Australian (ASX) Stock Market Forum

GRR - Grange Resources

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Pommiegranite said:
Can anyone tell me whether Grange's pellets will be merchant pig iron, as Shaw stockbroking's modelling is using a long term projection of $88 per tonne.

http://www.grangeresources.com.au/images/grange-31--uphoh.pdf

This seems very low for MPI:confused:

Thanks
Click to expand...

Pommiegranite, Grange's pellets are not Pig Iron. Pig Iron at about $300US per tonne has a higher price then pellets.

DRI pellets are currently priced at about $90- AUD per tonne. Shaw's long term projection using $88.50 AUD is not out of the question because DRI pellets are expected to rise because of the lack of scrap steel on the market.

DRI pellets can replace scrap steel input in EAF. (Electric Arc Furnaces)
 
The graph for this share is going up in a big way with solid MACD performance; all I might add on solid buying volumes over the past few weeks/months.

Does anyone disagree that we may be looking at $2.80 anytime soon?

I am a recent buyer of this stock in a relatively small way mainly for the purpose of establishing a base for future analysis and investment decisions. Cheers.
 
greenfs said:
The graph for this share is going up in a big way with solid MACD performance; all I might add on solid buying volumes over the past few weeks/months.

Does anyone disagree that we may be looking at $2.80 anytime soon?

I am a recent buyer of this stock in a relatively small way mainly for the purpose of establishing a base for future analysis and investment decisions. Cheers.
Click to expand...

I don't disagree now. The price is $2.75 I hope you aquired some shares when you asked the question! Good luck either way.

I don't know where this share is going to go in the near future. There is a lot of interest in Iron Ore and I think the magnetite mines are under priced compared to others. I know once the mine is in production it will be worth alot more than current share price.
 
Well this stock continues to please me, up to $2.90 now and up $0.40 this week alone. I am suprised that there is so little interest in it.
 
Someone is sure interested or otherwise the sp would not be going north in a south market. I have doubled up in the early days and am contented to sit pat for a while.

I can't find out too much about this one. Just bought on the chart movements. With a name like Grange how can we fail.
 
Well the news is out and as suspected Grange has signed an agreement with Rio Tinto to acquire a 100% interest in Rio Tinto’s Exploration Licence E70/2512 containing the eastern 6km extension of the Southdown magnetite deposit.
 
Dear Grange stakeholders.
Since the news about the Rio stake is out ( in my view a win win situation ) the stake is only going South, inspite of a strong recovery of all junior miners. It was down in 3 days from $3>2,10 and doesnot move above $2,30/35 the last couple of days, inspite a very strong recovery in the market. It's more pulling a dead horse with pretty low volume.
Moreover the share performance of GRR compared to MMX, SDL,MIS,GBG,FMG etc is more a snake uphill the last 2 years and not much fun, inspite of all BBY's efforts.
Does anyone on this forum have an explanation for this low interest?
 
gfu said:
Moreover the share performance of GRR compared to MMX, SDL,MIS,GBG,FMG etc is more a snake uphill the last 2 years and not much fun, inspite of all BBY's efforts.
Does anyone on this forum have an explanation for this low interest?
Click to expand...

In the past 12 months you could have made (500% MMX) (300% SDL) (MIS 400%) (GBG 200%) & (FMG 200%) and I which do I own... GRR at 60% increase in 12 months and I haven't even got that.

All of these companies above have at lease some Hematite iron ore. MMX, SDL, MIS, AND FMG basically only have Hematite and many have the capacity to increase their resources. The closest to GRR would be GBG Gindelbie, which is targeting exports of only 8mt's from resources of 22.8 mt's of Hematite and Approx 1.43? bt's of Magnetite. Grange initially will export 6.8 mt's of DR pellets so is close to GBG's 8mt's export. (Grange's DR pellets are better) Gindelbie has a better strip ratio than Grange with its Magnetite, therefore the cost of extraction will be slightly higher for Grange.

It would be a good question to ask Grange Direct and if you could post their responce for all to read.

I am not too concerned with Grange. It's just that we have known the size of their resource and it does not contain Hematite.

John Veldhuizen from BBY has been correct with his valuations on Hematite mines which I have read in the past. BBY points out that the Grange is trading at a 60% discount to their valuation of $5.58 released only one week ago.
http://www.grangeresources.com.au/images/grange---tohso.pdf

If Cape Lambert Iron Ore receives its first payment at the end of this week (31/8) from a Chinese investor, I am confident this will boost Grange's share price. Both Cape Lambert and Grange hold Magnetite.
 
Thanks for respond.
I agree that there is some reluctancy based upon Magnetite or Hematite, however main reason for slow performance to my opinion might be a combination of bad PR work and their timeschedules which they do not hold, fe JV partners to be launched mid aug 2006, they announced this in march 2006.
Todate, 12 months later, only 1 JV partner is launched for a very low entry price.
We have had 4 trading halts the last 2 years, all market responses were negative to the news. Reason, a very poor PR wording in the text, it is not the kind of Puclic Relations of FMG, which makes it sexy.
However the good news is that one might expect that the next 1 or maybe 2 JV partners will be launched soon, maybe around or before september 27, on which date there is a shareholdersmeeting to approve the RIO deal.
 
Whats peoples thoughts on this one? In December there were media releases every where that Grange was in 'talks' with a number of middle eastern companies, but I havent heard anything since. I see that they were over at the Australian resources conference in Dubai this week promoting Southdown. If Rio is taken over by BHP will this have any negative consequences for Grange? since Rio hold 9% of the stock as well as 17 mill unlisted options.
 
More sellers than buyers across the board and Grange keeps on falling. To what price are these sellers willing to get out at?

Grange has better quality magnetite than Cape Lambert Iron Ore. Cape Lambert Iron Ore has a bigger resource but most is in thin layers hundreds of metres under ground. Grange is better but lets say Grange and Cape Lambert are similar. (including Lambert's transport to Cape Preston Port is similar to the distance to Albany port for Grange) The Chinese have offered $400 million just 3 weeks ago for the whole Cape Lambert Iron Ore project. Surely if Grange was to sell the project "now" they would get at least $400 million. That does not include Grange is far more advanced than Cape Lambert. I'm just talking about the resource.

So "one step at a time" (In my opinion to find a share base for Grange) $400 million as is.
(Grange owns 70% = $280 million)= $2.43 per share. Current price is $1.55

With the current Iron Ore price increase of +65-71% from Rio and Bhp expected. Is it going to be harder or easier for Grange to attract its second major partner? In my opinion the steel mills being blackmailed by the major iron ore suppliers and I think many steel mills will want to control their supply of ore?

Perwaja Steel (next door to Grange's proposed pellet plant) was paying in the order of $180- per tonne "last" year and used 1.5 million tonnes. (+71% increase this year) Do the maths!

The Age today:
http://business.theage.com.au/grange-heads-downstream/20080313-1z9l.html

Today's ASX release Investor Presentation:
http://imagesignal.comsec.com.au/asxdata/20080314/pdf/00823177.pdf
 
Jez they have been hammered again today, a low of $1.365. :banghead: I guess the prospect of having a large debt to fund southdown is too scary for most investors.
 
The debt issue will be very interesting....
Put it this way, is nobody going to buy a house now?
--------------

Yesterday Vale Blast Furnace pellets bound for Europe (BF Pellets) have now been negotiated for 2008.

BF Pellets 86.67% increase , DR Pellets prices should be higher.

http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?infoid=2250&sid=554

Grange Resources has been working towards producing DR Pellets. Include their joint venture partner Sojitz of Japan and things are looking good. Since 1974 Sojitz has been an equity partner producing pellets in Brazil.

If Vale is investing a substantial amount to increase pellet production doesn't the JV between Grange and Sojitz have a chance?

Beware: If you are interested in Grange I have no doubt that "Stops" have contributed to the sell down along with the manipulators. Set stops, Manipulators manipulate, stops and suckers activate, lions pounce. It appears to be happening again and again. (Just my opinion, invest how you want)
 
Vale has now released their 2008 DR Pellet prices. $2.4222 dmtu.

This is about US$167- per ton for Grange's Pellets. Freight from Brazil to Asia is approx $30- per ton. My calculations with information from Grange totals US$197- per ton (US). Thats the benchmark price with delivery. I believe the Spot market last year was paying approx US$180- per ton delivered into Asia.

The article from Vale:

Rio de Janeiro, April 2, 2008 – Vale, the world's largest iron ore and pellets producer, concluded the direct reduction pellet price negotiations for 2008 with four important clients in the Middle East and North Africa: Ezz Steel, located in Egypt, Libyan Iron and Steel Company, in Libya, Qatar Steel Company, in Qatar, and Saudi Basic Industries, in Saudi Arabia.

As an outcome of these negotiations, the direct reduction pellet price, FOB Tubarão, increased by 86.67% relatively to 2007. Therefore, the new reference price per dry metric ton Fe unit for 2008 is US$ 2.4222 for Tubarão direct reduction pellets.
http://www.vale.com/vale_us/cgi/cgilua.exe/sys/start.htm?infoid=2286&sid=554
 

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