million dollar question, page-20

Wah Nam may win the BRM battle, but it has probably lost the Marillana war. Given the immense amount of money needed to be raised to take the project forward Wah Nam's low ethical behaviour, how can Wah Nam possibly convince capital and debt markets they have the ethics and competence to be entrused with 2-3 billion dollars +++ to bring the project to market?

Wah Nam has no rail agreement, it is at risk of losing or at the very least having a large reduction in its port allocation. And how many shares does Wah Nam have on issue now 7 billion? and options?? Who knows what further dilutions they will be doing. Equity market raisings for greenfield iron or projects are hard enough in good times, but even if we were in a bull run now, Wah Nam's capital structure and track record for losing shareholder wealth would have any sane investor not only showing them the door, but not even letting them into the building.

I have always maintained that a large low grade detrital play like Marillana is a bull market resource, and everything needed to be in place at the right time for it to come to market. BRM had the window of opportunity in from 2007-08, and with some luck and good management decisions was able to keep the window open in 2009- early 2011. The Wah Nam takeover debacle has meant BRM is now on the wrong side of the cycle....it may be 5 years before the cycle returns, and whether Wah Nam will be around the who knows?