Grange Resources Limited · ASX:GRR
Grange Resources — London ASX Conference (March 2010)
28 slides from Grange Resources's conference presentation, Mar 15, 2010
Slide 1: Grange Resources March 2010
For personal use only Grange g Resources March 2010 NOT FOR DISTRIBUTION IN THE US Level 11, 200 St Georges Terrace NOT FOR DISTRIBUTION IN THE US Perth Western Australia 6000 1
Slide 2: Important Information and Disclaimer
Important p Information and Disclaimer For personal use only This document has been prepared by Grange Resources Limited (ABN 80 009 132 405) (Grange or the Company). No party other than Grange has authorised or caused the issue of this document, or takes responsibility for, or makes any statements,
Slide 3: Grange Highlights
Grange g Highlights g g For personal use only Grange is Australia’s largest magnetite producer, formed by a merger between Grange and Australian Bulk Minerals (ABM) in 2009. 9 Australia’s leading exporter of iron ore pellets, producing 2.2Mtpa from the Savage River operations in Tasmania in CY2009 9
Slide 4: Company snapshot
Company p y snapshot p For personal use only Board of Directors Current ownership p Structure Mr Xi Zhiqiang Chairman Free float Mr Neil Chatfield Deputy Chairman Mr Russell Clark g g Director,, CEO Managing 31.70 PML Mr Wei Guo Non Executive Director 46.90 Mr Clement Ko Non Executive Director RGL G
Slide 5: Jiangsu Shagang: A strong partnership
Jiangsu Shagang A strong partnership For personal use only Shagang g g Overview Grange’s largest shareholder Demonstrated continuing support for Grange with an attractive LOM offtake agreement g at Savage River at benchmark prices and agreement to negotiate at fair market price for Grange’s shar
Slide 6: Grange Board
Grange g Board For personal use only Grange has a strong board with a diverse range of experience. Xi Zhiqiang: Chairman Neil Chatfield: Deputy Chairman • Extensive experience in the Chinese steel industry • Recently Executive Director and CFO of Toll Holdings, a position • Baosteel employee for 30
Slide 7: Key Information 2009
Key Information 2009 Profitable f even during economically hard times For personal use only CY09 Operational p Statistics Jan - Jul – Savage River Jun 2009 Dec 2009 Total volume ol me mined (‘000 bcm) 9 372 9,372 9 763 9,763 Total ore mined (‘000 bcm) 701 978 Concentrate produced (‘000 tonnes) 1,036
Slide 8: Iron Ore Value
Iron Ore Value For personal use only • Iron Ore Pellet ~65-69% Fe 40% Value & price • Direct Shipping pp g Lump p ~63% Fe Qualitty • Magnetite Concentrate ~ 67% Fe • Direct Shipping Fines ~58% Fe NOT FOR DISTRIBUTION IN THE US 8
Slide 9: Pellet Price
Pellet Price Rising rapidly with economic recovery For personal use only • Since the iron ore price settlement in June 2009, Grange has had offers to buy pellets into the spot market at a significant premium to current benchmark Pellets are highly leveraged to the world’s economic recovery – when
Slide 10: Leading Magnetite Producer
Leading g Magnetite g Producer For personal use only Grange’s position as Australia’s leading magnetite producer is supported by quality assets in Tasmania and Western Australia. Southdown Project (70%) Savage River (100%) 90km northeast of the Port Northwest Tasmania of Albany Annualised prod
Slide 11: Savage River Overview
Savage g River Overview For personal use only Ownership • Grange 100% • Mineral Resource of 316Mt magnetite at Resources and 50.7% DTR R Reserves • Ore Reserve of 124Mt magnetite at 49.2% DTR • 2.6Mtpa blast furnace pellets and concentrate Production (annualised basis) • Potential to expand to 2.9Mt
Slide 12: Large Scale Operations
Large g Scale Operations p For personal use only NOT FOR DISTRIBUTION IN THE US 12
Slide 13: Own Downstream Infrastructure
Own Downstream Infrastructure For personal use only NOT FOR DISTRIBUTION IN THE US 13
Slide 14: Own Port and Shiploading Infrastructure
Own Port and Shiploading p g Infrastructure For personal use only NOT FOR DISTRIBUTION IN THE US 14
Slide 15: Increased Production
Increased Production For personal use only 2009 Concentrate & Pellet Production 700,000 2.6Mtpa 650,000 600,000 550,000 , 500,000 450,000 400,000 350,000 300,000 Jan- Mar Apr - Jun Jul-Sep Oct-Dec Concentrate production Pellet production 15 NOT FOR DISTRIBUTION IN THE US 15
Slide 16: Reducing costs
Reducing g costs For personal use only 60 55 50 45 uarter 40 A$ million per qu Overhead 35 Pipeline to Pellet Crusher to Pipeline 30 Shared Expenses Mine to Crusher 25 20 15 10 Jan- Mar Apr - Jun Jul-Sep Oct-Dec 16 NOT FOR DISTRIBUTION IN THE US 16
Slide 17: Leveraged to price
Leveraged g to price p For personal use only Margin leverage to price @2.6Mtpa @2 6Mtpa 400 350 M 300 a r A$ million 250 g Revenue i Costs n 200 150 100 2009 +20% +30% +40% +50% +60% +70% +80% 17 NOT FOR DISTRIBUTION IN THE US 17
Slide 18: Solid Customer Base
Solid Customer Base Long term offtake agreements – providing revenue stability For personal use only Agreements are in place for both Savage River and Southdown production at market prices or better. • China’s largest private steel mill, producing 22 Mtpa of pig iron • Grange’s largest shareholder •
Slide 19: Southdown Project
Southdown Project High grade magnetite project with advanced infrastructure For personal use only Ownership • Grange 70% 70%, Sojitz Corporation 30% Resources and • Mineral Resource of 654Mt magnetite at 36.5% DTR1,2 Reserves1 • Ore Reserve of 388Mt magnetite at 35.5% DTR1,3 • 6 6Mt magnetite 6.6Mtp
Slide 20: Resources and Reserves
Resources and Reserves Supporting Long Mine Lives For personal use only Grange has 774Mt of attributable Mineral Resources and 396Mt of attributable O Reserves. Ore R Mineral Resources (inclusive of reserves) Ore Reserves Tonnes Grade Tonnes Grade ((Mt)) ((%DTR)) ((Mt)) ((%DTR)) Savage River 4 Savag
Slide 21: Grange Resources – production growth prospects
Grange Resources – production growth prospects For personal use only 10000 9000 U id Upside 8000 7000 6000 5000 Southdown kt 4000 3000 2000 1000 Savage g River 0 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 NOT FOR DISTRIBUTION IN THE US 21
Slide 22: The largest producing magnetite company
The largest producing magnetite company For personal use only Out of the numerous junior companies with magnetite assets, Grange is the only l one in i production. d ti NOT FOR DISTRIBUTION IN THE US 22
Slide 23: Current Focus and Future Milestones
Current Focus and Future Milestones For personal use only Operational improvements at Savage River being implemented ¾ Management Operating System being installed ¾ New equipment to replace old less productive units ¾ Inventory and cost reductions Drilling and model new resources at Savage River
Slide 24: Grange Resources – Summary
Grange g Resources – Summary y For personal use only Australia's leading magnetite producer Australia’s largest iron ore pellet producer High grade quality products Solid customer and revenue base Long life assets Low sovereign risk Extensive magnetite technical and operational experti
Slide 25: Key Contacts
Key y Contacts For personal use only Primary contacts: Russell Clark Managing Director & Chief Executive Officer +61 8 9321 1118 managingdirector@grangeresources.com.au i di t @ NOT FOR DISTRIBUTION IN THE US 25
Slide 26: Competent Person Statement
Competent p Person Statement For personal use only • Southdown Project j • The information in this presentation which relates to the Mineral Resources of the Southdown Project is based on information compiled by James Farrell who is a full-time employee of Golder Associates Pty Ltd and a Member of t
Slide 27: Appendix A – Southdown Project
Appendix pp A – Southdown Project j For personal use only In situ Mineral Resource Estimate Classification Measured Resources Indicated Resources Inferred Resources Total Resources Tonnes (Mt) 219.7 210.3 224.4 654.4 DTC wt% 37.4 38.9 33.4 36.5 DTC Fe% 69.2 69.3 69.1 69.2 DTC SiO2% 1.72 1.94 2.07 1.
Slide 28: Appendix B – Savage River
Appendix pp B – Savage g River For personal use only Mineral Resource and Ore Reserve Estimates Mineral Resource Tonnes (Mt) Grade (%DTR) Ore Reserve Tonnes (Mt) Grade (%DTR) Measured 88.01 52.7 Proved 52.39 49.6 Indicated 135.96 51.7 Probable 72.00 48.9 Inferred 92.22 47.2 Total 124.40 49.2 Total 3
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