Grange Resources Limited · ASX:GRR
Grange Resources — Standard Chartered Earth's Resources Conference 2012
28 slides from Grange Resources's conference presentation, Jun 20, 2012
Slide 1: Australia's leading magnetite producer
Australia’s leading magnetite producer Russell Clark Standard Chartered Managing Director and CEO Earth’s Resources Conference 20 June 2012
Slide 2: Disclaimer
Disclaimer The material in this presentation (“material”) 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 war
Slide 3: Company Overview
Company Overview Grange remains Australia’s leading magnetite producer. An ASX 300 company, with a large well managed long term cash producing mining operation, a strong balance sheet, no net debt, and paying dividends - and a larger magnetite project at DFS offering even more value in the future. J
Slide 4: The future for iron ore
The future for iron ore Iron ore, coke & limestone in Blast Furnace 101 Hot gasses out Hot gasses out Hot air in Hot air in Molten slag out Molten iron out June 2012 Slide 4
Slide 5: Iron units in = Iron units out
Iron units in = Iron units out Blast Furnace 101 50% - 80% Sinter 20% - 50% Lump and Pellets • Sinter is made from “fines” • Lump 63% Fe, • “Pilbara fines” 62% Fe (reducing) • Pellets up to 67% Fe (low contaminants) • New products from new producers: • Availability of lump is falling • Special fines
Slide 6: Sinter, Lump and Pellet mix over time
Sinter, Lump and Pellet mix over time 23 76 21 75 19 Lump & Pellets % of blast furnace feed Sinter % of blast furnace feed 74 17 15 73 13 72 11 71 9 70 7 5 69 2005 2010 2015 2020 2025 2030 2035 Lump Pellets Sinter Source:CRU June 2012 Slide 6
Slide 7: Iron ore and pellet feed demand
In 18 years iron ore demand doubles and pellet feed demand grows almost four fold Iron ore and Pellet feed demand 3,500 400 3,000 350 300 2,500 Million tonnes pellet feed x2 Million tonnes iron ore 2,000 x4 250 200 1,500 150 1,000 100 500 50 0 0 2005 2010 2015 2020 2025 2030 2035 iron ore demand imp
Slide 8: Magnetite – The premium iron ore
Magnetite – The premium iron ore Iron Ore Pellet ~65.5% Fe Higher ~US$1721 FOB Tasmania Magnetite Concentrate QUALITY ~67% Fe Direct Shipping Lump ~63% Fe Direct Shipping Fines Lower ~57% Fe ~US$1222 CFR China Note: 1price from March 12 quarterly 2prices from Dec 11 quarterly Lower Price Higher June
Slide 9: Company Snapshot
Company Snapshot Current key statistics (A$) Current Ownership Structure Ordinary shares on issue 15 June 2012 1,155m Free float Last share price 15 June 2012 $0.5 38.11% PML 46.48% Market capitalization 15 June 2012 $577m RGL Group Cash & Receivables 31 March 2012 $274.2m 7.83% 7.58% Jiangsu Shagan
Slide 10: Grange Assets
Grange Assets Australia’s Leading Magnetite Producer Savage River (100%) Southdown Project (70%) Quality assets in Tasmania and Western Australia. June 2012 Slide 10
Slide 11: Grange 2011 Highlights
Grange 2011 Highlights • Record safety achievement – zero LTI • Record cashflow - $210.4m • Record profit - $216.6m • Record dividends – 5c/share (8% yield) • Southdown project DFS completed • Southdown Mineral Resources increased The business is now set for a sustainable future! June 2012 Slide 11
Slide 12: The Southdown Project
The Southdown Project X bigger than Savage River June 2012 Slide 12
Slide 13: The Southdown Project DFS Highlights
The Southdown Project DFS Highlights • $150 million spent to date - an advanced project!! • JORC mineral resources >1.2 billion tonnes at 34.1% DTR • Ore reserves of 397 million tonnes at 35.69% DTR. • DFS mine life of 14 years within the current permitted area and total resource indicates a potenti
Slide 14: The Southdown Project Resource
The Southdown Project The Resource DFS: 14 year: 397 million tonne reserve @ 35.7% DTR LOM: 30+ years: 1.22 billion tonnes resource @ 34.1%DTR June 2012 Slide 14
Slide 15: Resources
June 2012 RESOURCES
Slide 16: Southdown Magnetite Project Concentrator Flow Sheet
Southdown Magnetite Project Concentrator Flow Sheet June 2012 Slide 16
Slide 17: Southdown Magnetite Project Product Quality Expectations
Southdown Magnetite Project Product Quality Expectations Southdown Magnetite % Concentrate Following recent Total Fe 69.4 additional test work, the expected SiO2 1.28 concentrate quality has improved, with Al2O3 1.36 lower SiO2 and Al2O3. TiO2 0.46 P 0.002 S 0.08 LOI (Loss of ignition) -2.91 June 20
Slide 18: Southdown Magnetite Project Power and Pipelines
Southdown Magnetite Project Power and Pipelines Key Facts - Power: Estimated Length 288km Capacity 330kV transmission line Key Facts – Pipelines Estimated Length 100km June 2012 Slide 18
Slide 19: Southdown Magnetite Project Water Supply
Southdown Magnetite Project Water Supply Source Seawater reverse osmosis desalination plant Capacity 11 GL/a Location Coastal location 25km from mine June 2012 Slide 19
Slide 20: Southdown Magnetite Project Port Infrastructure
Southdown Magnetite Project Port Infrastructure Vessels Cape size (18m draft) Activities Deepen, widen and extend shipping channel New wharf Dewatering plant and storage shed Area 9ha Reclaimed Increases port capacity from 2.5Mt to 14Mt June 2012 Slide 20
Slide 21: Southdown Magnetite Project Permitting
Southdown Magnetite Project Permitting ; Mine environmental permit Granted November 2009, amendment required in 2011 for 10mtpa ; Port permits Granted November 2010 Water permit Desalination permit targeted Q2 2012 June 2012 Slide 21
Slide 22: Southdown Project DFS Capital Expenditure
Southdown Project DFS Capital Expenditure Total Cost Description (A$ M) Mine & Concentrator 1,330 Desalination Plant, Pipelines and Transmission Line 640 Albany Port Works, Berth, Storage Facilities 380 Sub-total 2,350 Owners Costs, EPCM and Contingency 535 Total Estimate Project Costs 2,885 June 20
Slide 23: Southdown Project DFS Operating Cost Summary
Southdown Project DFS Operating Cost Summary A$/t Operating Costs Concentrate Mining 24.4 Concentrator 24.6 Pipeline, Filtration and Port 5.7 Overheads 3.8 Total Operating Costs 58.5 June 2012 Slide 23
Slide 24: Southdown Magnetite Project Target Time Line
Southdown Magnetite Project Target Time Line 2011 2012 2013 2014 2015 Pre- feasibility Definitive Feasibility Financing Construction Production June 2012 Slide 24
Slide 25: June 2012 Slide 25
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Slide 26: Why Grange?
Why Grange? Very attractively priced Existing cashflow and great margins Dividend payer, strong yield Strong Balance Sheet, strong cash position, No net debt World class projects Proven performer with 40 years magnetite experience June 2012 Slide 26
Slide 27: Key Contacts
Key Contacts Primary contacts: Russell Clark Managing Director & Chief Executive Officer +61 8 9327 7901 [email protected] Media: Tarryn Truscott Consultant, “LastSay.” Communications 08 6102 7295 or 0438 906 643 [email protected] June 2012 Slide 27
Slide 28: Competent Person Statement
Competent Person Statement Southdown Project The information in this report which relates to the Mineral Resources of the Southdown Project- Western Tenements is based on information compiled by Michael Everitt who is a full-time employee of Grange Resources Limited and a Member of the Australasia
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