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The Manager Company Announcements Office Australian Securities Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000

15 December 2011

By electronic lodgement

Dear Sir/Madam

Brockman Resources Limited (ASX: BRM) – takeover bid by Wah Nam International Australia Pty Ltd Target’s Statement

We attach, by way of service pursuant to item 14 of section 633(1) of the Corporations Act 2001 (Cth), a copy of the target’s statement of Brockman Resources Limited ( Brockman ) in response to the off-market takeover bid by Wah Nam International Australia Pty Ltd for all the ordinary shares in Brockman.

Yours faithfully

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Tara Robson Brockman Resources Company Secretary

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Brockman Resources Limited (ABN 73 009 372 150)

Tar get’s Statement

The Independent Directors of Brockman Resources Limited unanimously recommend that you ACCEPT

the takeover offer from Wah Nam International Australia Pty Ltd (in the absence of a superior proposal)

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) for all of the ordinary shares in Brockman Resources Limited not already held by Wah Nam International Australia.

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.

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 ASX and the HKEx, for all of the ordinary shares in Brockman not already held by Wah Nam Australia.

A copy of this Target’s Statement was lodged with ASIC and given to the ASX on 15 December 2011. Neither ASIC nor the ASX nor any of their respective officers take any responsibility for the content of this Target’s Statement.

Key dates

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Date of Wah Nam’s Offer [•] December 2011
Date of this Target’s Statement 15 December 2011
Close of Wah Nam’s Offer Period 4:00pm Western Standard Time ( WST ) on [•] January 2012
(unless extended or withdrawn)
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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 554 240 (for calls made from within Australia) or +61 3 9415 4337 (for calls made from outside Australia).

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

Defined terms

A number of defined terms are used in this Target’s Statement. These terms are explained in section 10 of this Target’s Statement. In addition, unless the contrary intention appears or the context requires otherwise, words and phrases used in this Target’s Statement 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 Independent 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.

BROCKMAN RESOURCES Target’s Statement 1

Important notices

Disclaimer as to information

The information on Wah Nam, Wah Nam Australia, the Wah Nam Group and Wah Nam’s securities contained in this Target’s Statement has been prepared by Brockman using publicly available information, and information provided by Wah Nam. The information in this Target’s Statement concerning Wah Nam, Wah Nam Australia and the Wah Nam Group and those 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$7.8825:A$1, being the exchange rate at close of trading on 9 December 2011.

Maps and diagrams

Any diagrams, charts, maps, graphs figures, 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 554 240 (for calls within Australia) and +61 3 9415 4337 (for international calls). Brockman’s privacy policy is available at www.brockman.com.au. The registered address of Brockman is Level 1, 117 Stirling Highway, Nedlands, Western Australia, 6009.

BROCKMAN RESOURCES Target’s Statement

15 December 2011

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Dear Shareholders

ACCEPT WAH NAM AUSTRALIA’S TAKEOVER OFFER FOR BROCKMAN

On 12 December 2011, Brockman Resources Limited ( Brockman ) (ASX: BRM) announced that it had entered into a Bid Implementation Agreement ( BIA ) with Wah Nam International Holdings Limited ( Wah Nam ) (HKEx: 0159; ASX: WNI), pursuant to which Wah Nam International Australia Pty Ltd ( Wah Nam Australia ), a wholly owned subsidiary of Wah Nam, intends to make a conditional off–market takeover offer for the remaining shares in Brockman that Wah Nam does not already own ( Wah Nam’s Offer or the Offer ). Wah Nam Australia currently owns 55.33% of Brockman’s shares on issue.

The Offer consideration is A$1.50 cash and 18 Wah Nam Shares ( Wah Nam Shares ) for every 1 (one) share in Brockman ( Brockman Share ), implying an Offer price of A$3.03[1] for every one Brockman Share. This represents a premium of approximately A$0.77 per Brockman Share or approximately 34%, when compared to the closing price of Brockman’s Shares on 9 December 2011, the last trading day prior to the announcement of the Offer. The Independent Expert has determined that Wah Nam’s Offer is fair and reasonable.

The Brockman independent directors (namely Brockman Joint Deputy Chairman Mr Ross Norgard, Brockman Non Executive Director Mr Michael Spratt and Brockman Interim Chief Executive Officer Mr Colin Paterson, being those Brockman directors who are not nominees of, nor suggested to Brockman by, Wah Nam (the Independent Directors )), unanimously recommend that Brockman Shareholders ACCEPT Wah Nam’s Offer in the absence of a superior proposal. The key reasons to ACCEPT Wah Nam’s Offer are that the Offer:

(i) represents an attractive premium to recent trading levels of Brockman Shares and should provide a more liquid investment;
(ii) will simplify the current shareholder structure by consolidating all shareholdings into Wah Nam. Consolidation should improve funding options to develop Brockman’s Marillana iron ore project; and
(iii) provides immediate value certainty via the A$1.50 cash component as well as exposure to the potential upside of Brockman’s Marillana iron ore project via the 18 Wah Nam Shares scrip component.

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 Target’s Statement in its entirety.

The Independent Directors, in the absence of a superior proposal, intend to accept the Wah Nam Offer made in respect of any Brockman Shares they own or control, (representing 11.35% of Brockman Shares currently on issue), no later than 2 days after the satisfaction of the conditions set out in sections 13.9(a) to (d) of the Bidder’s Statement.

Following careful consideration of the strategic alternatives available to Brockman, the Independent Directors concluded that Wah Nam’s Offer represents the best opportunity for Brockman Shareholders to maximise the value of their investment.

1 Calculated based on the closing price of Wah Nam Shares on the HKEx of HK$0.67 on 9 December 2011, converted to A$ using A$:HK$ exchange rate of 7.8825 as at 9 December 2011.

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 [email protected] Email brockman.com.au Web 73 009 372 150 ABN

BROCKMAN RESOURCES Target’s Statement

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Offer conditions

The Wah Nam Offer is subject to certain conditions ( Conditions ), including Wah Nam shareholder approval. The Wah Nam shareholder meeting to vote on the shareholder resolutions is scheduled to be held on or around 6 January 2012. Details of the Conditions and Wah Nam shareholder approval are set out in section 6.3 of this Target’s Statement and section 13.9 of the Bidder’s Statement.

Financing

Wah Nam Australia will fund the cash consideration payable under the Offer using a combination of:

existing cash resources;
the proceeds from the issue of Wah Nam Shares and the issue of a convertible bond ( Convertible Bond ) to Ocean Line Holdings Limited and its associates (as that term is defined in the listing rules of the Hong Kong Stock Exchange) ( Subscriber ) under a subscription agreement between the Subscriber and Wah Nam dated 12 December 2011 ( Subscription Agreement ); and
the proceeds from the placement of Wah Nam Shares ( Placement Shares ) to placees procured, on a fully underwritten basis, by REORIENT Financial Markets Limited ( Underwriter ) under an underwriting agreement between the Underwriter and Wah Nam dated 12 December 2011 ( Underwriting Agreement ).

Wah Nam shareholder approval is required to approve the Subscription Agreement and the transactions contemplated under it, including the allotment and issue of the Subscription Shares and the issue of the Convertible Bond. Shareholder approval is also required to approve the Underwriting Agreement and the transactions contemplated under it, including the allotment and issue of the Placement Shares.

This Target’s Statement contains the formal response of the Brockman Board to Wah Nam’s Offer. I strongly encourage you to read all information contained in this Target’s Statement carefully and to seek independent advice. You are also strongly encouraged to read the Bidder’s Statement, which you should receive in the mail in the coming days, if you have not yet already.

Your Board will keep you informed of any further developments in relation to the Offer. The Offer is scheduled to close at 4:00pm Australian Western Standard Time on [•] January 2012 (unless extended).

Brockman’s financial adviser is UBS AG, Australia Branch, with legal advice being provided by Freehills.

If you have any queries in relation to Wah Nam’s Offer, you can call 1300 554 240 (for calls made from inside Australia) or +61 3 9415 4337 (for calls made from outside Australia). We will also post updates on our website at www.brockman.com.au.

Yours sincerely

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Ross Norgard Non-Executive Joint Deputy Chairman Brockman Resources Limited

4 BROCKMAN RESOURCES Target’s Statement

What you should do

ACCEPT

Your Independent Directors unanimously recommend that you ACCEPT Wah Nam’s Offer (in the absence of a superior proposal)

Your Independent Directors unanimously recommend that you ACCEPT Wah Nam’s Offer for all of the Brockman Shares you hold. Subject to certain key bid Conditions being satisfied, your Independent Directors intend on accepting Wah Nam’s Offer for any Brockman Shares they own or control, in the absence of a superior proposal.

You should:

1 Read this Target’s Statement (including the contents of the Independent Expert’s Report) and the Bidder’s Statement.
2 Consider the choices available to you (as outlined in section 4 of this Target’s Statement).
3 Consult your investment, financial, taxation or other professional adviser if in doubt about what to do and as to the effect of accepting Wah Nam’s Offer.
4 If you have any queries concerning the Offer, please contact the Brockman Shareholder information line on:
1300 554 240 within Australia; or
+61 3 9415 4337 from outside of Australia,

which is open from Monday to Friday between 8:00am and 8:30pm AEST.

How can you ACCEPT Wah Nam’s Offer

To accept the Offer, you should follow the instructions as set out below and in section 13.5 of the Bidder’s Statement, depending on the nature and type of your holding.

In summary, to accept your Brockman Shares into the Offer, you will need to:

complete the acceptance form which accompanies the Bidder’s Statement; and
mail the acceptance form to:

Wah Nam International Australia Pty Ltd

c/o Computershare Investor Services Pty Limited GPO Box 52

Melbourne, Victoria, 3001

Australia

using the reply paid envelope (if you are posting from within Australia) or by airmail (if you are posting from outside Australia).

If you are signing the acceptance form:

under a power of attorney, a certified copy of the power of attorney; or
as an executor of a will or the administrator of the estate of a deceased Brockman Shareholder, the relevant grant of probate or letter of administration,

must also be forwarded with the acceptance form for inspection.

BROCKMAN RESOURCES Target’s Statement

What you should do

If you are a holder of Brockman Loan Shares, you should read section 9.6 of this Target’s Statement which contains information about how you can accept the Offer in respect of your Loan Shares.

To validly accept Wah Nam’s Offer, Wah Nam must receive your acceptance form before 4:00pm WST on [•] January 2012, (unless extended).

BROCKMAN RESOURCES Target’s Statement

Contents of this Target’s Statement

Section	title	Page
1.	Why you should ACCEPT the Offer	9
2.	Frequently asked questions	19
3.	Brockman Independent Directors’ recommendations	25
4.	Your choices as a Brockman Shareholder	29
5.	Profle of Brockman	31
6.	Key features of Wah Nam’s Offer	39
7.	Independent Expert’s Report	49
8.	Information relating to Brockman’s directors	131
9.	Additional information	135
10.	Glossary and interpretation	143
11.	Authorisation	147

BROCKMAN RESOURCES Target’s Statement 7

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BROCKMAN RESOURCES Target’s Statement

1. Why you should ACCEPT the Offer

Why you should ACCEPT the Offer

Why you should ACCEPT Wah Nam’s offer …

Wah Nam’s Offer represents an attractive premium to recent trading levels

Wah Nam’s Offer should provide a more liquid investment than your current holding in 2 Brockman

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|||
|---|---|
|Wah Nam’s Offer will simplify the current shareholder structure, which should improve|
|3|funding options to develop the Marillana Project|

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|||
|---|---|
|Wah Nam’s Offer provides immediate value certainty and exposure to the potential|
|4|upside of the Marillana Project|
|The Independent Expert has determined that Wah Nam’s Offer is fair and reasonable|
|5|
|No superior proposal has emerged from another party, and is unlikely to emerge|
|6|
|Wah Nam’s Offer has the unanimous support of the Independent Directors|
|7|
|There are risks in not accepting Wah Nam’s Offer|
|8|

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You should therefore ACCEPT Wah Nam’s Offer for all of the Brockman Shares you hold

10 BROCKMAN RESOURCES Target’s Statement

Why you should ACCEPT the Offer

1.1 Wah Nam’s Offer represents an attractive premium to recent trading levels

Wah Nam’s Offer comprises:

A$1.50 in cash; and
18 Wah Nam Shares.

for every 1 (one) share in Brockman.

As shown in Figure A, the implied value of Wah Nam’s Offer is:

approximately A$3.15, based on the 90 calendar day VWAP[2] of Wah Nam Shares to 9 December 2011, representing a premium of approximately A$1.16 per Brockman Share or 58% when compared to the 90 calendar day VWAP of Brockman Shares to 9 December 2011;
approximately A$2.92, based on the 30 calendar day VWAP[2] of Wah Nam Shares to 9 December 2011, representing a premium of approximately A$0.80 per Brockman Share or 38% when compared to the 30 calendar day VWAP of Brockman Shares to 9 December 2011; and
approximately A$3.03[3] , based on the last closing price of Wah Nam Shares on the HKEx on 9 December 2011, representing a premium of approximately A$0.77 per Brockman Share or 34% when compared to the last closing price of Brockman Shares on 9 December 2011.

Figure A: Implied value of Wah Nam’s Offer

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3.50
3.00
58% 34%
2.50 38%
2.00
1.50 3.15 2.92 3.03
1.00 1.99 2.12 2.26
0.50
0.00
90 calendar day VWAP 30 calendar day VWAP Last Close
Implied value of the Offer BRM
$A
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Source: Bloomberg and IRESS as at 9 December 2011

If you accept the Offer, the actual Australian dollar value of Wah Nam’s Offer will vary depending on the share price of Wah Nam Shares during the Offer Period, when the Wah Nam Shares are issued, and any fluctuations in the A$:HK$ exchange rate. An example of the impact on the implied value of Wah Nam’s Offer resulting from movements in Wah Nam’s Share price is provided in Table B below for illustrative purposes:

2 VWAP calculated by converting the daily value of Wah Nam Shares traded to A$ using the respective daily A$:HK$ exchange rate. 3 Calculated based on Wah Nam closing share price on the HKEx of HK$0.67 on 9 December 2011, converted to A$ using A$:HK$ exchange rate of 7.8825 as at 9 December 2011.

BROCKMAN RESOURCES Target’s Statement

Why you should ACCEPT the Offer

Table B: Illustrative example of the impact of Wah Nam Share price movements on the implied Offer value

Number of Wah Nam Shares Wah Nam Share price at 9 December 2011 18 Wah Nam Share price at time of issue:	Number of Wah Nam Shares Wah Nam Share price at 9 December 2011 18 Wah Nam Share price at time of issue:	x	Wah Nam Share price (A$) 0.085a	=	Value of Wah Nam Shares (A$) 1.53	+	Cash (A$) 1.50	=	Total implied Offer value 3.03
Wah Nam Share price increases	18	x	0.095b	=	1.71	+	1.50	=	3.21
Wah Nam Share price decreases	18	x	0.075c	=	1.35	+	1.50	=	2.85

Notes:

a Calculated based on Wah Nam closing share price of HK$0.67 on the HKEx on 9 December 2011, converted to A$ using A$:HK$ exchange rate of 7.8825 as at 9 December 2011

b Assumed A$0.01 increase in Wah Nam Share price (in A$) for illustrative purposes
c Assumed A$0.01 decrease in Wah Nam Share price (in A$) for illustrative purposes

Brockman Shareholders may not be required to pay brokerage if they accept Wah Nam’s Offer in respect of their Brockman Shares. Further details are set out in section 1.7 of the Bidder’s Statement.

1.2 Wah Nam’s Offer should provide a more liquid investment than your current holding in Brockman

Since the conclusion of Wah Nam Australia’s previous takeover offer on 15 June 2011, there has been a significant decline in liquidity in Brockman Shares (see Figure C1 and C2) when compared to the same periods prior to the previous takeover offer. This is partly due to Wah Nam’s 55.33% interest in Brockman. Given Wah Nam’s majority interest in Brockman, low levels of liquidity are likely to continue. Low levels of liquidity may increase the likelihood that Brockman Shares are mispriced by the market.

Furthermore, if Wah Nam’s Offer is successful, you will have the option of trading your newly issued Wah Nam Shares on the ASX or the HKEx. As a result, consolidation of 100% of the Brockman register within Wah Nam should provide greater liquidity to Brockman Shareholders than what is currently available through Brockman’s listing on the ASX. For more details about holding Wah Nam Shares, please see section 4 of the Bidder’s Statement.

12 BROCKMAN RESOURCES Target’s Statement

Why you should ACCEPT the Offer

Brockman liquidity analysis

Figure C1: Brockman turnover by volume

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21 (66%)
18
(69%)
15
12
9 (72%)
6
3 (78%
0
90 60 30 5
Trading days prior to offer
Pre-previous takeover offer
Pre-current Wah Nam Offer
BRM turnover by volume (m)
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Figure C2: Brockman turnover by value

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80
(80%)
(84%)
60
(86%)
40
20 (89%)
0
90 60 30 5
Trading days prior to offer
Pre-previous takeover offer
Pre-current Wah Nam Offer
BRM turnover by value (A$m)
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Source: IRESS as at 9 December 2011

1.3

Wah Nam’s Offer will simplify the current shareholder structure, which should improve funding options to develop the Marillana Project

Wah Nam is listed on the HKEx, one of the world’s largest capital markets, and serves as a gateway to achieving exposure to the rapidly growing China market. Consequently, if Wah Nam’s Offer is successful, it will simplify the current Brockman shareholding structure, which should improve the ability to secure funding to facilitate the development of the world–class Marillana Project.

Furthermore, simplifying the current Brockman shareholding structure will allow Wah Nam to focus on progressing the Marillana Project under a single company and a single corporate centre, rather than the current, more complex structure.

1.4

Wah Nam’s Offer provides immediate value certainty and exposure to the potential upside of the Marillana Project

Wah Nam’s Offer is A$1.50 in cash and 18 Wah Nam Shares for each Brockman Share. The Independent Directors believe that the A$1.50 cash component delivers immediate value certainty to Brockman Shareholders in the current market environment. Further, the scrip component of 18 Wah Nam Shares provides Brockman Shareholders with exposure to the potential upside of the world–class Marillana Project if and when it progresses through to production.

BROCKMAN RESOURCES Target’s Statement 13

Why you should ACCEPT the Offer

1.5 The Independent Expert has determined that Wah Nam’s Offer is fair and reasonable

The Independent Expert, Deloitte, was engaged by the Independent Directors to express an opinion in a report on whether Wah Nam’s Offer is fair and reasonable to Brockman Shareholders.

The Independent Expert’s Report states that in the opinion of the Independent Expert, Wah Nam’s Offer of A$1.50 in cash and 18 Wah Nam Shares for each Brockman Share is fair and reasonable to Brockman Shareholders, and provides reasons for that opinion.

Wah Nam’s Offer is FAIR

The Independent Expert has assessed the fair market value of a Brockman Share on a control basis to be in the range of A$2.70 to A$3.05.

The Independent Expert has assessed the fair market value of the consideration under Wah Nam’s Offer to be in the range of A$2.70 to A$2.95.

On the basis that the assessed value of the consideration being offered under Wah Nam’s Offer is within the range of the estimated fair market value of a Brockman Share, the Independent Expert has concluded that the offer is FAIR .

Wah Nam’s Offer is REASONABLE

The Independent Expert has concluded that Wah Nam’s Offer is REASONABLE on the basis that it is FAIR , and also taking into consideration the following factors:

it is difficult to progress the Marillana Project under the current shareholding structure;
it may be difficult to source project and equity funding under the current shareholding structure;
the terms of Wah Nam’s Offer have been negotiated over a number of months;
an alternative offer is unlikely given Wah Nam’s controlling interest in Brockman;
the cash consideration provides Brockman Shareholders with an opportunity to realise approximately 50% of their investment;
the scrip consideration enables Brockman Shareholders to participate in the potential upside of the proposed merged entity;
Brockman Shareholders are receiving a premium to the share price of Brockman prior to the announcement of Wah Nam’s Offer; and
in the absence of Wah Nam’s Offer, Brockman Shares may trade below current levels.

The Independent Directors believe the Independent Expert’s conclusions support their view that Wah Nam’s Offer represents the best opportunity for Brockman Shareholders to maximise the value of their investment in the absence of an alternative, superior offer. The above summary of the key conclusions and opinion of the Independent Expert should be read in conjunction with the Independent Expert’s Report, which is contained in Section 7 of this Target’s Statement.

14 BROCKMAN RESOURCES Target’s Statement

Why you should ACCEPT the Offer

1.6 No superior proposal has emerged from another party, and is unlikely to emerge

The Independent Directors have unanimously agreed to recommend Wah Nam’s Offer in the absence of a superior proposal. The Independent Directors’ unanimous support of Wah Nam’s Offer follows careful consideration of the strategic alternatives available to Brockman, including progressing the development of the Marillana Project with Wah Nam as the majority shareholder, as well as other potential corporate transactions. The Independent Directors concluded that Wah Nam’s Offer represents the best opportunity for Brockman Shareholders to maximise the value of their investment given the current Brockman Shareholder structure.

As at the date of this Target’s Statement, Brockman has not received any alternative proposal from any party. As Wah Nam already has a 55.33% interest in Brockman through Wah Nam Australia, a superior proposal is unlikely to emerge.

1.7

Wah Nam’s Offer has the unanimous support of the Independent Directors

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

Ross Norgard, Non-Executive Joint Deputy Chairman;
Colin Paterson, acting Chief Executive Officer; and
Michael Spratt, Non-Executive Director.

The Independent Directors are directors who are not nominees of, nor suggested to Brockman by Wah Nam. The Independent Directors unanimously recommend that Brockman Shareholders ACCEPT Wah Nam’s Offer of $1.50 cash and 18 Wah Nam Shares for each Brockman Share, for the reasons outlined in this section 1 of this Target’s Statement.

Subject to the satisfaction of the Conditions described in sections 6.3(a) to 6.3(d) of this Target’s Statement, and in the absence of a superior proposal, the Independent Directors intend on accepting Wah Nam’s Offer for any Brockman Shares they own or control. This represents 11.35% of Brockman Shares on issue or 25.41% of Brockman Shares not currently owned by Wah Nam Australia.

Brockman Shareholders are urged to read this Target’s Statement (including the contents of the Independent Expert’s Report) and the Bidder’s Statement in full prior to making their decision. In particular, Brockman Shareholders should note that Wah Nam’s Offer is subject to a number of Conditions, which are summarised in section 6.3 of this Target’s Statement.

BROCKMAN RESOURCES Target’s Statement 15

Why you should ACCEPT the Offer

1.8 There are risks in not accepting Wah Nam’s Offer

If Wah Nam’s Offer is not successful, the Brockman Share price may fall in the absence of another party making an offer. Brockman Shareholders will be exposed to the ongoing risks associated with an investment in Brockman.

In addition, there are potential financing risks that you, as a Brockman Shareholder, will continue to be exposed to if you do not accept Wah Nam’s Offer, including the requirement to secure financing for the Marillana Project, which could be achieved through the issue of equity which may dilute your shareholding in Brockman.

If you do not accept Wah Nam’s Offer and the Offer Period ends after becoming unconditional:

liquidity in Brockman may decline even further, potentially making it more difficult to sell your Brockman Shares after the Offer Period ends;
it will be even more unlikely that a superior proposal will emerge;
Wah Nam may be entitled to seek to remove Brockman from the official list of the ASX; and
Wah Nam Australia may be entitled to acquire your Brockman Shares through compulsory acquisition (see section 6.15 of this Target’s Statement for more information).

Further, if at the end of the Offer Period Wah Nam has not obtained a relevant interest in 80% of Brockman Shares on issue, Brockman Shareholders who accepted the Offer will not be eligible for partial CGT roll over relief (see section 6.19 of this Target’s Statement for more information).

16 BROCKMAN RESOURCES Target’s Statement

1.9 Risk factors associated with a holding in Wah Nam

There are a number of risks that Brockman Shareholders should be aware of in relation to holding Wah Nam Shares. The risks associated with holding Wah Nam Shares is set out in section 7 of the Bidder’s Statement. Brockman Shareholders should seek independent financial and taxation advice before making any investment decision and any decision relating to Wah Nam’s Offer.

1.10 Possible reasons for not accepting the Offer

This section sets out some reasons why Brockman Shareholders may wish not to follow the unanimous recommendation of the Independent Directors to accept the Offer and instead decline to accept the Offer. This section should be read in conjunction with section 7 of the Bidder’s Statement which sets out the risk factors associated with being a shareholder in Wah Nam.

(a) You may disagree with the Independent Directors’ recommendation and the Independent Expert’s conclusion

You may hold a different view to the Independent Directors and the Independent Expert and believe that the Offer of A$1.50 cash and 18 Wah Nam Shares for each Brockman Share is inadequate.

(b) You may want to retain a direct and pure exposure to only Brockman’s current assets and future growth profile

By not accepting the Offer, and if the Offer does not proceed to compulsory acquisition, you will continue to retain a direct and pure exposure to only Brockman’s current assets and future growth profile.

If you accept the Offer, or if you do not accept the Offer and the Offer proceeds to compulsory acquisition, you will no longer participate in the future performance of only Brockman but of the enlarged Wah Nam Group, as you will be issued Wah Nam Shares as part of the Offer consideration. This will mean that you will still retain some exposure to Brockman’s assets and potential value that could be generated in the future through the successful development of Brockman’s projects. You will also be exposed to the performance of Wah Nam’s other principal activities and assets. Section 3 of the Bidder’s Statement outlines Wah Nam’s principal activities and assets.

(c) If and when Brockman pays out dividends in the future, you may want the opportunity to receive any potential future dividends paid out by Brockman

By not accepting the Offer, and if Wah Nam’s Offer does not proceed to compulsory acquisition, you will retain the opportunity to receive any potential future dividends paid out by Brockman, if and when dividends are paid.

If you accept the Offer, or if you do not accept the Offer and the Offer proceeds to compulsory acquisition, you will no longer have the opportunity to receive potential future dividends from Brockman, if and when dividends are paid out by Brockman. You may however, be entitled to receive any potential future dividends from Wah Nam, if and when dividends are paid out by Wah Nam.

(d) You may consider that there is the potential for a superior proposal to be made in relation to Brockman in the foreseeable future

BROCKMAN RESOURCES Target’s Statement 17

It is possible that a superior proposal for Brockman could materialise in the future. However, as at the date of this Target’s Statement, the Independent Directors have not received or become aware of an alternative proposal. As set out in section 1.6 of this Target’s Statement, the Independent Directors believe that an alternative proposal is unlikely to emerge.

(e) The tax consequences of the Offer may not be suitable to your financial position

As set out in section 6.19 of this Target’s Statement, acceptance of the Offer by Brockman Shareholders is likely to have tax implications. 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 10 of the Bidder’s Statement or in this Target’s Statement as being advice on their own affairs. Brockman Shareholders should consult with their own independent taxation advisers regarding the taxation implication of participating in the Offer given the particular circumstances which apply to them.

18 BROCKMAN RESOURCES Target’s Statement

2. Frequently asked questions

BROCKMAN RESOURCES Target’s Statement

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.

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Question Answer
Why have I You have received this Target’s Statement because you are a shareholder in Brockman.
received this This Target’s Statement is Brockman’s formal response to Wah Nam’s Offer and contains
document? important information prepared by your Independent Directors to help you determine
whether to accept or reject Wah Nam’s Offer.
What is Wah Wah Nam Australia is offering A$1.50 cash and 18 Wah Nam Shares for each Brockman
Nam’s Offer for my Share held by you.
Brockman Shares?
What choices As a Brockman Shareholder, you have the following choices in respect of your Brockman
do I have as Shares:
a Brockman
• accept the Offer;
Shareholder?
• sell your Brockman Shares on the ASX (unless you have previously accepted the
Offer and you have not validly withdrawn your acceptance); or
• reject the Offer by doing nothing.
There are several implications in relation to each of the above choices. A summary of these
implications is set out in section 4 of this Target’s Statement.
What are the In the absence of a superior proposal, Mr Ross Norgard, Mr Colin Paterson and Mr Michael
Independent Spratt, your Independent Directors, recommend that you ACCEPT the Offer.
Directors of
Brockman
recommending?
What do the Brockman’s three Independent Directors, Mr Ross Norgard, Mr Colin Paterson and Mr
Independent Michael Spratt intend on accepting Wah Nam’s Offer for any Brockman Shares they own
Directors intend or control, subject to:
to do with their
• the satisfaction of the Conditions described in sections 6.3(a) to 6.3(d) of this Target’s
Brockman Shares?
Statement; and
• the absence of a superior proposal.
Together, the Independent Directors have a relevant interest in 11.35% of Brockman’s
current shares on issue. Mr Ross Norgard (and his Associates) is Brockman’s second
largest shareholder (after Wah Nam Australia) with a relevant interest of approximately
9.33% of the Brockman Shares on issue.
What is the opinion The terms and conditions of the Offer have been reviewed by the Independent Expert,
of the Independent Deloitte.
Expert?
Deloitte has concluded that the Offer is fair and reasonable to Brockman Shareholders.
A copy of the Independent Expert’s Report is contained in section 7 of this Target’s
Statement. The Independent Directors recommend you read the Independent Expert’s
Report in full.
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20 BROCKMAN RESOURCES Target’s Statement

Frequently asked questions

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Question Answer
What is Wah Nam’s Wah Nam Australia, a wholly owned Subsidiary of Wah Nam, is Brockman’s largest
relationship with shareholder, with 55.33% of the Brockman Shares on issue. Brockman entered into the
Brockman? BIA with Wah Nam on 12 December 2011, under which Wah Nam undertook to procure
Wah Nam Australia to make the Offer on certain terms and conditions.
See section 9.7 of this Target’s Statement for further details.
Why should I The Independent Directors unanimously recommend that you ACCEPT Wah Nam’s Offer
accept Wah Nam’s in the absence of a superior offer, for the following key reasons:
Offer?
• Wah Nam’s Offer represents an attractive premium;
• Wah Nam’s Offer should provide a more liquid investment than your current holding
in Brockman;
• Wah Nam’s Offer will simplify the current shareholder structure, which should
improve funding options to develop the Marillana Project; and
• Wah Nam’s Offer provides immediate value certainty and exposure to the potential
upside of the Marillana Project.
See sections 1.1 to 1.7 of this Target’s Statement for further details of why you should
accept the Offer, and section 1.8 of this Target’s Statement for further details of the risks in
not accepting Wah Nam’s Offer.
Why might I decline Despite the benefits set out above, you may decline Wah Nam’s Offer for the following
Wah Nam’s Offer? reasons:
• you may disagree with the Independent Directors’ recommendation and the
Independent Expert’s conclusion;
• you may want to retain a direct and pure exposure to only Brockman’s current assets
and future growth profile;
• if and when Brockman pays out dividends in the future, you may want the opportunity
to receive any potential future dividends paid out by Brockman;
• you may consider that there is the potential for a superior proposal to be made in
relation to Brockman in the foreseeable future; and
• the tax consequences of the Offer may not be suitable to your financial position.
See sections 1.9 and 1.10 of this Target’s Statement for further details of the risk factors
associated with a holding in Wah Nam and the possible reasons for not accepting the Offer.
How do I accept Details of how to accept Wah Nam’s Offer are set out in section 13.5 of the Bidder’s
the Offer? Statement.
How do I reject the The Independent Directors’ recommendation is that you accept Wah Nam’s Offer in the
Offer? absence of a superior proposal.
To reject Wah Nam’s Offer, you do not need to do anything.
If you intend on rejecting Wah Nam’s Offer, do not respond to any correspondence from
Wah Nam.
You should note however, that if Wah Nam Australia at a later date acquires a relevant
interest of at least 90% of Brockman Shares, Wah Nam Australia may be entitled to
compulsorily acquire the remaining Brockman Shares it does not already own.
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BROCKMAN RESOURCES Target’s Statement

Frequently asked questions

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Question Answer
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 6.11 of this Target’s Statement for further details).
When does the The Offer Period is presently scheduled to end at 4:00pm WST on [•] January 2012, but the
Offer close? Offer Period can be extended in certain circumstances.
See section 6.8 of this Target’s Statement for details of the circumstances in which the Offer
Period can be extended.
What happens if If you accept Wah Nam’s Offer now and Wah Nam Australia subsequently increases its
Wah Nam Australia Offer, you will receive the higher consideration if Wah Nam’s Offer becomes unconditional.
increases its Offer?
What are the In summary, the Conditions to the Offer are:
Conditions to the
• the Treasurer approving or not objecting to the Offer under the Foreign Acquisitions
Offer?
and Takeovers Act 1975 (Cth) ;
• approval of the requisite majority of Wah Nam shareholders:
1 to acquire all of the Brockman Shares not already owned by Wah Nam
Australia and to allot and issue the Consideration Shares;
2 to the Subscription Agreement and the allotment and issue of the Subscription
Shares and the issue of the Convertible Bond (and the allotment and issue of
Wah Nam Shares which may be issued after the conversion rights attached
Convertible Bond are exercised); and
3 to the Underwriting Agreement and the allotment and issue of the Placement
Shares;
• completion of the subscription for the Subscription Shares and the Convertible Bond
by the Subscriber under the Subscription Agreement;
• completion of the placement of the Placement Shares pursuant to the Underwriting
Agreement;
• at the end of the Offer Period, Wah Nam Australia having a relevant interest in more
than 80% of the total number of Brockman Shares on issue;
• between the Announcement Date and the end of the Offer Period, no regulatory
actions in consequence of or in connection with the Offer occurring; and
• the A$/US$ exchange rate as quoted on Bloomberg does not exceed US$1.10 for
50% of the time over the 5 Trading Days after the last of the Conditions described in
the first to fifth bullet point above are satisfied.
See section 6.3 of this Target’s Statement for further details.
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22 BROCKMAN RESOURCES Target’s Statement

Frequently asked questions

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Question Answer
What happens if If the Conditions are not satisfied or waived before the end of the Offer Period, the Offer will
the Conditions lapse. You would then be free to deal with your Brockman Shares even if you had accepted
of the Offer are the Offer.
not satisfied or
waived?
When will Wah Section 13.14 of the Bidder’s Statement indicates that Wah Nam Australia will give a Notice
Nam advise as to of Status of Conditions on [•] January 2012. Wah Nam Australia is required to set out in the
the status of the Notice of Status of Conditions:
Conditions of the
• whether the Offer is free of each Condition;
Offer?
• whether, to the best of Wah Nam Australia’s knowledge, each Condition has been
fulfilled on the date the notice is given; and
• Wah Nam Australia’s voting power in Brockman.
If the Offer Period is extended before the time on which the Notice of Status of Conditions
is to be given, the date for the Notice of Status of Conditions will be taken to be postponed
for the same period, and Wah Nam will be required to give notice that sets out the new date
for giving the Notice of Status of Conditions.
If a Condition is fulfilled (so that the Offer becomes free of that Condition) 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 notice that states that the particular
Condition has been fulfilled.
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.
I accept the Offer?
See section 6.12 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 6.19 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 554 240 (for calls
that I can call made from inside Australia) or +61 3 9415 4337 (for calls made from outside Australia).
if I have further
queries in relation
to the Offer?
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BROCKMAN RESOURCES Target’s Statement 23

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BROCKMAN RESOURCES Target’s Statement

3. Brockman Independent

Brockman Independent Directors’ recommendations

3.1 DIRECTORS OF BROCKMAN

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

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Name Position
Peter Luk Non-Executive Chairman
Ross Norgard Non-Executive Joint Deputy Chairman
Warren Beckwith Non-Executive Joint Deputy Chairman
Colin Paterson Acting Chief Executive Officer
Richard Wright Non-Executive Director
Robert Brierley Non-Executive Director
Howard Chung Yue Chu Non-Executive Director
Michael Spratt Non-Executive Director
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3.2 INDEPENDENT DIRECTORS’ RECOMMENDATIONS

After taking into account each of the matters in this Target’s Statement and in the Bidder’s Statement, each of your Independent Directors recommend that you accept Wah Nam’s Offer (in the absence of a superior proposal).

In considering whether to accept the Offer, your Independent 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 4 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.

3.3 THE POSITION OF PETER LUK, WARREN BECKWITH, RICHARD WRIgHT, ROBERT BRIERLEY AND HOWARD CHUNg YUE CHU

Each of Peter Luk, Warren Beckwith, Richard Wright, Robert Brierley and Howard Chung Yue Chu have abstained from making any recommendations as to whether Brockman Shareholders should accept the Offer. The relationships between the aforementioned directors of Brockman and Wah Nam are as follows:

Peter Luk and Howard Chung Yue Chu are executive directors of Wah Nam;
Peter Luk and Warren Beckwith are directors of Wah Nam Australia; and
Richard Wright and Robert Brierley were suggested to the Board by Wah Nam, and have in the past acted or currently act as consultants to Wah Nam.

Given their respective relationships with Wah Nam, each of Peter Luk, Warren Beckwith, Richard Wright, Robert Brierley and Howard Chung Yue Chu consider it inappropriate for them to make a recommendation to Brockman Shareholders in relation to the Offer.

Details of the relevant interests of Peter Luk, Warren Beckwith, Richard Wright, Robert Brierley and Howard Chung Yue Chu in Brockman Shares and Wah Nam Shares are set out in section 8 of this Target’s Statement.

26 BROCKMAN RESOURCES Target’s Statement

Brockman Independent Directors’ recommendations

3.4 THE POSITION OF THE INDEPENDENT DIRECTORS (ROSS NORgARD, COLIN PATERSON AND MICHAEL SPRATT)

Ross Norgard was the founding chairman of Brockman. He stepped down from this role in June 2010, and has continued as a non-executive director and joint deputy chairman of Brockman (a role he shares with Warren Beckwith).

Colin Paterson was a founding director of Brockman. He was appointed as acting chief executive officer of Brockman in September 2011.

Michael Spratt was appointed to the Board on 2 December 2011.

Details of the relevant interests of the Independent Directors in Brockman Shares are set out in section 8 of this Target’s Statement.

3.5 INDEPENDENT DIRECTORS’ COMMITTEE

To ensure the independence of the Independent Directors, the directors of Brockman resolved that a Board committee be established, called the Independent Directors’ committee, which has general oversight of Brockman’s consideration of any proposed transaction between Brockman and Wah Nam or any superior proposal.

Specifically, the Independent Directors’ committee is responsible for:

managing any potential conflicts of interest of directors of Brockman;
ensuring the independence of Brockman and compliance with all relevant laws;
engaging, liaising and dealing with advisers and experts;
approving the final terms of any corporate transaction (including the Offer) and any necessary documents; and
entering into any agreement, commitment or other understanding with a third party in order to carry out its responsibilities in relation to the above.

The Independent Directors’ committee is comprised of the Independent Directors.

3.6 INTENTIONS OF YOUR INDEPENDENT DIRECTORS IN RELATION TO THE OFFER

Each Independent Director of Brockman who has a relevant interest in Brockman Shares, presently intends to ACCEPT the Offer in relation to for any Brockman Shares they own or control, subject to:

the satisfaction of the Conditions described in sections 6.3(a) to 6.3(d) of this Target’s Statement; and
the absence of a superior proposal.

BROCKMAN RESOURCES Target’s Statement 27

Brockman Independent Directors’ recommendations

3.7 INDEPENDENT ExPERT’S REPORT

Under section 640 of the Corporations Act, if a bidder’s voting power in the target is 30% or more, or a director of the bidder is also a director of the target, the target’s statement must include or be accompanied by a report by an expert that states whether, in the expert’s opinion, the takeover offer is fair and reasonable and gives the reasons for forming that opinion.

At the date of this Target’s Statement, Wah Nam Australia has more than 30% of the voting power in Brockman. Further, two directors of Wah Nam (Peter Luk and Howard Chung Yue Chu) and two directors of Wah Nam Australia (Peter Luk and Warren Beckwith) are also directors of Brockman.

Accordingly, the Independent Directors commissioned Deloitte to prepare an Independent Expert’s Report in relation to the Offer pursuant to section 640 of the Corporations Act 2001 (Cth).

Deloitte has concluded that the Offer is fair and reasonable to Brockman Shareholders. The Independent Expert’s Report is set out in section 7 of this Target’s Statement. You should read the Independent Expert’s Report in its entirety as part of your assessment of the Offer.

28 BROCKMAN RESOURCES Target’s Statement

4. Your choices as a Brockman

Your choices as a Brockman Shareholder

Your Independent Directors recommend that you ACCEPT Wah Nam’s Offer (in the absence of a superior proposal).

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

(a) 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 6.2 of this Target’s Statement and in section 13.1 of the Bidder’s Statement.

If Brockman Shareholders accept the Offer and during or at the end of the Offer Period Wah Nam has obtained a relevant interest in 80% of Brockman Shares on issue, the accepting Brockman Shareholders may be eligible for partial CGT rollover relief (see section 6.19 of this Target’s Statement).

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

(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 Brockman Shares on market for cash.

On 9 December 2011, the Brockman Share price closed at A$2.26, approximately a 34% premium to the implied Offer price of A$3.03 based on the closing price of Wah Nam‘s Shares of HK$0.67 on the HKEx on 9 December 2011 and a HK$:A$ exchange rate of 7.8825. The latest price for Brockman Shares and Wah Nam Shares may be obtained from the ASX website www.asx.com.au and the HKEx website www.hkex.com.hk, respectively.

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) Do not accept the Offer

Brockman Shareholders who do not wish to accept the Offer should do nothing. By doing nothing you will be rejecting Wah Nam’s Offer.

Brockman Shareholders should consider the risk of remaining a minority shareholder in Brockman (see section 6.16 of this Target’s Statement).

In addition, Brockman Shareholders should note that if Wah Nam Australia and its Associates have a relevant interest in at least 90% of the total number of Brockman Shares on issue 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 6.15 of this Target’s Statement for further details).

30 BROCKMAN RESOURCES Target’s Statement

5. Profile of Brockman

Profile of Brockman

Brockman is an ASX-listed Australian hematite iron ore company with its principal project, the 100% owned Marillana iron ore project (the 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 that aim to assist Brockman to develop a pipeline of future projects and expansions.

5.1 KEY PROJECTS AND OPERATIONS

The following section provides a summary of Brockman’s key projects and operations. Further information relating to Brockman’s key projects and operations can be found in Brockman’s investor presentation dated 16 November 2011 and in Brockman’s 2011 annual report (both of which are available at www.brockman.com. au and www.asx.com.au (ASX: BRM)).

(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 further value enhancement potential to its shareholders.

Total Mineral Resources at the Marillana Project (see Brockman’s ASX announcement dated 9 February 2010) of 1.63 billion tonnes of mineralisation at 43.4% Fe are reported as being present in various forms within the project. A summary of the grades and tonnages for each ore-type is set out in Table 1 and 2 below.

Table 1: Marillana Project beneficiation feed Mineral Resource summary (cut-off grade: 38% Fe)

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Mineralisation Resource Tonnes grade
type classification (Mt) (%Fe)
Measured 173 41.6
Detrital Indicated 1,036 42.5
Inferred 201 40.7
Pisolite Indicated 117 47.4
Measured 173 41.6
Total Indicated 1,154 43.0
Inferred 201 40.7
TOTAL 1,528 42.6
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Note: total tonnes may not add up due to rounding.

32 BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

Table 2: Marillana Project CID Mineral Resource summary (cut-off grade: 52% Fe)

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Resource Tonnes Fe CaFe Al2O3 SiO2 P LOI
Classification (Mt) (%) (%) (%) (%) (%) (%)
Indicated 84.2 55.8 61.9 3.6 5.0 0.097 9.8
Inferred 17.7 54.4 60.0 4.3 6.6 0.080 9.3
TOTAL 101.9 55.6 61.5 3.7 5.3 0.094 9.7
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Notes:

CaFe represents calcined iron; Al2O3 represents aluminium oxide; SiO2 represents silicon dioxide; P represents phosphorus and LOI is ‘loss on ignition’ – a measure of the water content of the iron ore.
CaFe is calculated by Brockman using the formula CaFe = Fe% / ((100-LOI)/100).
Total tonnes may not add up due to rounding.

From these Mineral Resources, proved and probable Ore Reserves of 1,001 million tonnes of detrital ore grading 42.4% Fe and 48.5 million tonnes of CID ore grading 55.5% Fe have been determined. Full details of the Ore Reserves are provided in Brockman’s ASX announcement of 9 September 2010 and summarised in Tables 3 and 4 below.

Table 3: Marillana Project detrital Ore Reserves

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Reserve Classification Mt Fe (%)
Proven 133 41.6
Probable 868 42.5
TOTAL 1,001 42.4
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Table 4: Marillana Project CID Ore Reserves

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Reserve Mt Fe CaFe Sio2 AI2O3 P LOI
Classification (%) (%) (%) (%) (%) (% )
Probable 48.5 55.5 61.5 5.3 3.7 0.09 9.7
TOTAL 48.5 55.5 61.5 5.3 3.7 0.09 9.7
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see notes set out below Table 2 above.

The Ore Reserves reported are within pit designs based on open pit optimisations carried out on measured and indicated Mineral Resources classifications only. The resource model was regularised to a parent block size of 20m by 20m by 6m (minimum mining bench height) reflecting the scale of mining to be employed. The pit optimisation took into account dilution and ore loss associated with the 6m minimum mining benches, setbacks along tenement boundaries and overall pit slope angles.

(ii)

Definitive feasibility study (DFS)

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

Key outcomes of the DFS included:

1.6 billion tonne Mineral Resource was converted to an Ore Reserve totalling 1.05 billion tonnes;

BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

an improved waste to ore stripping ratio of 0.85 (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 DSO exported from the Pilbara;
a ‘fines’ only -8mm product will be produced;
the beneficiated detrital iron deposit ore and the CID – DSO will be blended to produce a single product in the years following the commencement of DSO production; 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 or infrastructure providers in the Pilbara region to develop an optimal business model for future project ownership and financing, including potential off-take agreements.

Brockman received a Front End Engineering and Design (FEED) report in October 2011. Following a review of the FEED report and from information received to date, Brockman has concluded that further changes and improvements can be made to the process plant design to optimise capital and operating costs. An engineering firm has been appointed to commence this optimisation study. The process flow sheet has been validated, but optimisation of the process plant layout and some of the equipment selection has been identified as providing Brockman with the opportunity for significant construction efficiencies and associated capital cost savings. The target completion date for the optimisation study is June 2012.

Brockman recently undertook a strategic review of the Marillana Project. Average construction costs in the Pilbara have increased by about 30% since completion of the DFS. However, capital increases will be kept to a minimum through the improvement opportunities identified during the strategic review. Accordingly, the strategic review is critical in formulating a revised timetable for key project milestones leading to production.

(iv) Bankable feasibility study (BFS)

The BFS will establish the overall economics of the Marillana Project design and costings within an accuracy provision of ± 10%. The BFS will be used by the Board to assess and establish the basis and conditions for the Marillana Project’s funding arrangements. Brockman is working towards funding the Marillana Project by forming a joint venture with an end user. Work on the BFS is ongoing.

(v) Rail infrastructure

Brockman continues to actively pursue rail infrastructure arrangements for the Marillana Project.

34 BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

As previously announced (on 16 December 2010), Brockman is negotiating with Fortescue Metals Group Limited (FMG) in relation to an agreement for an end-to-end rail haulage, port access and marketing service for the Marillana Project. There can be no guarantee that the negotiations will result in a binding agreement and any agreement is likely to be subject to a number of conditions. In addition to the negotiations with FMG, Brockman has also held confidential discussions with existing and proposed infrastructure owners that have the potential to achieve a rail solution for the Marillana Project.

It is likely that any rail solution for Brockman will pass through land covered by the Palyku native title claim area. Brockman has agreed a term sheet for an infrastructure agreement with the Palyku people and is progressing a final agreement.

Infrastructure and mine engineering programme manager, Calibre Global Pty Ltd’s rail division completed a value engineering exercise on the rail pre-feasibility study completed in July 2010 for the proposed spur line linking the Marillana Project to the FMG mainline. Work is continuing on the detailed engineering of the train loading configuration and rail alignments at the mine site. The value engineering process demonstrated that significant cost savings could be achieved depending on the operating standards adopted by Brockman for the spur line.

As an alternative to the proposed railway spur line, a term sheet has been drafted with the Department of State Development which sets out the principles by which Brockman will gain the necessary land tenure for a rail corridor from a rail loop on the Marillana site to the port of Port Hedland. This rail option is being examined and will involve an independent third party.

(vi) Port infrastructure

Brockman continues to actively pursue port infrastructure arrangements for the Marillana Project.

Brockman is a founding member of the North West Infrastructure (NWI), an incorporated joint venture between mining companies formed to develop key infrastructure required to maximise the export potential of the Pilbara region.

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

The pre-feasibility study on the port concluded that the development is viable. 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.

NWI completed an ‘Environmental Referral Document’, which was submitted to the Environmental Protection Authority (EPA) in July 2011. In late November 2011, the EPA released their recommendation for the development of the facilities for public comment.

(vii) 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’ concerns 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.

BROCKMAN RESOURCES Target’s Statement 35

Profile of Brockman

(b) West Pilbara project ‘hub’

Brockman’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 FMG’s 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 project

The Duck Creek project is located about 115km West-North-West of Paraburdoo in the West Pilbara region of Western Australia. During the 2010/2011 drilling season, a total of 1,657m of broad space reconnaissance drilling was carried out in 45 holes.

Significant DSO grade mineralisation at shallow depths (often outcropping at the surface) were recorded from the targets drilled at the Duck Creek project. The mineralisation contains very low levels of the phosphorous, and is otherwise comparable with other West Pilbara CID Mineral Resources.

(ii) West Hamersley project

The West Hamersley project comprises one granted exploration licence covering 51km[2] and contains extensive areas of outcropping Brockman Iron Formation.

Helicopter-supported reconnaissance mapping and sampling over West Hamersley identified six zones of hematite mineralisation grading 56-64% Fe. An initial drilling programme of 407m of broad space reconnaissance drilling was carried out in 36 shallow holes. This drilling confirmed significant shallow DSO grade hematite.

The shallow depth and the nature of the mineralisation suggest low cost mining, with the added advantage that all mineralisation is above the water table. Brockman will continue to drill the Duck Creek and West Hamersley projects in the 2011/2012 drilling season to build up a resource base sufficient to support development of the West Pilbara project hub.

(iii) Mt Stuart

The Mt Stuart project consists of two exploration licences granted early in 2010. Initial reconnaissance sampling over a mesa of CID mineralisation at Mt Stuart demonstrated that ore grade mineralisation is present. Four samples of CID mineralisation collected averaged 58% Fe with low contaminants.

(c) Other tenement holdings

(i) 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 (between Rio Tinto Iron Ore and Hancock Prospecting Pty Ltd).

36 BROCKMAN RESOURCES Target’s Statement

Profile of Brockman

Recent sampling from the Ophthalmia project has shown that there is a significant deposit of hematite mineralisation at the Sirius prospect. 104 surface samples were taken with 98 returning a mineralisation of greater than 54% Fe with low contaminants.

Initial reconnaissance surface sampling at the Ophthalmia project also identified DSO grade mineralisation in a number of other areas at Coondiner (to 66% Fe), Kalgan Creek (to 66% Fe) and Ophthalmia Range (to 57% Fe). Follow up sampling has produced further encouraging assays from these areas. Results received from an additional 45 surface rock samples collected in late September from composite traverse samples across strike of the banded ironstone formation mineralisation have confirmed the prospectivity of the Ophthalmia project area ahead of drilling.

The Ophthalmia project is located in close proximity to existing infrastructure, and only 70 km away from the Marillana Project meaning that it could take advantage of any rail infrastructure that Brockman develops. An initial reverse circulation drilling programme has commenced at Ophthalmia. If the results obtained from the initial drilling programme are in line with Brockman’s expectations, a full resource evaluation drilling will commence in 2012, followed by the commencement of scoping studies.

Further information relating to the Ophthalmia Project can be found in Brockman’s ASX announcement of 30 August 2011.

(ii) Mt Florance

Brockman 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.

(iii) Other iron ore tenements

Brockman holds a number of other exploration licence applications within the Pilbara iron ore province, all of which are considered prospective for iron ore mineralisation.

5.2 FINANCIAL INFORMATION AND RELATED MATTERS

As at 30 June 2011 Brockman held $53,506,681 in cash and was debt free. Brockman’s full consolidated financial statements for the period ended 30 June 2011 can be found in its 2011 annual report which is available at www.brockman.com.au and www.asx.com.au (ASX: BRM).

There has not been any matter or circumstance, other than those referred to in Brockman’s consolidated statements, its 2011 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.

BROCKMAN RESOURCES Target’s Statement 37

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BROCKMAN RESOURCES Target’s Statement

6. Key features of Wah Nam’s Offer

Key features of Wah Nam’s Offer

6.1 INFORMATION ABOUT WAH NAM

Wah Nam Australia is a wholly owned Subsidiary of Wah Nam. Wah Nam is incorporated in Bermuda and listed on the ASX and on the HKEx.

Wah Nam is a diversified company with investments in copper, zinc, lead, mineral exploration and transport. Wah Nam is focussed on being a developer of strategic mining assets in politically stable, mineral resource-rich countries.

Wah Nam has provided information on its businesses in section 3 of the Bidder’s Statement.

6.2 CONSIDERATION PAYABLE TO SHAREHOLDERS WHO ACCEPT THE OFFER

The consideration being offered by Wah Nam Australia is 18 Wah Nam Shares and A$1.50 in cash for each Brockman Share it does not already own. The Consideration Shares received 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. The Conditions are set out in full in section 13.9 of the Bidder’s Statement and in the BIA.

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

(a) Foreign investment approval: the Treasurer consenting on an unconditional basis, or not objecting, to the Offer under the Foreign Acquisitions and Takeovers Act 1975 (Cth) ;
(b) Wah Nam shareholder approval: the requisite majority of:
(i) independent Wah Nam shareholders approving the acquisition by Wah Nam 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;
(ii) Wah Nam shareholders approving the Subscription Agreement, and the transactions contemplated thereunder, including:
- the allotment and issue of Subscription Shares to the Subscriber; and
- the issue of the Convertible Bond to the Subscriber and the allotment and issue of Wah Nam Shares which may be issued upon the exercise of the conversion rights attached to the Convertible Bond; and
(iii) Wah Nam shareholders approving the Underwriting Agreement, and the transactions contemplated thereunder, including the allotment and issue of the Placement Shares,

at general meeting by poll;

(c) Subscription: completion of the subscription for the Subscription Shares and the Convertible Bond to the Subscriber under the Subscription Agreement;
(d) Placement: completion of the placement of the Placement Shares under the Underwriting Agreement;
(e) 80% minimum acceptance: at the end of the Offer Period, Wah Nam Australia having a relevant interest (as defined in section 608 of the Corporations Act) in more than 80% of all of the Brockman Shares on issue;

BROCKMAN RESOURCES Target’s Statement

Key features of Wah Nam’s Offer

(f) 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 an Australian or Hong Kong government agency;
(ii) no action or investigation is announced, commenced or threatened by any Australian or Hong Kong 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; and

(g) Exchange rate variation: The A$/US$ exchange rate as quoted on Bloomberg does not exceed US$1.10 for 50% of the time over the 5 Trading Days after the last of the Conditions described in paragraphs 6.3(a) to 6.3(e) are satisfied

6.4 SOURCES OF CASH

The maximum amount of cash required by Wah Nam Australia to fund the cash component of the Offer if all acceptances were received for all the Brockman Shares not already held by Wah Nam Australia (and assuming all holders of Brockman Options with an exercise price of A$1.25, A$1.30 or A$3.00 exercise their Brockman Options) is approximately A$100,600,000. See section 9.1(a) of the Bidder’s Statement for further details regarding this calculation.

Wah Nam Australia will fund the cash component of the Offer using a combination of:

Wah Nam’s existing cash resources;
the proceeds from the issue of the Subscription Shares and the Convertible Bond under the Subscription Agreement; and
and the proceeds from the placement of the Placement Shares under the Underwriting Agreement.

The aggregate of Wah Nam’s existing cash resources and the proceeds received under the Subscription Agreement and Underwriting Agreement are in excess of what Wah Nam Australia requires to fund the cash component of the Offer, together with the amounts required to cover all of the transaction costs associated with the Offer and the $A/US$ exchange rate reaching US$1.10.

(a) Cash resources

As set out in section 9.1(c) of the Bidder’s Statement, at the commencement of the Offer Period, Wah Nam holds unrestricted cash equivalent to A$33,700,000. This cash will be applied to partially fund the cash component of the Offer.

(b)

Subscription Agreement

On 12 December 2011, Wah Nam entered into a Subscription Agreement with the Subscriber under which, subject to the conditions precedent set out below:

the Subscriber agreed to subscribe for Subscription Shares at an aggregate consideration of HK$333,060,000 (A$42,253,092); and

BROCKMAN RESOURCES Target’s Statement

Key features of Wah Nam’s Offer

the Subscriber agreed to subscribe for the Convertible Bond at an aggregate consideration of HK$173,940,000 (A$22,066,303).

The Subscription Agreement is subject to:

no material breach by Wah Nam in respect of its warranties given under the Subscription Agreement;
the requisite majority of Wah Nam shareholders approving the allotment and issue of the Subscription Shares, the Convertible Bond and any Wah Nam Shares which may be issued pursuant the Convertible Bond;
the HKEx permitting the listing of the Subscription Shares and any Wah Nam Shares which may be issued pursuant the Convertible Bond; and
there being no event which has or could reasonably be expected to have a material adverse affect on the Wah Nam Group, to the reasonable satisfaction of the Subscriber.

The consideration received from the Subscription Shares will be applied to partially fund the cash component of the Offer. A detailed summary of the Subscription Agreement (including the events on which the Convertible Bond converts into Wah Nam Shares) is set out in sections 9.1(d) and 12.3 (respectively) of the Bidder’s Statement.

Underwriting Agreement

On 12 December 2011 Wah Nam and the Underwriter entered into the Underwriting Agreement under which, subject to the conditions precedent set out below, the Underwriter agreed, in consideration of receiving commission of 2.5% of the aggregate price of the Placement Shares, to procure, on a fully underwritten basis, placees for the Placement Shares at an aggregate price of HK$78,000,000 (A$9,895,337).

The Underwriting Agreement is subject to similar conditions precedent as the Subscription Agreement, being;

no material breach of the Subscription Agreement by either Wah Nam or the Underwriter in respect of each of their warranties given under the Underwriting Agreement;
the requisite majority of Wah Nam shareholders approving the issue of the Placement Shares;
the HKEx permitting the listing of the Placement Shares; and
there being no event which has or could reasonably be expected to have a material adverse affect on the Wah Nam Group, to the reasonable satisfaction of the Underwriter.

The consideration received from the Placement Shares will be applied to partially fund the cash component of the Offer. A detailed summary of the Underwriting Agreement is set out in section 9.1(e) of the Bidder’s Statement.

6.5 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 [•] January 2012.

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;

42 BROCKMAN RESOURCES Target’s Statement

Key features of Wah Nam’s Offer

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 Offer 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.

6.6 EFFECT OF BREACH OR NON-FULFILMENT OF 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 with Wah Nam Australia to acquire your Brockman Shares.

Subject to the Corporations Act and the HKEx Listing Rules, Wah Nam Australia may, at any time, declare the Offer to be free from any Conditions. However, if Wah Nam Australia has not declared the Offer to be free from the Conditions, 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.

6.7 OFFER PERIOD

Unless Wah Nam’s Offer is extended or withdrawn, it is open for acceptance from [•] December 2011 until 4:00pm WST on [•] January 2012.

The circumstances in which Wah Nam Australia may extend or withdraw its Offer are set out in section 6.8 and section 6.9 respectively of this Target’s Statement.

6.8 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 6.5 of 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 waived), Wah Nam Australia 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.

If this event occurs, the Offer Period is automatically extended so that it ends 14 days after that event occurred.

6.9 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 ASIC consent.

BROCKMAN RESOURCES Target’s Statement 43

Key features of Wah Nam’s Offer

6.10 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 those 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 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 Australia will be able to exercise the Rights attaching to their Brockman Shares.

6.11 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 Australia extends the Offer Period by more than one month and the Offer is still subject to the Conditions.

6.12 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:

14 days after the date the Offer becomes or is declared unconditional; and
14 days 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 14 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.

6.13 EFFECT OF AN IMPROVEMENT IN CONSIDERATION ON SHAREHOLDERS WHO HAVE ALREADY ACCEPTED THE OFFER

If Wah Nam Australia improves the consideration offered under its Offer, 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.

6.14 LAPSE OF OFFER

The Offer will lapse if the Conditions are not waived 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.

6.15 COMPULSORY ACQUISITION

Wah Nam Australia has indicated in section 8.2 of the Bidder’s Statement that if it satisfies the required thresholds it intends to compulsorily acquire any outstanding Brockman Shares.

44 BROCKMAN RESOURCES Target’s Statement

Key features of Wah Nam’s Offer

Wah Nam Australia will be entitled to compulsorily acquire any Brockman Shares in accordance with the Corporations Act 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 the total number of Brockman Shares on issue.

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 total number of Brockman Shares on issue. Wah Nam Australia would then have rights to compulsorily acquire Brockman Shares not owned by it within 6 months of becoming a 90% holder. The price for compulsory acquisition under this procedure would have to be considered in a report of an independent expert.

6.16 MINORITY OWNERSHIP CONSEQUENCES

If Wah Nam Australia acquires less than 90% of the total number of Brockman Shares on issue then Wah Nam will continue to hold a majority shareholding through Wah Nam Australia in Brockman. Accordingly, Brockman Shareholders who do not accept the Offer will continue to be minority shareholders in Brockman. This has a number of implications, including:

Wah Nam will continue to 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 the Board 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 the Brockman 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 the 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;
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 interest in Brockman incrementally without either obtaining Brockman Shareholder approval or launching another takeover offer. For example, if Wah Nam obtained an interest in Brockman of 85% under the Offer, it could obtain the 90% threshold required for compulsory acquisition within 1 year; and
if Wah Nam Australia acquires 75% or more of the total number of Brockman Shares on issue it will be able to pass a special resolution of Brockman. This will enable Wah Nam to, among other things, change Brockman’s constitution.

BROCKMAN RESOURCES Target’s Statement 45

Key features of Wah Nam’s Offer

6.17 ALTERNATIVES TO THE OFFER

Subject to the terms of the BIA the Independent Directors will consider any alternative to the Offer in order to maximise value for Brockman Shareholders (including any potential rival takeover bids for Brockman).

As at the date of this Target’s Statement, Brockman has not received any alternative proposal from any party. As Wah Nam Australia already has a 55.33% shareholding in Brockman, a superior proposal is unlikely to emerge, however the Independent Directors will keep Brockman Shareholders informed of any material developments. In this regard, Brockman will update you no more than 14 days and no less than 7 days before the end of the Offer Period.

6.18 BROCKMAN SHARE PRICE ABSENT THE OFFER

While there are many factors that influence the market price of Brockman Shares, your Independent 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 Australia acquires less than 90% of the total number of Brockman Shares on issue or if the takeover is otherwise unsuccessful.

6.19 TAxATION CONSEQUENCES OF THE OFFER

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 10 of the Bidder’s Statement.

The following comments do not apply to Brockman Shareholders who are not residents 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 10 of the Bidder’s Statement notes, partial 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 total number of Brockman Shares on issue, Brockman Shareholders who make an Australian capital gain by accepting the Offer will not be able to elect to obtain a partial scrip-for-scrip-CGT rollover of that capital gain. Brockman Shareholders may therefore incur higher CGT liabilities from disposal of their Brockman Shares.

If the value of the Offer consideration is greater than the CGT cost base for the Brockman Shares of a Brockman Shareholder and partial CGT 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 the CGT discount that applies in respect of CGT assets held for at least 12 months. Those Brockman Shareholders may therefore be taxed on the full net capital gain at their top marginal rate of tax.

If the value of the Offer consideration is less than the CGT reduced cost base for the Brockman Shares of a Brockman Shareholder, on disposal they will make a capital loss to the extent of the difference. As section 10.2 of the Bidder’s Statement notes, a Brockman Shareholder can potentially use such a capital loss to offset capital gains.

(b) 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.

BROCKMAN RESOURCES Target’s Statement

Key features of Wah Nam’s Offer

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

As section 10 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.

(d) 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 10 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 Independent 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.

6.20 TREATMENT OF OVERSEAS SHAREHOLDERS AND UNMARKETABLE PARCEL HOLDERS

Any Brockman Shareholder:

(a) 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; or
(b) who, if they accepted the Offer, would not be issued with a Marketable Parcel of Wah Nam Shares in consideration of their Brockman Shares,

will not be issued with Wah Nam Shares under the Offer.

Instead, Wah Nam 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 section 619(3) of the Corporations Act, and will cause that 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 20 Business Days after the close of the Offer. The nominee will then distribute to each of those foreign holders, or holders of unmarketable parcels, their proportion of the proceeds of sale net of expenses.

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

BROCKMAN RESOURCES Target’s Statement 47

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7. Independent Expert’s Report

BROCKMAN RESOURCES Target’s Statement

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Associations and relationships We are ultimately owned by the Deloitte member firm in	Australia (Deloitte Touche Tohmatsu). Please see www.deloitte.com.au/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu.	Deloitte Touche Tohmatsu has not provided any	previous services to Brockman Resources Limited or	Wah Nam International Holdings Limited.	What should you do if you have a complaint?	If you have any concerns regarding our report or service,	please contact us. Our complaint handling process is	designed to respond to your concerns promptly and	equitably. All complaints must be in writing to the	address below.	If you are not satisfied with how we respond to your	complaint, you may contact the Financial Ombudsman	Service (FOS). FOS provides free advice and assistance to consumers to help them resolve complaints relating to	the financial services industry. FOS’ contact details are also set out below.	The Complaints Officer Financial Ombudsman Service	PO Box N250 GPO Box 3	Grosvenor Place Melbourne VIC 3001 Sydney NSW 1220 [email protected] [email protected] www.fos.org.au Fax: +61 2 9255 8434 Tel: 1300 780 808 Fax: +61 3 9613 6399		What compensation arrangements do we have? Deloitte Touche Tohmatsu holds professional indemnity insurance that covers the financial services provided by us. This insurance satisfies the compensation requirements of the Corporations Act 2001 (Cth).
Financial Services Guide	What is a Financial Services Guide? This Financial Services Guide (FSG) provides important information to assist you in deciding	whether to use our services. This FSG includes details	of how we are remunerated and deal with complaints.	Where you have engaged us, we act on your behalf when	providing financial services. Where you have not	engaged us, we act on behalf of our client when	providing these financial services, and are required to	give you an FSG because you have received a report or	other financial services from us.	What financial services are we licensed to	provide?	We are authorised to provide general financial product advice or to arrange for another person to deal in financial products in relation to securities, interests in managed investment schemes and government debentures, stocks or bonds.			Our general financial product advice	Where we have issued a report, our report contains only	general advice. This advice does not take into account your personal objectives, financial situation or needs. You should consider whether our advice is appropriate for you, having regard to your own personal objectives,	financial situation or needs.	If our advice is provided to you in connection with the acquisition of a financial product you should read the relevant offer document carefully before making any decision about whether to acquire that product.	How are we and all employees remunerated?	We will receive a fee of approximately AUD 235,000	exclusive of GST in relation to the preparation of this	report. This fee is not contingent upon the success or	otherwise of the proposed transaction between Wah Nam	International Holdings Limited and Brockman Resources	Limited (the Takeover Offer).	Other than our fees, we, our directors and officers, any	related bodies corporate, affiliates or associates and their	directors and officers, do not receive any commissions or	other benefits.	All employees receive a salary and while eligible for	annual salary increases and bonuses based on overall	performance they do not receive any commissions or	other benefits as a result of the services provided to you.	The remuneration paid to our directors reflects their	individual contribution to the organisation and covers all	aspects of performance.	We do not pay commissions or provide other benefits to	anyone who refers prospective clients to us.

In selecting a high value of AUD 0.080 for a share in the Proposed Merged Entity, we have had regard to the	Subscription Price, which we consider provides good evidence as to the fair market value of a share in the Proposed	Merged Entity on a minority interest basis, together with trading in Wah Nam shares after 8 November 2011.	We have adopted a value of AUD 0.065 as the low end of the value range for the Proposed Merged Entity, which is	approximately the high end of our valuation range for the Proposed Merged Entity derived under the sum-of-the-parts	method.	We have therefore selected a value for a share in the Proposed Merged Entity in the range of AUD 0.065 to AUD 0.080	on a minority interest basis.	The Takeover Offer was announced by Wah Nam on 13 December 2011 and our report is contained within the Target’s	Statement issued to be on 15 December 2011. As a consequence, we have had the opportunity to observe only two days	of trading in Wah Nam shares after the announcement of the Takeover Offer.		Given the limited time between the announcement of the Takeover Offer and the issue of the Target Statement, trading	in Wah Nam shares may not fully incorporate the market’s view of the Takeover Offer.	Based on the VWAP of Wah Nam shares over the two days after the announcement of the Takeover Offer, the implied	purchase price of a Brockman share is AUD 3.19, however, this implied consideration may change as the market fully incorporates the consequences of the Takeover Offer.	Under the Takeover Offer, Wah Nam has offered the Bid Consideration to Shareholders, consisting of Cash	Consideration of AUD 1.50 and 18 shares in the Proposed Merged Entity.	We set out below the value of the Bid Consideration under the Takeover Offer.	We set out below the value of the Bid Consideration under the Takeover Offer.	Table 4: Valuation of the Bid Consideration		Unit Low High	*Value of the Scrip Consideration*	Deloitte assessed value of a share in the Proposed Merged Entity (on a minority interest basis) AUD 0.065 0.080	Number of shares issued in the Proposed Merged Entity shares 18 18	Estimated value of the Scrip Consideration AUD 1.17 1.44	Cash Consideration AUD 1.50 1.50		Total value of the Bid Consideration AUD 2.67 2.94		Selected value of the Bid Consideration AUD 2.70 2.95			Source: Deloitte analysis	Based on the VWAP of Wah Nam shares over the two days after the announcement of the Takeover Offer, the implied	purchase price of Brockman is AUD 3.19, however, this implied consideration may change as the market fully	incorporates the consequences of the Takeover Offer.	Our assessed value of a share in Brockman on a control basis is in the range of AUD 2.70 to AUD 3.05 based on the	sum-of-the-parts method.	The Bid Consideration offered by Wah Nam is within the range of our estimate of a Brockman share.	The Takeover Offer is reasonable	The Takeover Offer is reasonable		In accordance with ASIC Regulatory Guide 111 an offer is reasonable if it is fair. On this basis, in our opinion the	Takeover Offer is reasonable.	We have also considered the following factors in assessing the reasonableness of the Takeover Offer.	We have also considered the following factors in assessing the reasonableness of the Takeover Offer.	*It is difficult to progress the Marillana Project under the current shareholding structure*		Brockman has had extensive discussions with a number of parties regarding possible joint ventures, sales contracts	(with potential Asian customers) and shipping, rail and port options. It has become obvious in recent months that the	uncertainty associated with the intentions of the controlling shareholder is limiting Brockman’s ability to progress these	discussions. In the absence of the Takeover Offer this uncertainty is likely to continue and it will be difficult to negotiate a suitable infrastructure solution in a reasonable timeframe.	discussions. In the absence of the Takeover Offer this uncertainty is likely to continue and it will be difficult to negotiate a suitable infrastructure solution in a reasonable timeframe.	Deloitte:Brockman Resources Limited - Independent expert’s report Page 4

Our assessed fair market value of a share in Brockman is summarised in Table 2.		Table 2: Value of a share in Brockman based on sum-of-the-parts method	Low High	Section Unit value value		Fair market value of the Marillana Project 9.2.1 AUD million 325.0 375.0	Exploration assets of Brockman 9.2.2 AUD million 20.0 20.0	Surplus assets 9.2.3 AUD million 9.0 9.0	Enterprise value of Brockman (on a control basis) AUD million 354.0 404.0		Net cash 9.2.4 AUD million 41.3 41.3	Equity value of Brockman (on a control basis) AUD million 395.3 445.3		Number of shares on issue 9.2.5 Million 145.7 145.7	Value of a share in Brockman (on a control basis) AUD 2.71 3.06	Deloitte assessed value of a share in Brockman using	the sum-of-the-parts method AUD 2.70 3.05		Source: Deloitte analysis	We have selected a valuation range of AUD 2.70 to AUD 3.05 based on the sum-of-the-parts method.	*Valuation of the Bid Consideration*	Estimating the value of the Bid Consideration under the Takeover Offer requires an estimate of the value of a share in	the combined entity consisting of Wah Nam and Brockman (Proposed Merged Entity). Our valuation of a share in the	Proposed Merged Entity is set out in Section 10.5 and is prepared on a minority interest basis, as Shareholders will	receive shares which represent a minority interest in the Proposed Merged Entity.	In order to value a share in the Proposed Merged Entity, we have considered:	 the value of a share based on the sum-of-the-parts methodology, which estimates the market value of a company by	separately valuing each asset and liability of the company and deducting a minority interest discount	 the Subscription Price at which the Share Placement, conversion of the Convertible Bond and the placement under	the Underwriting Agreement is being undertaken		 trading in Wah Nam shares on the Hong Kong Stock Exchange (HKEX) prior to announcement of the Takeover		Offer, but after 9 November 2011, when Brockman confirmed to the Australian Securities Exchange (ASX) that it	was in preliminary discussions with Wah Nam about a potential transaction	 trading in Wah Nam shares on the HKEX up to 14 December 2011, being the first two trading days after the	announcement of the Takeover Offer.	The value of a share in the Proposed Merged Entity derived under each of the methods discussed above is summarised	in Table 3.		Table 3: Value of a share in the Proposed Merged Entity – summary		Low High	Section (AUD) (AUD)		Sum-of-the-parts method 10.2 0.062 0.064	Subscription Price 10.3 0.076 0.076	Wah Nam VWAP 1between 9 November 2011 and 9 December 2011 10.4 0.082 0.082	Wah Nam VWAP between 13 December 2011 and 14 December 2011 10.4 0.094 0.094		Source: Deloitte analysis	Note:		1. VWAP – volume weighted average price.	Deloitte:Brockman Resources Limited - Independent expert’s report Page 3

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Page 16
2016F
619 2016F
2015F
581 2015F
2014F Sweden
1 538 2014F
511 2013F Exports 2013F South Africa
6. Atlas Iron Limited (Atlas), Territory Resources Limited, Cliffs Natural Canada
470 2012F 2012F
Production India
Brazil
5. The Pilbara is particularly significant with more than 84% of Australia’s total identified 448 2011F 2011F
Australia
423 2010
2010
353 2009
0 2009 Brockman Resources Limited - Independent expert’s report
Outlook 700 600 500 400 300 200 100 0 F – forecast. 1,400 1,200 1,000 800 600 400 200
The WA iron ore industry represents almost 97% of total Australian production, followed by South Australia (2.5%) and Tasmania (less than 1%) resources and almost 92% of total production Resources Incorporated, Mount Gibson Iron Limited, Murchison Metals Limited, OneSteel Limited (OneSteel) and Grange Resources Limited are smaller iron ore companies currently in production. 3.3 Figure 1 below shows that historical and expected growth in Australian iron ore exports. Figure 1: Medium term Australian production and export outlook Source: Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Note: 1. Figure 2: Medium term world export outlook Source: ABARES World trade of iron ore is projected to increase at an average annual rate of 6% between 2010 and 2016, growing to 1.39 billion tonnes (Bt) by the end of 2016. The majority of export growth is expected to come from Australia and Brazil, as illustrated in Figure 2. Australian exports of iron ore are projected to increase at an average annual rate of 8% between 2010 and 2016. By 2016, Australia’s iron ore exports are projected to account for 43% of world trade, as several large projects by BHP, Rio, CITIC Pacific Mining Management Pty Limited (the Sino Iron project) and Fortescue are scheduled to commence production. 5 IBISWorld Industry Report B1311 – Iron Ore Mining in Australia February 2010 6 UBS Investment Research; Australia Mining and Metals; Australian Resources Weekly 23 April 2010 Deloitte:
4 . Page 15
Deposits
Mount Whaleback and Mount Tom Price Channar, Paraburdoo and Jimblebar Nammuldi, West Angelas, Mining Area C, Marandoo, Hope Downs, Cloudbreak and Christmas Creek Robe River and Yandicoogina Pardoo Koolan Island Balmoral, Cape Lambert and Karara
1. Iron ore is Australia’s second largest export 3 . 1 O / 4.0% 32 O / 32 / 0.4% 2
O32 / 4.0% LOIO32 / 5% LOI O32 / 10% LOI O32 / 2.4% Al2 / 1.01% Al2
/ 1.7% Al2 , 2.4% Al2 / 1.5% Al2 / 1.4% Al2
2. Australia produced an estimated 420 million tonnes (Mt) of iron ore during the
/ 1.0% LOI O32
Characteristics 65% Fe / 0.05% P / 4.3% SiO 62.7% Fe / 0.10% P / 3.4% SiO 62% Fe / 0.06% P / 3% SiO 58% Fe / 0.05% P / 4.8% SiO Low: 57.4% Fe / 0.09% P / 7.07% SiO LOI High: 63.8% Fe / 0.017% P / 6.13% SiO 0.46% LOI 66.3% Fe (after beneficiation) / 0.02% P / 1.9% SiO Al
Brockman Resources Limited - Independent expert’s report
Iron ore industry in Australia
Loss on Ignition. Brockman ore, which can be further classified as low phosphorous (Premium Brockman) or high phosphorous Brockman ore Marra Mamba ore CID, also known as pisolite, which is a mixture of hematite and goethite.
3.2 The Australian iron ore mining industry is forecast to account for 2.6% of the national gross domestic product in Financial Year (FY) FY2012, with sales estimated at AUD 56.6 billion product after coal (according to IBIS World Pty Ltd (IBISWorld). Australia has approximately 13% of the world’s iron ore resources, fourth after Ukraine, Russia and China, but second in terms of iron ore content after Brazil 2010 calendar year (CY), second highest after China (900 Mt), followed by Brazil (370 Mt). Australia was the largest exporter in 2010 (402 Mt), followed by Brazil (308 Mt) and India (87 Mt) Table 5 below outlines the various types and characteristics of Australian iron ore producing mines. Brockman’s mineral resources are a blend of channel iron deposits (CID) and detrital (a form of other hematite). Table 5: Australian iron ore product types - characteristics and deposits Product Type Premium Brockman Brockman Marra Mamba CID Other Hematite Magnetite (pellets) Source: Geoscience Australia Note: 1. The Pilbara is the primary iron ore producing region in Australia. The three main types of hematite ore mined in the Pilbara are as follows: a) b) c) Rio Tinto Limited (Rio), the largest Australian iron ore producer (approximately 41% market share) and BHP Billiton Limited (BHP) (approximately 37% market share) currently account for approximately 78% of total iron ore production in Australia. Fortescue Metals Group Limited (Fortescue) is another prominent Pilbara iron ore producer with current installed capacity of 55 Mt per annum (Mtpa) and expansion plans to increase capacity to 155 Mtpa by June 2013 1 IBISWorld Industry Report B1311 – Iron Ore Mining in Australia August 2011 2 US Geological Survey website and Minerals Yearbook – 2009 3 ABARE Australia Commodities – June Quarter 2011 4 Fortescue AGM Investor Presentation – 9 November 2011 Deloitte:
mt mt
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2010
2009
2008
Other
2007
Ukraine
2006 Russia
India
2005
China
Brazil
2004
Australia
2003
2002
Global supply 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2001 Brazil production excludes pellets China production was converted to correspond with world average Fe content.
Australian domestic iron ore demand is relatively small and the only substantial local consumers of iron ore are OneSteel and BlueScope Steel Limited. This is not expected to change in the short to medium term. 3.5 Iron ore is mainly produced in China, Australia, Brazil and India, while Australia, Brazil and India are the major iron ore exporting countries. China produces on average very low quality iron ore (iron ore content around 30% compared to 50% or more for traded ore) and uses most of its iron ore production for domestic steel production. Figure 5 shows the increase in global iron ore production from 932 Mt in 2001 to 1,886 Mt in 2010. The increase in iron ore production over this period is primarily due to the economic growth, urbanisation and industrialisation of China. Figure 5: Global iron ore production per country Source: United States (US) Geological Survey Notes: 1. 2. Of the total global production of iron ore in 2010, 1,036 Mt was exported and the balance used for domestic consumption. While China and India are significant producers of iron ore (as shown in Figure 5), they are not significant exporters of iron ore (as shown in Figure 6) due to significant local consumption.
Iron ore Production (Mt)
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Page 17
2016F
Forecast
2015F Actual 2011
2010
2014F Other
2009
Korea India
2013F Japan 2008 Korea
2007 Japan
2012F 2006
European Union United States
China 2005
2011F
2004 European Union
2010 2003 China
2002
1,400 1,200 1,000 800 600 400 200 0 2009 Global demand 1,600 1,400 1,200 1,000 800 600 400 200 0 2001 Brockman Resources Limited - Independent expert’s report
As shown in Figure 3, China is expected to continue as the largest importer as its demand for iron ore rises at a faster rate than that of domestic production. This is projected to underpin China’s import growth of 5% per annum which is expected to reach 857 Mt in 2016. Figure 3: Medium term world import outlook mt Source: ABARES A recovery in global demand is expected to be consistent with the expected economic recovery in many developed countries. As such, iron ore imports by other major Asian economies are projected to increase over the outlook period, having declined significantly in 2009. 3.4 Demand for iron ore is driven by iron and steel making, which in turn is driven by a range of industries of which the most important are construction, motor vehicle manufacturing, ship building, plant and equipment manufacturing and consumer goods manufacturing. A key driver of demand for Australian iron ore is demand from China. The combination of significant growth in iron ore exports to China (115% over the 5 years ending 2010) and the fact that iron ore exports to China currently make up around 70% of Australia’s total exports, means China is an important future driver of demand for the Australian iron ore industry. The main markets for iron ore are the steel producing regions of Asia, Europe and North America. The figure below shows the historical global steel consumption by region. Figure 4: Global steel consumption per country Steel Consumption (Mt) Source: ABARES Deloitte:
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Page 20
Brockman Resources Limited - Independent expert’s report
Infrastructure
Spot price has been displayed from July 2008 due to the availability of information FOB – Free on board; USc/dmtu – US cents per dry metric tonne unit.
The increase in iron ore prices over the past decade, as illustrated in Figure 7, was mainly driven by the growth in steel production in China to supply its rapid infrastructure development. Figure 7: Historical fines spot and contract prices Source: Thomson Reuters (Professional) Australia Limited (Thomson Reuters), Bureau of Resources and Energy Economics (BREE) Notes: 1. 2. The generally accepted benchmark price in the iron ore industry is the Hamersley lump and fine prices exported from Dampier (also known as the Pilbara blend lump and fines). The Hamersley prices are closely linked to the corresponding BHP prices for the export of comparable products from Port Hedland. 3.7 Iron ore mined in the Pilbara is shipped from three ports, Dampier, Cape Lambert and Port Hedland. The Dampier and Port Hedland ports are owned by the State Government of WA. Rio has operations at Dampier and Cape Lambert. Hamersley Iron Pty Limited (Hamersley Iron), a subsidiary of Rio, operates the East Intercourse and Parker Point berths and owns the port infrastructure facilities at Dampier. Robe River Iron Associates (Robe River), an unincorporated joint venture (JV) which is 53% owned by Rio, owns and operates the Cape Lambert port facilities. BHP and Fortescue operate out of Port Hedland and own the port infrastructure facilities, including berths at the port. The State Government has acknowledged that the three existing ports will not meet the forecast demand for export facilities over the medium to long term and that an alternative port or an expansion of existing port facilities is required in the Pilbara. In March 2010, the State Government identified Anketell Point, 30 kilometres (km) east of Karratha (with the next closest port being Dampier) as the site of the Pilbara’s next major iron ore port. Aquila Resources Limited, Fortescue and MCC Australia Holdings Pty Limited are the foundation investors in the proposed new port. The State Government is expected to nominate from these investors, including a third party, which group will take control over the development of the port by the end of 2011. The Port Hedland Port Authority completed the Utah Point multi-user berth at Port Hedland in September 2010. This new berthing operation provides 20 Mtpa which has been allocated to Atlas, Mineral Resources Limited, Moly Mines Limited and BHP. This is expected to be further augmented by an additional 50 Mtpa of capacity from the South Western Creek development at the Port Hedland port inner harbour which has been allocated to the North West Iron Ore Alliance (now trading as North West Infrastructure), which is owned by Atlas and Brockman. A prefeasibility study has been completed on the new facility with the study concluding that the proposed port and materials handling infrastructure will be capable of meeting the shipping needs of the North West Infrastructure (NWI) members. Deloitte:
Page 19
Forecast 2012
Actual 2011
2010
2009 Other
2008 Sweden
2007
South Africa
2006 Canada
India
2005
Brazil
2004 Australia
2003
2002
Brockman Resources Limited - Independent expert’s report
1,400 1,200 1,000 800 600 400 200 0 2001 Pricing
Figure 6: Global iron ore exports per country Source: ABARES Vale SA (Vale) of Brazil is the largest global iron ore producer followed by Rio and BHP. Iron ore produced by Vale, Rio and BHP represents the majority of seaborne traded iron ore and this is expected to continue in the short to medium term with most of the future increase in global iron ore exports forecast to come from Brazil and Australia. This increase is expected to be delivered primarily through significant investment in new infrastructure. 3.6 Iron ore is traditionally sold in the export market was sold through long term contracts, many of which had terms of between eight and 25 years. These contracts prescribed the volume of iron ore sold but prices were generally based on an annually negotiated benchmark price, which was set through separate negotiations between one of the major producers (Rio, BHP and Vale) and global steel mills. Traditionally, once one of the major producers agreed a price with an individual (or consortium) steel mill, this price became the benchmark price for the next Japanese financial year (JFY) and was replicated throughout the industry. The JFY runs from 1 April to 31 March. If the price was not set by 1 April then an interim pricing level was agreed until the new benchmark price was negotiated. However, JFY2009 price negotiations saw a move away from the traditional system with individual producers negotiating their own price. A major change in the pricing of iron ore occurred in March 2010, with BHP announcing it had negotiated quarterly contracts with most of its Asian customers. The new pricing system between the large producers and Asian steel mills sets the price for the upcoming quarter based on the spot price in the first half of the month prior to the new quarter. Vale and Rio announced a similar outcome soon afterwards, albeit based on lagging spot price values (up to four months in arrears). Deloitte:
Iron ore Exports (Mt)
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Page 21
Brockman Resources Limited - Independent expert’s report
The current rail infrastructure in the Pilbara is owned and operated by Hamersley, Robe River, BHP and Fortescue. The distance from the mines to port in the Pilbara requires significant investment in rail infrastructure. The following figure shows the current operating railway lines in the Pilbara and Brockman’s Marillana Project. Figure 8: Nearby rail lines to the Marillana Project Source: Brockman Fortescue has been in dispute with Rio and BHP regarding third party access to their Pilbara rail networks. In August 2008, the National Competition Council recommended that the rail services of Rio and BHP for the Robe, Hamersley Iron and Goldsworthy railway lines be declared open to third party access. This recommendation was accepted by the Federal Treasurer in October 2008. In November 2008, Rio and BHP applied to the Australian Competition Tribunal for a review of that decision. The Tribunal concluded that the Treasurer’s decision would only be upheld for BHP’s Goldsworthy railway line. The effect of this decision on Rio is that it is not required to provide third party access to its rail lines. This decision has been appealed by Fortescue and is anticipated to be heard by the High Court in the first half of 2012. Under its WA State Agreement, Fortescue’s railway line is open to access by other miners at commercial rates. Fortescue has entered into one haulage arrangement with a junior miner, BC Iron Limited, and has stated it has been in negotiations with a number of other junior miners for haulage on its railway line. No access applications have yet been made public in relation to Fortescue’s rail line. Recently, QR National has stated that it is in preliminary discussions with some of the junior miners to construct and operate another Pilbara railway line that would target junior mining companies in the region that do not have existing access to rail networks. Both Brockman and Flinders Mines Limited (Flinders) have stated publicly that they are currently considering QR National as an alternative to using the existing railway lines in the Pilbara. Deloitte:
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1Limited (33%) Location
NWIOA Ops Pty
East Pilbara, WA East Pilbara, WA West Pilbara, WA West Pilbara, WA West Pilbara, WA
Pty Ltd (100%)
Brockman
Infrastructure interest 100% 100% 100% 100% 100%
Ownership
Pty Ltd (100%)
2 3 4 3 5
Brockman Iron
Grade 58%
Limited 40% - 43% 57% - 67% 56% - 59% 56% - 64%
Brockman Resources
Ltd
(100%)
Brockman
Exploration Pty 1
BIF CID CID
Type of ore Detrital/CID Brockman
Ltd
(100%)
Brockman East Pty
Mining
Legal structure (100%) NWIOA Ops Pty Limited trading as NWI. Major assets BIF = bedded iron formation. A detailed description of each of the iron ore types is provided in Section 2 of the technical expert’s report, provided in Appendix 6 Based on an independent technical report prepared in accordance with JORC Based on surface reverse circulation (RC) drilling results Based on rock chip sampling and RC drilling results Based on initial sampling.
Yilgarn(WA) Pty Ltd
4.2 Figure 10 below sets out the group structure for Brockman. Figure 10: Brockman group structure Source: Brockman Note: 1. NWI is owned by Brockman and Atlas. 4.3 Brockman has the following assets. Table 6: Brockman projects Project East Pilbara Projects Marillana Project Ophthalmia West Pilbara Projects Duck Creek West Hamersley Mount Stuart Source: ASX announcements Notes: 1. 2. 3. 4. 5.
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for the Marillana Project harbour for NWIOA Ops Pty Limited, now trading as NWI, of which Brockman is a founding member and 33% shareholder (including 0.3 Bt of Indicated Resources) Marillana Project the Port Hedland port was completed by NWI. The study concluded that development was economically viable and accommodates the NWI members’ projected 50 Mtpa of iron ore exports by CY2013 financial and technical viability of the project Wah Nam shares for every one share held in Brockman, implying an equity value of AUD 6.47 per Brockman share end rail haulage, port access and marketing arrangement for the Marillana Project development of the Marillana Project was granted close of the offer, Wah Nam had acquired 55.33% of the issued capital of Brockman discussions with Wah Nam regarding a potential transaction and future cooperation.
Yilgarn was incorporated on 5 March 2002  Yilgarn was listed on the ASX in August 2004  During October 2007, announced maiden Indicated JORC compliant resource for the Marillana Project of 43.5 Mt  Changed its name to Brockman Resources Limited in November 2007  In December 2007, raised approximately AUD 8 million in equity capital to fund additional drilling and exploration  On 5 March 2008, upgraded the Marillana Project’s JORC compliant resource to 1.1 Bt  Raised AUD 112 million in equity capital for further development of the Marillana Project  The WA State Government confirmed the reservation of two new multi-user berths in the Port Hedland port inner  In August 2008, announced a 40% upgrade to the Marillana Project’s JORC compliant resource to 1.6 Bt  On 15 April 2009, upgraded the Marillana Project’s JORC compliant Indicated Resources to 0.6 Bt  In December 2009, signed the final Native Title Agreement covering the Marillana Project  In January 2010, announced that the Department of Mines and Petroleum granted a mining lease for the  In March 2010, the pre-feasibility study for the development of multi-user berths and associated infrastructure at  In September 2010, announced a positive definitive feasibility study for the Marillana Project, confirming the  In November 2010, Wah Nam launched a hostile takeover bid for Brockman. The bid comprised a scrip offer of 30  During December 2010, announced it had advanced negotiations with Fortescue on an agreement for an end-to- In February 2011, the public environment review was approved and final environmental approval for the  On 15 June 2011, Wah Nam declared its off-market takeover offer for Brockman would not be extended. At the  In August 2011, identified a new hematite mineralisation target at the Ophthalmia Project  On 9 November 2011, in response to an ASX price query, Brockman announced that it was in preliminary 
Profile of Brockman Company history
4 Brockman is an iron ore exploration and development company with a portfolio of iron ore assets at different stages of development located in the Pilbara region. The company’s key asset is the Marillana Project located in the East Pilbara. Brockman, previously called Yilgarn Mining Pty Limited (Yilgarn), is listed on the ASX with a market capitalisation of AUD 327 million as at 9 December 2011. 4.1 An overview of Brockman’s history is provided in Figure 9 below. Figure 9: Company history of Brockman 2002 2004 2007 2008 2009 2010 2011 Source: Brockman, ASX announcements and other publicly available information
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Grade (% Fe) 41.6 43.2 43.0 41.6 43.9 41.8 43.4
(Mt) 133 917 1,050 173 1,237 219 1,629
Volume
1
7. Brockman also received the Front End Engineering and Design (FEED) report
, however, these impurities reduce using conventional gravity separation techniques. The and SiOO232
Reserves and resources Mine plan and development schedule
Mineral resources are inclusive of iron ore reserves.
4.3.1.1 The iron mineralisation of the Marillana Project comprises detrital, pisolite and CID formations. A summary of the JORC compliant resource from the Marillana Project is outlined in the table below. Table 7: Marillana Project reserve and resource summary Reserves Proved Probable Total reserves Resources Measured Indicated Inferred Total resources Source: ASX announcements Note: 1. 4.3.1.2 The following information is based on the completed definitive feasibility study. A bankable feasibility study is currently being undertaken and therefore the mine plan and development schedule is not yet finalised. The Marillana Project will consist of a traditional open cut mine, using a staged start-up and commencing with conventional truck and excavator for both ore and waste. The mine plan is also considering in-pit crushing and conveying as a potential alternative mining method. The definitive feasibility study contemplated the operation to produce approximately 980 Mt of run-of mine (ROM) detrital ore and 50 Mt of CID ore over a life of mine of 25 years. The operation is expected to produce a product which is anticipated to have similar specification to a benchmark Pilbara Blend fines product. The detrital ore has an insitu Fe grade averaging 42% at a 38% cut off and based on metallurgical test work completed to date can be upgraded to approximately 60.5% to 61.5% using a dense media separation process. The detrital ore has high levels of Al CID product is expected to have an Fe grade of approximately 55.5%, will not require beneficiation and will be blended directly with the detrital ore to form the single fines product. The operation is expected to yield saleable ore production of approximately 18.5 Mtpa. During 2010, Brockman completed the definitive feasibility study and during 2011 was granted final environmental approval by the WA State Government from UGL Resources Pty Limited in 2011, the results of which are to be incorporated into the bankable feasibility study.
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Page 25
Brockman Resources Limited - Independent expert’s report
Marillana Project
The figure below sets out the location of Brockman’s assets. Figure 11: Brockman’s tenement locations Source: Brockman 2011 annual report Details on each asset are also provided in the independent technical expert’s report provided in Appendix 6. An overview of each asset is outlined in the following sections. 4.3.1 The Marillana Project is located in the Hamersley Iron Province in the East Pilbara, approximately 100 km northwest of Newman and comprises mining leases M47/1414 and M47/1419. The project is in close proximity to other large scale iron ore projects operated by BHP, Rio and Fortescue, as well as rail infrastructure owned by BHP and Fortescue. The Marillana Project is accessed via the Great Northern Highway and the unsealed Roy Hill-Munjina road, which is intersected by BHP’s rail line. The BHP rail line runs from Newman to Port Hedland through the Marillana Project, a 310 kilometre (km) route from the Marillana Project site to Port Hedland. The Fortescue rail line runs from its Cloudbreak mine to Port Hedland approximately 80 km north of the Marillana Project, whilst the Rio railway from its Yandicoogina mine to Dampier is located approximately 40 km west of the Marillana Project. Deloitte:
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shares) until the loan amount and interest charges are repaid. If an employee wishes to sell the shares the subject of the
Shareholder Loans the proceeds are first used to repay loan and interest amounts. Approximately AUD 9 million in
Shareholder Loans was outstanding as at 31 October 2011.
4.5 Share price performance
A summary of Brockman’s recent share price performance is provided in Table 10 below.
Table 10: Brockman’s quarterly share price information
Quarter end date
High
(AUD)
Low
(AUD)
Last Trade
(AUD)
Volume
(‘000)
VWAP
1
(AUD)
31-Mar-2010
3.92
2.37
3.77
32,175
3.10
30-Jun-2010
3.89
2.61
2.98
29,685
3.22
30-Sep-2010
3.86
2.78
3.72
11,630
3.26
31-Dec-2010
6.15
3.69
4.90
27,448
5.18
31-Mar-2011
6.10
4.84
5.92
15,975
5.59
30-Jun-2011
6.10
2.50
2.90
23,122
5.40
30-Sep-2011
3.81
1.79
1.94
5,175
3.01
9-Dec-2011
1
2.45
1.60
2.26
4,631
1.92

Source: Thomson Reuters
Note:
1.
Relates to the period from 1 October 2011 to 9 December 2011, when Brockman shares were placed into a trading halt.
In the 12 months prior to the announcement of the initial Wah Nam takeover offer on 11 November 2010,
approximately 1.7 million Brockman shares were traded on average each week. This equates to an average weekly
trading volume of approximately 1.3% of the total shares on issue during this period. The volume of shares traded
increased significantly during the period of the initial Wah Nam takeover offer with approximately 2.1 million shares
traded on average each week in the period between October 2010 and December 2010.

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% 33.7 21.6 5.2 4.1 2.5 2.5 2.0 1.5 1.4 1.2 24.2 100.0
48,766,028 31,347,405 7,466,512 6,008,015 3,676,145 3,577,013 2,920,669 2,243,348 2,074,550 1,738,771 34,984,695 144,803,151 Vesting conditions Fully vested Fully vested Fully vested Fully vested Fully vested 100,000 vest on 17-Jan-2012; 150,000 vest on 17-Jan-2013; 200,000 vest on 17-Jan-2014
Number of shares
Expiry date 21-Apr-2013 11-Nov-2013 16-Mar-2012 15-Jun-2014 31-Aug-2014 16-Jan-2015
1 price (AUD) 1.25 1.30 3.21 3.21 3.00 5.85
Exercise
1 2 2 0.25 0.60 1.50 0.60 1.50 0.45 4.9
Number of options (million)
2
Capital structure and major shareholders Together, represents Wah Nam’s collective shareholding of 55.33%. Represents holdings which are controlled by Ross Norgard, which, in addition to smaller holdings not shown above, contribute to a total interest of approximately 9.3%.
Tranche
4.4 As at 9 December 2011, Brockman had 144.8 million fully paid ordinary shares and 4.9 million unlisted options on issue. The following table lists the top ten shareholders of Brockman as at 9 December 2011. Table 8: Top 10 shareholders of Brockman Fully paid ordinary shareholders Wah Nam International Australia Pty Limited Holdex Nominees Pty Limited Citicorp Nominees Pty Limited Longfellow Nominees Pty Limited HSBC Custody Nominees Mr Ross Norgard JP Morgan Nominees Australia Limited Flinders Property investments Pty Limited Longfellow Nominees Pty Limited Mr Wayne Richards Other Total shareholders Source: ASX announcements Notes: 1. 2. The following table shows the number of options on issue, including their terms, as at 9 December 2011. Table 9: Brockman’s unissued shares under option Tranche 1 Tranche 2 Tranche 3 Tranche 4 Tranche 5 Tranche 6 Total Source: ASX announcements As at 9 December 2011, approximately 0.85 million of the unlisted options were in-the-money, based on the closing share price of AUD 2.26. Brockman provides its employees with an Employee Loan Scheme (ELS), whereby option holders are entitled to exercise their options using funds provided by Brockman. These loans are referred to as Shareholder Loans. Interest is charged on the loans at statutory rates and Brockman retains security over the issued shares (referred to as the loan
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Table 12: Financial performance
Actual
FY2009
Audited
(AUD’000)
Actual
FY2010
Audited
(AUD’000)
Actual
FY2011
Audited
(AUD’000)
Other income
-
110
118
Exploration and evaluation expenditure
(17,422)
(19,941)
(32,980)
Administration expense
(2,696)
(3,259)
(6,280)
Share-based payment expense
(1,109)
(5,478)
(5,792)
EBITDA
1
(21,228)
(28,568)
(44,934)
Depreciation and amortisation
(84)
(93)
(202)
EBIT
2
(21,312)
(28,661)
(45,136)
Net interest income
6,100
4,423
4,330
Profit before tax
(15,212)
(24,239)
(40,807)

Source: Brockman annual reports
Notes:
1.
EBITDA – earnings before interest, tax, depreciation and amortisation
2.
EBIT – earnings before interest and tax.
We note the following in relation to Brockman’s financial performance:

Brockman’s projects are still in development or exploration

Brockman’s accounting policy is to expense all exploration expenditure as incurred.

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5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 -
6
5
4
Closing share price (LHS)
3
1,2 2
Daily volume (RHS)
1
Comment Brockman announced a 133% increase in Measured and Indicated resources for the Marillana Project, resulting in a total resource of 1.63 Bt Wah Nam launched a hostile takeover bid for Brockman Brockman’s share price declined following the Brockman Board’s “decline” recommendation in respect of the Wah Nam offer The close of the Wah Nam bid securing 55.3%, together with delays in the finalisation of a rail deal and concerns in relation to financing and infrastructure requirements Wah Nam took control of the Brockman board on 16 September 2011, share price decline following a sharp decline in market sentiment with economic uncertainty in Europe and commodity price volatility Brockman received an ASX price query. It confirmed it was in preliminary discussions with Wah Nam regarding cooperation and a potential transaction.
1 2 3 4 5 6
AUD - RHS – right hand side LHS – left hand side.
AUD 7.00 AUD 6.00 AUD 5.00 AUD 4.00 AUD 3.00 AUD 2.00 AUD 1.00
Daily share price movements and trading volumes are presented graphically in the figure below. A summary of key movements is provided in Table 11. Figure 12: Brockman’s share price activity on the ASX Source: Thomson Reuters Notes: 1. 2. Table 11: Selected Brockman announcements Reference Source: Thomson Reuters; ASX announcements; Brockman
Volume traded
Dec 2011
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
Feb 2010
Jan 2010
Closing share price
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.
10
own. The bid comprised a scrip offer of 30 shares in Wah Nam for every share held in Brockman, implying an equity value of AUD 6.47 per Brockman share. It simultaneously made a takeover bid for FerrAus Limited (FerrAus), which was unsuccessful due to a competing bid from Atlas 15 June 2011. At the close of the offer, Wah Nam had acquired 55.33% of the issued capital of Brockman.
Wah Nam was listed on the HKEX in 2002  Wah Nam acquired Limousine and Shuttle Bus Business from Parkland International Holdings in June 2007  Wah Nam acquired 90% of the Damajianshan copper mine in China  In June 2009, Wah Nam acquired 5.89% of the issued capital of Brockman  In November 2010, Wah Nam launched a takeover bid for all the issued capital in Brockman it did not already  Wah Nam was listed on the ASX in January 2011  On 15 June 2011, Wah Nam declared its off-market takeover offer for Brockman would not be extended after 
Profile of Wah Nam Company history
2002 2007 2008 2009 2010 2011
5 Wah Nam is a company incorporated in Bermuda. Its main interests are a 90% interest in a copper mine in China, a limousine rental and airport shuttle bus services business in Hong Kong and China (Limousine and Shuttle Bus Business), and a 55.3% interest in Brockman. Wah Nam is dual-listed and has been listed on the HKEX since 2002 and the ASX since January 2011. As at 9 December 2011, Wah Nam has a market capitalisation of approximately AUD 460 million 5.1 Figure 13: Company history of Wah Nam Source: Wah Nam company website; ASX announcements; other publicly available information
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The audited statements of financial position of Brockman as at 30 June 2010 and 30 June 2011 are summarised in the
table below.
Table 13: Financial position
30-Jun-2010
Audited
(AUD’000)
30-Jun-2011
Audited
(AUD’000)
Cash and cash equivalents
84,234
53,507
Trade and other receivables
783
1,352
Financial assets
110
-
Total current assets
85,127
54,859
Property, plant and equipment
324
279
Other
308
322
Total non-current assets
633
601
Trade and other payables
3,805
3,766
Provisions
199
318
Total current liabilities
4,004
4,085
Provisions
100
70
Total non-current liabilities
100
70
Net assets
81,656
51,306

Source: Brockman annual reports
We note the decline in cash from 30 June 2010 to 30 June 2011 was principally due to exploration and evaluation
expenditure of AUD 33 million incurred in FY2011.

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Page 35
(China)(90%)
(BVI)(100%) (BVI)(100%) Luchun Xingtai Mining Co. Limited
Smart year
Golden Genie Limited Investments Limited
2
Position in Brockman Chairman and Non-executive Director n/a Non-executive Director n/a n/a n/a n/a Non-executive Director
(HK)(100%) (HK)(100%)
(BVI) (100%) Airport Shuttle Services Limited Parklane Limousine Services Limited
Perryville Group Limited
(Bermuda)
Holdings Limited 1
Wah Nam International (55.3%)
1,2,3 Company (BVI) (100%) Wah Nam International (Australia) (100%) Brockman Resources Limited (Australia)
Wah Nam Iron Ore Australia Pty Limited
Position in Wah Nam Chairman Executive Director and Company Secretary Executive Director Non-executive Director Non-executive Director Non-executive Director Chief Investment Officer Director, Wah Nam International Australia Pty Limited
Company (HK) (100%) Brockman Resources Limited - Independent expert’s report
Legal structure Wah Nam Iron Ore HK – Hong Kong BVI – British Virgin Islands The remaining 10% of Luchun Xingtai Mining Co. Limited (Luchun Xingtai), through which Wah Nam owns its 90% interest in the Damajianshan copper mine, is owned by Yunnan Moasheng Yuan. Directors and management Au-Yeung Sai Kit Alex is Financial Controller and Director of Wah Nam International Australia Pty Limited n/a – not applicable
5.2 Figure 14 below sets out the current group structure for Wah Nam, including the country of incorporation of each entity. Figure 14: Wah Nam group structure Source: ASX announcements Notes: 1. 2. 3. 5.3 Wah Nam’s key management personnel, including their positions in both Wah Nam and Brockman, are summarised in Table 14. Table 14: Key management personnel – Wah Nam Name Luk Kin Peter Joseph Chan Kam Kwan Jason Chu Chung Yue Howard Lau Kwok Kuen Eddie Ulwe Henke Von Parpart Yip Kwok Cheung Danny Hendrianto Tee Warren Beckwith Source: ASX announcements; Wah Nam Notes: 1. 2. Deloitte:
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5.4.1.2 Limousine and Shuttle Bus Business
The Limousine and Shuttle Bus Business operates in China (Beijing, Shanghai, Ghuangzhou and Shenzhen) and Hong
Kong through its wholly owned subsidiary, Perryville Group Limited. Perryville Group Limited currently operates a
fleet of over 130 vehicles, servicing high end corporate and individual customers and hotels.
In CY2010, income from the Limousine and Shuttle Bus Business contributed AUD 18.5 million19, or 87%, of Wah
Nam’s total revenues earned. Over the six month period ended 30 June 2011, this business division reported a 16%
increase in revenue compared to the corresponding period in the previous year, primarily driven by increasing activity
in the travel industry in both Hong Kong and China.
Wah Nam estimates that the Damajianshan copper mine will produce over 0.4 Mtpa of copper concentrate for at least
18 years.
The Damajianshan copper mine’s JORC compliant ore reserves and resources as at 11 November 2011 are shown in the
Table 15.12
Table 15: Damajianshan copper mine reserve and resource summary
1
Grade
Volume
(Mt)
Cu
(%)
As
2
(%)
Pb
3
(%)
Zn
4
(%)
Bi
5
(%)
Ag
6
(g/t
**7) **

Deloitte:Brockman Resources Limited - Independent expert’s report
Page 38
5.5 Capital structure and major shareholders
Wah Nam shares are dual-listed on the HKEX and the ASX with a total of 5.4 billion fully paid ordinary shares on
issue. Wah Nam also has 15.0 million listed and 74.5 million unlisted employee options on issue.
Wah Nam shareholders can move their shares from one register to the other register, thereby allowing shareholders to
access both capital markets. The liquidity of Wah Nam shares has been assessed having regard to trading on both the
HKEX (the primary exchange) and the ASX (the secondary exchange).
The following table lists the substantial shareholders of Wah Nam as at 31 October 2011.
Table 16: Wah Nam substantial shareholders
Name
Number of shares
Percentage
The XSS Group Limited
361,300,276
6.7%
China Guoyin Investments (HK) Ltd
321,661,070
6.0%
Ocean Line Holdings Limited
1
321,428,440
6.0%
Groom High Investments Limited
279,548,000
5.2%
Other
4,075,341,617
76.0%
Total shareholders
5,359,279,403
100.0%
Source: ASX announcements
Note:
1.
Ocean Line Holdings Limited (which is also the Subscriber) is beneficially owned by Kwai Sze Hoi (60%) and Cheung Wai Fung (40%).
In the 12 months prior to the announcement of the initial Wah Nam takeover offer for Brockman and FerrAus on
11 November 2010, approximately 15.1 million Wah Nam shares were traded each week. This equates to an average
weekly trading volume of approximately 0.5% of the total shares on issue during this period. The volume of shares
traded decreased during the period of the initial Wah Nam takeover offer with approximately 7.0 million shares traded
each week in the period between October 2010 and December 2010.20During CY2011, Wah Nam issued new shares for
the following purposes:

between 13 May 2011 and 17 June 2011, Wah Nam issued 1.4 billion shares as part of Wah Nam’s takeover offer
for Brockman

on 15 July 2011, Wah Nam issued 3.9 million shares at a price of AUD 0.20 per share to Capital Investment
Partners as part payment of advisory fees for services provided to Wah Nam in relation to the takeover offer for
Brockman.

19Ibid.
20Share volumes refer to HKEX listed shares only as Wah Nam did not list on the ASX until January 2011
Deloitte:Brockman Resources Limited - Independent expert’s report
Page 37
Reserves
Proved
4.4
1.49
5.70
1.28
42.6
n/a
n/a
Probable
3.2
1.42
6.28
1.49
47.9
n/a
n/a
Total reserves
7
7.6
1.46
5.94
1.37
44.8
n/a
n/a
Resources
Measured
4.4
1.79
6.83
1.54
0.37
0.24
51.1
Indicated
3.2
1.70
7.52
1.79
0.52
0.25
57.4
Inferred
7.7
1.61
6.48
2.18
0.48
0.24
63.1
Total resources
7
15.2
1.68
6.80
1.91
0.46
0.24
58.3
Source: ASX announcements
Notes:
1.
100% of reserves and resources shown in Table 15, of which Wah Nam’s interest is 90%
2.
As – arsenic
3.
Pb – lead
4.
Zn – zinc
5.
Bi – Bismuth
6.
Ag – silver
7.
g/t – grams per tonne
8.
Total – refers to weighted average grading based on total JORC compliant reserves and resources.
The Damajianshan copper mine produced approximately 1.8 kilotonnes (kt), 1.2 kt and 1.9 kt of copper concentrate
during CY2008, CY2009 and CY2010, respectively.
The average price per tonne achieved by the Damajianshan copper mine for its copper concentrate product in CY2009,
CY2010 and for the six month period ended 30 June 2011, per tonne, was Renminbi (RMB) 32,00013, RMB 49,00014
and RMB 49,300,15respectively. Wah Nam attributed the increase in the prices achieved to increasing Chinese demand
combined with a shortage of available supply.
Since acquiring its interest in the Damajianshan copper mine, Wah Nam has amortised and impaired the asset from the
original purchase price of AUD 130 million to a value of AUD 105 million16as at 30 June 2011. Income from mining
activities contributed approximately AUD 2.8 million17in CY2010, or 13.2% of Wah Nam’s total revenues. Wah Nam
reported a net loss before amortisation and impairment for the Damajianshan copper mine in CY2010 of
AUD 0.4 million.18

12The Damajianshan mine’s reserve and resource statements were prepared on 11 November 2011 in accordance with JORC
13Approximately AUD 5,059 per metal tonne, based on an average AUD to RMB exchange rate in CY2009 of 1 AUD to 6.3 RMB
14Approximately AUD 7,888 per metal tonne, based on an average AUD to RMB exchange rate in CY2010 of 1 AUD to 6.2 RMB
15Approximately AUD 7,024 per metal tonne, based on an average AUD to RMB exchange rate for the six month period ended
30 June 2011 of 1 AUD to 7.0 RMB
16Impaired from HKD 987 million to HKD 869 million; conversion from HKD to AUD based on the spot exchange rate as at
30 June 2011
17Based on an average exchange rate during HKD of 1 AUD to 6.2 HKD
18Ibid.

200 250 300 350 400 millions)	200 250 300 350 400 millions)	Source: Thomson Reuters - 50 100 150 AUD 0.00 AUD 0.05 AUD 0.10 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011 Jul 2011 Aug 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Volume t Closing Daily volume - HKEX (RHS) Closing share price - HKEX (LHS) 11 10 30-Sep-2010 0.21 0.20 0.20 203,212 0.21 31-Dec-2010 0.24 0.20 0.20 93,252 0.22 31-Mar-2011 0.21 0.16 0.18 176,527 0.19 30-Jun-2011 0.21 0.13 0.16 372,389 0.18 30-Sep-2011 0.16 0.09 0.09 136,881 0.13 9-Dec-2011 2 0.09 0.07 0.09 22,024 0.08 Source: Thomson Reuters Notes: 1. Converted into AUD based on the relevant exchange rate on the day of trading 2. Relates to the period from 1 October 2011 to 9 December 2011, when Wah Nam shares were placed into a trading halt.
	6 4 3 2 5 7 8 9	11 10


	1
AUD 0.30 Wah Nam’s recent share price performance, based on each exchange on which Wah Nam is listed, is summarised in Table 18 and Table 19 below.	AUD 0.15 AUD 0.20 AUD 0.25 share price (AUD) Table 18: Wah Nam’s quarterly share price information – HKEX 1 Quarter end date High (AUD) Low (AUD) Last Trade (AUD) Volume (‘000) VWAP (AUD) 31-Mar-2010 0.20 0.15 0.20 356,144 0.19 30-Jun-2010 0.21 0.19 0.22 207,055 0.20

The audited income statements of Wah Nam for CY2009 and CY2010 and the reviewed income statement for the six
month period ended 30 June 2011 are summarised in the table below.
Table 21: Financial performance
Actual
Actual
Actual
Actual
CY2009
CY2010
30-Jun-11
30-Jun-11
Audited
Audited
Unaudited
Unaudited
(HKD’000)
(HKD’000)
(HKD’000)
(AUD’000)
1
Income
95,374
131,996
67,984
8,468
Direct costs
(84,729)
(106,792)
(59,414)
(7,401)
Gross profit
10,645
25,204
8,570
1,068
Change in fair value on available-for-sale
investments
133,644
491,187
(175,560)
(21,869)
Selling and administrative expenses
(31,618)
(96,555)
(48,114)
(5,993)
Exploration and evaluation expenses
-
-
(17,678)
(2,202)
Other income
300
168
3,201
399
Other net gains
505
1,790
125,559
15,640
Foreign exchange gain / (loss)
(285)
32,405
85,800
10,688
Impairment of mining right
(38,314)
(153,000)
-
-
Finance costs
(20,914)
(4,001)
(828)
(103)
Profit / (loss) before tax
53,963
297,198
(19,050)
(2,373)

Source: Wah Nam annual reports
Note:
1.
Converted into AUD based on the average exchange rate during the period of 1 January 2011 to 30 June 2011 of 1 AUD to 8.0 HKD.
We note the following in relation to Wah Nam’s financial performance:

Wah Nam’s reporting currency is HKD

prior to acquiring a controlling interest in Brockman, Wah Nam treated its interest in Brockman as an available-for-
sale investment. Wah Nam also classified its interest in Atlas as an available-for-sale investment. As at
30 June 2011, Wah Nam consolidated its investment in Brockman

income from the Limousine and Shuttle Bus Business contributed 87% of Wah Nam’s total revenue during
CY2010, with the sale of mineral ore products representing the balance

other net gains during the six month period to 30 June 2011 relate to the acquisition of Brockman. Upon Wah Nam
increasing its interest in Brockman from 22.34% to 55.33%, the cumulative gain on available for sale investments
previously recognised in reserves was released to the income statement

exploration and evaluation expenses largely relate to Brockman

impairment losses recognised in CY2010 relate to the mining rights associated with the Damajianshan copper mine.
The asset is amortised using the units of production method, based on Proved and Probable Reserves of 7.8 Mt.

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3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
11
10
9
8
Closing share price - ASX (LHS)
7
1
Daily volume - ASX (RHS)
Notes: Wah Nam raised HKD 297 million to assist with acquisition and investment opportunities Wah Nam acquired 9.5 million Brockman shares for HK196.4 million Wah Nam raised HKD 199 million to assist with acquisition and investment opportunities Wah Nam subscribed for 25 million FerrAus shares for HKD 147 million Wah Nam raised HKD 200 million to assist with further acquisition and investment opportunities Wah Nam announced the takeover offers for Brockman and FerrAus Wah Nam commences trading on the ASX Wah Nam announced that it would not withdraw its takeover offer for FerrAus despite FerrAus announcing an AUD 35 million capital raising Takeover offers extended for Brockman and FerrAus The takeover offer for Brockman closed. The decline in price thereafter was likely due to, amongst other factors, continued European sovereign debt concerns, commodity price volatility and easing GDP growth in China Brockman responded to a price query from the ASX that it was in preliminary discussions with Wah Nam regarding a potential transaction and cooperation
ASX share price activity relates to the period from Wah Nam’s listing date of 11 January 2011 to 9 December 2011. 1 2 3 4 5 6 7 8 9 10 11
AUD 0.25 AUD 0.20 AUD 0.15 AUD 0.10 AUD 0.05 AUD 0.00
Figure 17: Wah Nam’s share price activity on the ASX Source: Thomson Reuters Note: 1. Table 20: Selected Wah Nam announcements Reference Source: ASX announcements
Volume traded (millions)
Dec 2011
Nov 2011
Oct 2011
Sep 2011
Aug 2011
Jul 2011
Jun 2011
May 2011
Apr 2011
Mar 2011
Feb 2011
Jan 2011
Dec 2010
Nov 2010
Oct 2010
Sep 2010
Aug 2010
Jul 2010
Jun 2010
May 2010
Apr 2010
Mar 2010
Feb 2010
Jan 2010
Closing share price (AUD)
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The audited and reviewed statements of financial position of Wah Nam as at 31 December 2010 and 30 June 2011 are
summarised in the table below.
Table 22: Financial position
31-Dec-10
30-Jun-11
30-Jun-11
Audited
Unaudited
Unaudited
(HKD’000)
(HKD’000)
(AUD’000)
1
Cash and cash equivalents
135,590
565,110
68,567
Restricted cash
5,200
5,200
631
Inventories
12,164
15,333
1,860
Trade receivables
30,013
25,285
3,068
Other receivables, deposits and prepayments
11,445
22,714
2,756
Amount due from related party
1,067
1,156
140
Financial assets at fair value through profit or loss
5,187
-
-
Current assets
200,666
634,798
77,023
Property, plant and equipment
87,668
98,568
11,960
Available-for-sale investments
1,545,224
307,987
37,369
Mining right
850,616
865,795
105,051
Goodwill
11,405
11,405
1,384
Intangible asset
11,217
6,050,443
734,126
Other non-current assets
8,685
12,130
1,472
Non-current assets
2,514,815
7,346,328
891,361
Trade payables
12,350
8,421
1,022
Other payables and accrued charges
46,069
84,663
10,273
Amounts due to related parties
4,368
10,005
1,214
Bank borrowings
41,622
42,411
5,146
Obligations under finance leases
1,951
3,453
419
Current liabilities
106,360
148,953
18,073
Obligations under finance leases
2,860
8,636
1,048
Amount due to a related party
32,360
33,096
4,016
Deferred income tax liabilities
223,499
1,821,171
220,970
Provision for restoration costs
489
1,086
132
Non-current liabilities
259,208
1,863,989
226,166
Net assets
2,349,913
5,968,184
724,145
Net assets per share
HKD 0.60
HKD 1.11
AUD 0.14

Deloitte:Brockman Resources Limited - Independent expert’s report
Page 43
Source: Wah Nam annual report; Wah Nam interim report
Note:
1.
Converted into AUD based on the spot exchange rate as at 30 June 2011 of 1 AUD to 8.2 HKD.
We note the following in relation to Wah Nam’s financial position:

as at 30 June 2011, Wah Nam consolidated Brockman for accounting purposes

the restricted cash of AUD 0.6 million is held as security for Wah Nam’s bank facility

inventory relates to copper concentrate mined

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50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
Detritals process recovery %
Saleable ore production
20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -
subject to the completion of a bankable feasibility study and securing an appropriate rail and port infrastructure solution, production is expected to commence in FY2016 projected detrital ore volumes will include mining all Proved and Probable Reserves and 13 Mt of Indicated Resources, while projected CID ore volumes will include mining all Measured Resources and 3 Mt of Indicated Resources we have also considered the additional value implied by the Marillana Project potentially mining further Indicated and Inferred Resources above those currently projected in the Model. recent broker forecasts for Pilbara Blend fines ore (FOB 62% Fe) most recent Consensus Economics price forecasts for Pilbara Blend fines ore historical spot and contract prices into the Asia Pacific market, as set out in Section 3.6 Brockman has yet to enter into any sales agreements
Saleable production volumes The Marillana Project is projected to produce 424 Mt of saleable ore and has a life of mine based on the current defined reserves and resources of 25 years. The average production over life of mine is 16.3 Mtpa (on a dry basis). The figure below illustrates the projected iron ore production volumes and detrital process recovery from the Marillana Project over the life of mine. Figure 18: Projected iron ore production and ore process recovery Source: the Model; SRK; Deloitte analysis We note the following:    Iron ore pricing assumptions All the iron ore produced by the Marillana Project is expected to be exported to Asian customers. Price settlements between iron ore producers and Chinese and Japanese steel mills are generally based on quarterly negotiations with prices benchmarked to short term spot market averages. We have had regard to the following in selecting appropriate pricing assumptions for saleable fines ore:    
FY2040
FY2039
FY2038
FY2037
FY2036
FY2035
FY2034
FY2033
FY2032
FY2031
FY2030
FY2029
FY2028
FY2027
FY2026
FY2025
FY2024
FY2023
FY2022
FY2021
FY2020
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Mdmt
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The following table sets out the valuation outcomes from our discounted cash flow analysis.		Table 27: Discounted cash flow valuation of the Marillana Project (AUD million)			Discount rate		14.5% 14.0% 13.0% 12.5%	Fortescue Option Long term benchmark iron ore price (real)	Fortescue Option Long term benchmark iron ore price (real)	+5% 258.3 380.8 657.1 812.9	Selected long term iron ore price (USc 115/dmtu) 107.8 219.7 472.1 614.4	(5)% (42.7) 58.6 287.1 415.9	Rail and port fees		+5% 42.7 151.3 396.5 534.9		Selected rail and port fee assumptions 107.8 219.7 472.1 614.4 (5)% 172.9 288.1 547.7 694.0			Delay scenario No delay 107.8 219.7 472.1 614.4	One year delay 63.4 164.0 393.8 525.1 Two year delay 37.2 127.7 337.4 458.6	Independent Solution	Long term benchmark iron ore price (real) +5% 362.0 464.6 695.9 826.3	Selected long term iron ore price (USc 115/dmtu) 193.1 283.8 488.2 603.4 (5)% 24.1 102.9 280.6 380.6	Rail and port fees +5% 93.3 178.8 371.6 480.4 Selected rail and port fee assumptions 193.1 283.8 488.2 603.4	(5)% 292.6 388.5 604.5 726.2		Delay scenario	No delay 193.1 283.8 488.2 603.4 One year delay 117.4 198.2 382.8 488.1	Two year delay 67.5 139.7 306.6 403.1	Port Ownership Option		Long term benchmark iron ore price (real) +5% 457.3 569.4 821.8 963.9	Selected long term iron ore price (USc 115/dmtu) 288.4 388.6 614.2 741.1	(5)% 119.4 207.7 406.5 518.3	Rail and port fees +5% 188.6 283.6 497.5 618.0 Selected rail and port fee assumptions 288.4 388.6 614.2 741.1 (5)% 387.9 493.3 730.4 863.8		Delay scenario	No delay 288.4 388.6 614.2 741.1		One year delay 224.2 313.1 515.9 631.5	Two year delay 185.7 264.6 447.2 552.7		Source: Deloitte analysis	Conclusion	The range of values for the Marillana Project varies significantly under the different infrastructure scenarios and the	base assumptions adopted.	Deloitte:Brockman Resources Limited - Independent expert’s report Page 60
The extent to which these resources can be converted into reserves depends on the outcomes of future exploration and	drilling and further analysis of the geology of the deposits.	As discussed in Section 8.5, there are a number of port and rail options currently being evaluated by Brockman, which			we have considered in our valuation of the Marillana Project.	These scenarios are summarised as follows:		 the Fortescue Option:this scenario assumes an end-to-end rail haulage, port access and marketing arrangement	for the ore produced from the Marillana Project. Brockman will construct a rail spur from the Marillana Project to	Fortescue’s rail line and will pay haulage and port charges to Fortescue for use of its rail and port infrastructure.	This scenario assumes that Fortescue secures and develops additional infrastructure to support Marillana Project	ore and that Brockman will be able to transfer its port allocation from NWI for use at the Fortescue facilities	 the Independent Solution:under this scenario, an independent third party will construct a rail line from the		Marillana Project to the proposed new berths at South West Creek. Port charges, including a capital return, will be		paid to the independent owner-operator of the berths at market rates	 the Port Ownership Option:under this scenario, an independent third party will construct a rail line from the		Marillana Project to the proposed new berths at South West Creek (consistent with the Independent Option), however Brockman will fund part of the capital to construct the port in proportion to its ownership interest in NWI via equity and non-amortising debt. Under this scenario, the residual value of Brockman’s share of the value of the port has also been included in our valuation of the Marillana Project.			Discount rate	The discount rate used to equate the future cash flows to a present value reflects the risk adjusted rate of return demanded by a hypothetical investor.	We have selected a nominal after tax discount rate in the range of 13.0% to 14.0% to discount the future cash flows of the Marillana Project to their present value.	In selecting this discount rate range we considered the following:	 the rates of return for comparable listed Australian iron ore companies		 the debt to equity ratios of comparable listed Australian iron ore companies	 an appropriate cost of debt	 an appropriate target debt to equity ratio.		A detailed consideration of these matters is provided in Appendix 2.		The discounted cash flow valuation	The estimated value of the Marillana Project derived under the discounted cash flow methodology is highly sensitive to a number of assumptions adopted in the Model. We have performed a sensitivity analysis of the value of the Marillana Project over life of mine under each infrastructure scenario by applying:	 a discount rate in the range of 12.5% to 14.5%		 a change of +/- 5% to the selected long term benchmark iron ore price			 a change of +/- 5% to estimated rail and port charges selected under each scenario	 a one and two year delay in the commencement of production.					Deloitte:Brockman Resources Limited - Independent expert’s report Page 59

Brockman has 4.9 million options on issue. For options with an exercise price of less than AUD 3.00 we have assumed	that these options will be exercised and converted to shares. We have added the cash proceeds from the exercise of these options to Brockman’s net cash and added the new shares to the total shares on issue in Brockman.	that these options will be exercised and converted to shares. We have added the cash proceeds from the exercise of these options to Brockman’s net cash and added the new shares to the total shares on issue in Brockman.	The options with an exercise price of AUD 3.00 and above are currently not in-the-money. These options are not expected to have material time value after consideration of the Black-Scholes Model. We have therefore not adjusted	our valuation of Brockman for these options.	Management has advised that there are no other assets surplus to the operations of Brockman and, with the exception of	the above, we have not identified any material surplus assets during the course of our work. The value of Brockman’s	current tax losses has been included in the Model.	9.2.4 Net cash	9.2.4 Net cash	The net cash of Brockman as at 31 October 2011 is set out in the following table and consists of cash and cash	The net cash of Brockman as at 31 October 2011 is set out in the following table and consists of cash and cash	equivalents on hand. We have also included the estimated proceeds from the exercise of all in-the-money options and	the payment to be made to holders of options with an exercise price of AUD 3.00 and above.		Table 29: Net cash		(AUD million)		Cash and cash equivalents 1.8	Term deposits 38.4	Estimated proceeds from exercise of in-the-money options 1 1.1	Net cash 41.3			Source: Brockman; Deloitte analysis	Note:	1. Based on the assumed exercise of the Brockman options with an exercise price of AUD 1.25 and AUD 1.30.		9.2.5 Valuation: sum-of-the-parts method	The value of Brockman derived from the sum-of-the-parts method is summarised below.	Table 30: Value of Brockman using the sum-of-the-parts method	Table 30: Value of Brockman using the sum-of-the-parts method		Low High	Section Unit value value		Fair market value of the Marillana Project 9.2.1 AUD million 325.0 375.0		Exploration assets of Brockman 9.2.2 AUD million 20.0 20.0	Surplus assets 9.2.3 AUD million 9.0 9.0	Enterprise value of Brockman (on a control basis) AUD million 354.0 404.0		Net cash 9.2.4 AUD million 41.3 41.3	Equity value of Brockman (on a control basis) AUD million 395.3 445.3		Number of shares on issue 1 4.4 Million 145.7 145.7	Value of a share in Brockman (on a control basis) AUD 2.71 3.06		Deloitte assessed value of a share in Brockman using	the sum-of-the-parts method AUD 2.70 3.05		Source: Deloitte analysis Note:	Source: Deloitte analysis Note:	1. Represents fully diluted capital of Brockman, consisting of 144.8 million issued shares and 0.9 million in-the-money options.	Deloitte:Brockman Resources Limited - Independent expert’s report Page 62

Several key risks remain in negotiating a suitable infrastructure solution, including:	 Brockman being able to reach a commercially viable agreement with Fortescue and Fortescue securing and	developing the required additional infrastructure	 Brockman obtaining funding to implement either the Fortescue Option or the Port Ownership Option	 Brockman reaching agreement with Atlas, as the other NWI member, on construction of the port under the Port	Ownership Option	 Brockman negotiating a suitable arrangement with an independent third party for the construction of the rail and	port infrastructure under the Independent Solution, or the rail infrastructure under the Port Ownership Option	 a commercially viable rail line in the Pilbara may require circa 65 Mtpa of throughput. The rail line therefore would	also require haulage from other parties to make it viable, potentially increasing the time to reach a suitable	agreement and reducing the likelihood of the Marillana Project commencing production by FY2016. In addition,	port capacity may need to be increased to accommodate this additional production.		In order to form a view on the estimated fair market value of the Marillana Project, we have considered how a potential	purchaser may assess the key infrastructure risks. A hypothetical purchaser may view Brockman’s interest in NWI as	having significant value compared to other junior iron ore miners in the Pilbara which do not have a similar port	allocation.		Potential purchasers will form different views on the relative benefits and risks of each infrastructure option. However,	given the current uncertainty of each potential option and the significant impact on value if none of the options	materialise within the anticipated timeframes, we consider it reasonable to assume a potential purchaser of the Marillana	Project would take a conservative view of the value of the project.	On the basis of the above, we estimate the fair market value of the Marillana Project to be in the range of	AUD 325 million to AUD 375 million.			9.2.2 Exploration assets of Brockman		SRK provided an assessment of the value of the exploration assets of Brockman, which is set out in Table 28.	Table 28: SRK’s valuation of the exploration assets of Brockman		Low High Preferred value	(AUD million) (AUD million) (AUD million)			Duck Creek 7.4 17.2 12.3	West Hamersley 2.3 6.7 4.5	Ophthalmia 0.3 1.1 0.7	Mt Stuart 0.4 1.3 0.8	Mt Florance 0.3 0.9 0.6	Total value of exploration assets 10.7 27.2 18.9		Source: SRK		Based on the above, we have selected a value for the exploration assets of AUD 20.0 for our valuation based on SRK’s	preferred value.	Refer to section 11 of Appendix 6 of the SRK report for further discussion of SRK’s valuation of the exploration assets.		9.2.3 Surplus assets		As Brockman is entitled to receive the amounts provided to employees under the Shareholder Loans (retaining security	over the loan shares until the Shareholder Loans are repaid in full), we have treated the Shareholder Loans as a surplus		asset and added the amount due of AUD 9 million to the value of Brockman.		Deloitte:Brockman Resources Limited - Independent expert’s report Page 61

The resource multiple implied by our valuation of Brockman (on a control basis) is higher than the average share	trading resource multiple of the comparable development stage companies and lower than the average share trading	resource multiple of the comparable producing companies identified.	We consider trading multiples for iron ore companies in the development stage to be most comparable to Brockman.	The average share trading resource multiple for the development stage company is AUD 0.4 per tonne (on a minority	interest basis), whilst the resource multiple implied by our valuation of Brockman is in the range of AUD 0.5 per tonne	interest basis), whilst the resource multiple implied by our valuation of Brockman is in the range of AUD 0.5 per tonne	to AUD 0.6 per tonne (on a control basis).	to AUD 0.6 per tonne (on a control basis).	We consider the share trading resource multiples broadly support our valuation of Brockman.	The following table sets out the resource multiples implied by comparable transactions that have occurred since 2005	The following table sets out the resource multiples implied by comparable transactions that have occurred since 2005	(refer to Appendix 4 for further details on the comparable transactions). We note that the resource multiples of the	comparable transactions that involve the acquisition of a controlling interest could include premiums for control. The	resource multiples implied by our valuation of Brockman are based on a control value.		Table 33: Comparable transactions		Implied	Interest Consideration Contained EV/ resources 2 Date Target Acquirer Ore type acquired (AUD million) Fe 1 (AUD/t)	Development stage companies in the Pilbara	27-Jun-11 FerrAus Atlas Hematite 100% 223 196 1.0	27-Jun-11 FerrAus Atlas Hematite 100% 223 196 1.0	21-Dec-10 Giralia Resources Limited Atlas Hematite 100% 828 282 2.7	10-Mar-10 Aurox Resources Limited Atlas Magnetite 100% 143 204 0.7	16-Oct-09 United Minerals BHP Hematite 100% 204 92 2.1	8-Sep-09 Warwick Atlas Hematite 77% 82 15 6.9	8-Sep-09 FerrAus CRM 3 Hematite 12% 4 13 98 0.9	1-Jul-05 Hope Downs Rio Hematite 50% 4,351 2,686 1.6	Average 2.3	Source: Deloitte analysis, CapitalIQ, various company announcements, Mergermarket	Notes:	1. Includes Measured, Indicated and Inferred Resources and includes Proved and Probable Reserves 2. Resource multiples have been calculated on an implied 100% basis, including reserves	3. CRM – China Railway Materials Commercial Corporation 4. Reflects the acquisition of a minority interest.	3. CRM – China Railway Materials Commercial Corporation 4. Reflects the acquisition of a minority interest.	We note the following in relation to the above:	 during 2010 and 2011 there were three takeover transactions involving development stage companies, which	 during 2010 and 2011 there were three takeover transactions involving development stage companies, which	achieved an average implied resource multiple of AUD 1.5/t. Two of these transactions consisted of the acquisition of target companies with hematite assets. The average resource multiple for these two transactions was AUD 1.9/t	achieved an average implied resource multiple of AUD 1.5/t. Two of these transactions consisted of the acquisition of target companies with hematite assets. The average resource multiple for these two transactions was AUD 1.9/t	achieved an average implied resource multiple of AUD 1.5/t. Two of these transactions consisted of the acquisition of target companies with hematite assets. The average resource multiple for these two transactions was AUD 1.9/t	 many of the above transactions are likely to include some special value, due to the strategic intention of the bidder and potential strategic value associated with gaining control of the target and its assets, in particular infrastructure assets, such as a port allocation.	 many of the above transactions are likely to include some special value, due to the strategic intention of the bidder and potential strategic value associated with gaining control of the target and its assets, in particular infrastructure assets, such as a port allocation.	 many of the above transactions are likely to include some special value, due to the strategic intention of the bidder and potential strategic value associated with gaining control of the target and its assets, in particular infrastructure assets, such as a port allocation.	 many of the above transactions are likely to include some special value, due to the strategic intention of the bidder and potential strategic value associated with gaining control of the target and its assets, in particular infrastructure assets, such as a port allocation.	For example, it is likely that some level of special value existed for the purchaser in the Atlas transactions with	Giralia Resources Limited (Giralia) and FerrAus and the BHP transaction with United Minerals. As a result, the	resource multiples paid were higher than they would have been if special value had not existed.	Based on our analysis above, we note there are few comparable transactions against which to benchmark a suitable	transaction resource multiple. We have therefore placed limited reliance on this cross-check.					Deloitte:Brockman Resources Limited - Independent expert’s report Page 64

9.3 Cross check: industry rules of thumb		We have compared the value of Brockman with reference to the resource multiples implied by our enterprise valuation	of Brockman on a control basis.	We note that resource multiples are only intended to provide a high level cross check for our valuation of Brockman.		The share trading resource multiples (enterprise value, implied by the current company share price, to Measured,		Indicated and Inferred Resources) observed for the selected comparable companies and resource multiples implied by	comparable transactions may vary significantly due to various factors including different cost structures, different	geotechnical/geomechanical issues, different stages of development, different ratios of reserves to total resources plus	reserves and different mine lives.		The following table sets out the resource multiples implied by our selected valuation range of the Marillana Project.		Table 31: Resource multiple implied by Deloitte valuation of Brockman		Section Unit Low High		Enterprise value of Brockman (control basis) 9.2.5 AUD million 354.0 404.0 Brockman resources 1 4.3.1.1 Mt 706.1 706.1	Resource multiple (on a control basis) AUD per tonne 0.5 0.6			Source: Deloitte analysis	Note:	1. Consists of Measured, Indicated and Inferred Resources and includes Proved and Probable Reserves.		The following table sets out the resource multiple implied by our valuation and the share trading resource multiples	(enterprise value, implied by the current company share price, to Measured, Indicated and Inferred Resources) observed	for Australian comparable companies (refer to Appendix 3 for descriptions of the comparable companies).	Table 32: Share trading reserve and resource multiples of comparable companies	EV 3/tonne	Company/asset Location Iron ore type Enterprise value 1 (AUD million) Resources 2 (Mt) contained Fe (AUD/t)	Brockman Pilbara Hematite 380 4 706 0.5		Development stage companies	Flinders Mines Limited Pilbara Hematite 269 506 0.5	Iron Ore Holdings Limited Pilbara Hematite 148 463 0.3		Average 0.4		Production companies	Fortescue Metals Group Limited Pilbara Hematite 17,449 3,627 4.8	Atlas Iron Limited Pilbara Hematite 2,600 583 4.5	Mount Gibson Iron Limited Pilbara Hematite 987 64 15.5	BC Iron Limited Pilbara Hematite 201 77 2.6	Average 6.9	Overall average 4.7	Source: Thomson Reuters, Deloitte analysis, company announcements	Notes:	1. Enterprise values as at 21 November 2011	2. Consists of Measured, Indicated and Inferred Resources and includes Proved and Probable Reserves	3. EV – enterprise value	4. Based on the approximate midpoint of the valuation range selected for Brockman.	Deloitte:Brockman Resources Limited - Independent expert’s report Page 63

10.2 The sum-of-the-parts method 10.2.1 Brockman Based on our analysis in Sections 9.2.1 and 9.2.2, the enterprise value of Brockman on a control basis, excluding surplus assets and net cash, is estimated to be as follows: Table 34: Enterprise value of Brockman Low High Section Unit value value Fair market value of the Marillana Project 9.2.1 AUD million 325.0 375.0 Exploration assets of Brockman 9.2.2 AUD million 20.0 20.0 Total enterprise value of Brockman (on a control basis) AUD million 345.0 395.0	Source: Deloitte analysis 10.2.2 The Damajianshan Copper Mine The value of the 90% interest held by the Proposed Merged Entity in the Damajianshan Copper Mine has been estimated with reference to the most recent value in use analysis performed for impairment testing purposes as at 31 December 2010. Wah Nam did not impair the value of its interest in the Damajianshan Copper Mine as at 30 June 2011 on the basis that the market price for copper and the demand for copper in China remained strong. We have therefore adopted the value recorded by Wah Nam for the Damajianshan Copper Mine as at 30 June 2011 in our valuation of the Proposed Merged Entity. The value of Wah Nam’s interest in the Damajianshan Copper Mine is shown in the table below. Table 35: Valuation of Wah Nam’s interest in the Damajianshan Copper Mine Unit Value Fair market value of the Damajianshan Copper Mine (100%) HKD million 925.9 Fair market value of the Damajianshan Copper Mine (100%) 1 AUD million 117.5 Fair market value of Wah Nam's interest in the Damajianshan Copper Mine (90%) AUD million 105.7 Selected value of Wah Nam's interest in the Damajianshan Copper Mine (90%) AUD million 106.0	Deloitte:Brockman Resources Limited - Independent expert’s report Page 68 Source: Deloitte analysis Note: 1. Converted into AUD based on an exchange rate of 1 AUD to 7.8825 HKD. 10.2.3 The Limousine and Shuttle Bus Business The value of the Limousine and Shuttle Bus Business has been estimated based on the recoverable amount of the assets allocated to this operating division by Wah Nam as at 30 June 2011. The written down value of the assets of the Limousine and Shuttle Bus as at 30 June 2011 was approximately AUD 18 million.25 25Based on the book value of segment assets of HKD 141.5 million, translated into AUD at the current exchange rate of 1 AUD to 7.8825 HKD

10.2.8 Conclusion: sum-of-the-parts method	The implied value of the Proposed Merged Entity derived from the sum-of-the-parts method is summarised below.	Table 37: Value of the Proposed Merged Entity using the sum-of-the-parts method	Table 37: Value of the Proposed Merged Entity using the sum-of-the-parts method		Section Unit Low High		Brockman 10.2.1 AUD million 345.0 395.0	Limousine and Shuttle Bus Business 10.2.3 AUD million 18.0 18.0	Damajianshan copper mine (90%) 10.2.2 AUD million 106.0 106.0	Total enterprise value (control basis) AUD million 469.0 519.0		Net cash 10.2.7 AUD million 40.9 40.9		Total equity value (control basis) AUD million 509.9 559.9	Discount for minority interest 10.2.6 10% 15%		Fair market value (minority interest basis) AUD million 458.9 475.9		Shares outstanding 6.2 million 7,456.3 7,456.3		Implied value per share in the Proposed Merged Entity	(on a minority interest basis) AUD 0.062 0.064			Source: Deloitte analysis		10.3 The Subscription Price		On 12 December 2011 Wah Nam announced the Share Placement and the placement under the Underwriting	Agreement, which consists of the issue of a total of 685 million shares at the Subscription Price of HKD 0.60 per share	or AUD 0.076 per share based on the exchange rate as at 9 December 2011 of 1 AUD to 7.8825 HKD. Conversion of	the Convertible Bond is also being undertaken at the Subscription Price.	the Convertible Bond is also being undertaken at the Subscription Price.	The Subscription Price of AUD 0.076 represents a 10% discount to the closing share price of Wah Nam on the HKEX	on 9 December 2011 of AUD 0.085. We note that equity placements often occur at a discount to the closing share price	on 9 December 2011 of AUD 0.085. We note that equity placements often occur at a discount to the closing share price	prior to the announcement of the placement to encourage investor participation.		10.4 Trading in Wah Nam shares		Brockman received an ASX price query on 9 November 2011. In the price query, the ASX noted a change in the closing	price of Brockman shares from AUD 1.95 on 8 November 2011 to an intra-day trading high of AUD 2.39 on	9 November 2011. Brockman immediately confirmed it was in preliminary discussions with Wah Nam regarding a potential transaction. Share trading in Wah Nam shares may therefore reflect market speculation regarding a potential transaction between Wah Nam and Brockman.	9 November 2011. Brockman immediately confirmed it was in preliminary discussions with Wah Nam regarding a potential transaction. Share trading in Wah Nam shares may therefore reflect market speculation regarding a potential transaction between Wah Nam and Brockman.	9 November 2011. Brockman immediately confirmed it was in preliminary discussions with Wah Nam regarding a potential transaction. Share trading in Wah Nam shares may therefore reflect market speculation regarding a potential transaction between Wah Nam and Brockman.	9 November 2011. Brockman immediately confirmed it was in preliminary discussions with Wah Nam regarding a potential transaction. Share trading in Wah Nam shares may therefore reflect market speculation regarding a potential transaction between Wah Nam and Brockman.	Between 9 November 2011 and 9 December 2011, Wah Nam’s share price ranged from a low of AUD 0.073 to a high of AUD 0.086 with a VWAP of AUD 0.082 over the period.26	Between 9 November 2011 and 9 December 2011, Wah Nam’s share price ranged from a low of AUD 0.073 to a high of AUD 0.086 with a VWAP of AUD 0.082 over the period.26	Between 9 November 2011 and 9 December 2011, Wah Nam’s share price ranged from a low of AUD 0.073 to a high of AUD 0.086 with a VWAP of AUD 0.082 over the period.26	Wah Nam placed its shares in a trading halt on 12 December 2011 before trading resumed on 13 December 2011 after	announcement of the Takeover Offer. Between 13 December 2011 and 14 December 2011, the share price of Wah Nam	announcement of the Takeover Offer. Between 13 December 2011 and 14 December 2011, the share price of Wah Nam	ranged from a low of AUD 0.085 to a high of AUD 0.103 with a VWAP of AUD 0.094.27	26Based on share trading on the HKEX, converted into AUD using the AUD/HKD exchange rate on the relevant trading day	27VWAP calculated with reference to Wah Nam’s closing price on the HKEX on 14 December 2011	Deloitte:Brockman Resources Limited - Independent expert’s report Page 72

Table 36: Pro forma net cash of the Proposed Merged Entity	Section Unit Amount	Brockman	Net cash 9.2.4 AUD million 41.3		Wah Nam	Bank borrowings 5.8 HKD million (42.4)	Obligations under finance lease 5.8 HKD million (12.1)	Total debt HKD million (54.5)	Add: cash on hand 1 5.8 HKD million 82.1	Add: proceeds from sale of Atlas shares 2 HKD million 260.9	Net cash HKD million 288.5		AUD to HKD exchange rate AUD to HKD 7.8825	Net cash AUD million 36.6	Proposed Merged Entity	Net cash of Brockman 9.2.4 AUD million 41.3	Net cash of Wah Nam AUD million 36.6	Net cash of the Proposed Merged Entity before the Takeover Offer,	Share Placement, Convertible Bond and the Underwriting	Agreement AUD million 77.9		Add/(less):	Proceeds from Share Placement 3 1.1 AUD million 42.3		Proceeds from issue of Convertible Bond 4 1.1 AUD million 22.1	Proceeds from placement under Underwriting Agreement 5 1.1 AUD million 9.9	Cash Consideration paid under Takeover Offer 6 AUD million (98.3)	Proceeds from repayment of Shareholder Loans AUD million 9.0	Transaction costs 7 AUD million (17.5)	Less: unconverted portion of Convertible Bond 8 6.2 AUD million (4.4)		Net cash of the Proposed Merged Entity after the Takeover Offer,	Share Placement, Convertible Bond and the Underwriting Agreement 9 AUD million 40.9				Source: Deloitte analysis	Notes:	1. Excludes Brockman’s cash and cash equivalents as at 30 June 2011 of HKD 483 million. Brockman’s cash position has been separately included	2. Between 20 September 2011 and 9 December 2011, Wah Nam progressively sold down 100% of its interest in Atlas (consisting of 1.15% of total	Atlas shares outstanding). Total proceeds of HKD 261 million were received	3. Represents proceeds of HKD 333 million converted into AUD using an exchange rate of 1 AUD to 7.8825 HKD	4. Represents proceeds of HKD 174 million converted into AUD using an exchange rate of 1 AUD to 7.8825 HKD	5. Represents proceeds of HKD 78 million converted into AUD using an exchange rate of 1 AUD to 7.8825 HKD	6. Consists of total Cash Consideration payable to Shareholders in consideration of 65.5 million shares in Brockman on a fully diluted basis	7. Refers to total estimated transaction costs of HKD 138 million translated into AUD using an exchange rate of 1 AUD to 7.8825 HKD. Transaction	costs include commissions payable to the Underwriter, estimated landholder duty and other transaction costs	8. Represents unconverted portion of the Convertible Bond of HKD 35 million converted into AUD using an exchange rate of 1 AUD to 7.8825 HKD	(refer to Section 6.2)	9. The net cash of the Proposed Merged Entity differs to the net cash of Wah Nam estimated in the Bidder’s Statement. This is due to the Bidder’s	Statement excluding transaction costs, cash proceeds received from holders of Brockman options with an exercise price of AUD 1.25 and AUD	1.30 (gross proceeds of AUD 1 million) and cash proceeds received from Shareholders with Shareholder Loans (AUD 9 million).				Deloitte:Brockman Resources Limited - Independent expert’s report Page 71

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Page 74
Definition Specific company risk premium Australian Bureau of Agricultural and Resource Economics and Sciences Australian Financial Services Licence Silver Aluminium oxide American Stock Exchange Accounting Professional and Ethical Standards Board Limited Australian Securities and Investments Commission Australian Securities Exchange Atlas Iron Limited Auditing and Assurance Standards Board Australian dollars Aurox Resources Limited Beta Bank Bill Swap Bid Rate BC Iron Limited BHP Billiton Limited Bismuth Bedded iron formation Collectively, the Cash Consideration of AUD 1.50 and the Scrip Consideration of 18 shares in the Proposed Merged Entity consisting of Wah Nam and Brockman Wah Nam International Holdings Limited Bureau of Resources and Energy Economics Brockman Resources Limited Billion tonnes British Virgin Islands Capital Asset Pricing Model AUD 1.50 Channel iron deposits The carbon tax and emissions trading scheme legislation passed by the Federal Government on 8 November 2011 The issue of a convertible bond of HKD 174 million to the Subscriber Corporations Act 2001 (Cth) China Railway Materials Commercial Corporation Copper Calendar year Aswath Damodaran Deloitte Corporate Finance Pty Limited Deloitte member firm in Australia Dry million tonnes Direct shipping ore Earnings before interest and tax Earnings before interest, tax, depreciation and amortisation
Brockman Resources Limited - Independent expert’s report
O32
Reference α ABARES AFSL Ag Al AMEX APESB ASIC ASX Atlas AUASB AUD Aurox β BBSY BC Iron BHP Bi BIF Bid Consideration Bidder, the BREE Brockman Bt BVI CAPM Cash Consideration CID Climate Change Plan Convertible Bond Corporations Act CRM Cu CY Damodaran Deloitte Deloitte Touche Tohmatsu dmt DSO EBIT EBITDA Deloitte:
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The value of a share in the Proposed Merged Entity derived under each of the methods discussed above is summarised
in the table below.
Table 38: Value of the Proposed Merged Entity – summary
Low
High
Section
(AUD)
(AUD)
Sum-of-the-parts method
10.2
0.062
0.064
Subscription Price
10.3
0.076
0.076
Wah Nam VWAP between 9 November 2011 and 9 December 2011
10.4
0.082
0.082
Wah Nam VWAP between 13 December 2011 and 14 December 2011
10.4
0.094
0.094

Source: Deloitte analysis
In selecting a high value of AUD 0.080 for a share in the Proposed Merged Entity, we have had regard to the
Subscription Price, which we consider provides good evidence as to the fair market value of a share in the Proposed
Merged Entity on a minority interest basis, together with trading in Wah Nam shares after 8 November 2011.
We have adopted a value of AUD 0.065 as the low end of the value range for the Proposed Merged Entity, which is
approximately the high end of our valuation range for the Proposed Merged Entity derived under the sum-of-the-parts
method.
We have therefore selected a value for a share in the Proposed Merged Entity in the range of AUD 0.065 to AUD 0.080
on a minority interest basis.
The Takeover Offer was announced by Wah Nam on 13 December 2011 and our report is contained within the Target’s
Statement to be issued on 15 December 2011. As a consequence, we have had the opportunity to observe only two days
of trading in Wah Nam shares after the announcement of the Takeover Offer.
Given the limited time between the announcement of the Takeover Offer and the issue of the Target Statement, trading
in Wah Nam shares may not fully incorporate the market’s view of the Takeover Offer.
Based on the VWAP of Wah Nam shares over the two days after the announcement of the Takeover Offer, the implied
purchase price of a Brockman share is AUD 3.19, however, this implied consideration may change as the market fully
incorporates the consequences of the Takeover Offer.

Morningstar Morningstar Inc	Mt Gibson Mount Gibson Iron Limited	MRRT Mineral Resources Rent Tax	MSCI Index Morgan Stanley Capital International World Index	Mt Million tonnes	Mtpa Million tonnes per annum	NASDAQ National Association of Securities Dealers Automated Quotation System	NPAT Net profit after tax	NSW New South Wales	NWI North West Infrastructure	NYSE New York Stock Exchange	OneSteel OneSteel Limited	P Phosphorus	Pb Lead	Pilbara Pilbara region	Proposed Merged Entity The combined entity consisting of Wah Nam and Brockman	QR National QR National Limited	RC Reverse circulation	Rf Risk free rate of return	Rm Expected return on the market portfolio	Rio Rio Tinto Limited	RMB Renminbi	Robe River Robe River Iron Associates	ROM Run-of mine	S Sulphur	Scrip Consideration 18 shares in the Proposed Merged Entity	Section 640 Section 640 of the Corporations Act (Cth) 2001	Share Placement Share placement to raise HKD 333 million at HKD 0.60 per share	Shareholder Loans Loans provided by Brockman to employees under the ELS	Shareholders Holders of Brockman shares other than Wah Nam	SiO2 Silicon dioxide	SRK SRK Consulting (Australia) Pty Limited	Subscriber Ocean Line Holdings Limited	Subscription Agreement Collectively, the Share Placement and the issue of the Convertible Bond	Subscription Price HKD 0.60 per share	Takeover Offer, the Wah Nam’s offer to acquire all of the outstanding shares in Brockman it does not already own	Thomson Reuters Thomson Reuters (Professional) Australia Limited	TPI The Pilbara Infrastructure Pty Limited	Underwriter REORIENT Financial Markets Limited	Underwriting Agreement Underwriting agreement to raise HKD 78 million via a placement to the Underwriter	United Minerals United Minerals Limited	US United States of America	USc/dmtu US cents per dry metric tonne	USD United States dollars	Vale Vale SA	Deloitte:Brockman Resources Limited - Independent expert’s report Page 76

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Definition Technical Assessment and Valuation of Minerals and Petroleum Assets and Securities for Independent Expert Reports Volume weighted average price Western Australia Weighted average cost of capital Wah Nam International Holdings Limited Warwick Resources Limited Wet metric tonne Yilgarn Mining Pty Limited Zinc
Reference VALMIN code, the VWAP WA WACC Wah Nam Warwick Resources wmt Yilgarn Zn
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						Source: Thomson Reuters and Deloitte analysis
1.41	1.41	1.91	1.91			Overall median
1.37	1.40	1.92	1.97			Overall average
1.37	1.42	1.87	1.95			Average – iron ore production companies
1.23	1.23	2.07	2.07	(11%)	201	BC Iron Limited
1.93	2.02	2.28	2.39	(35%)	987	Mount Gibson Iron Limited
0.83	0.96	1.30	1.51	11%	17,449	Fortescue Metals Group Limited
1.48	1.48	1.84	1.84	(6%)	2,600	Atlas Iron Limited
						Iron ore production companies
1.36	1.36	1.99	1.99			Average – iron ore development companies
1.49	1.49	2.34	2.34	(17%)	269	Flinders Mines Limited
1.41	1.41	1.73	1.73	(28%)	148	Iron Ore Holdings Limited
1.19	1.19	1.91	1.91	(23%)	230	Brockman Resources Limited
						Iron ore development companies
beta 3	beta	beta 3	beta	value 2	(AUD million)	Company
Unlevered	Levered	Unlevered	Levered	enterprise	value 1
4 year monthly		4 year monthly		Debt to	Enterprise
MSCI Index		Index	ASX 200

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Page 81
Securities Industry Research Centre of Asia-Pacific Limited Brockman Resources Limited - Independent expert’s report
correlation of revenues and cash flows to economic cycles, in that companies that are more exposed to economic cycles (such as retailers), will generally have higher levels of systematic risk (i.e. higher betas) relative to companies that are less exposed to economic cycles (such as regulated utilities).
 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 -
The betas of various Australian industries listed on the ASX are reproduced below and provide an example of the relative industry betas for a developed market. Figure 20: Betas for various industries (as at 30 June 2011) Source: The differences are related to the business risks associated with the industry. For example, the above diagram indicates transportation companies are more correlated to overall market returns with a beta close to 1.0 whereas telecommunications and other infrastructure companies (in particularly those that are regulated) typically have betas lower than 1.0. The geared or equity beta can be estimated by regressing the returns of the business or investment against the returns of an index representing the market portfolio, over a reasonable time period. However, there are a number of issues that arise in measuring historical betas that can result in differences, sometimes significant, in the betas observed depending on the time period utilised, the benchmark index and the source of the beta estimate. For unlisted companies it is often preferable to have regard to sector averages or a pool of comparable companies rather than any single company’s beta estimate due to the above measurement difficulties. Market evidence In estimating an appropriate beta for Brockman we have considered the betas of listed companies that have operating assets that are comparable to Brockman. These betas, which are presented below, have been calculated based on monthly returns, over a four year period, compared to the Standard and Poor’s ASX 200 index (ASX 200 Index) and the Morgan Stanley Capital International World Index (MSCI Index). Deloitte:
Telecommunication services
Health care equipment & services
Food, beverage & tobacco
Pharmaceuticals, biotechnology & life sciences
personal products
Food & staples retail and household &
Utilities
Insurance
Banks
Consumer services
Software & services
Materials (excl metals & mining)
Transportation
Real estate investment trusts
Energy
Consumer durables & apparel
Diversified financials
Media
Commercial services & supplies
Metals & mining
Retailing
Technology hardware & equipment
Automobile & components
Real estate excluding investment trusts
Capital goods
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We have not adjusted the cost of capital or the projected cash flows for the impact of dividend imputation due to the diverse	views as to the value of imputation credits and the appropriate method that should be employed to calculate this value.	Determining the value of franking credits requires an understanding of shareholders’ personal tax profiles to determine the	ability of shareholders to use franking credits to offset personal income. Furthermore, the observed EMRP already includes	ability of shareholders to use franking credits to offset personal income. Furthermore, the observed EMRP already includes	the value that shareholders ascribe to franking credits in the market as a whole. In our view, the evidence relating to the	the value that shareholders ascribe to franking credits in the market as a whole. In our view, the evidence relating to the	value that the market ascribes to imputation credits is inconclusive.		Conclusion on cost of equity	Based on the above factors we arrive at a cost of equity, K_e_, as follows:		Table 43:_K_e applied to valuation of Brockman	Input Low High	Input Low High		Risk free rate (%) 4.10 4.10	EMRP (%) 6.00 6.00	Beta 1.90 2.00	Specific company risk premium (%) - -	Specific company risk premium (%) - -	Ke – calculated (%) 15.50 16.10		Source: Deloitte analysis		Cost of debt capital (Kd)	We have selected a pre-tax cost of debt of 8.6% to 9.6% for Brockman as we consider a margin of 450 to 550 basis points	above the current risk free rate to be reasonable based on the rates currently payable by companies with comparable risk	profiles to Brockman. This converts to an approximate post-tax cost of debt of 6.1% to 6.8%.	Debt and equity mix	Current gearing levels of iron ore mining companies have been distorted compared to long-term trends due to the very	strong cash flows generated as a consequence of the recent high commodity prices.	We have adopted a target debt to enterprise value (gearing) ratio of 25% for Brockman.	Calculation of WACC	The calculation of the WACC, based on the above parameters, is as follows:	Table 44: WACC applied to valuation of Brockman	Low High		Cost of equity capital (%) 15.50 16.10	Post-tax cost of debt capital (%) 6.10 6.80	Debt to enterprise value ratio (%) 25.00 25.00	Nominal, post-tax WACC (%) 13.15 13.78			Source: Deloitte analysis	In selecting a discount rate for Brockman, we have selected parameters that take into consideration the early stage of	development of the Marillana Project. As development of the Marillana Project progresses, the risk associated with the	project will reduce. As a result, we would expect the WACC of the Marillana Project to be lower during the later stages of	project will reduce. As a result, we would expect the WACC of the Marillana Project to be lower during the later stages of	development and when the project starts producing compared to during the earlier stages of development.	development and when the project starts producing compared to during the earlier stages of development.	Based on the above, we have assessed the nominal post-tax WACC for Brockman to be in the range of 13.0% to 14.0%.				Deloitte: Brockman Resources Limited – Independent expert’s report Page 86

	*Early stage companies*	Generally, investors in early stage companies/projects often require higher rates of return than investors in mature		companies/projects. Venture capitalists are a common source of equity capital for early stage investments. The Australian		Venture Capital Guide provides the following indicative guidelines for their required rate of return.		Table 42: Venture capital required rates of return	Methodology Required rate of return		Starting a new business 30% to 40%	Expanding a business, MBOs or MBIs 20% to 30%		Source: Australian Private Equity and Venture Capital Guide 2010		These rates of return are significantly higher than those required for mature listed companies. The reason that the discount rate required for an early stage company is different to that required for a mature company is because the relationship between business risks, finance risks and the cost of equity changes as a company progresses from an early stage company				to a mature company. The relationship between business risk, finance risk and cost of equity is illustrated in the following	figure.	Figure 21: Business risks, finance risks and cost of equity		Phase Funding requirements Business risk Finance risk Cost of equity		Pre-build Low/Zero High High (but low debt) High			Build Peak High High			Consolidation Medium		Stabilise Low Low Low Low	Source: Adapted from The Valuation of Businesses, Shares and Other Equity, 3rd edition, W Lonergan		*Selection of specific company risk premium*	We have considered the development uncertainty regarding the success and timing of securing a commercially acceptable	rail and port solution for the Marillana Project. We note that our selected beta has primarily been based on the betas of	development stage companies with similar infrastructure issues as Brockman. Therefore, our selected beta incorporates the	risks associated with Brockman commencing production, including the risk of not securing a suitable rail and port solution	or that its ramp up to full production will be delayed. On this basis, we do not consider it necessary to add an additional		company specific risk premium.		Dividend imputation		Dividends paid by Australian corporations may be franked, unfranked, or partly franked. A franked dividend is one that is		paid out of company profits which have borne tax at the company rate, currently 30%. Where the shareholder is an	Australian resident individual or complying superannuation fund, it will generally be entitled to a tax credit (called an	imputation credit) in respect of the tax paid by the company on the profits out of which the dividend was paid. If the	recipient of the dividend is another company, the dividend will give rise to a credit in that company’s franking account	thereby increasing the potential of the company to pay a franked dividend at a later stage.	Deloitte: Brockman Resources Limited – Independent expert’s report Page 85

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Page 90
: Brockman Resources Limited – Independent expert’s report
some acquirers are prepared to pay above fair market value to realise ‘special purchaser’ value which is only available to a very few buyers. Such ‘special purchaser’ value would include the ability to access very high levels of synergistic benefits in the form of cost and revenue synergies or the ability to gain a significant strategic benefit abnormally high control premiums are often paid in contested takeovers where there are multiple bidders for a target company. In such cases, bidders may be prepared to pay away a greater proportion of their synergy benefits from a transaction than in a uncontested situation some of the observations of very high premiums are for relatively small listed companies where there is typically less trading liquidity in their shares and they are not closely followed by major broking analysts. In such situations, the traded price is more likely to trade at a deeper discount to fair market value on a control basis. a study conducted by S.Rossi and P.Volpin of London Business School dated September 2003, ‘Cross Country Determinants of Mergers and Acquisitions’, on acquisitions of a control block of shares for listed companies in Australia announced and completed from 1990 to 2002. This study included 212 transactions over this period and indicated a mean control premium of 29.5% using the bid price of the target four weeks prior to the announcement ‘Valuation of Businesses, Shares and Equity’ (4th edition, 2003) by W.Lonergan states at pages 55-56 that: “Experience indicates that the minimum premium that has to be paid to mount a successful takeover bid was generally in the order of at least 25 to 40 per cent above the market price prior to the announcement of an offer in the 1980s and early 1990s. Since then takeover premiums appear to have fallen slightly.” a study conducted by P.Brown and R.da Silva dated 1997, ‘Takeovers: Who wins?’, JASSA: The Journal of the Securities Institute of Australia, v4(Summer):2-5. The study found that the average control premium paid in Australian takeovers was 29.7% between the period January 1974 and June 1985. For the ten year period to November 1995, the study found the average control premium declined to 19.7%.
Many of the observed control premiums below 20% are likely to have been instances where the market has either been provided with information or anticipated a takeover offer in advance of the offer being announced. Accordingly, the pre-bid share trading price may already reflect some price appreciation in advance of a bid being received, which creates a downward bias on some of the observed control premiums in our study. Many of the observed control premiums above 40% are likely to have been influenced by the following factors which create an upward bias on some of the observed control premiums in our study:    Accordingly, the observed control premiums to share trading prices for such stocks will tend to be higher. Other studies In addition to the study above, we have also had regard to the following:    Deloitte
Page 89
34% 29% 46% 12%
Control premium
.
28
90 80 70 60 50 40 30 20 10 0 : Brockman Resources Limited – Independent expert’s report
Excluding transactions where inadequate data was available.
Appendix 5: Control premium studies Deloitte study We conducted a study of premiums paid in Australian transactions completed between 1 January 2000 and 30 September 2011. This study was conducted by Deloitte staff for internal research purposes. Our merger and acquisition data was sourced from Bloomberg and Reuters and yielded 474 transactions that were completed during the period under review Our data set consisted of transactions where an acquiring company increased its shareholding in a target company from a minority interest to a majority stake or acquired a majority stake in the target company. We assessed the premiums by comparing the offer price to the closing trading price of the target company one month prior to the date of the announcement of the offer. Where the consideration included shares in the acquiring company, we used the closing share price of the acquiring company on the day prior to the date of the offer. Summary of findings As the following figure shows, premiums paid in Australian transactions between 1 January 2000 and 30 September 2011 are widely distributed with a long ‘tail’ of transactions with high premiums. Figure 22: Distribution of data Source: Deloitte analysis The following table details our findings. Table 45: Premium analysis – findings Average Median Upper quartile Lower quartile Source: Deloitte analysis Notwithstanding the relatively wide dispersion of control premiums observed in our study we consider the control premium range of 20% to 40% to be representative of general market practice for the following reasons. 28 Deloitte
> 100%
100% 90% -
90% 80% -
80% 70% -
60% - 70%
60% 50% -
50% 40% -
40% 30% -
30% 20% -
20% 10% -
0% - 10%
(10%) - 0%
(20%) - (10%)
(30%) - (20%)
(40%) - (30%)
(50%) - (40%)
(60%) - (50%)
(70%) - (60%)
(80%) - (70%)
(90%) - (80%)
(100%) - (90%)
< (100%)
Number of transactions
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s
’
Independent Technical Expert Report and Mineral Asset Valuation Report Report Prepared for Deloitte Corporate Finance Pty Limited in connection with Brockman Resources Limited
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Report Prepared by SRK Consulting (Australasia) Pty Ltd BRO001 December 2011
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SRK Consulting Page ii Executive Summary Deloitte Corporate Finance Pty Limited (Deloitte) has asked SRK Consulting (Australasia) Pty Ltd (SRK) to prepare an Independent Technical Assessment Report (Report) on the mineral assets of Brockman Resources Limited (Brockman) located in Australia. The Report will also include a valuation of the exploration assets held by Brockman. Geology Brockman controls a number of iron ore projects in the Pilbara region of Western Australia. Its principal project is the Marillana Project but the company also has a number of tenements under various stages of application and ownership. Six iron-ore projects are considered here, including: � Marillana � Duck Creek � Ophthalmia � West Hamersley � Mt Florance � Mt Stuart The most advanced is the Marillana Project which has undergone a definitive feasibility study (DFS). The mining study for this was completed by Golder Associates Pty Ltd (Golder). The other projects are at much earlier stages of exploration with some including Exploration Targets with indicative mineralisation, not verifiable as a resource. Mineral Resources From its review of the Marillana Mineral Resource Estimate, SRK concludes that the resource has been estimated and classified using methodologies appropriate for the style of mineralisation. SRK did not identify any fatal flaws during its review. A summary of the Mineral Resource estimate for the Marillana Project is provided in Table ES-1 and ES-2 and Competent Person’sStatement below. Table ES-1: Beneficiation Feed Mineral Resource Summary for the Marillana Project (cut-off grade 38% Fe) SRK Consulting Page i Independent Technical Expert’s Report and Mineral Asset Valuation Report Deloitte Corporate Finance Pty Limited in connection with Brockman Resources Limited Level 1, 117 Stirling Highway Nedlands WA 6009 SRK Consulting (Australasia) Pty Ltd Level 2, 44 Market Street Sydney NSW 2000 e-mail: [email protected] website: srk.com.au Tel: +02 8079 1200 Fax: +02 8079 1222 SRK Project Number: BRO001 December 2011
	Total	% Fe 41.6 43.0 40.7 42.6
		Mt 173 1,154 201 1,528
	Pisolite	% Fe 47.4 47.4
		Mt 117 117
	DID	% Fe 41.6 42.5 40.7 42.1
		Mt 173 1,036 201 1,410
	Resource Classification Measured Indicated Inferred Total

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Page iv
Table ES-4: Ore Reserve summary for the Channel Iron Marillana Project
Reserve
Classification
CID
Mt
% Fe
% CaFe
% SiO2
% Al2O3
% P
% LOI
Proven
Probable
48.5
55.5
61.5
5.3
3.7
0.09
9.7
Total
48.5
55.5
61.5
5.3
3.7
0.09
9.7
Note: Reserves are included within Resources, data sourced from http://www.brockman.com.au/
Competent Person’s Statement
The information in this report that relates to the Mineral Resources and Ore Reserves is based on
information compiled by Mr I Cooper, Mr J Farrell and Mr A Zhang.
The Ore Reserves statement has been compiled in accordance with the guidelines defined in the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(The JORC Code– 2004 Edition). The Ore Reserves have been compiled by Mr Cooper, who is a
member of the AusIMM and a full-time employee of Golder Associates Pty Ltd. Mr Cooper has
sufficient experience that is relevant to the style of mineralisation, type of deposit under
consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the
2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves.
Mr J Farrell, who is a member of the AusIMM and a full-time employee of Golder Associates Pty Ltd,
produced the Mineral Resource 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 he is undertaking to qualify as a Competent Person
as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results’ – the
JORC Code.
Mr A Zhang, who is a member of the AusIMM and a full-time employee of Brockman Resources
Limited, provided the geological interpretations and the drillhole data used for the Mineral Resource
estimation. Mr Zhang has sufficient experience that is relevant to the style of mineralisation, type of
deposit under consideration and to the activity he is undertaking to qualify as a Competent Person
as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results’ – the
JORC Code.
Geotechnical Engineering
The main aspects of the Marillana Project that require geotechnical assessment include the stability
of the open pit slopes, and excavatability and trafficability within the pits. In addition, the stability of
waste dump slopes and those of other storage facilities or embankments, the foundations for the
plant and other surface infrastructure elements at the mine site and any site influences for port and
rail development were also reviewed.
In terms of pit slope design and development, the conditions in the pit walls may be variable and a
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Page iii
Mining & Reserves
A number of Mining Studies have been undertaken on the Marillana deposit.
�
Definitive Feasibility Study - Mine Planning by Golder
�
Geotechnical Assessment - Open Pit Related Components by Coffey Mining
�
Marillana Iron Ore Project - SMU Study by Golder
�
Marillana Mining Options Study by Golder
�
Marillana Bankable Feasibility Study (BFS) (DRAFT) - Mining Component by Optiro
The proposed mining operation at Marillana, as detailed in the latest Optiro report will initially utilise a
Truck/ Excavator (T&E) load haul system.
The proposed mining operation at Marillana consists of a number of open pits. The optimised pits to
be mined take into account several constraints which limit the area available to be mined in the
lease.
These constraints are:
�
The orebody extends North under the Weeli Wolli Creek
�
The orebody extends south and west under the mining lease boundary
�
An area was sterilised in order to allow for the processing plant and related infrastructure
The mining operation will utilise 360 to 480 t excavators and 180 to 226 t capacity haul trucks.
Mining of the DID and overburden will be predominantly free dig. Ripping by dozer and light blasting
may be required in some areas. The channel iron deposit (CID) areas will require some blasting.
The CID pits have to be carefully scheduled so as not to interfere with the DID mine schedule and
backfilling. The CID will be blended with the DID. The proposed CID crusher rate is 3.5 million
tonnes per annum (Mtpa) and at various stages in the mine life, stockpiling of the CIDs will be
required.
There are two aspects to the schedule–the mining schedule and the backfill schedule. The mining
schedule was developed independently of the backfill schedule, but the backfill schedule is
dependent on the mining schedule. The waste disposal schedule, including fine and coarse rejects,
is an important aspect of the Optiro BFS (draft). The mining sequence and therefore waste disposal
plan is substantially different in the BFS (draft) compared to the plan in the DFS completed by
Golder. The Optiro plan will require substantially longer hauls to deliver the mining sequence, but
will also involve substantially less rehandle of waste material in the later years of the mine life.
There is insufficient land available for waste to be dumped outside the pits. Consequently, some
waste will be dumped on top of pits ahead of mining, then rehandled and placed as backfill in the
mined-out void. A waste dump will then also be located on top of the backfill. Optimisation studies
are ongoing to minimise rehandle requirements. A current summary of the Ore Reserve statement
for Marillana is provided in Table ES-3 and ES-4.
Table ES-3: Ore Reserve summary for the DID Marillana Project

STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
set of slope designs that are intended to be robust enough to be generally applicable have been
provided. Opportunities may exist for optimisation of the pit slope designs. Taking the shallow
nature of the pit and the generally low angles for the slopes into account, the geotechnical design
recommendations do not appear to present a fatal flaw.
STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
Reserve
Classification
DID
Mt
% Fe
Proven
133
41.6
Probable
868
42.5
Total
1,001
42.4

SRK Consulting Page x	4.5.1 Ore Reserve Notes ................................................................................................................ 20	4.6 Operating costs ................................................................................................................................. 20	4.7 Capital costs ...................................................................................................................................... 21	5 Geotechnical Engineering ......................................................................................... 22	5.1 Pit slope design and development .................................................................................................... 22	5.2 Mine site and project infrastructure ................................................................................................... 22	6 Hydrology & Hydrogeology ....................................................................................... 23	6.1 Summary–Observations / recommendations .................................................................................. 23	7 Metallurgy ................................................................................................................... 25	7.1 Mineral processing ............................................................................................................................ 25	8 Rail Infrastructure ....................................................................................................... 26		8.1 Rail transport alternatives ................................................................................................................. 26	8.2 TPI rail corridor .................................................................................................................................. 27	8.2.1 Overview................................................................................................................................ 27	8.3 Marillana rail spur and load out ......................................................................................................... 28	8.3.1 Overview................................................................................................................................ 28	8.3.2 Capacity considerations ........................................................................................................ 28	9 Review of Port Arrangements ................................................................................... 30	9.1 Introduction ....................................................................................................................................... 30	9.2 The Port Project ................................................................................................................................ 30 9.2.1 Basic configuration ................................................................................................................ 30	9.3 Rail Infrastructure at the stockyard ................................................................................................... 30	9.4 Capacity considerations .................................................................................................................... 31	9.5 Port Capacity Allocation .................................................................................................................... 31	9.6 Estimated operating costs ................................................................................................................. 31	9.7 Demurrage ........................................................................................................................................ 32	9.8 Other Port charges ............................................................................................................................ 33	9.9 Estimated capital costs ..................................................................................................................... 33	9.10 Summary ........................................................................................................................................... 34	10 Environmental & Social Impacts ............................................................................... 35	10 Environmental & Social Impacts ............................................................................... 35	10.1 Introduction ....................................................................................................................................... 35		10.2 Biophysical context ........................................................................................................................... 35	10.3 Regulatory ......................................................................................................................................... 36 10.4 Conclusions ....................................................................................................................................... 36	11 Exploration Valuation ................................................................................................. 38 11.1 Valuation of the Duck Creek Project ................................................................................................. 38	11 Exploration Valuation ................................................................................................. 38 11.1 Valuation of the Duck Creek Project ................................................................................................. 38	11.2 Valuation of West Hamersley Project ............................................................................................... 40 11.3 Valuation of Ophthalmia Project ....................................................................................................... 41	11.4 Valuation of the Mt Stuart Project ..................................................................................................... 42	11.4 Valuation of the Mt Stuart Project ..................................................................................................... 42	11.5 Valuation of the Mt Florance Project ................................................................................................. 43	STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011
SRK Consulting Page ix		Table of Contents	Executive Summary ..................................................................................................................................... ii	Disclaimer ................................................................................................................................................... xii	List of Abbreviations ................................................................................................................................... xiii	1 Introduction and Background ..................................................................................... 1	1.1 Programme objectives ........................................................................................................................ 1	1.2 Reporting standard.............................................................................................................................. 1	1.3 Work programme and Project Team ................................................................................................... 1	1.4 Statement of SRK independence ........................................................................................................ 2	1.5 Note on tenement status and material contracts ................................................................................ 2	1.6 Representation and Indemnities ......................................................................................................... 2	1.7 Consents ............................................................................................................................................. 2		2 Geology ......................................................................................................................... 3	2.1 Resource holdings .............................................................................................................................. 3	2.2 Regional Geology pertaining to the Projects ...................................................................................... 4	2.3 Projects ............................................................................................................................................... 6	2.3.1 Marillana .................................................................................................................................. 6 2.3.2 Duck Creek .............................................................................................................................. 8		2.3.3 Ophthalmia .............................................................................................................................. 8 2.3.4 West Hamersley .................................................................................................................... 10 2.3.5 Mt Florance ........................................................................................................................... 12	2.3.6 Mt Stuart ................................................................................................................................ 12	3 Mineral Resource Review .......................................................................................... 13		3.1 Mineral Resource Statement ............................................................................................................ 13	3.2 Data Quality Assurance and Control review ..................................................................................... 14	3.3 Survey data review............................................................................................................................ 14	3.4 Geological model review ................................................................................................................... 14	3.5 Variography review ........................................................................................................................... 14	3.6 Block model review ........................................................................................................................... 15	3.7 Independent estimation ..................................................................................................................... 15		3.8 Mineral Resource classification ........................................................................................................ 15	3.9 Conclusions and recommendations .................................................................................................. 15	4 Mining and Ore Reserve Estimate............................................................................. 16	4.1 Mining Studies ................................................................................................................................... 16 4.2 Site layout and mining constraints .................................................................................................... 16	4.3 Pit optimisation .................................................................................................................................. 17	4.4 Mining method & scheduling ............................................................................................................. 18 4.4.1 Scheduling ............................................................................................................................. 19		4.5 Ore Reserves .................................................................................................................................... 19		STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011

SRK Consulting Page 1	1 Introduction and Background	SRK contracted with BRL, and Deloitte controlled the scope of work for preparation of an	SRK contracted with BRL, and Deloitte controlled the scope of work for preparation of an	Independent Technical Assessment Report (Report) on the mineral assets of Brockman Resources	Independent Technical Assessment Report (Report) on the mineral assets of Brockman Resources	Independent Technical Assessment Report (Report) on the mineral assets of Brockman Resources	Limited (Brockman) located in Australia. The Report also includes a valuation of the exploration	assets held by Brockman.	The Report will be required as input into an Independent Expert’sReport (IER) prepared by Deloitte	The Report will be required as input into an Independent Expert’sReport (IER) prepared by Deloitte	and commissioned by Brockman as part of a proposed transaction with Wah Nam International	and commissioned by Brockman as part of a proposed transaction with Wah Nam International	Holdings Limited (Wah Nam).	Holdings Limited (Wah Nam).	1.1 Programme objectives	SRK understands that the objective of this study is to provide an independent assessment of the key	technical mining assumptions of Brockman’s main development asset (Marillana)and valuation of	Brockman’s exploration assets. SRK has selected the most appropriate valuation technique for the	assets, based on the development stages of the projects and the amount of available information.	assets, based on the development stages of the projects and the amount of available information.	This Report complies with the technical property information required under various securities laws	of Australia and may be included in the Deloitte IER to be prepared in connection with the proposed	transaction. This Report provides a review and valuation of the mineral assets, but does not provide	comment on the fairness and reasonableness of the proposed acquisition.	1.2 Reporting standard	1.2 Reporting standard	This Report has been prepared to the standard of, and is considered by SRK to be, a Technical Assessment Report and Valuation Report under the guidelines of the VALMIN Code. In this Report,	This Report has been prepared to the standard of, and is considered by SRK to be, a Technical Assessment Report and Valuation Report under the guidelines of the VALMIN Code. In this Report,	This Report has been prepared to the standard of, and is considered by SRK to be, a Technical Assessment Report and Valuation Report under the guidelines of the VALMIN Code. In this Report,	identified Mineral Resources and Ore Reserves are quoted using categorisation in accordance with	identified Mineral Resources and Ore Reserves are quoted using categorisation in accordance with	the JORC Code (2004) guidelines. The Report is prepared under the guidelines of the VALMIN	the JORC Code (2004) guidelines. The Report is prepared under the guidelines of the VALMIN	Code. Both Codes provide standards that are binding upon all members of the Australasian Institute	Code. Both Codes provide standards that are binding upon all members of the Australasian Institute	of Mining and Metallurgy (AusIMM) and the Australian Institute of Geoscientists (AIG). The VALMIN	Code incorporates the JORC Code for the reporting of Mineral Resources and Ore Reserves.	1.3 Work programme and Project Team	The Project commenced in late November 2011, with a review of existing remote electronic company	data and other information sourced by SRK from literature and company websites, in addition to	data and other information sourced by SRK from literature and company websites, in addition to	subscription databases such as Intierra and Metals Economics Group (MEG).	subscription databases such as Intierra and Metals Economics Group (MEG).	SRK did not visit the Marillana Project in Western Australia, as SRK considered that, due to the	project’s early stage of development, a site visit would not be required. The exploration properties	were not visited as SRK considered that a site visit would not materially impact the valuation.	SRK consultants had discussions with management, worked through the relevant databases,	compiled the report and completed research on comparable market transactions to assist with the	valuation.	Tony Stepcich acted as Project Manager. A number of SRK consultants worked on various aspects	Tony Stepcich acted as Project Manager. A number of SRK consultants worked on various aspects	of the Project concurrently as follows:	of the Project concurrently as follows:		� Mark Grodner compiled the Geology and Exploration sections	� Mark Grodner compiled the Geology and Exploration sections	� Mark Grodner compiled the Geology and Exploration sections	� Andre Wulfse reviewed the Mineral Resource Estimate and Geostatistics sections	� Andre Wulfse reviewed the Mineral Resource Estimate and Geostatistics sections	� Tony Stepcich compiled Mining Engineering and Mineral Reserves sections	� Ian de Bruyn worked on Geotechnical Engineering aspects	� Lisa Chandler and Troy Hindmarsh reviewed the Environmental aspects	STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011
Page xiii																																																															12 December 2011
SRK Consulting	List of Abbreviations	Abbreviation Meaning		ANZECC Australia New Zealand			AUD M million Australian dollars	BHPBIO BHP Billiton Iron Ore	BIF banded iron formation		BRL Brockman Resources Limited		CID channel iron deposit		COG cut-off grade CP Competent Person	CPR Competent Person’s Report	DEC Department of Environmental Conservation	DFS Definitive Feasibility Study		DID Detrital iron deposits	DMP Department of Mines and Petroleum	DMS dense media separation	dmt dry metric tonne	dmtu dry metric tonne unit	DSO direct shipping ore		FMG Fortescue Metals Group	FRS fines reject storage		g/t grams per tonne		GSWA Geological Survey of Western Australia		IER Independent Expert’s Report		IPCC in-pit crusher conveyor system	MAR managed aquifer recharge	MRE Mineral Resource Estimate Mt million tonnes	Mtpa million tonnes per annum		NWI North West Infrastructure		NWIOA North West Iron Ore Alliance	PEC Priority Ecological Community	PER Public Environmental Review	QA/QC Quality Assurance Quality Control	QR Queensland Rail	RC reverse circulation	ROM run-of-mine	SRK SRK Consulting (Australasia) Pty Ltd		SRL Special Railway Licence		t Tonnes			T&E Truck and excavator		TPI The Pilbara Infrastructure Pty Ltd				STEP/LORD BRO001_Brockman_IER_Rev5

Ha	3266	94	142	96	2467	1714	1182	3696	64	332	469	8249	29745 8217	1895	1581	316	2934	5012	9770	315	315 5708	1894	3477 4830	2800	3477	1265 8898
App date 11/05/2004	9/06/2010	18/10/2010	18/10/2010	18/10/2010	18/10/2010	11/03/2011	2/06/2010	18/10/2010	16/12/2010	19/08/2011	16/12/2010	18/12/2007	11/11/2009 12/06/2006	11/11/2010	17/04/2010	17/04/2010	28/11/2005	28/11/2005	15/09/2011	15/09/2011	15/09/2011 1/12/2005	24/03/2010	24/03/2010 30/11/2007	30/11/2007	7/12/2009	7/12/2009 28/06/2006
Status Live	Pend	Pend	Pend	Pend	Pend	Pend	Pend	Pend	Pend	Pend	Pend	Live	Pend Live	Live	Live	Live	Live	Live	Pend	Pend	Pend Live	Pend	Pend Live	Live	Pend	Live Live
Date expiry 5/10/2012												22/12/2030	17/12/2012	15/09/2016	17/03/2015	17/03/2015	12/02/2012	2/04/2013			8/03/2012		30/03/2015	30/03/2015		17/02/2016 13/10/2012
Date granted 6/10/2005												23/12/2009	18/12/2007	16/09/2011	18/03/2010	18/03/2010	13/02/2007	3/04/2008			9/03/2007		31/03/2010	31/03/2010		18/02/2011 14/10/2007
Holder Brockman Iron Pty Ltd													BE				BE BE						BE			BE
Lic. No. E47/1408	L45/0225	L45/0235	L45/0236	L45/0237	L45/0238	L46/0097	L47/0369	L47/0389	L47/0408	L47/0544	L52/0124	M47/1414	E47/2176 E47/1725	E47/2446	E47/1936	E47/1937	E47/1598	E47/1599	E47/2621	E47/2622	E47/2623 E47/1603	E47/2313	E47/2314 E47/1845	E47/1850	E47/2214	E47/2215 E47/1738
Project Marillana													Duck Creek				Ophthalmia West Hamersley t Stuart									M Mt Florance
� The first draft of the Report was Peer Reviewed by Richard Forsyth � The second draft of the Report was Peer Reviewed by Deborah Lord, with input from Peter Williams. 1.4 Statement of SRK independence Neither SRK nor any of the authors of this Report have any material present or contingent interest in the outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably regarded as being capable of affecting their independence or that of SRK. SRK has no beneficial interest in the outcome of the technical assessment being capable of affecting its independence. SRK confirms its Independence to the Commissioning Entity, Brockman. SRK’s feefor completing this Report of $131,578 is based on its normal professional daily rates plus reimbursement of incidental expenses. The payment of that professional fee is not contingent upon the outcome of the Report. 1.5 Note on tenement status and material contracts SRK has not independently verified the current ownership status and legal standing of the tenements that are subject of this Report. Instead it has relied on information provided by Brockman. SRK has prepared this Report on the understanding that all the tenements are legally in good standing and that there is no cause to doubt the eventual granting of any tenement applications. SRK has not reviewed the material contracts relating to the mineral assets of Brockman and is not qualified to make legal representations in this regard.																	1.6 Representation and Indemnities Brockman has agreed to provide full disclosure to SRK that all material information to the best of its knowledge and understanding has been provided and that such information is complete, accurate and true. As recommended by the VALMIN Code, Brockman has agreed to provide SRK with an indemnity under which SRK is to be compensated for any liability and/ or any additional work or expenditure resulting from any additional work required which results from SRK's reliance on information provided by Brockman or to Brockman not providing material information; or which relates to any consequential extension workload through queries, questions or public hearings arising from this Report.

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Hamersley Province	Description	Aeolian sand	Alluvium - unconsolidated silt, sand and gravel	Colluvium - unconsolidated rock fragments in soil		Colluvium, partly consolidated valley-fill			Laterite		Calcrete (Oakover Fm)	Robe Pisolite - pisolitic limonite along paleo- channels			Colluvium - consolidated	Wittenoom Formation
	Code	Qs	Qa/Qw	Qc		Czc			Czl		Czk	Czp			Czc
Deposit						Hematite DID iron deposits						Channel iron deposits
Marillana Project Area	Description	Wind-blown sand	Gravelly sand	Sandy gravels	Clast-supported gravel	Siliceous hematite detritus (ps < 5%)	Hematite detritus (ps 5 to 30%)	Pisolitiic hematite detritus (ps 30 to 75%)	Loose pisolite (ps > 75%)	Silty clay with minor fine grained ps	Calcrete and minor silt	Siliceous (weathered / reworked) CID	Unaltered CID, hard and red-brown	Basal CID, limonitic with clay	Basal conglomerate - polymictic
	Thickness	1 to 6	20			1 to 50			1 to 30	1 to 20	1 to 60	1 to 10	1 to 30	1 to 15	1 to 10
	Code	SND	GS	SG	GVL	HDS	HD	HDP	LP	LPC	CC	SCID	CID	BCID	BCG
Geological Age			Quaternary					Tertiary								Proterozoic
								Cenozoic
			Figure 2-3: Channel and DID iron deposit types			Note: Figure after Killick et al., 2003 The CID and DID are the primary targets in all but the Ophthalmia Project, where weathered Boolgeeda Iron Formation (part of the Hamersley Group and of similar age to the Brockman Iron		Formation) is being explored. 2.3 Projects Information regarding the geological characteristics and resources of each of the six project areas was obtained from the documents provided and from Brockman Company reports. These findings are presented below.

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Page 9
Figure 2-5: Location of the Sirius prospect within the Ophthalmia Project Note: map from http://www.brockman.com.au/
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12 December 2011
BRO001_Brockman_IER_Rev5
Figure 2-6: Geological map of the Sirius prospect Note: map from http://www.brockman.com.au/ Sampling and mapping at Sirius has identified three main iron ore types, based on the proportions of martite and goethite in the mineralisation, with average grades of each mineralisation style presented in Table 2-4.
STEP/LORD
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Page 11 -
2011
Release,
(ASX
Fe
58-61%
grading
Mt
20-30
of
Target
Helicopter-supported reconnaissance mapping and sampling over West Hamersley has identified six zones of hematite mineralisation grading 56-64% Fe (Figure 2-7). Figure 2-8: Geology of West Hamersley, Mt Stuart and Mt Florance Note: map from GeoVIEW.WA (http://mapserver.doir.wa.gov.au/GeoVIEW2) An initial programme of reconnaissance RC drilling in late 2010 comprising 407 m in 36 shallow holes found shallow DSO grade hematite mineralisation. Mineralisation at West Hamersley is in the form of cemented hematite-goethite canga, formed as valley-fill deposits at the base of the Brockman Iron Formation ranges within the project area. While individual valley targets range up to 2 km in length and 500 m in width, much of the area is covered by scree and therefore the continuity of the canga mineralisation cannot be established with certainty. Recent work supports an Exploration http://clients.weblink.com.au/clients/brockman2/). While Brockman is optimistic that it will report resources and reserves in the future at West Hamersley, any discussion in relation to exploration targets or resource potential is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.
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SRK Consulting Page 10	Table 2-4: Sample grades– Sirius prospect	LOI1000 2.98 5.37 9.28 5.49
		S 0.039 0.042 0.055 0.044
		P 0.074 0.113 0.145 0.108
		Al2O3 1.37 2.61 3.88 2.51
		SiO2 1.66 3.35 4.51 3.09
		Ca-Fe 67.33 64.99 62.2 65.1
		Fe 65.32 61.5 56.43 61.57
		No. Samples 24 38 17 79
		Martite dominant Martite - Goethite Goethite dominant Total

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Figure 2-7: Map of the West Hamersley Project
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3
Mineral Resource Review
A critical aspect of any Mineral Asset Valuation is the accuracy and precision of the underlying
Mineral Resource Estimates (MRE). In the case of this study, only the Marillana Project has an
associated public MRE. The review was desktop-based and consisted of the following aspects:
�
Review of the Competent Person’s Report (CPR)–Mineral Resource Report for the Marillana
Project dated August 2010, authored by Golder
�
A review of the resource drill data and resource block model
The reader is referred to the CPR for a detailed description of the assumptions and methodologies
used by the Competent Person (CP) during the MRE.The following sections summarise SRK’s
review of the methodology and findings.
3.1
Mineral Resource Statement
The resource estimates were classified in accordance with the guidelines provided by the
Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (JORC Code,
2004). These were announced to the ASX by Brockman on 9 February 2010. The classification of
Mineral Resources was considered appropriate on the basis of data density and quality,
representativeness of sampling, geological confidence criteria, the position of the water table and
estimation performance parameters.
The resource is based on the Ordinary Kriging interpolated block model_mar200110_ok.bmf_.
The Mineral Resource has been defined using geological boundaries and a cut-off grade of 38% Fe
for the DID mineralisation (Table 3-1) and 52% Fe for the CID mineralisation (Table 3-2). The cut-off
grades were selected based on the Mineral Resource achieving an acceptable product grade.
Table 3-1:
Marillana DID in situ Mineral Resource at a cut-off grade 38% Fe
Classification
Mt
% Fe
%Al2O3
SiO2 %
% P
LOI(1000°C) %
Measured Resources
173.2
41.6
4.85
30.19
0.063
4.08
Indicated Resources
1,153.5
43.0
5.85
27.79
0.055
3.51
Inferred Resources
201.2
40.7
5.01
32.42
0.053
3.20
Total
1,527.9
42.6
5.62
28.67
0.056
3.53
Table 3-2:
Marillana CID in situ Mineral Resource at a cut-off grade 52% Fe
SRK Consulting
Page 12
2.3.5 Mt Florance
Very little work has been done at Mt Florance (location shown in Figure 2-8). It consists of one
granted Exploration Licence containing a 20 km strike extent of Marra Mamba Iron Formation (under
cover).
Figure 2-9: Locality map of Mt Florance
2.3.6 Mt Stuart
The Mt Stuart Project (Figure 2-10) comprises three Exploration Licences and one Exploration
Licence application containing outcropping CID mineralisation. Initial reconnaissance sampling (four
samples) over a mesa of CID mineralisation demonstrated that ore grade mineralisation is present
with an average 58% Fe. The thickness of CID mineralisation in the area is estimated at 10-20 m.

STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
Classification
Mt
% Fe
%Al2O3
SiO2 %
% P
LOI %
Indicated Resources
84.2
55.8
3.58
5.03
0.097
9.76
Inferred Resources
17.7
54.4
4.34
6.62
0.080
9.30
Total
101.9
55.6
3.71
5.30
0.094
9.68
The information in this statement which relates to the Mineral Resource is based on information compiled
by James Farrell, who is a full-time employee of Golder Associates Pty Ltd and a member of the AusIMM.
James Farrell has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in
the JORC Code (2004).
The Competent Person responsible for the geological interpretation and drill holes data used for the
resource estimation is Mr Aning Zhang. Mr Zhang is a full-time employee of Brockman Resources
Limited, is a member of the AusIMM, and has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a
Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration
Results’ – the JORC Code.
STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
Figure 2-10: Locality map of Mt Stuart (circled) relative to West Hamersley and Duck Creek

==> picture [152 x 309] intentionally omitted <==

SRK Consulting
Page 19
4.4.1 Scheduling
SRK has not sighted a detailed mine planning schedule as this is still under construction by Optiro.
The life-of-mine (LOM) model supplied shows summary physical quantities per annum, but does not
show mining locations, dump locations, or excavator numbers. The schedule is a T&E schedule for
the LOM.
4.5
Ore Reserves
Table 4-1 and Table 4-2 show the DID and CID ore reserves at Marillana. These were announced to
the ASX by Brockman on 29 September 2010.
Table 4-1:
Marillana DID Ore Reserve
SRK Consulting
Page 18
Pit 13 (with Revenue Factor 1.0) was chosen as the optimal pit for Marillana. The size of the optimal
shell is insensitive to mining or processing costs.
The size of the optimal shell is not sensitive to an increase or decrease in cut-off grade of 2%, but a
change in cut-off grade does affect the tonnes available for Plant feed. Dropping the cut-off grade
will increase project cash-flow. Increasing the cut-off grade will decrease the project cash-flow.
The optimisation was sensitive to product recovery, changes in exchange rates and product prices.
Future drilling may upgrade the Inferred material and result in a larger pit shell than is currently the
case.
4.4
Mining method & scheduling

STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
Reserve
Classification
DID
Mt
% Fe
Proven
133
41.6
Probable
868
42.5
Total
1,001
42.4
Table 4-2:
Marillana CID Ore Reserve
Reserve
Classification
CID
Mt
% Fe
% CaFe
% SiO2
% Al2O3
% P
% LOI
Proven
Probable
48.5
55.5
61.5
5.3
3.7
0.09
9.7
Total
48.5
55.5
61.5
5.3
3.7
0.09
9.7
Note: Reserves are included within Resources, data sourced from http://www.brockman.com.au/
The information in this report that relates to the Mineral Resources and Ore Reserves is based on
information compiled by Mr I Cooper, Mr J Farrell and Mr A Zhang.
The Ore Reserves statement has been compiled in accordance with the guidelines defined in the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The
JORC Code– 2004 Edition). The Ore Reserves have been compiled by Mr Iain Cooper, who is a
member of the AusIMM and a full-time employee of Golder Associates Pty Ltd. Mr Cooper has
sufficient experience that is relevant to the style of mineralisation, type of deposit under
consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the
2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves.
Mr J Farrell, who is a member of the AusIMM and a full-time employee of Golder Associates Pty Ltd,
produced the Mineral Resource 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 he is undertaking to qualify as a Competent Person
as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results’ – the
JORC Code.
Mr A Zhang, who is a member of the AusIMM and a full-time employee of Brockman, provided the
geological interpretations and the drill hole data used for the Mineral Resource estimation. Mr Zhang
has sufficient experience that is relevant to the style of mineralisation, type of deposit under
consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the
2004 edition of the ‘Australasian Code for Reporting of Exploration Results’ – the JORC Code.
STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
The mining operation will utilise 360-480 t excavators and 180-226 t capacity haul trucks. Mining of
the DID and overburden will be predominantly free dig, with some ripping by dozer and light blasting
required in some areas.
The CID areas will be mined by a smaller fleet and some blasting will be required. The CID pits
have to be mined as quickly as possible so as not to interfere with the DID mining schedule and
backfill schedule. Crushed CID will be blended with beneficiated DID at a maximum rate of one in
six The proposed CID crusher rate is 3.5 Mtpa, and at various stages in the mine life, stockpiling of
the CIDs will be required.
There are two aspects to the schedule–the mining schedule and the backfill schedule. The mining
schedule was developed independently of the backfill schedule, but the backfill schedule is
dependent on the mining schedule. The waste disposal schedule including fine and coarse rejects is
an important aspect of the BFS (draft). The mining sequence and therefore waste disposal plan
proposed by Optiro is substantially different in the BFS draft compared to the plan in the DFS
completed by Golder. The Optiro plan will require substantially longer hauls to deliver the mining
sequence but also results in substantially less rehandle of waste.
There is insufficient land available for waste to be dumped outside the pits. Consequently, some
waste will be dumped on top of pits ahead of mining, then rehandled and placed as backfill in the
mined-out void. A waste dump will then also be located on top of the backfill. Optimisation studies
to minimise rehandle requirements are ongoing.
There is an environmental requirement that all excavated areas be covered with waste material to at
least 2 m above the water table. Due to a lack of dump space throughout the mine’s life, some
waste and coarse reject rehandling will be required.
The pit has been designed using Pit Shell 13 of the base case optimisation.
The design of the pits was influenced by:
�
Surface water management
�
Proximity to Process plant
�
Pit access and timing of backfill
�
Location and timing of Fines Reject Storage (FRS) requirements
�
Proximity to lease boundary and Weeli Wolli Creek.
The deepest point in the pit is 88 m below surface.

Other Port charges	The PHPA has a number of charges which it levies for use of the port. Following on from the	shipping survey for all types of ships that visit the Port Hedland, a hypothetical average ship has	been calculated. The purpose of this is to validate inputs into the financial model on a per tonne	basis. Based on the January 2011–September 2011 data, the average ship is described in	Table 9-3: Hypothetical ship size– all cargoes	Cargo Tonnes 135,303	GRT 78,591	DWT 150,965	Hours Alongside* 25	Note: Source–http://www.phpa.wa.gov.au; AECOM analysis	* Assuming 6000tph loader, continuous with half hour alongside at start and finish and rounded up to the nearest whole hour.	This ship would of course be close to the specification for a Class B ship.	The Port costs are shown in Table 9-4.	Table 9-4: Estimated Port charges	Table 9-4: Estimated Port charges	Port Charge Cost Per Call ($) Cost Per Tonne ($)	Wharfage 177,247 1.31	Berthage 6,221 0.05	Security charge 3,144 0.02	Pilotage 12,206 0.09	Tonnage 9,863 0.07	Vessel surcharge 6,429 0.05	Note: Source–http://www.phpa.wa.gov.au; AECOM analysis	Based on this data, and the simplistic estimates of capex and opex plus port charges, the total port	and handling costs used in the financial model appears to be verified.	Estimated capital costs	The NWI has conducted a PFS and is advancing a definitive engineering study into the development	of two berths in South West Creek to export its Port Hedland port capacity allocation. The facility will	need to cater for multiple parties and their various mine ramp ups. NWI studies are considering a	phased development approach to meet this requirement. Port development is typically associated with large capital investment for step changes in capacity. A challenge for the NWI will be to	manage the capital investment in light of the 50 Mtpa capacity allocation limit.	Capital for the NWI port has not been modelled. Rather it is assumed third party investment in the port facility results in an operating cost applied inclusive of a capital recovery charge. As an	Capital for the NWI port has not been modelled. Rather it is assumed third party investment in the port facility results in an operating cost applied inclusive of a capital recovery charge. As an	alternative to this, Brockman has pursued a commercial rail, port and marketing arrangement with	TPI. No executed agreement exists at the time of this report. Review of the capital recovery	component in operating charge estimates appears reasonable.	BRO001_Brockman_IER_Rev5 12 December 2011
9.8																										9.9											STEP/LORD
Demurrage	A survey of the PHPA cargo statistics for 2011 has been summarised in Table 9-1. The purpose is	to gain an appreciation of ship size, number of arrivals and assist in forming a view regarding	potential demurrage and estimate the parcel size of each vessel based on historical information.	Table 9-1: Summary of iron ore ships at Port Hedland 2011	Month Days Ships Export Tonnes DWT Average DWT Per ship Average Ships/day	Jan 31 97 15,332,927 17,000,962 175,268 3.13	Feb 28 82 12,850,539 14,264,957 173,963 2.93	Mar 31 106 17,783,249 19,009,203 179,332 3.42	Apr 30 94 15,881,055 17,014,963 181,010 3.13	May 31 111 18,214,535 19,567,762 176,286 3.58	Jun 30 111 18,550,788 20,023,598 180,393 3.70	Jul 31 106 17,533,033 18,837,412 177,711 3.42	Aug 31 120 20,221,330 21,971,735 183,098 3.87	Sep 30 119 2,009,397 21,171,317 177,910 3.97	Total 273 946 138,376,853 168,861,909 1,604,971 31	Average 30 105 15,375,206 18,762,434 178,330 3	Note: Source–http://www.phpa.wa.gov.au	From Table 9-1, the average Parcel size can be calculated by dividing Export Tonnes by the total	number of ships that visited the port in that period. This comes out to be 146,276 tonnes. This is a	large cape size category ship for which a demurrage rate equivalent to the charter rate of $30,000	per day is assumed.	Demurrage costs per year depend on the number of days the vessels have to wait. This is not known or estimated in the reviewed documents therefore a range of waiting days for each vessel	and respective demurrage has been estimated in Table 9-2, assuming a three-year ramp-up to the	50 Mtpa allocation.	Table 9-2: Demurrage estimation	Demurrage Calculation Units Operation Year 1 Operation Year 2 Operation Year 3	Iron ore throughput Million tonnes 18 42 50	Ship Cargo Size tonnes 146,276 146,276 146,276	Number of Vessels Number per annum 123.1 287.1 341.8	Charter Rate Cape Size USD per day $30,000 $30,000 $30,000	1 day waiting per vessel $ million per year $3.69 $8.61 $10.25	2 day waiting per vessel $ million per year $7.38 $17.23 $20.51	3 day waiting per vessel $ million per year $11.07 $25.84 $30.76	4 day waiting per vessel $ million per year $14.77 $34.46 $41.02	5 day waiting per vessel $ million per year $18.46 $43.07 $51.27	Note: Source–AECOM analysis as per assumptions	BRO001_Brockman_IER_Rev5 12 December 2011
9.7																																					STEP/LORD

Implied Value contained Fe (AUD/t)	AUD2.05	AUD1.46	AUD0.87	AUD0.21	AUD0.21	AUD0.95	AUD1.11
Transaction Value (100%)	AUD192.3M (estimated)	AUD134.2M (estimated)	AUD38.35M	AUD8.2M	AUD7.0M	AUD35.0M	Weighted Average
Resources	160.5 Mt @ 58.5% = 93,810,000 t Fe (Inferred)	158.0 Mt @ 58% = 91,690,000 t Fe (Indicated and Inferred)	78.3 Mt @ 56% = 43,850,000 t Fe (Inferred)	143.4 Mt @ 52.6% = 75,430,000 t Fe (Inferred)	63.1 Mt @53.4% = 33,680,000 t Fe (Inferred)	143.4 Mt @ 52.6% = 75,430,000 t Fe (Inferred)
Parties	Iron Ore Holdings –Hamersley Iron	United Minerals - BHPB	Talisman Mining –E-Com Multi	Cazaly Resources–St Istvan Gold	AusQuest– Dragon Energy	Cazaly-Winmat
Transaction date	Sep-11	Oct-10	Oct-10	Oct-10	Oct-10	May-11
Project Name	Koodaideri South	Railway Deposit	Wonmunna	Winmar	Rocklea	Winmar
Targets that have been stated by Brockman at the Duck Creek and West Hamersley Projects. In addition, information relating to projects that do not contain Mineral Resources at the time of the transaction was compiled and these transactions were considered with respect to generating a value for the very early stage exploration tenure, for the Ophthalmia, Mt Stuart and Mt Florance projects.

SRK Consulting Page 41	Table 11-3: Valuation of West Hamersley Exploration Target	Project Mineralisation type Low Value (AUD) Preferred Value (AUD) High Value (AUD)	West Hamersley Exploration Target 2.3M 4.5M 6.7M		11.3 Valuation of Ophthalmia Project	The Ophthalmia Project comprises two granted Exploration Licences (E47/1598, 1599) covering	7496 hectares as well as three Exploration Licence Applications (E47/2621–2623) for a further	10,400 hectares. Previous exploration completed by Brockman has included a short RC drilling programme, but to	date an Exploration Target has not been determined for the Ophthalmia Project.	In order to value the exploration potential at the Ophthalmia Project, SRK utilised the comparative	transaction relating to exploration stage projects. Eleven potentially comparable transactions	relating to tenements at an early stage of exploration were identified. These were of a “farm-in” or “earn-in” nature, where a certain percentage of ownership across multiple parties is achieved through the exploration expenditure. In these Joint Venture (JV) transactions, there is a shared risk,	in that if early expenditure does not generate useful information, the “optionee” can limit its risk by	opting out of further expenditure. Typically, these agreements run over several years (~3 to 6	years), and expenditure commitments usually exceed the minimum statutory expenditure	requirement to retain the properties.	The determination of a value for the earn-ins involves an assessment of how likely the earn-in is to proceed to completion. In the case of reconnaissance precious or base metal exploration assets where exploration is at a very early stage involving the testing of geological concepts, the likelihood	of the joint venture being completed is low, typically 5%. This assessment comes from observing the	transactions in subscription databases and interviews by SRK with exploration managers. The low	figure also reflects the overall rate of exploration success on early stage projects, commonly	considered about 1%.	However, in the case of the iron projects under consideration, the likelihood of the earn-in going to	completion is much higher as the presence of mineralisation has been demonstrated and the risk is	more related to certain grade and metallurgical factors being realised. Based on a number of	previous studies, SRK estimates that the likelihood of the earn-ins proceeding to completion is 70%.	Cash considerations and binding expenditure commitments are added to the earn-in value and are	not discounted for probability. The non-binding expenditure is discounted. Other types of	transactions include purchase of the tenements that do not require any discounting.	Table 11-4summarises the iron ore earn in transactions in Western Australia since February 2009.									STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011
SRK Consulting Page 40	Given that some drilling has been completed at Duck Creek, SRK has applied a 50% probability that	the potential quantum of mineralisation stated above for the Duck Creek area may eventually be realised and converted to an Inferred Resource. SRK has assumed an exploration budget of	approximately AUD500,000 would be appropriate to drill out the Exploration Target area.	To determine the valuation range for Exploration Targets a variation of +/- 40% was applied to	calculate the Low and High Values. The valuation of the Duck Creek Exploration Target is provided	in Table 11-2.	Table 11-2: Valuation of Duck Creek Exploration Target	Project Mineralisation type Low Value (AUD) Preferred Value (AUD) High Value (AUD)	Duck Creek Exploration Target 7.4M 12.3M 17.2M		11.2 Valuation of West Hamersley Project	The West Hamersley Project consists of a single granted Exploration Licence (E47/1603) extending over 5708 hectares and two pending Exploration Licence applications covering a further 5,371 hectares.		Reconnaissance rock-chip sampling identified six zones of hematite mineralisation which provided a	focus for RC drill testing. Brockman undertook a programme of 36 shallow RC holes which	confirmed mineralisation at shallow depths; however, the continuity of mineralisation could not be	well defined due to scree cover obscuring the mineralisation in some areas. Brockman has stated an Exploration Target (Section 2.3.4) of 20-30 Mt of iron ore grading 58-61% Fe resources (Brockman, ASX release dated 2 February 2011).	SRK reviewed the West Hamersley Project and exploration that Brockman is undertaking in the	Pilbara, based on information available in the public domain. While there is no certainty that future	exploration will result in the definition of a Mineral Resource, current exploration provides evidence	that mineralisation may be present in such zones. In addition, there is uncertainty with respect to the	continuity of thickness and grade that may be found with further drilling. These risk factors must be reflected in the valuation.		In order to value the exploration potential at West Hamersley, SRK utilised the comparative	transaction relating to resource stage projects as described previously. The resulting exploration	target value was then modified by two factors to obtain a value for the current exploration potential:	� The probability that the target returns positive exploration results	� The cost associated with reaching a stage where a resource can be reported.	Given the early stage nature of the Exploration Target at West Hamersley, compared for example to	the Marillana and Duck Creek Exploration Targets described above, SRK has applied a 30%	probability that the potential quantum of mineralisation stated above for the West Hamersley area	may eventually be realised and converted to an Inferred Resource. SRK has assumed an	exploration budget of approximately AUD500,000 would be appropriate to drill out the Exploration	Target area.	To determine the valuation range for Exploration Targets, a variation of ± 50% was applied to	calculate the Low and High Values to reflect the higher uncertainty relating to the earlier stage of	exploration. The valuation of the West Hamersley Exploration Target is provided in Table 11-3.	STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011

SRK Consulting Page 43	Ranges are calculated using a 55% range around the preferred values, which is a 5% increase in the	ranges used for the Exploration Target valuation models, reflecting a slightly greater uncertainty in the exploration area valuations.		Using the above inputs, SRK has estimated the value of the Mt Stuart Project to have a preferred value of AUD0.8M, with a low value of AUD0.4M to a high value of AUD1.3M.	Using the above inputs, SRK has estimated the value of the Mt Stuart Project to have a preferred value of AUD0.8M, with a low value of AUD0.4M to a high value of AUD1.3M.		11.5 Valuation of the Mt Florance Project	11.5 Valuation of the Mt Florance Project	The Mt Florance Project comprises one granted Exploration Licence (E47/1738) covering 8898 hectares, corresponding to 20 km strike length of Marra Mamba Iron Formation (under cover).	Previous mapping completed by the GSWA has identified outcropping CID mineralisation and initial	reconnaissance sampling returned elevated Fe grades. The thickness of CID mineralisation is estimated by Brockman to be 10 to 20 m thick.	In order to value the exploration potential at Mt Florance, SRK utilised the comparative transaction	relating to exploration stage projects, as used to value the Ophthalmia and Mt Stuart Projects.	Using the median value of AUD6,831 per square kilometre of tenement, SRK valued the exploration ground covering approximately 89 km2. This results in a valuation for Mt Florance of AUD0.6M.	Ranges are calculated using a 55% range around the preferred values, which is a 5% increase in the	ranges used for the Exploration Target valuation models, reflecting a slightly greater uncertainty in	the exploration area valuations.	the exploration area valuations.	Using the above inputs, SRK has estimated the value of the Mt Florance Project to have a preferred value of AUD0.6M, with a low value of AUD0.3M to a high value of AUD0.9M.		11.6 Exploration Valuation summary	Brockman’s exploration assets and resources not currently included in the DFS range from	greenfield exploration areas to resources adjacent to the Marillana Project. MREs have been	completed at Marillana, and Exploration Targets stated for the Marillana, Duck Creek and West	Hamersley projects. Other projects such as Ophthalmia, Mt Stuart and Mt Florance Projects are at	an early stage of exploration.	For Brockman’sResources and Exploration Targets, SRK relied on the comparable market value	For Brockman’sResources and Exploration Targets, SRK relied on the comparable market value	method to derive a value as there was considerable market activity in the sector. In valuing	Brockman’s resources, SRK has undertaken an analysis of comparable iron ore resources	transactions. These resources transactions were applied to estimate a value for the Inferred Mineral	Resource estimate for Marillana. The transactions were also applied, with appropriate discounting to	account for the stage of exploration to the Exploration Targets stated for the Marillana, Duck Creek and West Hamersley projects.	In addition, information was compiled relating to projects that do not contain Mineral Resources at	the time of the transaction, and these transactions were considered with respect to generating a value for the very early stage exploration tenure, for the Ophthalmia, Mt Stuart and Mt Florance projects.	A summary of the valuation of Brockman’s exploration assets is provided inTable 11-5.			STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011
SRK Consulting Page 42	Table 11-4: Comparable transactions, iron exploration, Western Australia	Project Name, Optionors Transaction date Optionees 100% Value (AUD) Area (km2) AUD/km2		Tom Price, AusQuest Oct-10 Dragon Energy 0.5M 31 16,129		Bullamine, Reedy Lagoon Corp Oct-10 Cliffs Natural Resources 5.7M 3484 1,645		Mt Bevan, Hawthorn Resources Aug-10 Legacy Iron Ore 10.4M 177 58,984	Unaly South, Meteoric Resources May-10 Black Ridge Mining 1.5M 15 102,857	Yalgoo, Venus Metals Feb-10 HD Mining and Investment 11.2M 234 47,863	Evanston, Global Iron Jan-10 Cliffs Natural Resources 0.8M 306 2,581	Victory Bore, Mutual Holdings Oct-09 Quest Minerals 0.5M 82 6,610	Magnetite Range, Mawson West Jun-09 Accent Resources 1.2M 172 6,831	Jigalong, Hannans Reward Jun-09 Warwick Resources/Atlas Iron 5.3 M 2235 2,348	Canegrass, Maxiums Resources May-09 Flinders Mines 1.4M 685 2,000	Miaree, Red River Resources Feb-09 Iron Mountain Mining 5.0M 307 16,402		(Input data © Copyright by Metals Economics Group 2010. All rights reserved).	This transactional data was applied to determine a value per square kilometre tenement area, where sufficient data was available. The eleven transactions provided a median value of AUD6,831/km2of	tenement (excluding the lowest and highest values for Bullamine and Unaly South respectively,	because they are considered anomalous).	To derive a preferred value for the Ophthalmia Project, which covers 10,400 hectares or 104 km2,	SRK has assumed the eventual grant of tenements currently under application. This results in a	valuation for Ophthalmia of AUD0.7M. Ranges are calculated using a 55% range around the	preferred values, which is a 5% increase in the ranges used for the Exploration Target valuation	models, reflecting a slightly greater uncertainty in the exploration area valuations.			Using the above inputs, SRK has estimated the value of the Ophthalmia Project to have a	preferred value of AUD0.7M, with a low value of AUD0.3M to a high value of AUD1.1M.		11.4 Valuation of the Mt Stuart Project	The Mt Stuart Project consists of three granted Exploration Licences (E47/1845, 1850, 2215) for 8895 hectares and one pending Exploration Licence Application (E47/2214) of 3477 hectares.	The combined total area under licence is 12,372 hectares.	Previous mapping completed by the Geological Survey of Western Australia (GSWA) has identified outcropping CID mineralisation and initial reconnaissance sampling returned elevated Fe grades. The thickness of CID mineralisation is estimated by Brockman to be 10 to 20 m thick.	Using the same exploration transactional data with a median value of AUD6,831/km2of tenement,	SRK valued the exploration ground covering approximately 124 km2and assuming the eventual	grant of tenements currently under application. This results in a valuation for Mt Stuart of AUD0.8M.	STEP/LORD BRO001_Brockman_IER_Rev5 12 December 2011

SRK Consulting
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12 Conclusions
SRK Consulting
Page 44
Table 11-5: Valuation of Inferred Mineral Resources, Exploration Targets and Exploration
Tenements of Brockman Resources Limited effective at 23 November 2011

STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
SRK has completed an Independent Technical Assessment Report on the mineral assets of
Brockman, particularly the Marillana Project.This report includes a valuation of Brockman’s other
iron ore exploration assets, and is required by Deloitte as input into an IER. SRK understands that
these reports were commissioned by Brockman as part of a proposed transaction with Wah Nam.
Brockman’s most advanced project is the Marillana Project located in the Pilbara region of Western
Australia. SRK reviewed the Geology, Mineral Resources, Ore Reserves and Mining aspects of the
Marillana Project as key inputs into the financial model being developed by Deloitte. In addition,
SRK considered Geotechnical Engineering, Hydrology and Hydrogeology technical inputs,
Metallurgical considerations as well as Environmental and Social Impact studies that have been
completed at Marillana. Three potential development scenarios were reviewed for the critical port
and rail infrastructure aspects.
From its high-level review of the Marillana MRE, SRK concludes that the resource has been
estimated and classified using methodologies appropriate for the style of mineralisation. SRK did
not identify any fatal flaws during its review.
With respect to the mining aspects, SRK did not identify any fatal flaws during its review. The stated
Mineral Resource is inclusive of the Ore Reserve which is reported within the pit designs which are
based on open pit optimisations. Measured Resources were converted into Proved Ore Reserves,
and Indicated Resources were converted into Probable Ore Reserves. There is a small amount of
Inferred contained within the pit designs. There is a change in mining method between the Golder
mining studies for the DFS and the Optiro BFS (draft). There are detailed capital estimates for the
Golder mining studies for the DFS which are no longer relevant. The Optiro study is not yet
completed; SRK has therefore not been able to undertake a detailed investigation of the current
capital cost structure. However, the capital costs quoted by Brockman appear to be of the
appropriate order of magnitude for this type of project.
In terms of geotechnical inputs into the Marillana development plan, SRK considers that the
geotechnical design recommendations do not appear to present a fatal flaw. Opportunities may exist
for optimisation of the pit slope designs. Previous excavatability and trafficability assessments have
been carried out using recognised methods and their conclusions are considered reasonable.
More detailed design inputs will need to be provided once the nature and location of the waste
disposal has been finalised and the slope heights known. Further study will be required for
investigation of ground conditions beneath specific major mine-site infrastructure at the plant site,
once the detailed plans and positions of these have been finalised.
Brockman has engaged consultants to address water management issues appropriately, with
development of plans at various stages of completion. SRK considers that the areas identified and
addressed through the water management tasks are appropriate for a mining project of this nature.
SRK considers the metallurgical testwork procedures and methodology to be well-documented and
executed. However, the impact of fluctuating grade at the pilot scale has not been fully assessed, so
the effect of fluctuating feed grade to the full-scale process plant remains an area of process risk.
SRK notes that there was insufficient finalised supporting documentation to justify changes made to
the financial model between the DFS and BFS, which made it difficult to establish whether changes
to the capital cost, operating cost and recovery are justified. However, based on discussion with
management SRK believe the costs and recoveries quoted are of an appropriate order of magnitude
and in line with industry standards.
STEP/LORD
BRO001_Brockman_IER_Rev5
12 December 2011
Project
Mineralisation
type
Low Value
(AUD M)
Preferred Value
(AUD M)
High Value
(AUD M)
Duck Creek
Exploration Target
7.4
12.3
17.2
West Hamersley
Exploration Target
2.3
4.5
6.7
Ophthalmia
Tenements
0.3
0.7
1.1
Mt Stuart
Tenements
0.4
0.8
1.3
Mt Florance
Tenements
0.3
0.6
0.9
Total Value
10.7
18.9
27.2

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draft Target’s Statement prepared by Brockman Bidder’s Statement prepared by Wah Nam draft Subscription Agreement draft Underwriting Agreement the Bid Implementation Agreement dated 11 December 2011 audited financial statements and annual reports for Brockman for FY2010 and FY2011 financial model for the Marillana Project prepared by Brockman other internal management information provided by Brockman, including the information provided in the electronic data room independent technical review of the development and exploration assets of Brockman prepared by SRK various publicly available media and government releases relating to the Mineral Resource Rent Tax various publicly available media and government releases relating to the Carbon Pollution Reduction Scheme and the Climate Change Plan annual reports for comparable companies company websites for Brockman, Wah Nam and comparable companies publicly available information on comparable companies and market transactions published by ASIC, Thomson Research, Capital IQ, Thomson Reuters, SDC Platinum and Mergermarket IBIS company and industry reports other publicly available information, media releases and brokers reports on Brockman, Wah Nam, comparable companies and the iron ore mining industry.
Appendix 7: Sources of information In preparing this report we have had access to the following principal sources of information:                 In addition, we have had discussions and correspondence with certain directors and executives of Brockman, including: Ross Norgard and Colin Paterson, Independent Directors of Brockman; and Derek Humphry, Chief Financial Officer of Brockman; in relation to the above information and to current operations and prospects.
Client Distribution Record
Company
Revision Details
Deloitte Corporate Finance Pty Limited Deloitte Corporate Finance Pty Limited
Draft Distributed to client: QA/QC pending Second draft report Third draft report Fourth draft report Final report presented to client Amended Final Report presented to client
D Lord D Lord
Revised By A Stepcich A Stepcich A Stepcich A Stepcich
Name
Nicki Ivory
Nicole Vignaroli
Date
29 Nov 2011 6 Dec 2011 8 Dec 2011 9 Dec 2011 12 Dec 2011 12 Dec 2011
0 1 2 3 4 5
Rev No.
SRK Consulting SRK Report Distribution Record Project Number: BRO001 Date Issued: 12 December 2011 This Report is protected by copyright vested in SRK Consulting (Australasia) Pty Ltd. It may not be reproduced or transmitted in any form or by any means whatsoever to any person without the written permission of the copyright holder, SRK.
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130 BROCKMAN RESOURCES Target’s Statement

8. Information relating

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BROCKMAN RESOURCESBROCKMAN RESOURCESTarget’s Statement Target’s Statement 131 131
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Information relating to Brockman’s directors

8.1 INTERESTS AND DEALINgS IN BROCKMAN SECURITIES

(a) Interests in Brockman Shares and Brockman Options

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

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Director Number of Brockman Shares Number of Brockman Options
Peter Luk – –
Ross Norgard 13,503,000 –
Warren Beckwith – –
Colin Paterson 2,933,247 –
Richard Wright – –
– –
Robert Brierley
Howard Chung Yue Chu – –
– –
Michael Spratt
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(b) Dealings in Brockman Shares and Brockman 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.

(c) Interests in Wah Nam securities

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

The interests of the directors of Brockman in Wah Nam or Wah Nam Australia securities are set out in the following table:

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Director Number of Wah Nam Shares Number of Wah Nam options
Peter Luk 361,300,276 39,000,000
Ross Norgard – –
Warren Beckwith – 13,500,000
Colin Paterson – –
Richard Wright – –
– –
Robert Brierley
Howard Chung Yue Chu – –
– –
Michael Spratt
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(d) Dealings in Wah Nam securities

No director of Brockman other than Peter Luk has 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.

Peter Luk, either directly or indirectly, has made the following acquisitions of relevant interests in Wah Nam in the 4 month period ending on the date immediately before the date of this Target’s Statement:

132 BROCKMAN RESOURCES Target’s Statement

Information relating to Brockman’s directors

2,660,000 Wah Nam Shares on 22 September 2011;
1,236,000 Wah Nam Shares on 23 September 2011;
4,492,000 Wah Nam Shares on 26 September 2011;
3,164,000 Wah Nam Shares on 27 September 2011;
56,000 Wah Nam Shares on 28 September 2011; and
2,476,000 Wah Nam Shares on 30 September 2011.

8.2 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 the Board, managerial office or a related body corporate of Brockman.

(b) Agreements connected with or conditional on the Offer

There are no agreements made between any Independent 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 of Brockman in contracts with Wah Nam

Mr Luk Kin Peter Joseph and Mr Chu Chung Yue Howard are employees of Wah Nam and have employment agreements with Wah Nam.

Mr Warren Beckwith provides consultancy services to Wah Nam pursuant to a consultancy agreement he has entered into with Wah Nam.

Mr Richard Wright and Mr Robert Brierley provide consultancy services to Wah Nam pursuant to adviser agreements with Wah Nam.

Except as set out above, 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 133

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134

BROCKMAN RESOURCES Target’s Statement

9. Additional information

Additional information

9.1 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.

9.2 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.

9.3 ISSUED CAPITAL

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

144,803,151 Brockman Shares;
250,000 unlisted options with an exercise price of $1.25, due to expire on 20 April 2013;
600,000 unlisted options with an exercise price of $1.30, due to expire on 11 November 2013;
600,000 unlisted options with an exercise price of $3.21, due to expire on 15 June 2014;
1,500,000 unlisted options with an exercise price of $3.21, due to expire on 16 March 2012;
1,500,000 unlisted options with an exercise price of $3.00, due to expire on 31 August 2014; and
450,000 unlisted options with an exercise price of $5.85, due to expire on 16 January 2015.

9.4 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 80,113,433 Brockman Shares, being 55.33% of the total Brockman Shares on issue; and
Ross Norgard, who holds 13,503,000 Brockman Shares, being 9.33% of the total Brockman Shares on issue.

9.5 EFFECT OF OFFER ON BROCKMAN’S EMPLOYEE INCENTIVE SCHEMES AND THE BROCKMAN OPTIONS ISSUED UNDER THOSE SCHEMES

(a) Brockman Options on issue

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). The ASX Listing Rules require the Plan to be approved by Brockman Shareholders every 3 years. The Plan was refreshed at Brockman’s annual general meeting which was held on 29 November 2011.

Brockman has 950,000 unlisted Brockman Options on issue under the Plan. Those unlisted Brockman Options and their vesting dates are as follows:

136 BROCKMAN RESOURCES Target’s Statement

Additional information

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Quantity Exercise Price Expiry Date Vesting Date
500,000 $3.21 15 June 2014 Fully vested
450,000 $5.85 16 January 2015 100,000 to vest on 17 January 2012,
150,000 to vest on 17 January 2013 and
200,000 to vest on 17 January 2014
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Under the terms of the Plan, options which have been granted but are not yet vested automatically vest upon the launch of the Offer. Thos options may be exercised during the Offer Period and the shares issued upon exercise can be accepted into the Offer.

In addition to the Brockman Options set out above, Brockman has 3,950,000 unlisted Brockman Options on issue which were not issued under the Plan. Those unlisted Brockman Options and their vesting dates are as follows:

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Quantity Exercise Price Expiry Date Vesting Date
100,000 $3.21 15 June 2014 Fully vested
1,500,000 $3.21 16 March 2012 Fully vested
600,000 $1.30 11 November 2013 Fully vested
250,000 $1.25 20 April 2013 Fully vested
1,500,000 $3.00 31 August 2014 Fully vested
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Effect of Offer on Brockman Options on issue

Wah Nam has agreed to make offers to acquire all of the Brockman Options with an exercise price of A$1.25 and A$1.30 and pursuant to clause 21 of the Plan, the Board intends to approve these transfers. A summary of the offer to be made to A$1.25 and A$1.30 Brockman Option holders is set out in section 12.5 of the Bidder’s Statement.

Brockman has agreed to use all reasonable endeavours to enter into agreements with the holders of Brockman Options to cancel all of the Brockman Options with an exercise price of A$3.00, A$3.21 and A$5.85 by the end of the Offer Period.

9.6 BROCKMAN SHARES ACQUIRED PURSUANT TO BROCKMAN EMPLOYEE SHAREHOLDER LOAN SCHEME

Brockman currently has an employee shareholder loan scheme (Loan Agreement) in place to facilitate employees exercising Brockman Options they receive under the Plan. To allow the Brockman Shares held pursuant to the Loan Agreement (Loan Shares) to be accepted into the Offer, the following steps will be undertaken by Brockman:

(a) the Board will approve an amendment to the Plan and each Loan Agreement to allow the Consideration Shares to be used as security for the shareholder loans;
(b) any employee who wished to accept the Offer must, as a condition for Brockman agreeing to process that acceptance, enter into a revised Loan Agreement (on the terms approved by the Board). This will be completed by way of letter agreement;
(c) Brockman will release the holding lock on the Loan Shares and will execute (acting as attorney under the power granted under the Loan Agreement) the acceptance of the Offer on behalf of the loan holder; and
(d) Brockman will deal with the loan holder’s consideration under the Offer as follows:

BROCKMAN RESOURCES Target’s Statement 137

Additional information

(i) if cash proceeds exceed the outstanding shareholder employee loan, the loan will be entirely repaid, with the excess cash being transferred, and unencumbered Consideration Shares issued, to the loan holder; or
(ii) if cash proceeds are less than the outstanding shareholder employee loan, the shareholder loan will be reduced by the amount of the cash proceeds and the Consideration Shares will be issued to the loan holder, but will be security for repayment of the outstanding balance (with those shares subject to a trading lock).

9.7 THE BID IMPLEMENTATION AgREEMENT

On 12 December 2011, Brockman and Wah Nam entered into a bid implementation agreement (the BIA).

The BIA sets out each party’s obligations in connection with the conduct of the Offer. A summary of the key terms of the BIA is set out below and in section 12.1 of the Bidder’s Statement.

A copy of the BIA was released to the ASX on 12 December 2011 and is available for download from Brockman’s website www.brockman.com.au and the ASX website www.asx.com.au (ASX: BRM).

(a) Exclusivity

From 12 December 2011 until the later of:

the last date of the Offer Period; or
the date the BIA is terminated,

Brockman must observe the following exclusivity provisions.

(i) No Shop

Brockman must not directly or indirectly solicit or invite any competing proposal or expression of interest or offer which may lead to a competing proposal, or initiate discussions with any third party which may reasonably be expected to lead to a competing proposal.

(ii) No talk

Subject to 9.7(a)(iv) below, Brockman must not participate in any discussions or negotiations in relation to a competing proposal or which may reasonably be expected to lead to a competing proposal. Further, Brockman must not provide any information to a third party for the purposes of enabling that party to make a competing proposal.

(iii) No commitments in respect of competing proposals

Subject to 9.7(a)(iv) below, Brockman must not enter into any agreement, arrangement or understanding in relation to a competing proposal requiring Brockman to abandon, or otherwise fail to proceed with, the Offer.

(iv) Exceptions

The exclusivity provisions described in sections 9.7(a)(ii) and 9.7(a)(iii) above do not apply to the extent that they restrict the Independent Directors from taking or refusing to take any action with respect to a competing proposal, provided that the Independent Directors have determined that:

the competing proposal could reasonably be expected to lead to a superior proposal; and

138 BROCKMAN RESOURCES Target’s Statement

Additional information

after receiving legal advice from its external advisers, failing to respond to the competing proposal would constitute or would be likely to constitute a breach of the Independent Directors’ fiduciary or statutory obligations.
(v) Obligation to notify

Brockman must notify Wah Nam of:

any approach by a third party which may reasonably be expected to lead to a competing proposal; or
any request for information relating to Brockman by a third party,

unless the competing proposal has been determined by the Independent Directors to fall within the exception described in the second bullet point of section 9.7(a)(iv) above.

(b)

Reimbursement of costs

Wah Nam must pay a fee up to a maximum amount of A$1,000,000 (including GST) for Brockman’s reasonable legal costs and costs relating to the Independent Expert’s Report incurred and paid in relation to the Offer in the event that:

(i) the Conditions described in sections 6.3(a) to 6.3(d) of this Target’s Statement have not been satisfied or waived by the end of the Offer Period; or
(ii) Brockman terminates the BIA for one of the reasons described in section 9.7(e)(i) below.
(c)

Representations and warranties

The BIA contains representations and warranties by Brockman and Wah Nam that are typical for an agreement of its nature, including general corporate warranties.

Treatment of Brockman Options

Subject to the Offer becoming unconditional and Wah Nam holding a relevant interest of 90% or more in Brockman, Wah Nam must offer to acquire each Brockman Options with an exercise price of A$1.25 and A$1.30 in exchange for:

(i) the issue of 18 new Wah Nam Shares to the holder of the Brockman Option; and
(ii) payment to the holder of the Brockman Option, in cash, the difference between A$1.50 and the exercise price of the Brockman Option acquired.

The timing of the allotment of the Wah Nam Shares and the payment of the cash consideration described in sections 9.7(d)(i) and 9.7(d)(ii) above, must be on the same terms as the payment of the Offer consideration set out in sections 13.1 and 13.8 of the Bidder’s Statement.

(e) Termination
(i) Brockman may terminate the BIA if:
- the meeting of the Wah Nam shareholders to approve the Offer is not held and concluded within 60 days after the Announcement Date;
- the placement of Wah Nam Shares and the Convertible Bond is not completed in accordance with its terms within 60 days after the Announcement Date; or

139

BROCKMAN RESOURCES Target’s Statement

Additional information

Wah Nam commits a material breach of the BIA, and that material breach is not remedied within the prescribed period.
(ii) Wah Nam may terminate the BIA if:
Brockman commits a material breach of the BIA, and that material breach is not remedied within the prescribed period; or
an Independent Director fails to recommend the Bid or makes any public statement or takes any action that contradicts his recommendation.
(iii) Either Brockman or Wah Nam may terminate the BIA if:
the last day of the Offer Period passes and the Offer has not been freed from each of the Conditions;
Wah Nam withdraws the Offer for any reason; or
the Independent Directors recommend a competing proposal in accordance with section 9.7(a)(iv) above.

In any event, the BIA automatically terminates at 4:00pm on the last day of the Offer Period.

9.8 CONFIDENTIALITY AgREEMENT

On 2 December 2011, Brockman and Wah Nam entered into a confidentiality agreement. The confidentiality agreement contains terms that are typical for an agreement of its nature, except that Wah Nam has agreed to give Brockman a reasonable opportunity to review Wah Nam’s application to the Treasurer for approval of the Offer under the Foreign Acquisitions and Takeovers Act 1975 (Cth) .

9.9 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 this Target’s Statement as Brockman’s Australian legal advisers 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, has given, and has not withdrawn before the lodgement of this Target’s Statement with ASIC, its written consent to be named in this Target’s Statement as Brockman’s corporate advisers 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 ASIC 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 554 240 (for calls made from within Australia) or +61 3 9415 4337 (for calls made from outside Australia).

140 BROCKMAN RESOURCES Target’s Statement

Additional information

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.

9.10 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 Offer. Nor has Brockman been granted any waivers from the ASX in relation to the Offer.

9.11 JORC CODE REPORTINg OF BROCKMAN’S MINERAL RESOURCES AND ORE RESERVES

(a) Information relating to exploration results, Mineral Resources or 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 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 Pty Ltd, 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 that he is undertaking to qualify as a ‘Competent Person’ as defined in the JORC Code. Mr Cooper consents to the inclusion of the matters based on this information in this Target’s 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 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’s 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 is a fulltime employee of Brockman, provided the geological interpretations and the drill hole data used for the Mineral Resource estimation. 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’s Statement of the matters based on his information in the form and context that the information appears.

(b) Exploration targets

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 Brockman’s landholding outside of the currently defined JORC Code compliant Mineral Resources at Brockman’s Marillana Project.

BROCKMAN RESOURCES Target’s Statement 141

Additional information

9.12 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 the Board.

The Independent Directors 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 Independent Directors 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 Independent Directors 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 Independent Directors have had regard to:

the nature of the Brockman Shares;
the matters that Brockman Shareholders may reasonably be expected to know;
the fact that certain matters may reasonably be expected to be known to Brockman Shareholders’ professional advisers; and
the time available to Brockman to prepare this Target’s Statement.

142 BROCKMAN RESOURCES Target’s Statement

10. Glossary and interpretation

Glossary and interpretation

9.1 gLOSSARY

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

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Term Meaning
A$ Australian dollar.
AEST Australian Eastern Standard Time.
Announcement Date the date that the Offer was announced by Wah Nam Australia to the market, being
12 December 2011.
ASIC the Australian Securities and Investments Commission.
Associate has the meaning given in the Corporations Act.
ASx the ASX Limited, ACN 008 624 691 or, where the context requires, the financial
market operated by it on which Brockman Shares and Wah Nam Shares are quoted.
ASx Listing Rules the official listing rules of the ASX.
BFS bankable feasibility study.
BIA the Bid Implementation Agreement dated 12 December 2011 between Brockman
and Wah Nam.
Bidder’s Statement the bidder’s statement of Wah Nam Australia dated 13 December 2011.
Bloomberg the Bloomberg professional service data product owned and distributed by
Bloomberg Finance LP.
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 Iron a 620m thick unit of iron and gangue minerals within the Hamersley Group.
Formation
Brockman Options an option to acquire an unissued Brockman Share.
Brockman Shares fully paid ordinary shares in Brockman.
Brockman Shareholder a holder of Brockman Shares.
Business Day a day that is both a business day within the meaning given in the ASX Listing Rules
and a day (other than a Saturday) that banks in Perth, Western Australia and Hong
Kong are open for business.
CgT capital gains tax.
CID channel iron deposit.
Conditions the conditions of the Offer, as described in section 13.9 of the Bidder’s Statement and
section 6.3 of this Target’s Statement.
Consideration Shares the Wah Nam Shares issued to Brockman Shareholders as consideration for their
Brockman Shares under the Offer.
Convertible Bond the convertible bond issued by Wah Nam under the Subscription Agreement between
Wah Nam and the Subscriber.
Corporations Act the Corporations Act 2001 (Cth) (as modified or varied by ASIC).
Deloitte Deloitte Corporate Finance Pty Limited, ACN 003 833 127; AFSL 241457.
DFS definitive feasibility study.
DSO direct ship ore.
Fe iron.
FEED front-end engineering and design.
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144 BROCKMAN RESOURCES Target’s Statement

Glossary and interpretation

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Term Meaning
FMg Fortescue Metals Group Limited, ABN 57 002 594 872.
Hamersley group a 2,500 million years old group of late Archaean and early Proterozoic rock formations
located in the Pilbara region of Western Australia.
HK$ Hong Kong dollar.
HKEx Hong Kong Exchanges and Clearing Limited or, where the context requires, the
financial market operated by it on which Wah Nam Shares are quoted.
HKEx Listing Rules the official listing rules of the HKEx.
Independent Directors the directors of Brockman who are not nominees of, nor suggested to Brockman by,
Wah Nam, being (at the time of this Target’s Statement) Ross Norgard, Colin Paterson
and Michael Spratt.
Independent Expert Deloitte.
Independent Expert’s the report produced by the Independent Expert set out in section 7 of this Target’s
Report Statement.
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.
Loan Agreement the Brockman employee loan scheme agreement entered into in accordance with the
Plan.
Loan Shares the Brockman Shares held pursuant to the Loan Agreement.
Marketable Parcel has the meaning given in the official operating rules of the ASX which, among other
things, includes a parcel of shares which have a value of greater than A$500.
Marra Mamba Iron a 230m thick unit of iron and gangue minerals within the Hamersley Group.
Formation
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 5.1(a) of this Target’s Statement.
Mineral Resource has the meaning given in the JORC Code.
Mtpa million tonnes per annum.
Notice of Status of Wah Nam Australia’s notice disclosing the status of the Conditions to the Offer which
Conditions is required to be given by section 630(3) of the Corporations Act.
NWI the North West Infrastructure.
Offer or Wah Nam’s the offer by Wah Nam Australia for Brockman Shares, which offer is contained in
Offer 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.
Placement Shares any Wah Nam Shares to be issued under the Underwriting Agreement.
Plan the Brockman Resources Limited Employee Option Plan, dated 26 August 2008 (as
amended from time to time).
Rights has the meaning given to it in section 4.8 of the Bidder’s Statement.
Subscriber Ocean Line Holdings Ltd, a company incorporated under the laws of Hong Kong.
Subscription the subscription agreement between Wah Nam and the Subscriber dated on or about
Agreement the Announcement Date.
Subscription Shares any Wah Nam Shares to be issued under a Subscription Agreement.
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BROCKMAN RESOURCES Target’s Statement

Glossary and interpretation

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Term Meaning
Subsidiary has the meaning given to it in the Corporations Act.
Trading Day the daily period that the HKEx is open for trading.
Target’s Statement this document (including any attachments), being the statement of Brockman under
Part 6.5 Division 3 of the Corporations Act.
Treasurer the Treasurer of the Commonwealth of Australia.
Underwriter REORIENT Financial Markets Limited, a company incorporated under the laws of
Hong Kong.
Underwriting the underwriting agreement between Wah Nam and the Underwriter dated on or
Agreement about the Announcement Date.
US$ United States dollar.
VWAP volume weighted average price.
Wah Nam Wah Nam International Holdings Limited, ARBN 143 211 867, a company
incorporated in Bermuda and listed on both the ASX (ASX: WNI) and the HKEx
(HKEx: 0159).
Wah Nam Australia Wah Nam International Australia Pty Ltd, ACN 134 696 727.
Wah Nam group Wah Nam and each of its Subsidiaries.
Wah Nam Shares fully paid ordinary shares in Wah Nam.
WST Australian Western Standard Time.
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10.2 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) unless explicitly expressed otherwise, a reference to time is a reference to WST; and
(ix) unless otherwise stated, a reference to dollars, $, A$, AUD, cents, ¢ and currency is a reference to the lawful currency of the Commonwealth of Australia.

146 BROCKMAN RESOURCES Target’s Statement

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11. Authorisation
BROCKMAN RESOURCES Target’s Statement 147
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Authorisation

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

Signed for and on behalf of Brockman:

date: 15/12/2011

sign here: _________

print name: Ross Norgard

position: Non-Executive Joint Deputy Chairman

148 BROCKMAN RESOURCES Target’s Statement

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Head Office Level 1, 117 Stirling Hwy Nedlands WA 6009

Postal Address PO Box 141 Nedlands WA 6909

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

Email [email protected]

AI assistant

Brockman Mining Limited — M&A Activity 2011

48994_rns_2011-12-14_c9c51f18-50d4-4f77-85ec-73b5f6ec7bfe.pdf

By electronic lodgement

Brockman Resources Limited (ASX: BRM) – takeover bid by Wah Nam International Australia Pty Ltd Target’s Statement

Tar get’s Statement

Important notices

Nature of this document

Key dates

Brockman Shareholder information

Defined terms

No account of personal circumstances

Disclaimer as to forward looking statements

Important notices

Disclaimer as to information

Foreign jurisdictions

Foreign currency

Maps and diagrams

Privacy

ACCEPT WAH NAM AUSTRALIA’S TAKEOVER OFFER FOR BROCKMAN

Offer conditions

Financing

What you should do

ACCEPT

Your Independent Directors unanimously recommend that you ACCEPT Wah Nam’s Offer (in the absence of a superior proposal)

You should:

How can you ACCEPT Wah Nam’s Offer

What you should do

Contents of this Target’s Statement

1. Why you should ACCEPT the Offer

Why you should ACCEPT the Offer

Why you should ACCEPT the Offer

1.1

Wah Nam’s Offer represents an attractive premium to recent trading levels

Why you should ACCEPT the Offer

Table B: Illustrative example of the impact of Wah Nam Share price movements on the implied Offer value

Notes:

1.2

Wah Nam’s Offer should provide a more liquid investment than your current holding in Brockman

Why you should ACCEPT the Offer

Brockman liquidity analysis

Figure C2: Brockman turnover by value

Why you should ACCEPT the Offer

1.5

The Independent Expert has determined that Wah Nam’s Offer is fair and reasonable

Wah Nam’s Offer is FAIR

Wah Nam’s Offer is REASONABLE

Why you should ACCEPT the Offer

1.6

No superior proposal has emerged from another party, and is unlikely to emerge

Wah Nam’s Offer has the unanimous support of the Independent Directors

Why you should ACCEPT the Offer

1.8

There are risks in not accepting Wah Nam’s Offer

1.9

Risk factors associated with a holding in Wah Nam

1.10

Possible reasons for not accepting the Offer

(a) You may disagree with the Independent Directors’ recommendation and the Independent Expert’s conclusion

(b) You may want to retain a direct and pure exposure to only Brockman’s current assets and future growth profile

(c) If and when Brockman pays out dividends in the future, you may want the opportunity to receive any potential future dividends paid out by Brockman

(d) You may consider that there is the potential for a superior proposal to be made in relation to Brockman in the foreseeable future

(e) The tax consequences of the Offer may not be suitable to your financial position

2. Frequently asked questions

Frequently asked questions

Frequently asked questions

Frequently asked questions

Frequently asked questions

3. Brockman Independent

Brockman Independent Directors’ recommendations

3.1 DIRECTORS OF BROCKMAN

3.2 INDEPENDENT DIRECTORS’ RECOMMENDATIONS

3.3 THE POSITION OF PETER LUK, WARREN BECKWITH, RICHARD WRIgHT, ROBERT BRIERLEY AND HOWARD CHUNg YUE CHU

Brockman Independent Directors’ recommendations

3.4 THE POSITION OF THE INDEPENDENT DIRECTORS (ROSS NORgARD, COLIN PATERSON AND MICHAEL SPRATT)

3.5 INDEPENDENT DIRECTORS’ COMMITTEE

3.6 INTENTIONS OF YOUR INDEPENDENT DIRECTORS IN RELATION TO THE OFFER

Brockman Independent Directors’ recommendations

3.7 INDEPENDENT ExPERT’S REPORT

4. Your choices as a Brockman

Brockman Mining Limited M&A Activity 2011