Slide 1: Merger of Grange Resources and Australian Bulk Minerals
For personal use only Merger of Grange Resources and Australian Bulk Minerals Iron ore pellet producer with significant growth potential 25 September 2008
Slide 2: Important Notice
Important Notice For personal use only The purpose of this material is to provide general information about the proposed transaction between Grange Resource Limited (“Grange”) and Australian Bulk Minerals (“ABM”). This material is not and does not constitute an offer, invitation or recommendation to
Slide 3: Merger Summary
Merger Summary For personal use only Merger Structure • Grange to acquire ABM by issuing ~380m shares to ABM’s shareholders • Merger unanimously recommended by Grange Board1 Board Recommendation • Grange directors will vote in favour of the merger in respect of their personal shareholdings1 Ownershi
Slide 4: Merger Highlights
Merger Highlights For personal use only Transforms Grange into Asia’s leading magnetite iron ore pellet producer Combines two highly complementary production and development projects Large combined resource with long mine life and substantial expansion potential Significant development, fina
Slide 5: Snapshot of the Merged Company
Snapshot of the Merged Company For personal use only • Current: 2.3Mtpa BF pellets and 0.08Mtpa concentrate Annual • 2010/11 Target: 2.9Mtpa BF pellets and 0.08Mtpa concentrate Production1 • 2012/13 Target: 7.7Mtpa BF and DR pellets and 0.08Mtpa concentrate • Mineral Resource: 659Mt magnetite at 43.
Slide 6: Asia's Leading Magnetite Producer
Asia’s Leading Magnetite Producer For personal use only The proposed merger with ABM will transform Grange into Asia’s leading magnetite pellet producer • Transforms Grange as an investment proposition for equity investors • Becomes Asia’s leading producer of magnetite pellets immediately • Leverage
Slide 7: Creating the Next Major Australian Iron Ore Producer
Creating the Next Major Australian Iron Ore Producer For personal use only Enhanced market position and a platform for growth 160.0 18.2bn 2,000 25 20 1,500 • Material increase in scale Market Capitalisation ($m)1 • Expected market value of 15 ~A$1bn Production (Mt)1 1,000 • 3rd largest pure play ir
Slide 8: Portfolio with Significant Growth Potential
Portfolio with Significant Growth Potential For personal use only Very attractive organic growth and financial strength to consider acquisition opportunities 8 • Grange’s Bukit Ibam Mine will commence production in late 2008 – Expected to produce 100ktpa of concentrate2 6 – Expansion potential • Pot
Slide 9: Resources and Reserves to Support Long Mine Life
Resources and Reserves to Support Long Mine Life For personal use only After the merger, Grange will have 659Mt of attributable Mineral Resources and 403Mt of attributable Ore Reserves Mineral Resources Ore Reserves Tonnes Grade Tonnes Grade (Mt) (%DTR) (Mt) (%DTR) Savage River Savage River Measured
Slide 10: Strong Cash Flow and Financing Capacity
Strong Cash Flow and Financing Capacity For personal use only MergeCo pro-forma financials Half Year to Half Year to Unit Dec 08 Total Jun 08 (Actual) (Forecast)1 Pellets Sold Mt 1.1 1.1 to 1.2 2.2 to 2.3 Average Price Received2 A$/t 76.6 130 to 140 105 to 110 Pellet Revenue A$m 83.3 155 to 165 240
Slide 11: Exposure to Record Iron Ore Prices
Exposure to Record Iron Ore Prices For personal use only The producing Savage River Project provides Grange with immediate exposure to current high iron prices 250 200 • Iron ore prices have increased significantly since 2002 to the high 86.7% prices that prevail today BF Pellets (USc/dmtu)1 • Grang
Slide 12: New Grange Board
New Grange Board For personal use only Bringing together the expertise and knowledge of Grange and ABM Russell Clark: Managing Director and CEO Bin Shen: Non-executive Director • Appointed Managing Director of Grange in March 2008 • Deputy General Manager and the Director of Finance • 30 years of mi
Slide 13: New Grange Management Team
New Grange Management Team For personal use only A team with significant experience at Savage River, which can be applied to the development of Southdown Ross Carpenter: General Manager Projects Wayne Bould: General Manager Business Readiness • Joined the Savage River Project in 2004 • Joined Grange
Slide 14: New Ownership of Grange
New Ownership of Grange For personal use only Existing Grange shareholders will retain a 26.1% interest in the enlarged company1 Other existing Grange shareholders 5.2% 20.9% Stemcor Rio Tinto’s existing holding2 • London based steel trading major • A leading provider of marketing, finance and logis
Slide 15: Savage River Project Overview
Savage River Project Overview For personal use only The Savage River Project is located in northern Tasmania and comprises an open pit mine and concentrator, 83km slurry pipeline to port and coastal pellet plant Port Latta – Pellet Plant producing 2.3Mtpa of pellets Slurry Pipeline to Port Latta (83
Slide 16: Savage River Key Facts
Savage River Key Facts For personal use only • Shagang (61.2%), RGL (18.0%), Pacific Minerals Ownership (10.8%) and Stemcor Pellets (10.0%) Resources and • Mineral Resource of 323Mt magnetite at 50.5% Fe Reserves • Ore Reserve of 131Mt magnetite at 48.9% Fe • 2.3Mtpa blast furnace pellets and 80ktpa
Slide 17: Southdown Project Overview
Southdown Project Overview For personal use only Grange’s key asset is the Southdown Magnetite Project Pellet Plant producing 4. 6.8Mtpa direct reduction and blast furnace pellets Concentrate shipped 3. in capesize vessels 2. 100km slurry pipeline to Albany Port 1. 6.6Mtpa mining and concentrating o
Slide 18: Southdown Key Facts
Southdown Key Facts For personal use only Ownership • Grange 70%, Sojitz Corporation 30% Resources and • Mineral Resource of 479Mt magnetite at 37.3% Fe Reserves1 • Ore Reserve of 388Mt magnetite at 35.5% Fe • 6.6Mtpa magnetite concentrate Production1 • 6.8Mtpa direct reduction and blast furnace pel
Slide 19: Indicative Timetable
Indicative Timetable For personal use only Key Events Date Merger between Grange and ABM announced September 2008 Notice of Meeting and Explanatory Memorandum sent to October 2008 Grange shareholders Grange shareholder meeting November 2008 Completion of transaction December 2008 19