the conditions You would then be free to deal with Brockman Shares even if you had accepted the Offer.
of the offer are
not satisfied or
waived?
----- End of picture text -----

BROCKMAN RESOURCES Target’s Statement 35

Frequently asked questions

==> picture [470 x 234] intentionally omitted <==

----- Start of picture text -----

Question answer
When will i be sent If you accept the Offer, you will have to wait for the Offer to become unconditional before
my consideration if you will be sent your consideration from Wah Nam Australia.
i accept the offer?
(See section 6.11 of this Target’s Statement for further details on when you will be sent
your consideration.)
What are the tax A general outline of the tax implications of accepting the Offer is set out in section 6.18 of
implications of this Target’s Statement.
accepting the
As the outline is a general outline only, Brockman Shareholders are encouraged to seek
offer?
their own specific professional advice as to the taxation implications applicable to their
circumstances.
is there a number If you have any further queries in relation to the Offer, you can call 1300 134 857 (for calls
that i can call made from inside Australia) or (03) 9415 4216 (for calls made from outside Australia).
if i have further
queries in relation
to the offer?
----- End of picture text -----

36 BROCKMAN RESOURCES Target’s Statement

4. Brockman Directors’

Brockman Directors’ recommendations

4.1 directors of BrocKmaN

As at the date of this Target’s Statement, the directors of Brockman are:

==> picture [291 x 126] intentionally omitted <==

----- Start of picture text -----

Name Position
Barry Cusack Non-Executive Chairman
Ross Norgard Deputy Non-Executive Chairman
Wayne Richards Managing Director
Colin Paterson Executive Director
Ross Ashton Non-Executive Director
J David Nixon Non-Executive Director
----- End of picture text -----

4.2 directors’ recommeNdatioNs

after taking into account each of the matters in this target’s statement and in the Bidder’s statement, each of your directors recommend that you reject the Wah Nam offer for the reasons set out in section 1 of this target’s statement.

In considering whether to accept the Offer, your directors encourage you to:

• read the whole of this Target’s Statement and the Bidder’s Statement;

• have regard to your individual risk profile, portfolio strategy, tax position and financial circumstances;

• consider the alternatives noted in section 5 of this Target’s Statement; and

• obtain financial advice from your broker or financial adviser on the Offer and obtain taxation advice on the effect of accepting the Offer.

4.3 iNteNtioNs of yoUr directors iN relatioN to the offer

Each director of Brockman who has a relevant interest in Brockman Shares, presently intends to reject the Offer in relation to those Brockman Shares.

Details of the relevant interests of each Brockman Director in Brockman Shares are set out in section 7 of this Target’s Statement.

38 BROCKMAN RESOURCES Target’s Statement

1. Your choices as a

Your choices as a Brockman Shareholder

your directors recommend that you reJect the Wah Nam offer.

However, as a Brockman Shareholder you have three choices currently available to you:

(a) do not accept the offer

Shareholders who do not wish to accept the Offer should do nothing.

Shareholders should note that if Wah Nam Australia and its associates have a relevant interest in at least 90% of Brockman Shares during or at the end of the Offer Period, Wah Nam Australia will be entitled to compulsorily acquire the Brockman Shares that it does not already own (See section 6.14 of this Target’s Statement for further details).

(b) sell your Brockman shares on market

During a takeover, shareholders of a target company who have not already accepted the bidder’s offer can still sell their shares on market for cash.

On 9 December 2010 Brockman’s share price closed at A$4.82, a 22% discount to the implied Offer price of A$6.16 based on Wah Nam’s closing share price of HK$1.57 on 9 December 2010 on the HKEx and a HK$:A$ exchange rate of 7.6471. The latest price for Brockman Shares and Wah Nam Shares may be obtained from the ASX website asx.com.au and hkex.com.hk.

Shareholders who sell their Brockman Shares on market may be liable for CGT on the sale and may incur a brokerage charge.

Brockman Shareholders who wish to sell their Brockman Shares on market should contact their broker for information on how to effect that sale.

(c) accept the offer

Brockman Shareholders may elect to accept the Offer. Details of the consideration that will be received by Brockman Shareholders who accept the Offer are set out in section 6.1 of this Target’s Statement and in the Bidder’s Statement.

Brockman Shareholders should be aware that if they accept the Offer and Wah Nam acquires less than 80% of Brockman Shares under the Offer, those Brockman Shareholders may be liable for CGT as rollover relief may not be available (see section 6.18 of this Target’s Statement).

The Bidder’s Statement contains details of how to accept the Offer in section 13.5.

40 BROCKMAN RESOURCES Target’s Statement

6. Information about Wah Nam and

Information about Wah Nam and key features of Wah Nam’s Offer

6.1 imPortaNt iNformatioN aBoUt Wah Nam

Wah Nam has provided information on its businesses in section 3 of the Bidder’s Statement. This section 6.1 provides Brockman’s views on that information. Importantly, and as described further below, Brockman considers that the level of information provided in the Bidder’s Statement is insufficient to allow Brockman Shareholders to fully understand Wah Nam’s operations and its prospects and there are a number of other matters Brockman Shareholders should be aware of. Brockman Shareholders should read this section carefully to understand Brockman’s views on the information provided by Wah Nam.

(a) overview

Wah Nam is an investment holding company, incorporated in Bermuda and listed on the HKEx. Wah Nam Australia is an Australian incorporated wholly-owned Subsidiary of Wah Nam. Wah Nam, through its Subsidiaries, is principally engaged in the exploitation, processing and sales of mineral resources, the provision of limousine rental and airport shuttle bus transportation services in Hong Kong and the People’s Republic of China (PRC) and the investment of funds in equity securities.

(b)

damajianshan mine

Wah Nam’s principal mining asset is its 90% stake in the Damajianshan base metals mine, located in the south of the PRC, close to the Vietnam border.

The 90% interest in the mining right was acquired by Wah Nam in September 2008 for approximately HK$987 million (approximately A$128 million) from Smart Year Investments Limited. The remaining 10% is held by Yunnan Maosheng Yuan. Since the date of the acquisition the asset has incurred amortisation losses and impairment losses and been adjusted for foreign exchange movements to result in a carrying value as at 30 June 2010 as shown in the Wah Nam Interim Report 2010 of HK$856 million (approximately A$107 million). This mining right makes up the majority of the mining operation which is carried at HK$885 million (approximately A$114 million) as at 30 June 2010 as shown in the Wah Nam Interim Report 2010.

figure 10

Damajianshan mining right carrying value waterfall (A$ million)

==> picture [388 x 197] intentionally omitted <==

----- Start of picture text -----

128.0 (1.6)1.6 (19.6)19.6
0.5 107.2
Acquisition value Amortisation loss Impairment loss Exchange differences Carrying value
(19 September 2008) (30 June 2010)
----- End of picture text -----

Source: Wah Nam Interim Report 2010.

42 BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

No formal mining was conducted at the Damajianshan mine in 2008 and 2009. According to section 3.3(a) of the Bidder’s Statement, in FY2009 and HY2010, the production volume of copper concentrate was approximately 340 tonnes and 125 tonnes respectively, and the sale of copper concentrate was approximately 410 tonnes and 74 tonnes, respectively. This translates to turnover, not profit, of HK$14.8 million (A$1.9 million) for FY2009 and HK$3.4 million (A$0.4 million) for HY2010.

Since 30 June 2008 and despite exploration activities in 2009 the Resource has not materially improved in approximately 2.5 years.

Brockman has serious concerns with a number of potential issues identified in the Technical Report which was prepared by consultants Behre Dolbear on acquisition of the asset in 2008 and which was included in the Bidder’s Statement. In particular, the Technical Report shows:

• significant levels of arsenic in the orebody;

• mining licence expiry in 2012. There is no guarantee that this will be renewed or extended;

• current Resource extends deeper than existing mining right level. There is no guarantee of those rights being secured;

• no resource or reserve upgrade/increase since acquisition despite an emphasis on “exploration and the delineation of additional resources to support an expanded operation”;

• disposal of tailings to a local contractor to make bricks. Brockman has concerns those tailings may contain high levels of arsenic and possibly lead given the characteristics of the orebody; and

• no environmental plan to manage the seepage of arsenic and heavy metals in the tailings facilities into the water table of the region.

Wah Nam has not provided sufficient information in the Bidder’s Statement to allow an appropriate valuation to be performed on Damajianshan by Brockman Shareholders. In particular, the Bidder’s Statement contains inadequate disclosure about Wah Nam’s intentions to increase production at the Damajianshan mine or its production plans.

Further, the assumptions which were relied upon to arrive at the current carrying value as shown in the Interim Report have not been disclosed and as such it is not possible to form a view on the adequacy of this valuation. In the absence of an appropriate value, the carrying value of A$114 million has been used as a proxy for assessed value.

(c) limousine / airport shuttle business

This business segment provides high end limousine rental services in Hong Kong and the PRC and airport shuttle bus services in Hong Kong. Currently the business has a fleet of 133 limousine cars serving major hotels, corporate and individual customers.

Wah Nam’s Bidder’s Statement notes that this business segment will continue to provide a stable revenue and income source to the Wah Nam Group. However, review of historical trading data disclosed by Wah Nam in its Annual and Interim Reports shows that the limousine rental services business has been loss-making up until HY2010 and that the airport shuttle bus services business has generated less than A$1 million each year over the last two and a half years in review. The combined total net profit from both the limousine rental and airport shuttle bus businesses in the most recent 6 months of trading has amounted to only A$300,000.

BROCKMAN RESOURCES Target’s Statement 43

Information about Wah Nam and key features of Wah Nam’s Offer

figure 11

Segment revenue and profit

==> picture [413 x 162] intentionally omitted <==

----- Start of picture text -----

a$ million 2008 2009 hy2010
Revenue
Limousine rental services 9.15 8.42 5.76
Airport shuttle bus services 2.03 1.92 0.88
total 11.19 10.34 6.64
Net Profit
Limousine rental services (15.21) (4.94) 0.22
Airport shuttle bus services 0.95 0.22 0.08
total (14.26) (4.72) 0.30
----- End of picture text -----

Source: Wah Nam Annual Report 2009, Wah Nam Interim Report 2010

Despite Wah Nam’s limousine rental and airport shuttle bus services businesses appearing to generate the majority of revenue for Wah Nam’s business historically, the Bidder’s Statement contains no information about the matters which are key to enable Brockman Shareholders to make an assessment about this business segment such as:

• the business strategy;

• major contracts; and

• licences for its limousine rental and airport shuttle bus services.

Given the information disclosed in the Bidder’s Statement, it is difficult to determine how material this business will be as a contributor to Wah Nam’s operations and performance going forward. This business unit’s cash flow contribution is insignificant given the scale of Wah Nam and certainly does not appear to provide a “stable revenue and income source to the Wah Nam Group” as noted by Wah Nam in the Bidder’s Statement.

6.2 coNsideratioN PayaBle to shareholders Who accePt the offer

The consideration being offered by Wah Nam Australia is 30 Wah Nam Shares for each Brockman Share it does not already own. The Wah Nam Shares received as consideration under the Offer will rank equally in all respects with the existing Wah Nam Shares. Brockman Shareholders should note that Wah Nam Shares are in Wah Nam, which is a Bermudan incorporated entity (as opposed to Brockman, which is an Australian company) so the rights attaching to Wah Nam Shares may differ from those attaching to Brockman Shares.

6.3 coNditioNs of the offer

Wah Nam’s Offer is subject to a number of conditions. Those conditions are set out in full in section 13.9 of the Bidder’s Statement.

By way of broad overview, the conditions to the Offer are:

• (a) Wah Nam shareholder approval: The requisite majority of Wah Nam Shareholders approving the acquisition by Wah Nam Australia of all of the Brockman Shares it does not already own on the terms of the Offer and the allotment and issue of the Consideration Shares and subsequent approval from Wah Nam Shareholders for any improvement in the Offer;

44 BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

• (b) Prescribed occurrences: Between the Announcement Date and the end of the Offer Period (inclusive), no ‘prescribed occurrence’ as defined in s652C of the Corporations Act occurring;

• (c) 50% minimum acceptance: At the end of the Offer Period, Wah Nam Australia having a relevant interest (as defined in s608 of the Corporations Act) in more than 50% of all Brockman Shares;

• (d) No regulatory actions: Between the Announcement Date and the end of the Offer Period (inclusive):

• (i) there is not in effect any preliminary or final decision, order or decree issued by a Government Agency;

• (ii) no action or investigation is announced, commenced or threatened by any Government Agency; and

• (iii) no application is made to any Government Agency (other than by Wah Nam or any of its Associates),

  • in consequence of or in connection with the Offer (subject to exceptions) which may, or which may threaten to restrain, prohibit or impede the acquisition of Brockman Shares under the Offer or the completion of any transaction contemplated by the Bidder’s Statement, or seeks to require the divestiture by Wah Nam Australia of any Brockman Shares, or the divestiture of any material assets of Brockman or the Wah Nam Group;

• (e) No material transactions: Between the Announcement Date and the end of the Offer Period (inclusive), neither Brockman nor any Subsidiary of Brockman:

• (i) acquires, offers to acquire or agrees to acquire one or more companies or assets (or an interest in one or more companies or assets) for an amount in aggregate greater than A$5 million or makes an announcement about such a transaction;

• (ii) disposes, offers to dispose or agrees to dispose of one or more companies or assets (or an interest in one or more companies or assets) for an amount in aggregate greater than A$5 million or makes an announcement about such a disposal;

• (iii) enters into, offers to enter into or announces that it proposes to enter into any joint venture or partnership or dual listed company structure, involving a commitment of in aggregate greater than A$5 million, other than in the ordinary course of business, or makes an announcement in relation to such entry, offer or agreement;

• (iv) incurs or commits to, or grants to another person a right the exercise of which would involve Brockman incurring or committing to, any capital expenditure or liability in respect of one or more related items of in aggregate greater than A$5 million or makes an announcement about such a commitment; or

• (v) discloses (without having disclosed to the ASX prior to the Announcement Date) the existence of any matter described in sub-paragraphs 6.3(e)(i) to 6.3(e)(iv) above, or announces an intention or proposal to do anything described in sub paragraphs 6.3(e)(i) to 6.3(e)(iv) above.

• (f) No material adverse change: Between the Announcement Date and the end of the Offer Period (inclusive), no event, change or condition occurs, is announced or becomes known to Wah Nam Australia (whether or not it becomes public) where that event, change or condition has had, or could reasonably be expected to have, a material adverse effect on:

• (i) the business, assets, liabilities, financial or trading position, profitability or prospects of Brockman, since 30 June 2010;

BROCKMAN RESOURCES Target’s Statement 45

Information about Wah Nam and key features of Wah Nam’s Offer

• (ii) the status or terms of arrangements entered into by Brockman; or

• (iii) the status or terms of any approvals, licences or permits from Government Agencies applicable to Brockman,

except for events, changes and conditions publicly announced by Brockman or otherwise disclosed in public filings by Brockman or any of its Subsidiaries prior to the Announcement Date where the relevant disclosure is not, and is not likely to be, incomplete, incorrect, untrue or misleading;

• (g) Non-existence of certain rights: No person (other than a member of the Wah Nam Group) has or will have any right (whether subject to conditions or not) as a result of Wah Nam acquiring Brockman Shares under the Offer to:

• (i) acquire, or require the disposal of, or require Brockman or its Subsidiaries to offer to dispose of, any material asset of Brockman or any of its Subsidiaries; or

• (ii) terminate, or vary the terms of performance of, any material agreement of Brockman or any of its Subsidiaries;

• (h) No dividends or distributions: Between the Announcement Date and the end of the Offer Period (inclusive), neither Brockman nor any subsidiary of Brockman Resources, declares, distributes, or resolves to pay or provide any dividend, bonus or other share of its profits or assets;

• (i) No related Party transactions: Between the Announcement Date and the end of the Offer Period (inclusive), Brockman does not enter into or otherwise become a party to any transaction with a related party or related entity (as those terms are defined in the Corporations Act);

• (j) stock market index decline: Between the Announcement Date and the end of the Offer Period (inclusive), the S&P/ASX300 index does not fall more than 15% from the closing level of that index on the day before the Announcement Date at any time on any ASX trading day;

• (k) exchange rate Variation: Between the Announcement Date and the end of the Offer Period (inclusive), the exchange rate of A$ to HK$ does not appreciate more than 10% from the closing level of that rate on the day before the Announcement Date; and

• (l) No incorrect or misleading filings: Between the Announcement Date and the end of the Offer Period (inclusive), Wah Nam Australia does not become aware through ASIC or otherwise, that any document filed by or behalf of Brockman with the ASX or ASIC contains a statement which is incorrect or misleading in any material particular or from which there is a material omission.

In addition, Wah Nam’s Offer is subject to a statutory condition that permission for admission to quotation of the Consideration Shares on the HKEx and all Wah Nam Shares on the ASX is granted no later than 7 days after the end of the bid period.

As at the date of this Target’s Statement, Brockman is not aware of any act, omission, event or fact that would result in any of the conditions to the Offer being triggered other than those identified below.

On 3 December 2010, Brockman announced that it had awarded the FEED contract for the Marillana Project to UGL Resources Pty Ltd. As the value of the FEED contract exceeds A$5 million entry into the contract means that the condition of the Wah Nam Offer set out in 6.3(e) is not satisfied. Wah Nam has advised in its Bidder’s Statement that it does not intend to rely on the non-satisfaction of the condition to let its Offer lapse, and so will continue with the Offer.

46 BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

6.4 Notice of statUs of coNditioNs

Section 13.14 of the Bidder’s Statement indicates that Wah Nam Australia will give a Notice of Status of Conditions to the ASX and Brockman on 7 January 2011.

Wah Nam Australia is required to set out in its Notice of Status of Conditions:

• whether the Offer is free of any or all of the conditions;

• whether, so far as Wah Nam Australia knows, any of the conditions have been fulfilled; and

• Wah Nam Australia’s voting power in Brockman.

If the Offer Period is extended by a period before the time by which the Notice of Status of Conditions is to be given, the date for giving the Notice of Status of Conditions will be taken to be postponed for the same period. In the event of such an extension, Wah Nam Australia is required, as soon as practicable after the extension, to give a notice to the ASX and Brockman that states the new date for the giving of the Notice of Status of Conditions.

If a condition is fulfilled (so that the Offer becomes free of that condition) during the bid period but before the date on which the Notice of Status of Conditions is required to be given, Wah Nam Australia must, as soon as practicable, give the ASX and Brockman a notice that states that the particular condition has been fulfilled.

Wah Nam Australia gave notice on 13 December 2010 that the requisite majority of Wah Nam shareholders approved the Offer thereby satisfying the condition of the Offer set out in section 13.9(a) sub-paragraphs (i) and (ii) of the Bidder’s Statement. Sub-paragraphs (iii) and (iv) of the condition in section 13.9(a) of the Offer are not yet satisfied such that the offer remains conditional upon a further Wah Nam shareholder approval if Wah Nam varies the consideration under its Offer.

6.5 effect of Breach or NoN-fUlfilmeNt of offer coNditioNs

The effect of a breach or non-fulfilment of a Condition of the Offer is set out in section 13.11 of the Bidder’s Statement. Broadly, prior to the end of the Offer Period, a breach or non-fulfilment of a Condition of the Offer will not prevent you from accepting the Offer and a contract arising for Wah Nam Australia to acquire your Brockman Shares.

However, if Wah Nam Australia has not declared the Offer to be free from the Conditions (before the date applicable under s650F(1) of the Corporations Act) or the Conditions have not been fulfilled at the end of the Offer Period, then all contracts resulting from acceptance of the Offer and all acceptances that have not resulted in binding contracts will be void.

6.6 offer Period

Unless Wah Nam’s Offer is extended or withdrawn, it is open for acceptance from 15 December 2010 until 4:00pm WST on 17 January 2011.

The circumstances in which Wah Nam Australia may extend or withdraw its Offer are set out in section 6.7 and section 6.8 respectively of this Target’s Statement.

BROCKMAN RESOURCES Target’s Statement 47

Information about Wah Nam and key features of Wah Nam’s Offer

6.7 eXteNsioN of the offer Period

Wah Nam Australia may extend the Offer Period at any time before giving the Notice of Status of Conditions (referred to in section 6.3 in this Target’s Statement) while the Offer is subject to conditions. However, if the Offer is unconditional (that is, all the conditions are fulfilled or freed), Wah Nam may extend the Offer Period at any time before the end of the Offer Period.

In addition, there will be an automatic extension of the Offer Period if, within the last 7 days of the Offer Period:

• Wah Nam Australia improves the consideration offered under the Offer; or

• Wah Nam Australia’s voting power in Brockman increases to more than 50%.

If either of these events occur, the Offer Period is automatically extended so that it ends 14 days after the relevant event occurs.

6.8 WithdraWal of offer

Wah Nam Australia may not withdraw the Offer if you have already accepted it. However, if the Conditions have not been satisfied or waived at the end of the Offer Period, then all acceptances will be void. Before you accept the Offer, Wah Nam Australia may withdraw the Offer with the written consent of ASIC and subject to the conditions (if any) specified in such consent.

6.9 effect of accePtaNce

The effect of acceptance of the Offer is set out in section 13.7 of the Bidder’s Statement. Brockman shareholders should read these provisions in full to understand the effect that acceptance will have on their ability to exercise the Rights attaching to their Shares and the representations and warranties which they give by accepting of the Offer. In particular, accepting Brockman Shareholders will not be able to sell their Brockman Shares during the Offer Period and if Wah Nam’s Offer is declared or becomes unconditional Wah Nam will be able to exercise the Rights attaching to their Brockman Shares.

6.10 yoUr aBility to WithdraW yoUr accePtaNce

You only have limited rights to withdraw your acceptance of the Offer.

You may only withdraw your acceptance of the Offer if:

• the condition imposed by section 625(3) of the Corporations Act which applies in relation to scrip consideration that the bidder states will be quoted on a financial market (whether in Australia or elsewhere) is not satisfied; or

• Wah Nam Australia varies the Offer in a way that postpones, for more than one month, the time when Wah Nam Australia needs to meet its obligations under the Offer. This will occur if Wah Nam extends the Offer Period by more than one month and the Offer is still subject to conditions.

48 BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

6.11 WheN yoU Will receiVe yoUr coNsideratioN if yoU accePt the offer

In the usual case, you will be issued your consideration on or before the later of:

• one month after the date the Offer becomes or is declared unconditional; and

• one month after the date you accept the Offer if the Offer is, at the time of acceptance, unconditional,

but, in any event (assuming the Offer becomes or is declared unconditional), no later than 21 days after the end of the Offer Period.

However, there are certain exceptions to the above timetable for the issuing of consideration. Full details of when you will be issued your consideration are set out in section 13.8 of the Bidder’s Statement.

6.12 effect of aN imProVemeNt iN coNsideratioN oN shareholders Who haVe already accePted the offer

If Wah Nam Australia improves the consideration offered under its takeover bid, all Brockman Shareholders, whether or not they have accepted the Offer before that improvement in consideration, will be entitled to the benefit of that improved consideration.

6.13 laPse of offer

The Offer will lapse if the Offer conditions are not freed or fulfilled by the end of the Offer Period; in which case, all contracts resulting from acceptance of the Offer and all acceptances that have not resulted in binding contracts are void. In that situation, you will be free to deal with your Brockman Shares as you see fit.

6.14 comPUlsory acQUisitioN

Wah Nam Australia has indicated in section 8.6(a) of the Bidder’s Statement that if it satisfies the required thresholds it intends to compulsorily acquire any outstanding Brockman Shares.

Wah Nam Australia will be entitled to compulsorily acquire any Brockman Shares in respect of which it has not received an acceptance of its Offer on the same terms as the Offer if, during or at the end of the Offer Period, Wah Nam Australia and its Associates have a relevant interest in at least 90% (by number) of Brockman Shares.

If this threshold is met, Wah Nam Australia will have one month after the end of the Offer Period within which to give compulsory acquisition notices to Brockman Shareholders who have not accepted the Offer. Brockman Shareholders have statutory rights to challenge the compulsory acquisition, but a successful challenge will require the relevant shareholder to establish to the satisfaction of a court that the terms of the Offer do not represent ‘fair value’ for their Brockman Shares. If compulsory acquisition occurs, Brockman Shareholders who have their Brockman Shares compulsorily acquired are likely to be issued their consideration approximately 5 to 6 weeks after the compulsory acquisition notices are dispatched to them.

It is also possible that Wah Nam Australia will, at some time after the end of the Offer Period, become the beneficial holder of 90% of the Shares. Wah Nam Australia would then have rights to compulsorily acquire Brockman Shares not owned by it within 6 months of becoming the holder of 90%. The price for compulsory acquisition under this procedure would have to be considered in a report of an independent expert.

49

BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

6.15 miNority oWNershiP coNseQUeNces

If Wah Nam acquires more than 50% but less than 90% of the Brockman Shares then, assuming all other conditions to the Offer are fulfilled or freed, Wah Nam will acquire a majority shareholding in Brockman.

Accordingly, Brockman Shareholders who do not accept the Offer will become minority shareholders in Brockman. This has a number of possible implications, including:

• Wah Nam will be in a position to cast the majority of votes at a general meeting of Brockman. This will enable it to control the composition of Brockman’s board of directors and senior management, determine Brockman’s dividend policy and control the strategic direction of the businesses of Brockman and its subsidiaries;

• the Brockman Share price may fall immediately following the end of the Offer Period and it is unlikely that Brockman’s Share price will contain any takeover premium;

• liquidity of Brockman Shares may be lower than at present and there is a risk that Brockman could be fully or partially removed from certain S&P/ASX market indices due to lack of free float and/or liquidity;

• if the number of Brockman Shareholders is less than the number which, in ASX’s opinion, is sufficient to ensure that there is an orderly and liquid market in the securities, then Wah Nam may seek to have Brockman removed from the official list of the ASX. If this occurs, Brockman Shares will not be able to be bought or sold on the ASX;

• future Brockman dividend policy under the management of Wah Nam may vary significantly from what Brockman may consider;

• a proportion of the synergies referred to by Wah Nam in the Bidder’s Statement may not be achieved; and

• if Wah Nam acquires 75% or more of the Brockman Shares it will be able to pass a special resolution of Brockman. This will enable Wah Nam to, among other things, change Brockman’s constitution.

Additionally, assuming Wah Nam waives the 50% minimum acceptance condition, there may be consequences for Brockman Shareholders should Wah Nam increase its holding in Brockman, even if that increase is to a level of less than 50%. These consequences include:

• given that in many cases less than 100% of Brockman Shareholders may attend shareholder meetings to cast votes, Wah Nam may have the ability to pass shareholder resolutions, including resolutions to effect a change of the Brockman Board, notwithstanding that it does not hold 50% of Brockman Shares. That is, Wah Nam may still have effective control of Brockman in this situation; and

• while Wah Nam holds a relevant interest in Brockman of greater than 19%, it will have the ability to ‘creep’ – that is, it will be permitted to acquire further Brockman Shares in increments of 3% every 6 months. Wah Nam will be able to exercise its ability to ‘creep’ after the Offer has closed and by doing so can increase its holding in Brockman incrementally without either obtaining Brockman Shareholder approval or launching another takeover offer.

50 BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

6.16 other alterNatiVes to the offer

The Board is currently considering alternative options in order to maximise value for Brockman shareholders. These include the potential for rival takeover bids for Brockman.

At this stage, the Board is not in a position to provide shareholders with information in relation to the probability of an alternative transaction arising but will keep shareholders informed of any material developments. In this regard, your Board will update you no more than 14 days and no less than 7 days before the end of the Offer Period.

6.17 BrocKmaN share Price aBseNt the offer

While there are many factors that influence the market price of Brockman Shares, your directors anticipate that, following the close of the Offer, the market price of Brockman Shares may fall if Wah Nam’s Offer fails, if Wah Nam acquires more than 50% (but less than 90%) of the Brockman Shares or if the takeover is otherwise unsuccessful.

6.18 taXatioN coNseQUeNces of a chaNGe iN coNtrol iN BrocKmaN

The taxation consequences of accepting the Offer depend on a number of factors and will vary depending on your particular circumstances. A general outline of the Australian taxation considerations of accepting the Offer are set out in section 9 of the Bidder’s Statement.

The following comments do not apply to Brockman Shareholders who are not resident of Australia for taxation purposes, or who hold their Brockman Shares through a company, superannuation fund, partnership or trust. Those Brockman Shareholders should seek their own specific professional advice as to the taxation implications applicable to their circumstances.

(a) Potential tax liabilities where scrip-for-scrip-cGt rollover relief is not available

As section 9.2 of the Bidder’s Statement notes, scrip-for-scrip-CGT rollover relief will only be available if Wah Nam Australia becomes the owner of at least 80% of Brockman Shares following the Offer. Therefore, if as a result of the Offer, Wah Nam Australia owns less than 80% of the Brockman Shares, Brockman Shareholders who make an Australian capital gain by accepting the Offer will not be able to elect to obtain a scrip-for-scrip-CGT rollover of that capital gain. Brockman Shareholders may therefore incur significant CGT liabilities from disposal of their Brockman Shares.

If rollover relief is not available, Brockman Shareholders who have held their Brockman Shares for less than 12 months and who dispose of those Brockman Shares will not be eligible for any CGT discount that applies in respect of Brockman Shares held for at least 12 months. Those Brockman Shareholders may therefore be taxed on any net capital gain at their top marginal rate of tax.

(b)

loss of the benefit of capital losses and inability to utilise capital losses

Section 9.2 of the Bidder’s Statement states that “Such a capital loss may be used to offset a capital gain made in the same income year or in a future income year.” However, the Bidder’s Statement does not mention that there are circumstances in which a capital loss may be lost or in which restrictions apply to the utilisation of a capital loss.

(c) Brockman shares held as trading stock or otherwise on revenue account

Scrip-for-scrip-CGT rollover relief is not available if you hold your Brockman Shares as trading stock or otherwise on revenue account. Therefore, Brockman Shareholders who hold their Brockman Shares as trading stock or otherwise on revenue account may be left with significant income tax liabilities from any disposal of Brockman Shares.

51

BROCKMAN RESOURCES Target’s Statement

Information about Wah Nam and key features of Wah Nam’s Offer

(d) Potential tax liabilities on unfranked dividends received from Wah Nam

As section 9.3 of the Bidder’s Statement notes, any dividends paid by Wah Nam will not be franked under the Australian corporate income tax imputation system. This means shareholders in Wah Nam will not receive a tax offset for company tax paid on the profits out of which the dividends are paid. Shareholders in Wah Nam may therefore be taxed on dividends at their top marginal rate of tax.

(e) independent advice

You should carefully read and consider the taxation consequences of accepting the Offer. Brockman Shareholders should not rely on the disclosure of taxation considerations in Section 9 of the Bidder’s Statement or in this Target’s Statement as being advice on their own affairs. The outline provided in the Bidder’s Statement and this Target’s Statement is of a general nature only and you should seek your own specific professional advice as to the taxation implications (including foreign taxation implications) applicable to your circumstances.

Neither Brockman, nor any of its directors, nor its taxation or other advisers, accept any liability or responsibility in respect of any statement concerning the taxation consequences of accepting the Offer in relation to particular Brockman Shareholders.

6.19 treatmeNt of oVerseas shareholders

Any Brockman shareholder whose address (as recorded in the register of members of Brockman provided by Brockman to Wah Nam) is in a place outside Australia, New Zealand, Singapore and Hong Kong will not be issued with Wah Nam’s Shares under the Offer.

Instead, Wah Nam Australia will arrange for the relevant Wah Nam Shares (that would otherwise be transferred to such foreign holders) to be allotted to a nominee approved by ASIC for the purposes of s619(3) of the Corporations Act (Nominee), and will cause the Nominee to sell, or procure the on-market sale of all Wah Nam Shares allotted to it as soon as practicable and in any event, not more than 10 Business Days after the close of the Offer. The Nominee will then distribute to each of those foreign holders their proportion of the proceeds of sale net of expenses.

See section 13.6(b) of the Bidder’s Statement for further details.

52 BROCKMAN RESOURCES Target’s Statement

7. Information relating

Information relating to your Directors

7.1 iNterests aNd dealiNGs iN BrocKmaN secUrities

(a) interests in Brockman shares and options

As at the date of this Target’s Statement, your directors had the following relevant interests in Brockman Shares and Brockman Options:

==> picture [413 x 192] intentionally omitted <==

----- Start of picture text -----

director Number of Brockman shares Number of Brockman options
Barry Cusack 0 1,500,000 (exercise price of $3.00 and an
expiry date of 31 August 2014)
Ross Norgard 13,500,000 0
Wayne Richards 3,000,000 1,500,000 (exercise price of $3.21 and an
expiry date of 15 June 2014)
Colin Paterson 2,533,247 400,000 (exercise price of $3.21 and an expiry
date of 15 June 2014)
Ross Ashton 1,094,214 0
J David Nixon 100,000 600,000 (exercise price of $1.30 and an expiry
date of 11 November 2013)
total 20,227,461 4,000,000
----- End of picture text -----

(b) dealings in Brockman shares and options

No director of Brockman has acquired or disposed of a relevant interest in any Brockman Shares or Brockman Options in the 4 month period ending on the date immediately before the date of this Target’s Statement, other than as follows:

• (i) Mr Richards exercised 210,000 Brockman Options with an exercise price of $0.50 on 2 November 2010;

• (ii) Mr Nixon exercised 100,000 Brockman Options with an exercise price of $1.30 on 28 October 2010;

• (iii) Mr Richards exercised 790,000 Brockman Options with an exercise price of $0.50 on 27 October 2010. Proceeds for the exercise were provided by Brockman through the Plan;

• (iv) Mr Nixon sold 100,000 Brockman Shares on-market on 22 October 2010 for $3.97 each;

• (v) Mr Paterson sold 1,000,000 Brockman Shares to Wah Nam in an on-market special crossing on 22 October 2010 for $4.00 each;

• (vi) Mr Richards sold 1,000,000 Brockman Shares to Wah Nam in an off-market transfer on 6 October 2010 for $4.00 each; and

• (vii) Mr Barry Cusack was issued 1,500,000 Brockman Options pursuant to Brockman’s Extraordinary General Meeting held on 1 September 2010.

54 BROCKMAN RESOURCES Target’s Statement

Information relating to your Directors

(c) interests in Wah Nam securities

As at the date immediately before the date of this Target’s Statement, no Brockman director had a relevant interest in any Wah Nam or Wah Nam Australia securities.

(d) dealings in Wah Nam securities

No director of Brockman acquired or disposed of a relevant interest in any Wah Nam or Wah Nam Australia securities in the 4 month period ending on the date immediately before the date of this Target’s Statement.

7.2 BeNefits aNd aGreemeNts

(a) Benefits in connection with retirement from office

As a result of the Offer, no person has been or will be given any benefit (other than a benefit which can be given without member approval under the Corporations Act ) in connection with the retirement of that person, or someone else, from a board or managerial office of Brockman or related body corporate of Brockman.

(b) agreements connected with or conditional on the offer

There are no agreements made between any director of Brockman and any other person in connection with, or conditional upon, the outcome of the Offer other than in their capacity as a holder of Brockman Shares or Brockman Options.

(c) Benefits from Wah Nam

None of the directors of Brockman has agreed to receive, or is entitled to receive, any benefit from Wah Nam or Wah Nam Australia which is conditional on, or is related to, the Offer, other than in their capacity as a holder of Brockman Shares or Brockman Options.

(d) interests of directors in contracts with Wah Nam

None of the directors of Brockman has any interest in any contract entered into by Wah Nam or Wah Nam Australia.

BROCKMAN RESOURCES Target’s Statement 55

This page was left blank intentionally

56

BROCKMAN RESOURCES Target’s Statement

8. Additional information

Additional information

8.1 effect of the offer oN BrocKmaN’s material coNtracts

To the best of Brockman’s knowledge, none of the material contracts to which Brockman is a party contain change of control provisions which may be triggered as a result of, or as a result of acceptances of, the Offer and which may have a material adverse effect on the assets and liabilities, financial position and performance, profits and losses and prospects of Brockman.

8.2 material litiGatioN

Brockman does not believe that it is involved in any litigation or dispute which is material in the context of Brockman and its subsidiaries taken as a whole.

8.3 issUed caPital

As at the date of this Target’s Statement, Brockman’s issued capital consisted of:

• 142,963,151 fully paid ordinary shares;

• 250,000 unlisted options with an exercise price of $1.25, due to expire on 20 April 2013;

• 450,000 unlisted options with an exercise price of $1.25, due to expire on 10 May 2013;

• 350,000 unlisted options with an exercise price of $1.25 due to expire on 2 August 2013;

• 600,000 unlisted options with an exercise price of $1.30, due to expire on 11 November 2013;

• 3,140,000 unlisted options with an exercise price of $3.21, due to expire on 15 June 2014; and

• 1,500,000 unlisted options with an exercise price of $3.00, due to expire on 31 August 2014.

8.4 sUBstaNtial holders

As at the date of this Target’s Statement, based on the substantial shareholding notices provided to Brockman, the substantial shareholders of Brockman are:

• Wah Nam, which holds 32,347,405 Brockman Shares, being 22.63%; and

• Ross Norgard, who holds 13,500,000 Brockman Shares, being 9.5%.

58 BROCKMAN RESOURCES Target’s Statement

Additional information

8.5 effect of offer oN BrocKmaN’s emPloyee iNceNtiVe schemes aNd secUrities issUed UNder those schemes

To provide long term incentives to key management personnel, Brockman has issued Brockman Options to eligible persons under the Brockman Resources Limited Employee Option Plan, dated 26 August 2008 (as amended from time to time) and adopted by Brockman Shareholders at the annual general meeting held on 5 November 2008 (the Plan).

Brockman has 1,940,000 unlisted Brockman Options on issue under the Plan. Those unlisted Brockman Options and their vesting dates are as follows:

==> picture [441 x 72] intentionally omitted <==

----- Start of picture text -----

Quantity exercise Price expiry date Vesting date
450,000 $1.25 10 May 2013 200,000 on 11 May 2011 and 250,000 on 11 May 2012
350,000 $1.25 2 August 2013 150,000 on 3 August 2011 and 200,000 on 3 August 2012
1,140,000 $3.21 15 June 2014 495,000 on 1 July 2010 and 645,000 on 1 September 2011
----- End of picture text -----

Under the terms of the Plan, options granted under the Plan may be exercised:

• during a ‘bid period’ (which commences on the announcement date of Wah Nam’s Offer, being 10 November 2010, and ends when the Wah Nam Offer closes); or

• at any time after a shareholder, or a group of associated shareholders, become entitled to sufficient Brockman Shares to give it or them the ability, and that ability is successfully exercised, in general meeting, to replace all or a majority of the Brockman Board.

As a result, all Brockman Options issued under the Plan are exercisable until the end of the Offer Period. In addition, if Wah Nam replaces a majority of the Brockman Board, those Brockman Options will again become exercisable.

In addition, Brockman has 2,000,000 unlisted Brockman Options which were not issued under the Plan but were issued otherwise on the same terms as Brockman Options issued under the Plan. Those unlisted Brockman Options have an exercise price of $3.21, and an expiry date of 15 June 2014. 1,000,000 have vested and 1,000,000 vest on 1 September 2011.

As a result of Wah Nam’s Offer, the 1,000,000 Brockman Options not issued under the Plan that have not yet vested are exercisable until the end of the Offer Period. In addition, if Wah Nam replaces a majority of the Brockman Board, the 1,000,000 Brockman Options that have not yet vested will again become exercisable.

There are a further 1,500,000 unlisted options which were issued outside of the Plan, of which 750,000 have not yet vested. Under the terms of those Options, the unvested options may be exercised when the takeover bid is declared unconditional.

The remaining 850,000 unlisted Brockman Options are not impacted by the Offer.

59

BROCKMAN RESOURCES Target’s Statement

Additional information

8.6 coNseNts

Freehills has given, and has not withdrawn before the lodgement of this Target’s Statement with ASIC, its written consent to be named in the Target’s Statement as Brockman’s Australian legal adviser in the form and context in which it is so named. Freehills has not advised on the laws of any foreign jurisdiction, and has not provided tax advice in relation to any jurisdiction. Freehills has not caused or authorised the issue of this Target’s Statement, does not make or purport to make any statement in this Target’s Statement or any statement on which a statement in this Target’s Statement is based, and takes no responsibility for any part of this Target’s Statement other than any reference to its name.

UBS AG, Australia Branch (UBS) has given, and has not withdrawn before the lodgement of this Target’s Statement with ASIC, its written consent to be named in the Target’s Statement as Brockman’s financial adviser in the form and context in which it is so named. UBS has not caused or authorised the issue of this Target’s Statement, does not make or purport to make any statement in this Target’s Statement or any statement on which a statement in this Target’s Statement is based, and takes no responsibility for any part of this Target’s Statement other than any reference to its name.

As permitted by ASIC Class Order 01/1543 this Target’s Statement contains statements which are made, or based on statements made, in documents lodged by Wah Nam and Wah Nam Australia with ASIC or given to the ASX, or announced on the Company Announcements Platform of the ASX, by Wah Nam and Wah Nam Australia. Pursuant to the Class Order, the consent of Wah Nam and Wah Nam Australia is not required for the inclusion of such statements in this Target’s Statement. Any Brockman shareholder who would like to receive a copy of any of those documents may obtain a copy (free of charge) during the Offer Period by contacting the Brockman shareholder line on 1300 134 857 (for calls made from within Australia) or (03) 9415 4216 (for calls made from outside Australia).

As permitted by ASIC Class Order 03/635, this Target’s Statement may include or be accompanied by certain statements:

• fairly representing a statement by an official person; or

• from a public official document or a published book, journal or comparable publication.

In addition, as permitted by ASIC Class Order 07/429, this Target’s Statement contains share price trading data sourced from IRESS without its consent.

8.7 asic declaratioNs aNd asX listiNG rUle WaiVers

Brockman has not been granted any modifications or exemptions by ASIC from the Corporations Act in connection with the takeover bid. Nor has Brockman been granted any waivers from ASX in relation to the takeover bid.

60 BROCKMAN RESOURCES Target’s Statement

Additional information

8.8 Jorc code rePortiNG of BrocKmaN’s miNeral resoUrces aNd ore reserVes

The information in this Target’s Statement that relates to exploration results, Mineral Resources or Ore Reserves is based on information compiled by Mr I Cooper, Mr J Farrell and Mr A Zhang.

The Ore Reserves for Marillana statement has been compiled in accordance with the guidelines defined in the JORC Code. The Ore Reserves have been compiled by Iain Cooper of Golder Associates, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Cooper has had sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit under consideration to qualify as Competent Person as defined in the JORC Code. Iain Cooper consents to the inclusion of the matters based on this information in this Target Statement by Brockman, in the form and context in which it appears.

Mr J Farrell, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Golder Associates Pty Ltd, produced the Mineral Resource for Marillana estimates based on the data and geological interpretations provided by Brockman. Mr Farrell has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Farrell consents to the inclusion in this Target Statement of the matters based on his information in the form and context that the information appears.

Mr A Zhang, who is a Member of the Australasian Institute of Mining and Metallurgy and a full-time employee of Brockman, provided the geological interpretations and the drill hole data used for the Marillana Mineral Resource estimation. Mr Zhang is a full time employee of Brockman. Mr Zhang has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Zhang consents to the inclusion in this Target Statement of the matters based on his information in the form and context that the information appears.

exploration targets

While Brockman is optimistic that it will report Mineral Resources for the West Pilbara tenements in the future, any discussion in relation to the potential quantity and grade of Exploration Targets is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource for these tenements and it is uncertain if further exploration will result in determination of a Mineral Resource for the West Pilbara tenements or other prospects on the Company’s landholding outside of the currently defined JORC compliant Mineral Resources at the Company’s Marillana Project.

The information in this report that relates to Exploration Targets and exploration results is based on information compiled by Mr A Zhang, who is a Member of the Australasian Institute of Mining and Metallurgy and a fulltime employee of Brockman Resources Limited. Mr Zhang has sufficient experience that is relevant to the style of mineralisation, type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Zhang consents to the inclusion in this report of the matters based on his information in the form and context that the information appears.

61

BROCKMAN RESOURCES Target’s Statement

Additional information

8.9 No other material iNformatioN

This Target’s Statement is required to include all the information that Brockman Shareholders and their professional advisers would reasonably require to make an informed assessment whether to accept the Offer, but:

• only to the extent to which it is reasonable for investors and their professional advisers to expect to find this information in this Target’s Statement; and

• only if the information is known to any director of Brockman.

The directors of Brockman are of the opinion that the information that Brockman Shareholders and their professional advisers would reasonably require to make an informed assessment whether to accept the Offer is:

• the information contained in the Bidder’s Statement (to the extent that the information is not inconsistent or superseded by information in this Target’s Statement);

• the information contained in Brockman’s releases to the ASX, and in the documents lodged by Brockman with ASIC before the date of this Target’s Statement; and

• the information contained in this Target’s Statement.

The directors of Brockman have assumed, for the purposes of preparing this Target’s Statement, that the information in the Bidder’s Statement is accurate (unless they have expressly indicated otherwise in this Target’s Statement). However, the directors of Brockman do not take any responsibility for the contents of the Bidder’s Statement and are not to be taken as endorsing, in any way, any or all statements contained in it.

In deciding what information should be included in this Target’s Statement, the directors of Brockman have had regard to:

• the nature of the Brockman Shares;

• the matters that shareholders may reasonably be expected to know;

• the fact that certain matters may reasonably be expected to be known to shareholders’ professional advisers; and

• the time available to Brockman to prepare this Target’s Statement.

62 BROCKMAN RESOURCES Target’s Statement

9. Glossary and interpretation

Glossary and interpretation

9.1 Glossary

The meanings of the terms used in this Target’s Statement are set out below.

==> picture [441 x 606] intentionally omitted <==

----- Start of picture text -----

term meaning
a$ Australian dollar.
alliance the North West Iron Ore Alliance.
announcement date the date that the Offer was announced by Wah Nam Australia to Brockman
and the market, being 11 November 2010.
asic Australian Securities and Investments Commission.
associate has the meaning given in the Corporations Act.
asX ASX Limited.
Bfs bankable feasibility study.
Bidder’s statement the replacement bidder’s statement of Wah Nam Australia dated 6
December 2010.
Board the board of directors of Brockman.
Brockman or company Brockman Resources Limited ABN 73 009 372 150.
Brockman Group Brockman and its Subsidiaries.
Brockman options an option to acquire an unissued Brockman Share.
Brockman shares fully paid ordinary shares in Brockman.
Brockman shareholders the holders of Brockman Shares.
Business day a day on which the banks are open for business in Perth, excluding a
Saturday, Sunday or public holiday.
cGt capital gains tax.
chess holding a number of shares which are registered on Brockman’s share register being
a register administered by ASX Settlement Pty Limited and which records
uncertificated holdings of shares.
cid channel iron deposit.
combined Group the Wah Nam Group following its acquisition of all or a majority of the
Brockman Resources Shares and/or FerrAus Shares.
conditions the conditions of the Offer, as contained in sections 13.9 and 13.15 of the
Bidder’s Statement.
consideration shares the fully paid ordinary shares in Wah Nam offered to Brockman Shareholders
as consideration for their Brockman Shares under the Offer.
corporations act the Corporations Act 2001 (Cth) (as modified or varied by ASIC).
dfs definitive feasibility study.
directors the directors of Brockman.
fy financial year.
hKex Hong Kong Exchanges and Clearing Limited or the financial products
market, the Hong Kong Exchange, as the situation requires.
hK$ Hong Kong dollar.
----- End of picture text -----

64 BROCKMAN RESOURCES Target’s Statement

Glossary and interpretation

==> picture [440 x 601] intentionally omitted <==

----- Start of picture text -----

term meaning
hy half year.
Jorc code the 2004 edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’ prepared by the Joint Ore
Reserves Committee of The Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia.
marillana Project Brockman’s 100% owned iron ore project, located at Marillana,
approximately 100km north-west of Newman in the Pilbara region of
Western Australia, as described in detail in section 2.1.
mineral resource has the meaning given in the JORC Code.
mt million tonnes.
mtpa million tonnes per annum.
Notice of status of Wah Nam Australia’s notice disclosing the status of the conditions to the
conditions Offer which is required to be given by section 630(3) of the Corporations
Act.
offer or the Wah Nam the offer by Wah Nam Australia for Brockman Shares, which offer is
offer or Wah Nam’s offer contained in section 13 of the Bidder’s Statement.
offer Period the period during which the Offer will remain open for acceptance in
accordance with section 13.3 of the Bidder’s Statement.
ore reserve has the meaning given in the JORC Code.
Pfs pre-feasibility study.
Prc the People’s Republic of China.
Probable ore reserve has the meaning given in the JORC Code.
Proved ore reserves has the meaning given in the JORC Code.
related Party has the meaning given to it in the Corporations Act.
rights has the meaning given in section 14 of the Bidder’s Statement.
subsidiary has the meaning given to it in the Corporations Act.
target’s statement this document being the statement of Brockman under Part 6.5 Division 3 of
the Corporations Act.
VWaP volume weighted average price.
Wah Nam australia Wah Nam International Australia Pty Ltd ACN 134 696 727.
Wah Nam-Brockman- the Wah Nam Group following its acquisition of all or a majority of the
ferraus Group Brockman Shares and FerrAus shares.
Wah Nam Wah Nam International Holdings Limited ARBN 143 211 867, a company
incorporated in Bermuda and listed on The Stock Exchange of Hong Kong
(Stock Code 159).
Wah Nam Group Wah Nam and each of its Subsidiaries.
Wah Nam shares fully paid ordinary shares in Wah Nam.
----- End of picture text -----

65

BROCKMAN RESOURCES Target’s Statement

Glossary and interpretation

9.2 iNterPretatioN

In this Target’s Statement:

• (i) Other words and phrases have the same meaning (if any) given to them in the Corporations Act.

• (ii) Words of any gender include all genders.

• (iii) Words importing the singular include the plural and vice versa.

• (iv) An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and vice versa.

• (v) A reference to a section, clause, attachment and schedule is a reference to a section of, clause of and an attachment and schedule to this Target’s Statement as relevant.

• (vi) A reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them.

• (vii) Headings and bold type are for convenience only and do not affect the interpretation of this Target’s Statement.

• (viii) A reference to time is a reference to Australian Western Standard Time.

• (ix) A reference to dollars, $, A$, AUD, cents, ¢ and currency is a reference to the lawful currency of the Commonwealth of Australia.

66 BROCKMAN RESOURCES Target’s Statement

==> picture [596 x 842] intentionally omitted <==

----- Start of picture text -----

10. Authorisation
BROCKMAN RESOURCES Target’s Statement 67
----- End of picture text -----

Authorisation

This Target’s Statement has been approved by a resolution passed by the directors of Brockman. All Brockman directors voted in favour of that resolution.

Signed for and on behalf of Brockman:

date: 16/12/2010 sign here: _________

print name: Barry cusack

position: Non-executive chairman

68 BROCKMAN RESOURCES Target’s Statement

Head Office

Level 1, 117 Stirling Hwy Nedlands WA 6009

Telephone: +61 8 9389 3000 Facsimile: +61 8 9389 3033

Postal Address PO Box 141 Nedlands WA 6909

Email brockman@brockman.com.au