Brockman Resources Ltd (ASX: BRM) says it is in advanced negotiations with Fortescue Metals Group Ltd (ASX:FMG) for an end-to-end rail haulage, port access and marketing service for its wholly-owned Marillana Iron Ore Project in Western Australia.

"A term sheet reflecting the key principles for a binding heads of agreement is currently being negotiated with FMG," Brockman said in a statement on Thursday.

"There can be no guarantee that the current negotiations will result in a binding agreement, and any agreement is likely to be subject to the satisfaction of a number of conditions.

"However, Brockman's board is highly encouraged with the progress of negotiations."

Brockman said a binding agreement with Fortescue will mark a critical step towards the development of the Marillana Project, providing Brockman with key rail haulage, port handling and ship-loading facilities at commercial rates, and enabling it to achieve its objective of completing a bankable feasibility study on the Marillana Project in the second quarter of calendar year 2011 and a final Investment decision in Q3 of that year.

It said it intends to progress negotiations with FMG as rapidly as possible, in order to structure and finalise a binding agreement that will underpin its bankable feasibility study.

Brockman managing director Wayne Richards said that while there were specific arrangements to be finalised within the proposed agreement, finalising and successfully implementing a binding agreement with FMG would provide a comprehensive infrastructure solution for Brockman and the Marillana Project, ensuring the development of one of the Pilbara's largest emerging iron ore projects, in accordance with Brockman's development schedule.

"We are excited about realising the full potential of this multi-billion dollar project, and creating benefits for the communities within which we will operate," Mr Richards said.