GRR - Grange Resources

[divs4ever]

yes buying them years back and averaging down in the dip was the winning strategy here ( but it isn't always )

the Brazil dams failures proved to be a windfall for GRR , but maybe these tailwinds cannot last

the first parcel was bought @ 39c ( in 2012 ) and the last ( in 2014 ) @ 11.5c .. so it wasn't all smooth sailing

 

[Dona Ferentes]

GRR has gone from 30c to 71c in 2021, and paid a high yielding brace of dividends.

Market Cap: $769.63 million
2021 % Change: 123.33%

Some commentary:
Grange Resources has operated the Savage River iron ore mine in Tasmania for more than 50 years. Without a doubt 2021 was the best of the lot.

Savage River produces processed magnetite pellets grading well above even the premium 65% index that the Vale high grade Caracas ores receive from Chinese steelmakers.

When iron ore prices hit all time records of US$237/t in May, Grange and its largely Chinese major shareholders were laughing all the way to the bank. Grange received average prices of US$228.52/t for the March quarter ($297.66/t Australian), more than double its $113/t cost base.

The June quarter was even more absurd, as Grange sold 653,000t of pellets at US$287.15/t ($373.72/t) against falling operating costs of $90.16/t. That meant Grange made a headline margin of US$207.63 on every tonne shipped, more than the average price of the benchmark 62% fines index in the three months to June 30.

The other benefit of Grange and its Savage River mine is its future proofed nature. High grade iron ore like Granges will be required to supply modern steelmaking technologies that eschew coking coal for green fuels like hydrogen.

Those massive premiums shielded Grange from the iron ore price’s rapid decline through the second half of the year, helping it bank $554.60 million in cash and trade receivables of $21.45m as of September 30.

That healthy cash position led to not one but two dividend announcements this year, a 2c payout on the annual results and a sneaky10c a share special divvieannounced just before Christmas.

 

[divs4ever]

those 'zeros' are actually 2 x 0.5 cent divs. ( in 2016 )​

​

Per Share Statistics​

As of 25 May 2021, 10:00 am AEST

TYPE	2012	2013	2014	2015	2016	2016	2017	2018	2019	2020	TREND
Dividends ($)	0.04	0.02	0.03	0.01	0.00	0.00	0.01	0.02	0.02	0.03
Franking (%)	--	--	--	--	--	100.00	100.00	100.00	100.00	100.00
Dividend Yield (%)	--	--	--	--	--	7.10	4.70	10.00	8.00	10.20

 

[Dona Ferentes]

 

[divs4ever]

i suppose the BIG question in GRR is what is a good entry point for new buyers , i suspect 30 cents ( or less ) won't return quickly , and the share has patchy liquidity as a trading vehicle ( a nasty trap if trading on leverage ) , a small hobby trader ( able to wait months for an exit price ) might find it tempting

the OTHER question is when will the ( stalled ) Vale/BHP joint venture start shipping pellets again , and take some steam out of the market , this share has had some very nice tailwinds in thee last few years , but surely that cannot last , and the company will have to do it's own heavy lighting

all that said ... there could be a nasty storm/cyclone season coming soon that will limit iron shipments from Western Australia ( doesn't affect GRR as much because it has a major but steady customer , but still might lift the iron/pellet price that extra whisker )

one danger will be rising costs ( especially shipping costs )

DYOR

 

[Go Figure]

My January 2022 and FY 2022 stock tip is GRR it continues to generate good results, it is a well run profitable company and appears likely to produce strong December Quarter 2021 results which likely will flow on through 2022 as the IO price finds its base.

 

[divs4ever]

is up 25 cents today

$0.990
Today's Change
Up $0.255 (34.69%)

might be something to do with declaring another div. last Friday

Dividend information
Amount per share (Cents) Franked Amount per share (Cents)
Final dividend per share (fully franked) 10.00 10.00
Ex-dividend date 11 March 2022
Record date 14 March 2022
Payment date 29 March 2022

nice but nothing special UNTIL you realize it paid a 10 cent div. only 3 months back

( i hold GRR av. SP 20.3 cents ) well that is one way too get a free-carry

DYOR

 

[qldfrog]

is up 25 cents today

$0.990
Today's Change
Up $0.255 (34.69%)

might be something to do with declaring another div. last Friday

Dividend information
Amount per share (Cents) Franked Amount per share (Cents)
Final dividend per share (fully franked) 10.00 10.00
Ex-dividend date 11 March 2022
Record date 14 March 2022
Payment date 29 March 2022

nice but nothing special UNTIL you realize it paid a 10 cent div. only 3 months back

( i hold GRR av. SP 20.3 cents ) well that is one way too get a free-carry

DYOR

And i sold friday?

 

[divs4ever]

one of the few opportunities to rescue the investment cash , that i haven't taken over the years but HAVE thought about it several times

seems to be suddenly paying 3 monthly divs. after sitting on a mountain of cash for years , hoping to develop that other project

has been a quirky company to say the least

so i am guessing you missed the results on Friday as well ( i only found them trying to work out why the price spiked )

 

[Dona Ferentes]

And i sold friday?

and today's news:

Japan’s Nippon Steel said at the weekend that it is considering how it might need to adjust its supply lines, given 14 per cent of the high-grade iron ore pellets that Japan imports come from Ukraine.

Pellets are a small but high-quality part of the global iron ore trade, and Ukraine’s importance to this segment has risen in recent years after production from Brazil was hit by concerns about the safety of tailings dams in the country.

A Nippon spokesman said alternative sources for the raw materials in Brazil and Australia would be considered, and pellet prices – which always trade at a premium to iron ore prices – could push a little higher still.

 

[Erlang]

GRR seems to be the gift that keeps on giving for now. Has magnetite's day finally arrived in Australia?

Admittedly GRR released their results after the market closed on Friday, but I've noticed The AFR rarely mentions GRR, though it mentions plenty of other companies (which, in contrast, make little or no profits).

 

[qldfrog]

and today's news:

Yeap,rub it in DF!!!
Decision was made on internet access at time of asx open with time zone and the idea more of China minerals will now come straight from Russia,not from Australia or Brazil

 

[divs4ever]

gets a bit complicated to work out now but a Chinese company is a major holder of GRR

which makes one wonder about the recent capital returns

has the major holder convinced the company the undeveloped project will be cost inefficient ( or they are better off selling it off for say cash + a royalty ) they have been sitting on that cash pile for years

 

[qldfrog]

gets a bit complicated to work out now but a Chinese company is a major holder of GRR

which makes one wonder about the recent capital returns

has the major holder convinced the company the undeveloped project will be cost inefficient ( or they are better off selling it off for say cash + a royalty ) they have been sitting on that cash pile for years

Yes actually a potentially worrying good news for the long term...but in that case they might try to be bought back by a major?

 

[Erlang]

It's extremely difficult (I would argue mostly impossible) to guess the markets reactions to world events.

I have set CommSec to email me when "market sensitive" company announcements are made. There are also phone apps that give similar notifications.

Having looked at previous GRR announcements, they typically release their end-of-year results in late February.

Here's a speculation: At this rate, GRR may enter the ASX 300 or so -- I don't know what the cut-off is exactly. And then GRR may receive a boost from the effect of being included in index funds.

 

[divs4ever]

Yes actually a potentially worrying good news for the long term...but in that case they might try to be bought back by a major?

unless pressure is put on the major shareholder ( a Chinese gentleman , i believe ) i can't see that happening ( but given political rumblings rumblings not impossible )

be pushed into the top 200 or 300 ( since they are measured by market cap. , not tangible assets ) that IS possible partly because of take-overs but also , and by other companies shrinking

it would be interesting to see the 'ease of doing business ' ranking of Australia given the events of the last two years

 

[divs4ever]

Southdown Magnetite Project Prefeasibility Study
Southdown Project, Western Australia
• The Prefeasibility Study identifies a reduced-capital development option for the Southdown
Magnetite Project (anticipated to deliver reductions in capital spend from A$2.9B down to
A$1.39B).
• It focuses on a production rate of 5 million tonnes per annum of high-quality magnetite
concentrate at 69.5 % Fe, which attracts a significant price premium in the market.
• The concentrator design utilises dry grinding technology to improve efficiency and reduce power
and water demand, while still achieving a high-quality product.
• The reduced water demand can be met with a combination of ground water and recycled water.
• Early works are underway to confirm the potential of power supply via a transmission line to
connect to the Southwest Interconnected System at Muja, in order to access significant
renewable energy through a 3rd party provider.
• Studies indicate Cape size vessels can be loaded in King George Sound using transhipment
methods.
• Work is underway to seek revisions to current environmental approvals for the new aspects of
the project, with a new approval required for the transhipping operation.
Disclaimer
The material in this ASX release is not and does not constitute an offer, invitation or recommendation to subscribe for, or
purchase, any security in Grange Resources Limited (“GRR”) nor does it form the basis of any contract or commitment. GRR
makes no representation or warranty, express or implied, as to the accuracy, reliability or completeness of this material. GRR,
its directors, employees, agents and consultants, shall have no liability, including liability to any person by reason of negligence
or negligent misstatement, for any statements, opinions, information or matters, express or implied, arising out of, contained
in or derived from, or for any omissions from this material except liability under statute that cannot be excluded.
Statements contained in this material, particularly those regarding possible or assumed future performance, costs, dividends,
production levels or rates, prices, resources, reserves or potential growth of GRR or, industry growth or other trend projections
are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve
known and unknown risks and uncertainties. Actual results and developments may differ materially from those expressed or
implied by these forward-looking statements depending on a variety of factors.
The Prefeasibility Study referred to in this ASX release has been undertaken for the purpose of initial evaluation of a potential
development option for the Southdown Magnetite Project in Western Australia. It is a preliminary technical and economic
study of the potential viability of the Southdown Project, completed to a level of accuracy of +/- 25%. Further work will be
required to improve the accuracy and reduce the technical, financial, environmental and stakeholder risks related to this
development option.
Registered Office: 34a Alexander Street, Burnie, Tasmania 7320 page 2 of 13
ASX RELEASE
Grange Resources Limited (ASX:GRR) (Grange) is pleased to announce that a Prefeasibility Study
(PFS 2022) has been completed to assess capital reduction options for the Southdown
Magnetite Project (Southdown or the Project).
A Definitive Feasibility Study completed in 2012 (DFS 2012, see ASX announcement May 2012)
defined a project to produce 10 million tonnes per annum (mtpa) of high-grade magnetite
concentrate at 69.5% iron, over a potential mine life of 14 years.
PFS 2022, completed in February 2022, has identified a reduced-capital development option.
This involves a smaller 5mtpa concentrate production operation within the constraints of
existing mineral resources and ore reserves; and is anticipated to deliver reductions in capital
spend from A$2.9B down to A$1.39B. This alternative case extends the life of mine from 14
years to 28 years for the western zone, and potentially more than 50 years for the total resource
(see Project Details below). It is planned to be a pit to port operation involving:
• an open cut mine with contract mining
• a concentrator including dry grinding and wet separation techniques
• slurry and return water pipelines from/to the Port at Albany
• a transhipping operation to export concentrate in Cape size vessels
• a transmission line for power supply by a 3rd party to access a significant component of
renewable energy
• a mix of recycled and groundwater to supply reduced water needs.
The 10mtpa DFS 2012 remains the base option, and the decision as to whether the alternative
option is further studied to definitive feasibility will be an issue considered together by the joint
venture partners.
Commenting on the results of PFS 2022, Grange CEO Mr Honglin Zhao stated:
“PFS 2022 considers innovation in the process to enable a reduction in the capital
required to enable the project to proceed.
Southdown is a world-class magnetite deposit that is becoming increasingly relevant as
steel markets continue to demand premium iron ore products. At almost 70% iron
content, Southdown’s concentrate product will be one of the highest-grade seaborne
iron ores in the world.”
Project Summary
• Southdown is an advanced project with excess of A$180m spent to date on drilling,
test work, land acquisition, permitting and engineering studies.
• The project has defined Mineral Resources of more than 1.2 billion tonnes at 33.7%
DTR, and Ore Reserves of 388 million tonnes at 35.6% DTR, prepared in accordance
with JORC 2012 (see ASX announcement February 2014).
Registered Office: 34a Alexander Street, Burnie, Tasmania 7320 page 3 of 13
ASX RELEASE
• DFS 2012 was completed in April 2012 based on a design to produce at a nominal rate
of 10mtpa of concentrate at a premium quality specification of 69.5% Fe, which
attracts a significant price premium in the market.
• PFS 2022 was completed in February 2022 based on a design to produce at a nominal
rate of 5mtpa of concentrate, with a mine life of 28 years within the current permitted
area, with potential to extend to more than 50 years.
• PFS 2022 generates an NPV of A$243 million at a nominal discount rate of 10%, and an
ungeared internal rate of return (IRR) of 12%, based on average price assumptions from
long term forecasts of US$102.52/tonne FOB Albany, at an AUD:USD exchange rate of
$0.71. By comparison, an NPV of A$2,071 would be achieved based on the average
realised 65% index prices over past three years.
• Initial capital expenditure is estimated at A$1.39 billion and sustaining capex at A$203
million.
• C1 operating costs are estimated at A$60.61 per tonne of concentrate delivered at the
ships rail in Albany, with an all-in sustaining cost of A$84.12.
• All primary environmental approvals are in place and being maintained in good stead
for the existing DFS 2012, with a revision of the existing land-side approval in
preparation to include the new aspects, and a new approval required for the marine
transhipment operations.
• All land required for the DFS 2012 project site, slurry and water pipelines has been
secured, with negotiations progressing to secure new areas identified in PFS 2022
• Aboriginal heritage issues have been successfully resolved or in progress for DFS 2012,
with engagement ongoing in relation to new areas and sites identified in PFS 2022.
Detailed Project Information for the 5mtpa Alternative Development Option
Just 90km from Albany in Western Australia's Great Southern region, Southdown is a joint
venture (JV) between Grange (70%) and SRT Australia Pty Ltd (30%). SRT is jointly owned by
the Sojitz Corporation, a Japanese global trading company, and Kobe Steel, the third largest
Japanese steel maker.
The Southdown Magnetite Project is an advanced project with more than 1.2 billion tonnes of
high-quality mineral resources, including ore reserves of 388Mt. A Definitive Feasibility Study
completed in 2012 (DFS 2012, see ASX announcement May 2012) defined a project to produce
10 million tonnes per annum (mtpa) of high-grade magnetite concentrate at 69.5% iron, over
a potential mine life of 14 years.
In February 2022 Grange completed a prefeasibility level study into an alternative
development option based on a reduction of the nominal concentrate production rate to
Registered Office: 34a Alexander Street, Burnie, Tasmania 7320 page 4 of 13
ASX RELEASE
5mtpa. DFS 2012 is the base case option for the JV.
Grange recognises and respect the Traditional Owners of this Country and their connection to
the lands, waters and skies. Grange would like to acknowledge the support and assistance of
the Wagyl Kaip and Southern Noongar Native Title claimants, and the Menang people in the
development to date of the Southdown Project.
Grange would like to thank and acknowledge that the following organisations were engaged
in the Grange’s development of the PFS 2022:
• Wood (principal and process), and its subconsultant GHD (non-process infrastructure),
• Ausenco (pipeline),
• BMT (marine),
• Snowden Optiro (mining)
• and many specialists in individual areas.
Location
The Project is located ~90km northeast of Albany in the southwest corner of Western
Australia. The Southdown deposit extends approximately 12km in length, under Mining
Lease (M70/1309) and Retention Licence (R70/61) covering an area of more than 120 square
kilometres on largely freehold farming property.
Figure 1: Southdown Magnetite Project Location
Registered Office: 34a Alexander Street, Burnie, Tasmania 7320 page 5 of 13
ASX RELEASE
Mineral Resource & Ore Reserve
The Project contains a total resource of 1.25 Bt of magnetite ore grading at Davis Tube Recovery
(DTR) of 33.7%. This resource has been defined using geological boundaries and a cut-off grade
of 10 weight percent Davis Tube Concentrate (DTC) and includes minor internal dilution. A
resource statement prepared in accordance with JORC 2012 has been declared for the Project.
The mineral resource consists of alternating bands of magnetite hosted in clinopyroxene and
primary quartz located within SDJV mining lease, M70/1309 and Exploration Licence R70/61
(see ASX announcement, 28 February 2014).
The metallurgical plant has been designed to achieve 69.5% Fe in the final concentrate (see ASX
announcement, April 2012).

part of a much larger document

===========================================================================

DYOR

i hold GRR

 

[Erlang]

I wonder what's going on with the GRR price today. It shot up about 8 to 10 percent this morning on no news. But about a year ago (25.08.22) GRR released their half-yearly results. Perhaps we'll see new results in the next days.

 

[divs4ever]

yes that should be enlightening since GRR ships mostly to just one customer ( corporation )

maybe it will give us a clearer insight into what is happening inside China

although news on the other project might be forth-coming as well since they seem to have given-up on a joint-partner

but the question on shareholders lips must be what about the div. ???

back to the 'old days ' of 2 cents a year ( to conserve cash ) or is 10 and 20 cents a year the new normal

i had been seriously tempted to reduce the holding to rescue the investment cash .. but then the last two divs. had almost achieved that already ( 20 cents of the 20.3 cents a share invested )

i am just amazed more shareholders didn't catch on to this company earlier

i bought the last parcel in September 2014 @ 11.5 cents a share ( and probably should have brought a shopping trolley .. it was tightly held at the time so a car boot wouldn't have worked )

watch the production costs , you know how easily spooked the market is currently

 

[Dona Ferentes]

I wonder what's going on with the GRR price today. It shot up about 8 to 10 percent this morning on no news.

and down much more than that on results

But about a year ago (25.08.22) GRR released their half-yearly results. Perhaps we'll see new results in the next days.

Revenues from ordinary activities ( 6 months to 30 June V pcp $’000) ................. Down 24% from 450,572 to 341,051
Profit from ordinary activities after tax (before significant items) ..................... Down 36% from 205,914 to 132,188
Profit for the period attributable to members ...................................................... Down 36% from 205,914 to 132,188
Dividend of 2c ff