GRANGE RESOURCES Australia s leading magnetite producer Australia’s leading magnetite producer Australia Day Seminar - London Grange Resources Limited (GRR) 29 th November 2010 29 th November 2010 Level 11, 200 St Georges Terrace Level 11, 200 St Georges Terrace Perth, WA 6000, Australia Phone + 61 8 9327 7901 Russell Clark Fax + 61 8 9327 7932 www.grangeresources.com.au www grangeresources com au M Managing Director & CEO i Di t & CEO
Disclaimer Disclaimer The material in this presentation (“material”) is not and does not constitute an offer 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 warranty, express or implied, as to the accuracy, y y reliability or completeness of this material. GRR, its directors, employees, agents and consultants, shall have no liability, including liability to any person by reason of negligence or negligent misstatement, for any statements, opinions, information or matters, express or implied arising out of contained in or derived from or for any omissions from this or implied, arising out of, contained in or derived from, or for any omissions from this material except liability under statute that cannot be excluded. Statements contained in this material, particularly those regarding possible or assumed future performance costs dividends production levels or rates prices resources future performance, costs, dividends, production levels or rates, prices, resources, reserves or potential growth of GRR or, industry growth or other trend projections are, or may be, forward looking statements. Such statements relate to future events and expectations and, as such, involve known and unknown risks and uncertainties. Actual results and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors. NOT FOR DISTRIBUTION IN THE US 2
Snapshot 2009 Snapshot 2009 • Unhelpful banks • Unhelpful banks • High Debt • High Debt • Share register issues • Major pre-existing liabilities • Market Cap ~$200m Market Cap $200m • Prices below costs • Cash constrained NOT FOR DISTRIBUTION IN THE US 3
Snapshot 2010 Snapshot 2010 • No net debt no hedging • No net debt, no hedging • Institutional investment • Institutional investment • $97m cash at bank • Greater liquidity • $49m leasing and State $ g • Investors tripled, ASX 300 p , liabilities • Market cap ~$800m • Market pricing for all • Southdown development product product • Strong margins NOT FOR DISTRIBUTION IN THE US 4
Magnetite – the premium iron ore Magnetite – the premium iron ore ~US$150 $ • Iron Ore Pellet ~65-69% Fe RICE LITY • Direct Shipping Lump ~63% Fe pp g p E & PR QUAL VALUE • Magnetite Concentrate ~67% Fe V • Direct Shipping Fines ~58% Fe ~US$100 NOT FOR DISTRIBUTION IN THE US 5
Company Snapshot Company Snapshot Current Ownership Structure p Board of Directors B d f Di t Mr Xi Zhiqiang Chairman Free float Mr Neil Chatfield Deputy Chairman 32.70 Mr Russell Clark Mr Russell Clark Managing Director, CEO Managing Director, CEO PML PML 46.90 Mr Zhao Hong Lin Non Executive Director Mr Clement Ko Non Executive Director RGL Group Mr John Hoon Non Executive Director 7.90 Jiangsu g Currently sourcing an additional independent director Currently sourcing an additional independent director Shagang 12.50 Current key statistics (A$) R Research h Ordinary shares on issue 25 November 10 1,152m Citi Last share price 25 November 10 $0.755 Macquarie q Market capitalization 25 November 10 $870m Patersons Petra Capital Cash 30 September 10 $97m S Southern Cross Equities C Grange joined the ASX 300 in September 2010 NOT FOR DISTRIBUTION IN THE US 6
Grange Board Grange Board Grange has a board with a diverse range of relevant experience. Neil Chatfield: Deputy Chairman (Independent) Xi Zhiqiang: Chairman • Recently Executive Director and CFO of Toll Holdings, a position • Extensive experience in the Chinese steel industry held for over 10 years • Baosteel employee for 30 years, including 5 years as • 30 years experience in resources, logistics and transportation Managing Director of Baosteel Australia sectors sectors • Currently Independent Chairman of Virgin Blue, Non-executive Director of Seek Limited, Whitehaven Coal Limited, TransUrban Clement Cheung Ko: Non-executive Director Russell Clark: Managing Director and CEO • Chairman and CEO of Pacific Minerals Limited (PI) • Appointed Managing Director of Grange in March 2008 • More than 18 years experience in mining sector, with extensive • 31 years of mining experience in technical, project expertise in marketing and sales management, general management and executive positions • Prior to founding PI, he worked for BHP Billiton (China) Ltd as a • Prior to joining Grange, he worked for Renison Goldfields for senior regional marketing manager over 18 years and Newmont Mining Corporation for 8 years John Hoon: Non-executive Director (Independent) Zhao Hong Lin: Non-Executive Director • Joined Shagang Group in 1976 • Chairman of the Company’s Audit Committee and member of the Remuneration Committee • Executive Director of Jiangsu Shagang Group • Strong background in financial and audit matters • Vice President of Jiangsu Shagang Group • Previously a Director of Bao Australia Pty Ltd a subsidiary of • Commander of Project Development for Shagang Group China Shanghai Baosteel Corporation Pauline Carr: Company Secretary • Appointed Company Secretary in January 2010 Grange is currently sourcing • 25 years of management and commercial experience in the resources industry both Australian and International resources industry both Australian and International an additional Independent director dditi l I d d t di t companies NOT FOR DISTRIBUTION IN THE US 7
Jiangsu Shagang - Cornerstone Shareholder A strong partnership A strong partnership Grange’s largest shareholder � Demonstrated continuing support for � Grange with an attractive LOM offtake agreement at Savage River at market prices prices. Agreement to negotiate at fair market � price for Grange’s share of offtake from Southdown from Southdown Shagang’s investment in Grange � • In excess of A$17 billion Assets represents a significant direct iron • Jiangsu Province, China Location ore investment in Australia • Heavy plate, hot strip coil, stainless Potential for Grange to leverage off � hot rolled plate, cold rolled plate, Product Range Shagang’s strong balance sheet for high-speed wire rod, rebar coil and Southdown development in the future special steel bar • Over 25Mtpa pig iron Production Being backed by China’s largest Capacity • 27Mtpa other steel products privately owned steel producer • 26,500 Employees provides a large degree of provides a large degree of stability and is a positive for both Grange’s prospects and its shareholders NOT FOR DISTRIBUTION IN THE US 8
Best performing ASX stock Q1 2010 Best performing ASX stock, Q1 2010 N mber of Grange Shareholders Number of Grange Shareholders 4500 4000 3500 3000 2500 2000 1500 NOT FOR DISTRIBUTION IN THE US 9
Best performing ASX stock Q1 2010 Best performing ASX stock, Q1 2010 1000 Market Capitalisation $Am Market Capitalisation $Am 900 800 700 ASX 300 September 600 2010 500 400 300 200 100 0 NOT FOR DISTRIBUTION IN THE US 10
Grange Resources – Australia’s Leading Magnetite Producer Australia s Leading Magnetite Producer Grange’s position is supported by quality assets in Tasmania and Western Australia. Southdown Project (70%) Southdown Project (70%) Savage River (100%) Savage River (100%) � Northwest Tasmania � 90km northeast of the Port of Albany � Annualised production rate � 650 million tonnes of � 650 million tonnes of of 2.3Mtpa premium blast of 2 3Mtpa premium blast premium quality magnetite resource in furnace pellets and southern Western Australia concentrate � Targeting 10Mtpa concentrate, to produce � Mine life to 2024 e e to 0 high quality pellets for over 25 years � 118Mt reserves at 51% DTR � Infrastructure solutions in place � Owner-operated open pit mine, 83km slurry (power, ports, water) pipeline, coastal pellet plant and port pipeline, coastal pellet plant and port � Advanced permitting � Dedicated infrastructure – no third party � Potential to increase resources and reserves charges � Extensive operating experience applicable to Extensive operating experience applicable to Southdown development NOT FOR DISTRIBUTION IN THE US 11
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