Grange Resources Limited · ASX:GRR
Grange Resources — Investor Presentation (May 2011)
31 slides from Grange Resources's investor presentation, May 11, 2011
Slide 1: Australia's leading magnetite producer
For personal use only Australia’s leading g magnetite producer Southdown Magnetite Project Pre-feasibility Study May 2011
Slide 2: Disclaimer
Disclaimer For personal use only The material in this presentation (“material”) is not and does not constitute an offer, invitation or recommendation d ti tto subscribe b ib ffor, or purchase, h any security it iin G Grange R Resources Li Limited it d (“GRR”) nor does it form the basis of any contra
Slide 3: Overview
Overview For personal use only Australia’s A t li ’ lleading di magnetite tit producer d ASX 300 index company Strong St balance b l sheet, h t no nett ddebtbt Proven operational performance – tonnes and cashflow Quality Q lit product, d t hi highh margins i – iron i ore pelletsll t Larg
Slide 4: Magnetite – The premium iron ore
Magnetite g – The p premium iron ore For personal use only Higher Iron Ore Pellet ~65-69% Fe Magnetite Concentrate ALITY ~67% Fe QUA Direct Shipping Lump ~63% Fe LLower Direct Shipping Fines ~58% Fe Lower Price Higher May 2011 Slide 4
Slide 5: Company Snapshot
Company p y Snapshot p For personal use only Current key statistics (A$) Current Ownership Structure Ordinary shares on Free float 2 April 2011 1,153m issue 33.70% PML Last share price 2 April 2011 $0.655 46.90% Market capitalization 2 April 2011 $755m RGL Group 7.90% Cash & Receivables 31 March 201
Slide 6: Quality assets in Tasmania and Western Australia
Grange’s position is supported by quality assets in Tasmania and Western Australia. Australia For personal use only Southdown Project (70%) Savage River (100%) JV with Japanese Trading Northwest Tasmania Company, Sojitz (30%) Annualised production rate 90km northeast of the Port of 2.0 Mtpa
Slide 7: Large Scale Operations
Large g Scale Operations p For personal use only May 2011 Slide 7
Slide 8: Grange Downstream Infrastructure
Grange g Downstream Infrastructure For personal use only May 2011 Slide 8
Slide 9: Grange Port & Shiploading Infrastructure
Grange g Port & Shiploading p g Infrastructure For personal use only May 2011 Slide 9
Slide 10: Savage River - Leveraged to price
Savage g River - Leveraged g to p price For personal use only Margin leverage to price @2.0Mtpa 500 450 400 350 MARGIN on A$ millio 300 250 200 Revenue 150 Costs 100 120 130 140 150 160 170 180 190 200 210 220 May 2011 Slide 10
Slide 11: Southdown Project Key Facts
Southdown Magnetite g Project j Key y Facts For personal use only Ownership Grange 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 Targeting 10Mtpa magnetite concentrate for premium Product
Slide 12: Project Location Plan
Southdown Magnetite g Project j Location Plan For personal use only May 2011 Slide 12
Slide 13: Project Regional Benefits
Southdown Magnetite Project Regional Benefits For personal use only A long-term (30 to 50 years) sustainable industry in the Great Southern. • A local workforce (not FIFO) • Over 600 long long-term term jobs directly created • Work for local contractors and businesses • Injection of ~ $500M annually
Slide 14: Project PFS Highlights
Southdown Magnetite g Project j PFS Highlights g g For personal use only • Mine Capex, Capex including infrastructure A$2.57 A$2 57 billion; • Operating costs per tonne of concentrate produced <$60 per tonne; • Positive NPV with favourable IRR; • Mine life of 19-40 years @10mtpa of concentrate; • De
Slide 15: Project Orebody
Southdown Magnetite g Project j Orebody y For personal use only 654 Mt at 36.5% magnetite May 2011 Slide 15
Slide 16: Project Orebody Potential
Southdown Magnetite g Project j Orebody y Potential For personal use only Short Term PFS Case Longg Term Potential D t il Details P t ti l Potential Western Resource Western/Eastern Resource Full Western Resource Mine Life 19 years 21 years 40 years Ore (million tonnes) 430 ~575 ~1,200 Ore Grade %DT
Slide 17: Project Concentrator Flow Sheet
Southdown Magnetite Project Concentrator Flow Sheet For personal use only May 2011 Slide 17
Slide 18: Project Product Quality
Southdown Magnetite Project Product Quality For personal use only Southdown Magnetite Southdown Iron % % Concentrate Ore Pellets Total Fe 68.9 Total Fe 67 SiO2 1.56 B2 0.54 Al2O3 1.45 SiO2+Al2O3+TiO2 3.31 CaO 0 11 0.11 P <0.01 MgO 0.16 S 0.01 TiO2 0.38 P 0.04 S 0.08 LOI (Loss of ignition) -3.18 May
Slide 19: Project Location Plan
Southdown Magnetite g Project j Location Plan For personal use only May 2011 Slide 19
Slide 20: Water
Water For personal use only May 2011 Slide 20
Slide 21: Port of Albany New Berth Location
Port of Albany For personal use only New Berth Location May 2011 Slide 21
Slide 22: Project Environmental Permits
Southdown Magnetite g Project j Environmental Permits For personal use only ; Mi Environmental Mine E i t l permit it Granted November 2009,, amendment required in 2011 for 10mtpa ; Port p permits Granted November 2010 Water permit Desalination permit expected in 2011 May 2011 Slide 22
Slide 23: Project Australia - Malaysia
Southdown Project Australia - Malaysia For personal use only 4. Pellet Plant (7Mtpa) ( p ) 3. Concentrate shipped (10Mtpa) 2. 100km slurry pipeline to Albany Port 1. Mine and concentrator targeting 10Mtpa of concentrate production for over 25 years May 2011 Slide 23
Slide 24: The Kemaman Pellet Plant Location Plan
The Kemaman Pellet Plant Location Plan For personal use only May 2011 Slide 24
Slide 25: Project Timetable
Southdown Magnetite g Project j Timetable For personal use only 2011 2012 2013 2014 Pre Pre- ; Feasibility Definitive D fi i i Feasibility Construction Production May 2011 Slide 25
Slide 26: Project PFS Highlights
Southdown Magnetite g Project j PFS Highlights g g For personal use only Why is this project different to other magnetite projects being built? • Grange’s G ’ extensive operating experience and existing IP dramatically reduces execution risk, • The project is well advanced: ¾ Major j p permits for t
Slide 27: An Opportunity for WA
An Opportunity pp y for WA For personal use only The Southdown Magnetite Project will deliver a new long-term industry for Western Australia and the Great Southern Region. It will improve local infrastructure, infrastructure create regional employment and further develop the City of Albany as a regi
Slide 28: Positive Outcomes for WA
Positive Outcomes for WA For personal use only • A new industry in southern Western Australia • State Royalties of ~$50M per annum • State taxes ~ $5M pper annum • Port enhancements secure Albany as a commercial port • Better infrastructure for water & power • Partnerships that benefit the State & r
Slide 29: Regional Benefits
Regional Benefits For personal use only A long-term (30 to 50 years) sustainable industry in the Great Southern. • A local workforce (not FIFO) • Over 600 long long-term term jobs directly created • Work for local contractors and businesses • Injection of ~ $500M annually into local economy • Region
Slide 30: Key Contacts
Keyy Contacts For personal use only Primary contact: Russell Clark Managing Director & Chief Executive Officer +61 8 9327 7901 managingdirector@grangeresources.com.au May 2011 Slide 30
Slide 31: Competent Person Statement
Competent p Person Statement For personal use only Southdown Project 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 the Aus