GRR - Grange Resources

This is certainly one volatile little sucker!

GP, do you still hold?

I am thinking of jumping in on the next upswing.

markrmau said:

GP, do you still hold?

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No, I sold today for $1.08. Bought for $0.94 on 30th August, so got just under 15% in a month.

Cheers,
GP

GP, don't look at the depth (9:06 am)

Yeah, I see a big buy order at $1.20.

Nothing unusual about that. Given I sold yesterday, I'd expect a 20% to 30% jump up today at least.

GP

Grange is maturing nicely. Volume picking up and 2.7% and 4.4% increase over last two days.

Wonder what's happening?

Grange mine to generate $22b in revenue
Email Print Normal font Large font July 21, 2006 - 6:01PM

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AdvertisementJunior iron ore developer Grange Resources Ltd's flagship Southdown project will generate more than $22 billion in total revenue with construction of the mine due to start next year.

Netherlands-based chairman Anthony Bohnenn said the magnetite deposit would cost $1.6 billion ($US1.2 billion) to develop and the company was now looking for a joint venture partner to shoulder the entire development cost.

More than 20 international companies, including trading houses and steel makers, have registered interest in being involved in the project, located in the south of Western Australia.

Based on conservative iron ore prices, about 40 per cent lower than current levels, the mine would make a net profit of between $5 billion and $6 billion over the entire 22-year mine life.

"But that is likely to be more than 25 years," Mr Bohnenn said.

"The exciting thing is the quality of the ore is so good."

Mr Bohnenn said Grange would sell down its interest to between 40 and 50 per cent in exchange for the project being fully funded by joint venture partner.

Grange plans to build a 105 kilometre slurry pipeline from the mine to the port at Albany, shipping 6.6 million tonnes of ore up to a pelletising plant in Malaysia.

The pellets will sell for a premium on the world market as no coking coal needs to be used to make the final product - steel.

Brazilian miner CVRD currently monopolises the southeast Asian pellet market and Grange is confident its pellets will be cheaper for customers.

Mr Bohnenn, a former investment banker, said the iron ore price would remain very strong for the next two years with China continuing to be the driving force.

The project is based on half of a deposit split down the middle by a road with Rio Tinto holding the other half.

Mr Bohnenn said Rio Tinto was keen to hold the entire deposit, but Grange had quietly picked up the exploration licence two months before Rio moved on it.

"My dream is to get to have and mine Rio's half too," Mr Bohnenn said.

Construction of the project is due to start next year with first production expected in mid-2010.

Grange shares closed five cents stronger at $1.35 on Friday.

If the mine can generate $5~6b over 22~25 years mine life and GRR holds 50% share after the capital raising by the JV, that will be $2.5b over 25 years using the conservative iron ore prices.

2500m / 25 = $100m per year in revenue.

It seems like there are around 90~100m shares on issue.

$100m / 100m = $1 revenue per share per year over 25 years.

It's currently traded at $1.35

Would it be worth to buy for a long term holding?

I haven't ramped this for a while it seems....

Cop an eyeful of this.

http://www.grangeresources.com.au/images/7-BBY_Sept_06.pdf

I think they are being conservative.

As long as the Russians DON'T take it over, we are looking at $10/sh in next 1-2 years.

markrmau said:

I haven't ramped this for a while it seems....

Cop an eyeful of this.

http://www.grangeresources.com.au/images/7-BBY_Sept_06.pdf

I think they are being conservative.

As long as the Russians DON'T take it over, we are looking at $10/sh in next 1-2 years.

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Mark, good ramp, cheers. $10 in next 2 years, good ramp, BBY only put $5.00ish on it, why is your target double? Does look pretty good.

A LOT of resistance at $1.60 ish, if it gets through that it would be interesting.

Well grange have broken through the $1.60 mark, they are currently at $2.11. Over the last couple of weeks they have gone up 30% on no news. Any thoughts on why?
Cheers

Dont know Qlksver but (GRR) looks spot on from the technical side. A strong breakout today of a VERY bullish ascending triangle pattern means something is going on at (GRR). Huge volume recently, blue sky territory (GRR) looks set for some much higher levels. Probably will jump in tommorow depending what it does. Absolutely love these kind of set ups.

Yeah I have been holding these ones for about 4 years, so I have been watching them slowly mature. I believe this company has alot of potential. Output doesn't start on the Southdown project until 2010, so I think I will be holding to at least until then.

Grange announced this morning that the Japanese firm Sojitz has entered into a binding joint venture implementation agreement to become a 30% joint venture partner in the billion dollar Southdown Project. It seems all good at the moment, currently at $2.25.

Giday people. Thought you might like some interesting reading from BBY if you didn't already know.
Grr is Valued by BBY at $5.68 currently $2.09
http://www.grangeresources.com.au/images/grange-31--theel.pdf

Also refer to GBG report its a good read. Mentions GRR on page 3.
http://www.gindalbie.com.au/files/broker_reports-97-070529_BBY_May_2007.pdf

I now hold GRR. I do not hold GBG.

Good Luck. Will the Magnetites come into operation? I bet they do.

MR. said:

Giday people. Thought you might like some interesting reading from BBY if you didn't already know.
Grr is Valued by BBY at $5.68 currently $2.09
http://www.grangeresources.com.au/images/grange-31--theel.pdf

Also refer to GBG report its a good read. Mentions GRR on page 3.
http://www.gindalbie.com.au/files/broker_reports-97-070529_BBY_May_2007.pdf

I now hold GRR. I do not hold GBG.

Good Luck. Will the Magnetites come into operation? I bet they do.

Click to expand...

Thanks Mr for the link. That's a hefty valuation difference there! Almost tripple the current market cap? Golly. That's some upside. I don't see iron ore plays comming off too much even with a bit of a correction. Along with O&G seem to be the flavour of the month. I've only been watching Grange because I have some (maybe too many) options in MAK who are working on the West Southdown Project. Maybe there will be a merger/farmin by this Japanese mob one day?

Chart wise this is looking very interesting. Recently broke through $1.85 ish all time high and has now formed a pennant with three inside candles. Looks to me like it should break to the upside from here. Volume has been great.

Cheers.

Thanks for your reply Kennas.
I have checked out MAK thanks for this info.
(MAK is investigating to the west of Grange Resources (continuation)).

I take it you don't own shares in GRR. But I would be interested if you have an opinion as to why GRR continues to be well below BBY's reports.

Thanks.

MR. said:

Thanks for your reply Kennas.
I have checked out MAK thanks for this info.
(MAK is investigating to the west of Grange Resources (continuation)).

I take it you don't own shares in GRR. But I would be interested if you have an opinion as to why GRR continues to be well below BBY's reports.

Thanks.

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I have bought some now, MR. Just a few. I'm being a little cautious ATM. However, that valuation disparity seems a little absurd to me. I wonder who is wrong? I can't explain it.

Chart wise, (this is one year chart - above was 3 year weekly), the pennant is still forming with really short term support at about 2.08 and resistance at 2.15. I'm expecting a breakout to the upside here, considering the long term trend and the general market conditions at the moment, although the MACD and stochs have just gone bearish on us. Can't imagine it falling over, but I've got a stop at $1.98.

So whats wrong with GRR?

They have been working on the mine since Nov 2003.

The magnetite iron is of high quality. Energy consumpion to grind is far less than CFE.

Piping 100km to Port Albany not a problem with only one pump required at a dia of 300 - 400mm.

If permission is a problem through private land because they want too much as a royality, will the government allow the road ways as access?

Further funds need raising, yes. But they are not going to sell almost the mine or/and issue a billion shares.

Strip ratio high at 3:1 (3 parts dirt to 1 part Magnetite)

Only one mine will be built. So Rio will extract their portion via GRR. Rio missed out on GRR's part of the mine by a couple of months 4 years ago.

Workers would not be a problem. Not like the Pilbura. In fact Albany not only being a nice place have the population.

Waste water from pumping is extracted under one roof and pumped back to the mine. They arn't going to make a mess.

Comments anyone. Come on.

MR. said:

So whats wrong with GRR?

......

Comments anyone. Come on.

Click to expand...

Funnymentals are still there Mr. I was stopped out and didn't go back to catch this recent jump.

Will probably push on to $10 now...

kennas, I thought you may have been stopped out. I'm sorry to here of your loss. I'm no expert so I'll end up losing more than you.

I have found no reason why this company can not go into production.

BBY's reports on GBG and FMG have proved correct so why not GRR?

I'm not going to sell unless I come across a good reason.