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Burnie Office - Tasmania
(Registered Office)
34A Alexander Street
Burnie, TAS 7320
PO Box 659
Burnie, TAS 7320
+61 (3) 6430 0222
grr.info@grangeresources.com.au
ANNUAL
REPORT 2022
GRANGE RESOURCES LIMITEDBOARD OF DIRECTORSMichelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonMichael Dontschuk Non-Executive Director Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Managing Director / Chief Executive OfficerChongtao Xu Executive Director (appointed 1 March 2023)COMPANY SECRETARYPiers LewisREGISTERED OFFICEGrange Resources Limited ABN 80 009 132 40534a Alexander Street, BURNIE, TAS 7320Telephone: + 61 (3) 6430 0222Email: GRR.Info@grangeresources.com.auSHARE REGISTRYAdvance Share Registry Services Limited110 Stirling HighwayNedlands, WA 6009AUDITORSPricewaterhouseCoopers2 Riverside QuaySOUTHBANK, VIC 3006STOCK EXCHANGEGrange Resources Limited is listed on the ASX Limited (ASX Code: GRR) and the “OTC” Markets in Berlin, Munich, Stuttgart and Frankfurt in Germany (Code: WKN. 917447)WEBSITEwww.grangeresources.com.auThis report has been printed on recycled paper. OUR BUSINESSGrange Resources Limited (Grange or the Company), ASX Code: GRR, is Australia’s most experienced magnetite producer with over 55 years of mining and production from its Savage River mine and has a projected mine life beyond 2035. Grange’s operations consist principally of owning and operating the Savage River integrated iron ore mining and pellet production business located in the north-west region of Tasmania. The Savage River magnetite iron ore mine is a long-life mining asset. At Port Latta, on the north-west coast of Tasmania, Grange owns a downstream pellet plant and port facility producing over 2.5 million tonnes of premium quality iron ore pellets annually, with plans to increase annual production. Grange has a combination of spot and contracted sales arrangements in place to deliver its pellets to customers throughout the Asia Pacific region and beyond.In addition, Grange owns a major magnetite development project at Southdown, near Albany in Western Australia. The Southdown magnetite project, once developed, is expected to have the capacity to supply double the amount of iron ore produced at Savage River, at an initial annual production rate of 5 million tonnes of premium magnetite concentrate. The Company is continuing to evaluate options related to a strategic share of the Company’s interest in the project.OUR PURPOSEThe responsible provision of mineral resources to support sustainable development, growth and prosperity.OUR VISIONWe will produce high quality steel making raw materials economically and effectively. Our operations will be efficient, flexible, and stakeholder focused. OUR VALUESWe valueAt Grange we all will… Safety Work safely.Respect Lead & act with fairness, integrity, trust and respect.Accountability Be responsible & accountable for our actions.Efficiency Utilise our resources efficiently and effectively.Sustainability Engage with stakeholders and proactively manage our impact on their environment.Teamwork Work together openly and transparently.People Promote an inclusive and diverse environment in which our people can develop and prosper.ABOUT GRANGE1GRANGE RESOURCES LIMITEDBOARD OF DIRECTORSMichelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonMichael Dontschuk Non-Executive Director Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Managing Director / Chief Executive OfficerChongtao Xu Executive Director (appointed 1 March 2023)COMPANY SECRETARYPiers LewisREGISTERED OFFICEGrange Resources Limited ABN 80 009 132 40534a Alexander Street, BURNIE, TAS 7320Telephone: + 61 (3) 6430 0222Email: GRR.Info@grangeresources.com.auSHARE REGISTRYAdvance Share Registry Services Limited110 Stirling HighwayNedlands, WA 6009AUDITORSPricewaterhouseCoopers2 Riverside QuaySOUTHBANK, VIC 3006STOCK EXCHANGEGrange Resources Limited is listed on the ASX Limited (ASX Code: GRR) and the “OTC” Markets in Berlin, Munich, Stuttgart and Frankfurt in Germany (Code: WKN. 917447)WEBSITEwww.grangeresources.com.auThis report has been printed on recycled paper. 2022
OVERVIEW
OPERATIONAL OVERVIEW
• Achieved a major milestone of over 2,110 days Lost Time
Injury free.
• Mining activities have focused on waste stripping in both
North Pit and Centre Pit, following the successful completion
of North Pit Stage 6.
• Pellet production of 2.52 million tonnes for the year compared
to 2.60 million tonnes for the prior year.
• Delivered full year’s production profile and managed the
safety health and wellbeing of our employees throughout the
COVID-19 pandemic.
• Definitive feasibility study for underground mining in North
Pit commenced in 2022 with the location of the extraction
level being modelled after the completion of the North Pit
Stage 7 open pit mining.
• Redesigned Furnace Line 4 was commissioned in 2022 with
the initial phase completed and the next phase to implement
the intermediate air system scheduled for first half of 2023.
FINANCIAL OVERVIEW
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to
$321.6 million for the prior year, on revenues from operations
of $594.6 million compared to $781.7 million for the prior
year.
• Average realised product price (FOB Port Latta) of $203.18
per tonne for the year compared to $276.17 for the prior year.
• Unit C1 cash operating costs of $120.64 per tonne for the
year compared to $99.73 for the prior year mainly due to
significantly higher energy costs.
• Cash and liquid investments of $298.6 million at the end of
year compared to $463.5 million at the end of the prior year.
2
2022
OVERVIEW
OPERATIONAL OVERVIEW
• Achieved a major milestone of over 2,110 days Lost Time
Injury free.
• Mining activities have focused on waste stripping in both
North Pit and Centre Pit, following the successful completion
of North Pit Stage 6.
• Pellet production of 2.52 million tonnes for the year compared
to 2.60 million tonnes for the prior year.
• Delivered full year’s production profile and managed the
safety health and wellbeing of our employees throughout the
COVID-19 pandemic.
• Definitive feasibility study for underground mining in North
Pit commenced in 2022 with the location of the extraction
level being modelled after the completion of the North Pit
Stage 7 open pit mining.
• Redesigned Furnace Line 4 was commissioned in 2022 with
the initial phase completed and the next phase to implement
the intermediate air system scheduled for first half of 2023.
FINANCIAL OVERVIEW
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to
$321.6 million for the prior year, on revenues from operations
of $594.6 million compared to $781.7 million for the prior
year.
• Average realised product price (FOB Port Latta) of $203.18
per tonne for the year compared to $276.17 for the prior year.
• Unit C1 cash operating costs of $120.64 per tonne for the
year compared to $99.73 for the prior year mainly due to
significantly higher energy costs.
• Cash and liquid investments of $298.6 million at the end of
year compared to $463.5 million at the end of the prior year.
2
Grange is Australia’s proven, safe, reliable, long-life producer of magnetite iron ore and premium quality pellets. Grange is committed to the local community of Northwest Tasmania and makes a significant contribution to the state economy.The Board has reviewed our five key strategic drives that underpin the development of Grange’s business. These focus on: Developing a sustainable Life-of-Mine-Plan; Integrating innovation into all aspects of the business; Building capacity and capability within our workforce; Developing strategic initiatives for future development and Delivering our ESG goals. Grange’s business and operational planning is directed to enact these strategies.DEVELOP SUSTAINABLE LIFE-OF-MINE-PLAN The Life-of-Mine-Plan is a key to underpin investment decisions and to optimise business execution. Geotechnical instability has historically introduced uncertainty into the production profile. Over the past few years we have reduced the risk to the production profile with the re-commencement of Centre Pit to provide a second ore source; a substantial ore stockpile; investment in our geotechnical model and controls; and progression of the North Pit Underground feasibility study. We will continue to seek to mitigate increasing pressure on OPEX costs; develop contingency for extreme weather events; understand and mitigate risk delays on project development and complete the studies to enable integration and optionality for Open Pit and Underground operation.Centre Pit and stockpiles provide the main source of ore for 2023 and Grange will continue to invest in stripping Centre Pit and North Pit to deliver future high-grade ore. Focussed condition monitoring and maintenance will enable us to sustain and extend the life of our valuable infrastructure and assets. For longer term asset development, the focus will be on the completion of the Underground feasibility. This will provide a basis for an optimised Life of Mine Plan with a view to maximise the efficient and effective recovery of the mineral resources at Savage River. INTEGRATE INNOVATIONInnovation is critical to improving safety, efficiency and reducing cost. Innovation tools are integrated into the business through our Management Operating System (MOS) and we are building capability with our people and systems. This will be considered both at the strategic level in the development of the plan and at the transactional level. Application of new technology will support and improve operational outcomes. Our focus is to: determine the potential to introduce automation into the operation; upgrade the equipment tracking system for the mine and optimise the mining cycle to reduce delay and increase efficiency; review the opportunity for sources and supply of energy; and build production capability for potential expansion of the operation.BUILD CAPACITY & CAPABILITYWe recognise that our people are our most valuable asset. We have a committed workforce with a strong skills and experience base. There is increasing competition for human resources as the resource industry cycles and we note the risk of losing key technical staff and some of our skills and experience.To mitigate these risks we are implementing strategies to retain employees; attract the required skills into the business; improve the communication of our brand and operation in order to attract talent and build specialised expertise as we gain certainty with respect to our optimised and de-risked Life-of-Mine-Plan.DEVELOP STRATEGIC INITIATIVESGrange has developed capacity and capability. There are new markets developing to address changes in climate. Grange is well positioned to further develop existing assets and consider additional growth that will leverage opportunities in new areas.The Southdown feasibility study will be completed in 2023 and will provide guidance on the go-forward options for development of this world class project.DELIVER ESG GOALSGrange is committed to supporting the prosperity of the communities in which we operate. The global landscape is changing. Stakeholders are demanding reduction & elimination of Carbon Emissions, with businesses incorporating pricing to achieve net zero targets. We are aligning our business to the sustainable development goals that provide a roadmap to sustainability and resilience. 2023 PRIORITIES3 Grange Resources Limited (Grange) owns and operates Australia’s
oldest integrated iron ore mining and pellet production business
located in the northwest region of Tasmania. The Savage River
magnetite iron ore mine, 100km southwest of the city of Burnie, is a
long-life mining asset set to continue operation to beyond 2035. At
Port Latta, 70kms northwest of Burnie, is Grange’s wholly owned
pellet plant and port facility producing more than 2.5 million tonnes
of premium quality iron ore pellets annually with plans to increase
annual production. Grange holds long term supply contracts for 1
million tonnes of its annual production and offers the balance of
its production to market via a spot sales tendering and contracting
process.
As well as this profitable magnetite operation, Grange has the
majority interest in the Southdown magnetite mining project near
Albany in Western Australia.
Grange Resources is Australia’s most experienced magnetite
producer. Grange is a proven and reliable commercial producer
combining both mining and pellet production expertise.
ABOUT THE
GRANGE
BUSINESS
MAGNETITE
Magnetite is a naturally occurring mineral commonly refined into an
iron ore concentrate and used for steel production. Iron ore makes
up about five per cent of the Earth’s crust and most commonly
occurs in the form of haematite or magnetite. Most of the magnetite
mined is usually used to produce concentrate for pellet feed or
pellets which are used to make steel.
The Australian iron ore industry has traditionally been based on
the mining, production, and export of haematite ores, also referred
to as ‘Direct Shipping Ore’ (DSO). The majority of Australian iron
ore production comes from DSO. While magnetite is an emerging
industry in Australia, globally it accounts for approximately 50 per
cent of iron ore production.
Smelting magnetite to iron involves agglomeration or ‘clumping
together’ of the magnetite concentrate, and thermal treatment to
produce haematite iron ore pellets.
The pellets can be used directly in a blast furnace or at direct
reduction iron-making plants.
Magnetite concentrate has internal thermal energy, meaning less
energy is required as the magnetite is converted into haematite
pellets. This results in lower carbon dioxide emissions. The blast
furnace chemically reduces iron oxide into liquid iron called ‘hot
metal’. The iron ore and reducing agents (coke, coal and limestone)
are combined. Pre-heated air is blown at the bottom of the
combination for up to eight hours. The final product is a liquid which
is drained, and eventually refined to produce steel.
Mining magnetite ore is capital intensive and requires significant
downstream processing infrastructure including a beneficiation
plant, a pellet plant and port facilities. Magnetite products command
a value premium above haematite ore products such as fines and
lump. This premium is derived on two fronts, through additional iron
content, and a quality premium.
The growth in Chinese demand and its understanding of the use of
magnetite-based iron ore products has seen a significant change in
the value accrued to both magnetite concentrate and pellets, and
the methodology used for determining that value.
As magnetite concentrate is a refined product, it usually has higher
iron content and lower impurities. This can have beneficial quality
and environmental outcomes for the steel maker.
4
Magnetite is a naturally occurring mineral commonly refined into an
Grange Resources Limited (Grange) owns and operates Australia’s
iron ore concentrate and used for steel production. Iron ore makes
oldest integrated iron ore mining and pellet production business
up about five per cent of the Earth’s crust and most commonly
located in the northwest region of Tasmania. The Savage River
occurs in the form of haematite or magnetite. Most of the magnetite
magnetite iron ore mine, 100km southwest of the city of Burnie, is a
mined is usually used to produce concentrate for pellet feed or
long-life mining asset set to continue operation to beyond 2035. At
Port Latta, 70kms northwest of Burnie, is Grange’s wholly owned
pellet plant and port facility producing more than 2.5 million tonnes
of premium quality iron ore pellets annually with plans to increase
annual production. Grange holds long term supply contracts for 1
million tonnes of its annual production and offers the balance of
its production to market via a spot sales tendering and contracting
process.
As well as this profitable magnetite operation, Grange has the
majority interest in the Southdown magnetite mining project near
Albany in Western Australia.
Grange Resources is Australia’s most experienced magnetite
producer. Grange is a proven and reliable commercial producer
combining both mining and pellet production expertise.
ABOUT THE
GRANGE
BUSINESS
MAGNETITE
pellets which are used to make steel.
The Australian iron ore industry has traditionally been based on
the mining, production, and export of haematite ores, also referred
to as ‘Direct Shipping Ore’ (DSO). The majority of Australian iron
ore production comes from DSO. While magnetite is an emerging
industry in Australia, globally it accounts for approximately 50 per
cent of iron ore production.
Smelting magnetite to iron involves agglomeration or ‘clumping
together’ of the magnetite concentrate, and thermal treatment to
produce haematite iron ore pellets.
The pellets can be used directly in a blast furnace or at direct
reduction iron-making plants.
Magnetite concentrate has internal thermal energy, meaning less
energy is required as the magnetite is converted into haematite
pellets. This results in lower carbon dioxide emissions. The blast
furnace chemically reduces iron oxide into liquid iron called ‘hot
metal’. The iron ore and reducing agents (coke, coal and limestone)
are combined. Pre-heated air is blown at the bottom of the
combination for up to eight hours. The final product is a liquid which
is drained, and eventually refined to produce steel.
Mining magnetite ore is capital intensive and requires significant
downstream processing infrastructure including a beneficiation
plant, a pellet plant and port facilities. Magnetite products command
a value premium above haematite ore products such as fines and
lump. This premium is derived on two fronts, through additional iron
content, and a quality premium.
The growth in Chinese demand and its understanding of the use of
magnetite-based iron ore products has seen a significant change in
the value accrued to both magnetite concentrate and pellets, and
the methodology used for determining that value.
As magnetite concentrate is a refined product, it usually has higher
iron content and lower impurities. This can have beneficial quality
and environmental outcomes for the steel maker.
4
DEAR SHAREHOLDERS,The Company achieved outstanding performance in FY2022 as a result of the hard work and commitment made by our people to keep our operations running safely. Your Company delivered another strong set of financial results and paid dividends of 4 cents per share fully-franked. These results were achieved through a focused strategy of capital expenditure with improvements in operational performance and safety, supported by a continued focus on productivity. Our balance sheet remains strong. We have been reviewing our strategy against changes in the external environment by analysing the risks and opportunities we are facing and optimising our operations with a number of long-term improvement projects. We believe that the Board’s approach to strategy and risk management positions us to manage and respond to changes and capture opportunities to grow shareholder value over time. We maintain a relentless focus on the health and safety of our people and the communities in which we operate. 2022 REVIEWThe iron ore market was very volatile in 2022. The iron ore price reached its highest level for the year at about US$160 per tonne in March 2022, although the second part of the year had a different story. The price dropped by half to approximately US$80 per tonne in November 2022 due to renewed worries over COVID-19 restrictions in China. There were renewed concerns over the country’s property sector and cooling global economic growth. The Chinese market accounts for approximately two-thirds of global seaborne iron ore demand. The Company, like many other in the industry, was challenged by an inflationary environment that saw the cost of energy, labour and many other inputs of production rise significantly over the past year.In spite of these challenges, the Company achieved a profit after tax of $171.7million (2021: $321.6 million), on revenues from mining operations of $594.6 million (2021: $781.7 million). The year’s average product prices realised $203.18 per tonne (2021: $276.17 per tonne) (FOB Port Latta). Total iron ore product sales of 2.57 million tonnes (2021: 2.62 million tonnes) were achieved. Increases in fuel and gas costs were balanced with improved production rates resulting in C1 cash operating costs of $120.64 per tonne (2021: $99.73 per tonne). The increase in costs was largely due to the significant increase in energy costs. A final dividend of 2 cents per share taking total dividends declared for shareholders this year to 4 cents per share or $46.3 million. Cash and liquid investments positioned at $298.6 million (2021: $463.5 million) at the end of the year.The Company delivered strong results as the world recovers from 3 years of disruption caused by the COVID-19 pandemic. A focus on safety has been maintained across the business. 2022 was still a difficult and challenging year for everyone. We are very proud of the Company’s response to COVID-19. Despite all the uncertainties created by the pandemic, we have achieved over 2110 days Lost Time Injury Free. This achievement is made possible by the hard work and dedication of hundreds of employees, contractors, and the support of the local community throughout the year.Mining activities have focused on the cutbacks in both North Pit and Centre Pit, following the completion of North Pit Stage 6. North Pit Stage 6 yielded large stockpiles to support production in 2022 and 2023. Mining movement was impacted by mining equipment availability and positive COVID cases in the workforce, but improved significantly over the later part of the year. The North Pit Underground PFS demonstrated a technically and economical feasible underground mining operation for North Pit. Ore continuity at depth indicated the potential for 6 million tonne per annum production rate with a mine life of more than 10 years. The Definitive Feasibility Study was commenced in 2022, with an amendment of the extraction level after the completion of North Pit Stage 7 open pit mining. The redesigned pellet plant furnace line 4 was commissioned in 2022. The next phase will be to improve the air distribution through the furnace which is scheduled for Q2, 2023. These design modifications will improve production efficiency and support Grange’s decarbonisation initiatives.During 2022, the Company commenced a definitive feasibility study on a 5 Mtpa development case with new technology and additional test-work for Southdown magnetite project. In December 2022, the Company entered into a binding agreement with its joint venture partner, SRT Australia Pty Ltd to reacquire SRT’s 30 per cent interest in the Southdown Magnetite Project. FIRB approval on the acquisition was received on 3rd March 2023. The transaction is expected to be completed in Q2, 2023. Upon completion, Grange will hold 100 per cent ownership in the Project. All tenements, permits and project assets continue to be maintained in good order. Climate change is a defining issue the world is currently facing. Grange published its baseline Environmental, Social, and Governance (ESG) report with disclosures on 21 core metrics set by the World Economic Forum (WEF) in its standardised and globally recognised Stakeholder Capitalism Metrics ESG framework. Grange has developed a road map to reduce emissions. This will involve the reduction in energy used per tonne of product; upgrades to furnaces; CHAIRPERSON’S & CHIEF EXECUTIVE OFFICER’S REVIEW5 GRANGE RESOURCES ANNUAL REPORT 2022
recovery of heat in the pellet plant; application of technology
and electric vehicles in the mining operation; and alternative fuel
sources. The Board has endorsed the pursuit of decarbonisation
of Grange’s Business with specific targets for CO2-e reduction
including:
• The elimination of non-renewable coal sources like anthracite, by
2025.
• CO2-e emission target reduction of 50% by 2030 reducing
emissions to 53kg of CO2-e per tonne of iron ore products.
• Target of net zero CO2-e (Scope 1 and 2) emissions by 2035.
• Continuing focus on improving productivity and implementing
cost control projects
• Delivering on secured off take agreements
• Strategic review on the completion of the feasibility study on a
5 Mtpa development case with new technology for Southdown
magnetite project.
The company continues to assess and manage various business
risks which could impact the company’s operating and financial
performance and its ability to successfully deliver strategic priorities
including:
• Health, safety and environment
•
Impacts of climate change on our business
• Volatility in iron ore market and movements in foreign exchange
rates
• Volatility in the energy prices and availability, and tight labour
markets
• Production risks and costs associated with pit wall stability and
ageing infrastructure
THANK YOU
On behalf of Grange’s Board, we would like to thank all of our
employees for their dedication and hard work over the past year.
We are proud of our excellent culture, capability and resilience to
position us for a prosperous future. Thank you to our Shareholders
for your continued support.
Michelle Li
Chairman
Honglin Zhao
Chief Executive Officer
OUTLOOK
Looking ahead, the iron ore pellet market remains uncertain and
challenging. The iron ore price rallied after China reopened at
the end of 2022. On the 17th February, China issued its biggest-
ever cash injection of US$121 billion. This prompted increased
demand for steel as the manufacturing and construction sectors
recommenced normal activity. However, a modest increase in
seaborne iron ore supply during 2023, led by Brazil and India, will
impact the supply and demand equation and potentially impact the
iron ore price. The possible increasing pricing volatility stemming
from increasing geopolitical tensions, a growing debate over the
future of globalization and the United States’ policy of decoupling
from China. Risks with respect to energy costs are slightly reduced,
although labour markets remained tight.
Despite the uncertain conditions we currently face, the long-term
outlook for our sector remains positive. We continue to build our
safety culture through initiatives. Our employees are encouraged
to come up with new, creative ideas on how to strengthen and
improve our business. Our strong balance sheet provides a
fundamental base for managing volatile markets and ensuring
capital is available for sustaining operations through the cycle. This
strength is underpinned by our ongoing generation of solid cash
flows from operations. We continue to implement measures to both
preserve the balance sheet strength and align our capital allocation
framework with the cyclical nature of the industry. Our primary goal
is to remain competitive in a frequently changing iron ore market.
Our focus will remain on delivering value to our shareholders in
the near, medium and long term. We strive to ensure our company
remains strong and resilient. Sustainability will remain an important
priority and indeed, will play an increasingly important role in our
business.
The Board and the management team have a positive outlook for
the pellet market and are proactively exploring opportunities for
innovation, improvement and productivity growth. De-carbonisation
ambitions for the sector provide a unique opportunity for us. We
are confident in our competitiveness to supply a high quality, low
impurity iron ore pellet product. We strive to deliver value to our
loyal employees and shareholders.
The Company’s strategic focus is to generate sustained shareholder
value by safely producing high quality iron ore products from
its Savage River and Port Latta operations in Tasmania whilst
continuing to assess the feasibility of a major iron ore development
project at Southdown, near Albany in Western Australia, by:
• Optimising the Life of Mine Plan together with cost reduction
strategies
• Completing the Definitive Feasibility Study and transition
preparation for underground mining in North Pit
• Maintaining access to ore with continuing investment in mine
development
• Maintaining critical process infrastructure
6
GRANGE RESOURCES ANNUAL REPORT 2022
including:
2025.
OUTLOOK
recovery of heat in the pellet plant; application of technology
• Continuing focus on improving productivity and implementing
and electric vehicles in the mining operation; and alternative fuel
cost control projects
sources. The Board has endorsed the pursuit of decarbonisation
of Grange’s Business with specific targets for CO2-e reduction
• Delivering on secured off take agreements
• The elimination of non-renewable coal sources like anthracite, by
magnetite project.
• Strategic review on the completion of the feasibility study on a
5 Mtpa development case with new technology for Southdown
• CO2-e emission target reduction of 50% by 2030 reducing
emissions to 53kg of CO2-e per tonne of iron ore products.
The company continues to assess and manage various business
risks which could impact the company’s operating and financial
performance and its ability to successfully deliver strategic priorities
• Target of net zero CO2-e (Scope 1 and 2) emissions by 2035.
including:
Looking ahead, the iron ore pellet market remains uncertain and
challenging. The iron ore price rallied after China reopened at
the end of 2022. On the 17th February, China issued its biggest-
ever cash injection of US$121 billion. This prompted increased
demand for steel as the manufacturing and construction sectors
recommenced normal activity. However, a modest increase in
rates
markets
• Health, safety and environment
•
Impacts of climate change on our business
• Volatility in iron ore market and movements in foreign exchange
• Volatility in the energy prices and availability, and tight labour
seaborne iron ore supply during 2023, led by Brazil and India, will
• Production risks and costs associated with pit wall stability and
impact the supply and demand equation and potentially impact the
ageing infrastructure
iron ore price. The possible increasing pricing volatility stemming
from increasing geopolitical tensions, a growing debate over the
future of globalization and the United States’ policy of decoupling
from China. Risks with respect to energy costs are slightly reduced,
although labour markets remained tight.
THANK YOU
On behalf of Grange’s Board, we would like to thank all of our
employees for their dedication and hard work over the past year.
We are proud of our excellent culture, capability and resilience to
Despite the uncertain conditions we currently face, the long-term
position us for a prosperous future. Thank you to our Shareholders
outlook for our sector remains positive. We continue to build our
for your continued support.
Michelle Li
Chairman
Honglin Zhao
Chief Executive Officer
safety culture through initiatives. Our employees are encouraged
to come up with new, creative ideas on how to strengthen and
improve our business. Our strong balance sheet provides a
fundamental base for managing volatile markets and ensuring
capital is available for sustaining operations through the cycle. This
strength is underpinned by our ongoing generation of solid cash
flows from operations. We continue to implement measures to both
preserve the balance sheet strength and align our capital allocation
framework with the cyclical nature of the industry. Our primary goal
is to remain competitive in a frequently changing iron ore market.
Our focus will remain on delivering value to our shareholders in
the near, medium and long term. We strive to ensure our company
remains strong and resilient. Sustainability will remain an important
priority and indeed, will play an increasingly important role in our
business.
The Board and the management team have a positive outlook for
the pellet market and are proactively exploring opportunities for
innovation, improvement and productivity growth. De-carbonisation
ambitions for the sector provide a unique opportunity for us. We
are confident in our competitiveness to supply a high quality, low
impurity iron ore pellet product. We strive to deliver value to our
loyal employees and shareholders.
The Company’s strategic focus is to generate sustained shareholder
value by safely producing high quality iron ore products from
its Savage River and Port Latta operations in Tasmania whilst
continuing to assess the feasibility of a major iron ore development
project at Southdown, near Albany in Western Australia, by:
• Optimising the Life of Mine Plan together with cost reduction
strategies
• Completing the Definitive Feasibility Study and transition
preparation for underground mining in North Pit
• Maintaining access to ore with continuing investment in mine
development
• Maintaining critical process infrastructure
6
7
OPERATING & FINANCIAL REVIEWKEY HIGHLIGHTS• Achieved over 2,110 days Lost Time Injury Free.• Mining activities have focused on waste stripping in both North Pit and Centre Pit, following the successful completion of North Pit Stage 6.• Concentrate production was 2.62 million tonnes an increase from the previous year of 2.56 million tonnes.• Pellet production of 2.52 million tonnes for the year compared to 2.60 million tonnes for the prior year.• Grange’s high quality, low impurity iron ore products attracted average realised product price (FOB Port Latta) of $203.18 per tonne for the year, a decrease compared to $276.17 for the prior year.• Unit C1 cash operating costs of $120.64 per tonne for the year compared to $99.73 for the prior year mainly due to significantly higher energy costs.• Delivered profit after tax of $171.7 million for the year compared to $321.6 million for the prior year.• Cash and liquid investments of $298.6 million at the end of year compared to $463.5 million at the end of the prior year.8 SAFETY PERFORMANCEGrange operations have achieved over 2,110 consecutive days Lost Time Injury free by year end 2022. The sustained focus on lead indicators, hazard identification and risk management has helped us maintain the current long running lost time injury free period, despite a continued increase in worker hours.There was a notable decrease in Medical Treatment (MTI) injuries, however disabling injuries in 2022 remained the same as in 2021 (7 cases). During the year, there were 4 disabling injuries caused by mine operations jarring events, 1 similar type of injury in the concentrator and 2 ankle related injuries at Port Latta. All persons involved were given meaningful work for their respective periods of incapacity. They have actively contributed to their return-to-work programs reducing the periods of alternate work so far as reasonably possible.2022 saw considerable contractor involvement at both operational sites, increasing our worker hours and our level of risk exposures, with new and ongoing projects. These included contractor crews assembling new and repairing the older truck fleet, a crew working on the Pipeline Span to rectify corrosion, teams constructing new buildings at both sites and crews working on the new bentonite mixing system at Port Latta. Our SEMS (Safety, Environment Management System) onsite training and major hazard systems improvements continue to support a compliant, well managed and mature safety culture throughout the year.FULL YEAR RESULTGrange recorded a statutory profit after tax of $171.7 million for the year ended 31 December 2022 (2021: $321.6 million).Key revenue metrics for the year ended 31 December 2022 and the preceding 2021 year were as follows: 20222021Iron Ore Pellet Sales (dmt)2,429,7002,507,201Iron Ore Concentrate Sales (dmt)1,85342Iron Ore Chip Sales (dmt)136,760108,130Total Iron Ore Product Sales (dmt)2,568,3132,615,373Average Realised Product Price (US$/t FOB Port Latta)*141.28208.08Average Realised Exchange Rate (AUD:USD)0.69530.7535Average Realised Product Price (A$/t FOB Port Latta)203.18276.17*adjusted for the costs of freight and final pricing settlements on provisional settlements as per sales agreements. Pricing is typically finalised in one to three months after shipment month.Total sales for the year ended 31 December 2022 was 2.57 million tonnes of high quality, low impurity iron ore products (2021: 2.62 million tonnes) and reflects sustained production from maintaining access to high grade ore.The average iron ore product price received during the year was $203.18 per tonne of product sold (FOB Port Latta) (2021: $276.17 per tonne). Key operating metrics for the year ended 31 December 2022 and the preceding 2021 year were as follows: 20222021Total BCM Mined15,466,53413,667,044Total Ore BCM1,280,5012,804,234Concentrate Produced (t)2,624,8652,559,987Weight Recovery (%)45.244.4Pellets Produced (t)2,518,2322,597,428Pellet Stockpile (t)298,725210,193“C1” Operating Cost (A$/t Concentrate Produced)(1)120.6499.73(1) Note: “C1” costs are the cash costs associated with producing iron ore products without allowance for mine development, deferred stripping and stockpile movements, and also excludes royalties, sustaining capital, depreciation and amortisation costs.Mining activities have focused on the cutbacks in both North Pit and Centre Pit, following the successful completion of North Pit Stage 6. This ore mining stage yielded large stockpiles to support production in 2022 and 2023. Mining movement improved significantly over the later part of the year with completion of some repairs to the truck fleet and the implementation of modifications to the haul network. The new Caterpillar 6040 face shovel is working well and six second-hand Caterpillar 789 trucks have been introduced to the fleet to support production. The rebuild of the current fleet also continues with mechanical overhauls on six trucks completed during the year. Additional replacement equipment is scheduled for delivery in Q1, 2023.Lag IndicatorsJan ’22Feb ‘22Mar ‘22Apr ‘22May ‘22Jun ‘22Jul ‘22Aug ‘22Sep ‘22Oct ‘22Nov ‘22Dec ‘22IncidentsIncidents0123456012344.21.856MTILTIDITR:FRLT:FRDI:FR09 OPERATING & FINANCIAL REVIEWKEY HIGHLIGHTS• Achieved over 2,110 days Lost Time Injury Free.• Mining activities have focused on waste stripping in both North Pit and Centre Pit, following the successful completion of North Pit Stage 6.• Concentrate production was 2.62 million tonnes an increase from the previous year of 2.56 million tonnes.• Pellet production of 2.52 million tonnes for the year compared to 2.60 million tonnes for the prior year.• Grange’s high quality, low impurity iron ore products attracted average realised product price (FOB Port Latta) of $203.18 per tonne for the year, a decrease compared to $276.17 for the prior year.• Unit C1 cash operating costs of $120.64 per tonne for the year compared to $99.73 for the prior year mainly due to significantly higher energy costs.• Delivered profit after tax of $171.7 million for the year compared to $321.6 million for the prior year.• Cash and liquid investments of $298.6 million at the end of year compared to $463.5 million at the end of the prior year.8 GRANGE RESOURCES ANNUAL REPORT 2022
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The North Pit Underground PFS previously demonstrated a
technically and economical feasible underground mining operation
for North Pit. Ore continuity was demonstrated at depth and
highlights the potential for 6 million tonne per annum production rate
with an underground mine life of more than 10 years. The Definitive
Feasibility Study was commenced in 2022, with an amendment
to the location of the extraction level being modelled after the
completion of North Pit Stage 7 open pit mining. Additional drilling
to the north, revisions to geotechnical models were completed and
further exploration is planned as part of the DFS in 2023.
PORT LATTA IMPROVEMENT PROJECTS
The redesigned Furnace Line 4 was commissioned in 2022. The
initial phase involved integration into the operation with completion
of the refractory rebuild. The next phase will be to commission the
intermediate air system which will allow the improvement of air
distribution through the furnace, and is scheduled for Q2, 2023. This
will inform future design modifications to the other furnace lines
and support Grange’s decarbonisation initiatives.
ENERGY ALTERNATIVES
Early in 2020, Grange set out to investigate potential routes for
carbon reduction at our Tasmanian operation. It was identified that
our two biggest contributors were our diesel usage from the mining
fleet at Savage River and natural gas usage from the furnaces at the
Port Latta Pellet Plant.
As part of our strategic vision to reduce carbon emissions across
the operation, discussions were commenced through the formation
of the Heavy Industry Low Carbon Transition CRC (HILT-CRC). In
late 2021, the HILT-CRC was finalised, with Grange becoming a
founding member and core partner. It is with great excitement that
we work with the newly formed HILT-CRC to advance Australian
Heavy Industry’s Transition to Low Carbon.
In 2021, Grange also set out on a specific Hydrogen Study. This was
in line with the Tasmanian Government’s ambitions to establish a
Hydrogen Hub within Tasmania, to utilise the current Green Electricity
supply to generate Green Hydrogen. The study, co-founded by the
Tasmanian Government and in collaboration with Hatch, was aimed
at investigating the feasibility to convert our Port Latta operations
from natural gas to Green Hydrogen. This Prefeasibility Study
concluded that it was technically feasible to operate the Port Latta
facility on Hydrogen, with no impact on product make or quality.
The study also identified the key commercial drivers which would
need to be achieved to make the project commercially feasible and
will require support from the Tasmanian Government as part of
establishing a Tasmanian hydrogen economy. If these fundamentals
were achieved, the next step would be to undertake a pilot plant
scale trial and thereafter convert one of the 5 Port Latta Furnaces
to run on Hydrogen (pending supply and legislative requirements
being met).
Grange will continue to work with the Tasmanian Government,
external parties, and as part of the HILT CRC, to progress
decarbonisation strategies for our operations.
10
GRANGE RESOURCES ANNUAL REPORT 2022
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The North Pit Underground PFS previously demonstrated a
technically and economical feasible underground mining operation
for North Pit. Ore continuity was demonstrated at depth and
highlights the potential for 6 million tonne per annum production rate
with an underground mine life of more than 10 years. The Definitive
Feasibility Study was commenced in 2022, with an amendment
to the location of the extraction level being modelled after the
completion of North Pit Stage 7 open pit mining. Additional drilling
to the north, revisions to geotechnical models were completed and
further exploration is planned as part of the DFS in 2023.
PORT LATTA IMPROVEMENT PROJECTS
The redesigned Furnace Line 4 was commissioned in 2022. The
initial phase involved integration into the operation with completion
of the refractory rebuild. The next phase will be to commission the
intermediate air system which will allow the improvement of air
distribution through the furnace, and is scheduled for Q2, 2023. This
will inform future design modifications to the other furnace lines
and support Grange’s decarbonisation initiatives.
ENERGY ALTERNATIVES
Early in 2020, Grange set out to investigate potential routes for
carbon reduction at our Tasmanian operation. It was identified that
our two biggest contributors were our diesel usage from the mining
fleet at Savage River and natural gas usage from the furnaces at the
Port Latta Pellet Plant.
As part of our strategic vision to reduce carbon emissions across
the operation, discussions were commenced through the formation
of the Heavy Industry Low Carbon Transition CRC (HILT-CRC). In
late 2021, the HILT-CRC was finalised, with Grange becoming a
founding member and core partner. It is with great excitement that
we work with the newly formed HILT-CRC to advance Australian
Heavy Industry’s Transition to Low Carbon.
In 2021, Grange also set out on a specific Hydrogen Study. This was
in line with the Tasmanian Government’s ambitions to establish a
Hydrogen Hub within Tasmania, to utilise the current Green Electricity
supply to generate Green Hydrogen. The study, co-founded by the
Tasmanian Government and in collaboration with Hatch, was aimed
at investigating the feasibility to convert our Port Latta operations
from natural gas to Green Hydrogen. This Prefeasibility Study
concluded that it was technically feasible to operate the Port Latta
facility on Hydrogen, with no impact on product make or quality.
The study also identified the key commercial drivers which would
need to be achieved to make the project commercially feasible and
will require support from the Tasmanian Government as part of
establishing a Tasmanian hydrogen economy. If these fundamentals
were achieved, the next step would be to undertake a pilot plant
scale trial and thereafter convert one of the 5 Port Latta Furnaces
to run on Hydrogen (pending supply and legislative requirements
being met).
Grange will continue to work with the Tasmanian Government,
external parties, and as part of the HILT CRC, to progress
decarbonisation strategies for our operations.
EXPLORATION AND
EVALUATION
In 2022 there were 9,766 metres of diamond drilling completed.
5,524 metres were completed within the Centre pit deposit and 4,242
within the North Pit deposit. The diamond drilling was focused on
refinement of the existing Mineral Resources in North Pit and Centre
Pit and improvement of the geo-chemical categorisation of waste
rock types. The drilling has resulted in maintenance of the existing
Mineral Resources despite mining depletion.
The Mineral Resource stands at 485 million tonnes at 44.5% DTR,
maintaining our resource from the 2021 annual report, with a small
reduction in grade. The decrease in grade is a result of new drilling
data and updated statistical estimation of North Pit. The decrease
in total Mineral Resource grade is considered minor given the
quantum of the total Mineral Resources, annual mine production
levels, and the ongoing nature of the underground mining study.
Ore Reserves decreased to 96MT @ 46.7% DTR due primarily to
mining depletion from North Pit and Centre Pit during the year.
There was an improvement in confidence of Ore Reserves with an
increase in Proven Reserves. All Ore Reserves remain based on
open pit only mining methods and do not include any underground
mineable resources.
The North Pit Underground Definitive
Feasibility Study (NPUG DFS) is still in progress and estimation of
the underground Ore Reserves will be conducted at the conclusion
of the NPUG DFS scheduled for 2023.
Further resource definition drilling of North Pit from underground
is expected to commence in 2023. The aim is to improve confidence
in the quantity and grade of the resource and further de-risk the
mineral resource for potential underground mining while also
exploring the ore body at greater depth.
FINANCIAL POSITION
Grange’s net assets increased during the year to $904.1 million (31
December 2021: $871.2 million). The key movements in net assets
during the year are a result of the following:
• An increase in property plant and equipment and mine properties
and development of $60.6 million and $98.6 million respectively.
• An increase in other financial assets of $170.6 million due to
investment in term deposits
• An increase in trade receivables by $34.3 million
• A decrease in income tax payable by $62.9 million
• A decrease in cash and cash equivalents of $335.5 million (refer
to statement of cashflow) and
• A decrease in net deferred tax assets by $60.9 million.
• The Group’s market capitalisation as at 22 March 2023 is
$827.5 million.
STATEMENT OF CASH FLOWS
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net cash inflows from operating activities for the year were $196.9
million (2021: inflows $498.2 million) due to lower prices compared
to previous year and increase in unit operating costs.
NET CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflows from investing activities for the period were
$396.2 million (2021: outflows $79.6 million) and principally related
to funds invested in term deposits of $191.2 million and expenditures
for mine properties and development of $136.8 million and property,
plant and equipment of $87.7 million.
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net cash outflows from financing activities for the period were
$145.6 million (2021 outflow: $165.3 million) and principally related
to the payment of 2021 final dividend ($115.7 million) and 2022
interim dividend ($23.1 million).
10
11
GRANGE RESOURCES ANNUAL REPORT 2022
12
GRANGE RESOURCES ANNUAL REPORT 2022
12
MINERAL RESOURCES AND
ORE RESERVES STATEMENT
SAVAGE RIVER OPERATIONS
The following tables show the Mineral Resources and Ore Reserves
for the Savage River operations as at 31 December 2022. The
mining of ore throughout the year focussed on high grade supply
from North Pit. The Mineral Resource has been depleted since the
previous estimate dated 31 December 2021 as a result of mining
offset by updates from the drilling program. Ore Reserves have
decreased due to mining depletion from North Pit and Centre Pit.
Mineral Resources and Ore Reserves are categorised in accordance
with the Australasian Code for Exploration Results, Mineral
Resources and Ore Reserves of 2012 (JORC Code, 2012). Estimated
Measured and Indicated Mineral Resources include those Mineral
Resources modified to produce the estimated Ore Reserves. Mineral
Resources which are not included in the Ore Reserves did not meet
the required economic viability hurdle at the time of last review.
MINERAL RESOURCES
A summary of the total Mineral Resources for Savage River as at
31 December 2022, above a cut-off grade of 15% DTR is as follows:
As at December 2022
As at December 2021
Tonnes
(Mt)
Grade
% DTR*
Tonnes
(Mt)
Grade
% DTR*
Measured
Indicated
Inferred
Total
173.0
172.6
139.4
485.0
51.5
41.8
37.4
44.5
167.7
176.9
141.2
485.8
52.7
43.0
39.7
45.4
* Davis Tube Recovery – a measure of recoverable magnetite
ORE RESERVE
A summary of the Ore Reserve for Savage River as at 31 December
2022, above a cut-off grade of 15% DTR is as follows:
As at December 2022
As at December 2021
Tonnes
(Mt)
Grade
% DTR*
Tonnes
(Mt)
Grade
% DTR*
Proved
Probable
Total
69.0
27.7
96.7
49.3
40.1
46.7
61.6
41.5
103.1
51.1
41.4
47.2
A detailed statement of the Mineral Resources and Ore Reserves can
be found in the ASX announcement dated 31-March-2023. Grange
confirms in reproducing the Mineral Resources and Ore Reserves in
this subsequent report, that it is not aware of any new information
or data that materially affects the information included and all the
material assumptions and technical parameters underpinning the
estimates in this report continue to apply and have not materially
changed.
HEALTH SAFETY AND
ENVIRONMENT
OVERVIEW
Grange believes that responsible occupational Health and Safety
management with sound environmental and social responsibility
(HSE) practices are integral to an efficient and successful company.
Grange’s integrated OHS & ESR Management Systems form our
“Safety and Environment Management System” (SEMS) which
supports OHS & ESR policies and defines the required standards to
which any Grange facility must operate. Our OHS policy is reviewed
annually by our executive team and leads us to continually improve
our Safety Systems, reinforcing Psychological Health and Safety at
Work
SEMS is an integral part of the Grange Management System
(GMS) and is well supported by a management plan for 16 of the
major hazards identified in our industry. Of the 16 Major Hazard
Standards, 4 are deemed to be Principal Mining Hazards as outlined
in the Tasmanian Mining Legislation. The implementation and
effective management of SEMS enables compliance with legislation,
reduction of risk, increased efficiencies and provides the framework
for continuous improvement. SEMS is aligned to ISO 45001 & ISO
45003 Occupational Health & Safety Standards and to ISO 14001
Environmental Management Standards. These are all applicable to
any existing and future national or international operation. SEMS
is now integrated into our Certificate IV Leadership & Management
training competency for our current and aspiring leaders.
During 2022 we recognised the need for SEMS to include an update
to the “Supervisor’s Handbook” in the MOS toolbox and consultation
commenced with key stakeholders. This work will result in a new
version of the handbook being released in 2023.
MISSION STATEMENT
To drive a continuous improvement culture involving everyone at
Grange. We strive to eliminate injury, loss and waste, and create
positive environmental outcomes adding value to the communities
in which we operate.
This will be achieved through effective adherence to management
systems, integrated risk management practices, risk aware culture,
demonstrable
leadership, maintaining standards, monitoring
performance and looking after our people.
SAFETY PRINCIPLES
• All injuries and loss events are preventable
• All hazards can be identified and their risks managed
• No task is so important that it cannot be done safely and
respectfully
• Every person is accountable for their own safety and the safety
of those around them
• Safety performance can always be improved
SAFETY PERFORMANCE
The Company remains committed to providing safe systems
and a safe place of work for everyone at every site. We take this
commitment seriously and expect those working with and for us
share the same level of commitment. We want all our workers,
employees, contractors and visitors to return home in the same
or better condition than when they come to work. The Board has
monitored a 3-year HSE Strategic Plan culminating in 2023, during
13
GRANGE RESOURCES ANNUAL REPORT 2022
this year the goals of the plan were actively progressed and the plan
is on track for a successful 3-year outcome. The effectiveness of our
systems and safety management in general is well demonstrated
by the consistent measurable improvement in our safety lag
indicators. Targeted improvements in our lag indicators continue
to be reinforced by a regime of measurable lead indicators to help
reduce risk exposures.
During 2022 the company continued safety controls to manage the
impact of the global COVID-19 pandemic. The management of our
controls prevented any business disruption and ensured the health
safety and wellbeing of our employees, contractors and supported
our community.
In addition, Grange is committed to ensuring compliance with
legislative requirements for each area of its operations including
meeting or exceeding requirements within:
• Federal & State Work Health & Safety Legislation
• Anti-Discrimination Legislation
• Fair Work Australia Legislation
• Rehabilitation & Workers Compensation Legislation
• Environmental Legislation
• Codes of Practice nominated in all Federal and State Legislation
• Adopting accepted industry & Australian Standards in areas
where legislation is deficient
• Whistleblower legislation
• Mining specific, HSE Legislation as required; and
• Environmental licence conditions for existing and new operations.
Established systems are in place to ensure legislative requirements
are tracked, monitored and corrective actions implemented for any
instances of non-compliance.
Grange continued the focus on reducing costs without reducing
support services:
• Emergency Response Team (ERT) in-house training was further
developed, saving considerable costs, while maintaining a high
standard of response and continuing to develop our underground
rescue capability.
• The underground emergency refuge chambers and associated
ventilation and pumping equipment were monitored to maintain
compliance with industry standards and WST expectations.
• Emergency response team size was managed while increasing
our general first aid training coverage has ensured we have
competent people where they are needed.
• Obtained Federal and State government training funds reducing
the outlay for training in leadership and continuous improvement
and seeking to provide an opportunity for additional young
workers to commence apprenticeships.
• The highwall scaling excavator continued development and
promises to provide a machine capable of restoring lost berm
catch capacity in the mine, cleaning batters and improving
mining safety. It continues to generate industry wide interest.
• Participating in the Insurance Underwriters safety audit to
provide initiatives to help reduce insurance costs.
•
Investment in Mental Health and Wellbeing first aid training for
Management and Contact Officers has helped foster an alert and
caring worker relationship.
• Focus on gender diversity, respect at work and cultural
awareness has promoted the role of women in our workforce
14
and is supporting greater diversity in our teams.
• Strategic focus on “Critical Controls” further strengthens to our
risk management system and initiatives.
Grange recognises the importance of our contractors’ safety
management systems being aligned with WorkSafe Tasmania and
mine safety regulations as well as being on par with our own safety
standards. To this end we have incorporated and communicated
new OHS & ESR requirements for contractors into our SEMS.
The enhancement of our Safety Preventative Maintenance work
orders continued through 2022 with lead indicators, dedicated
Area Inspections covering all areas on site, formalising Task
Observations for management and key personnel as Lead Indicator
Key Performance Indicators (KPI’s). The lead indicators have been
strengthened by the addition of specific “care and maintenance”
KPIs for underground workings.
Completion and tracking of lead indicators have moved to the
iAuditor system meaning a speedy and more efficient process and
allowing more time for task observations. Lead Indicators have
helped reduce risk exposures across all areas. This is particularly
evident by our continued lost time injury (LTI) free status, seeing us
now more than 5 years LTI free.
SHARING AND LEARNING
Grange adopts a philosophy of continuous learning and sharing
of safety experiences. In addition to its highly successful on-line
induction programs, Grange conducts an extensive range of on-site
safety training activities including extensive work permit training,
energy isolations, site driving and pit driving permits, simulation
training for new operators, fire warden and extinguisher training as
well as refreshers on occupational first aid and road accident rescue
entrapment release. Grange also continues to offer a very effective
online “Isolations” training package allowing our offsite contract
workforce to learn our systems before coming to site.
During 2022 Grange have introduced an “ICAM” (Incident Cause
Analysis Method) investigation process into the incident reporting
system. The change has also helped enhance the daily review of
incidents in our pre-shift meetings. This allows an effective view
of newly raised incidents, open investigations, recently closed
investigations and actions in progress from investigations.
During the year Grange continued to work closely and openly with
the Office of the Chief inspector of Mines (OCIM), traditionally our
company provide an outlet for GMIRM (Global Mining Industry Risk
Management training sponsored by the Chief inspector of Mines and
we have asked to recommence this interaction during 2023.
GMIRM has four levels of Risk Management training G1 for workers,
G2 for Supervisors, G3 for Management and G4 for Directors and
Senior Executives. Grange again ran two, week-long G3 forums
during 2022 and will continue GMIRM training in 2023
All G3 seminars were open to other Tasmanian Mines and Mining
contractors via the Tasmanian Minerals, Manufacturing and Energy
Council (TMEC) to actively promote risk management throughout
the industry.
In addition to training delivered at the operational level, the company
continued to reinforce many site-wide health and safety programs
aimed at improving our employee’s wellbeing, including cancer
awareness, heart safety awareness, respect at work and mental
health awareness/first aid.
During the year the HSE team have continued the deployment of the
three-year Strategic Plan for HSE, achieving excellent results across
the spectrum. The plan aims to consolidate safety improvements
and target areas of lesser performance with a focus on training and
safety leadership.
GRANGE RESOURCES ANNUAL REPORT 2022
this year the goals of the plan were actively progressed and the plan
and is supporting greater diversity in our teams.
is on track for a successful 3-year outcome. The effectiveness of our
systems and safety management in general is well demonstrated
by the consistent measurable improvement in our safety lag
• Strategic focus on “Critical Controls” further strengthens to our
risk management system and initiatives.
indicators. Targeted improvements in our lag indicators continue
Grange recognises the importance of our contractors’ safety
to be reinforced by a regime of measurable lead indicators to help
management systems being aligned with WorkSafe Tasmania and
reduce risk exposures.
During 2022 the company continued safety controls to manage the
impact of the global COVID-19 pandemic. The management of our
mine safety regulations as well as being on par with our own safety
standards. To this end we have incorporated and communicated
new OHS & ESR requirements for contractors into our SEMS.
controls prevented any business disruption and ensured the health
The enhancement of our Safety Preventative Maintenance work
safety and wellbeing of our employees, contractors and supported
orders continued through 2022 with lead indicators, dedicated
our community.
In addition, Grange is committed to ensuring compliance with
legislative requirements for each area of its operations including
meeting or exceeding requirements within:
• Federal & State Work Health & Safety Legislation
• Anti-Discrimination Legislation
• Fair Work Australia Legislation
• Rehabilitation & Workers Compensation Legislation
• Environmental Legislation
Area Inspections covering all areas on site, formalising Task
Observations for management and key personnel as Lead Indicator
Key Performance Indicators (KPI’s). The lead indicators have been
strengthened by the addition of specific “care and maintenance”
KPIs for underground workings.
Completion and tracking of lead indicators have moved to the
iAuditor system meaning a speedy and more efficient process and
allowing more time for task observations. Lead Indicators have
helped reduce risk exposures across all areas. This is particularly
evident by our continued lost time injury (LTI) free status, seeing us
now more than 5 years LTI free.
• Codes of Practice nominated in all Federal and State Legislation
SHARING AND LEARNING
• Adopting accepted industry & Australian Standards in areas
Grange adopts a philosophy of continuous learning and sharing
where legislation is deficient
• Whistleblower legislation
• Mining specific, HSE Legislation as required; and
• Environmental licence conditions for existing and new operations.
of safety experiences. In addition to its highly successful on-line
induction programs, Grange conducts an extensive range of on-site
safety training activities including extensive work permit training,
energy isolations, site driving and pit driving permits, simulation
training for new operators, fire warden and extinguisher training as
well as refreshers on occupational first aid and road accident rescue
Established systems are in place to ensure legislative requirements
entrapment release. Grange also continues to offer a very effective
are tracked, monitored and corrective actions implemented for any
online “Isolations” training package allowing our offsite contract
instances of non-compliance.
workforce to learn our systems before coming to site.
Grange continued the focus on reducing costs without reducing
During 2022 Grange have introduced an “ICAM” (Incident Cause
support services:
• Emergency Response Team (ERT) in-house training was further
developed, saving considerable costs, while maintaining a high
standard of response and continuing to develop our underground
rescue capability.
• The underground emergency refuge chambers and associated
ventilation and pumping equipment were monitored to maintain
compliance with industry standards and WST expectations.
Analysis Method) investigation process into the incident reporting
system. The change has also helped enhance the daily review of
incidents in our pre-shift meetings. This allows an effective view
of newly raised incidents, open investigations, recently closed
investigations and actions in progress from investigations.
During the year Grange continued to work closely and openly with
the Office of the Chief inspector of Mines (OCIM), traditionally our
company provide an outlet for GMIRM (Global Mining Industry Risk
Management training sponsored by the Chief inspector of Mines and
• Emergency response team size was managed while increasing
we have asked to recommence this interaction during 2023.
our general first aid training coverage has ensured we have
competent people where they are needed.
GMIRM has four levels of Risk Management training G1 for workers,
G2 for Supervisors, G3 for Management and G4 for Directors and
• Obtained Federal and State government training funds reducing
Senior Executives. Grange again ran two, week-long G3 forums
the outlay for training in leadership and continuous improvement
during 2022 and will continue GMIRM training in 2023
and seeking to provide an opportunity for additional young
workers to commence apprenticeships.
All G3 seminars were open to other Tasmanian Mines and Mining
contractors via the Tasmanian Minerals, Manufacturing and Energy
• The highwall scaling excavator continued development and
Council (TMEC) to actively promote risk management throughout
promises to provide a machine capable of restoring lost berm
the industry.
catch capacity in the mine, cleaning batters and improving
mining safety. It continues to generate industry wide interest.
In addition to training delivered at the operational level, the company
continued to reinforce many site-wide health and safety programs
• Participating in the Insurance Underwriters safety audit to
aimed at improving our employee’s wellbeing, including cancer
provide initiatives to help reduce insurance costs.
awareness, heart safety awareness, respect at work and mental
•
Investment in Mental Health and Wellbeing first aid training for
health awareness/first aid.
Management and Contact Officers has helped foster an alert and
During the year the HSE team have continued the deployment of the
caring worker relationship.
• Focus on gender diversity, respect at work and cultural
awareness has promoted the role of women in our workforce
three-year Strategic Plan for HSE, achieving excellent results across
the spectrum. The plan aims to consolidate safety improvements
and target areas of lesser performance with a focus on training and
safety leadership.
14
The Company has a fully functional and qualified emergency response team (“ERT”) providing expert first aid and first response care to our sites and others in need including road accidents in the Savage River and Port Latta areas. The company is a member of the Tasmanian Mines Emergency Response Committee (TMERC) and commits to providing assistance through Mutual Aid to other member sites as requested. COMMITMENT TO SOCIAL RESPONSIBILITYGrange continued with its commitment to social responsibility engaging with our stakeholders and communities to help us understand and respond to their interests and concerns. In addition to regular dialogue with neighbours and communities close to our operations, the Company continues to host and support the education sector through tours, school curriculum information, industry links, a graduate program as well as work opportunities at its operations. During 2022 we managed to allow a number of work experience students to have a week each on site and we hosted smaller size “socially distanced and monitored” school tours despite the threats of the COVID-19 pandemic. During the year our management and workers have actively participated in WorkSafe Tasmania (WST) workshops, helping to share our Safety Management approach with other industry participants. Our interactions with WST have been positive. The collaboration has been mutually beneficial and the inspectorate has also requested Grange participate in the review the Tasmanian “Mines Work Health & Safety (Supplementary Requirements) Regulations 2012 during 2023. 15 GRANGE RESOURCES ANNUAL REPORT 2022
ENVIRONMENTAL
LEGISLATIVE APPROVAL
Grange obtained environmental and planning approval in 1996 and
1997 allowing it to operate under the Tasmanian Land Use Planning
and Approvals Act 1993 (LUPA), the Tasmanian Environmental
Management and Pollution Control Act 1994 (EMPCA), the Tasmanian
Goldamere Pty Ltd (Agreement) Act 1996 (Goldamere Act) and the
Tasmanian Mineral Resources Development Act 1995. This approval
covers an expected mine and processing life using open-cut mining
at Savage River, gangue removal and concentrating at Savage River
and pelletising at Port Latta.
During 2014 Grange received relevant approvals for the South
Deposit Tailings Storage Facility. Grange obtained approval to
construct an underground exploration drive and a portal to allow
exploration of the North Pit ore body at depth in 2019 and continues
to progress approval to mine the ore using underground mining
through the North Pit Underground project (NPUG). Grange
received planning approval from the Waratah Wynyard Council and
the Tasmanian Environment Protection Authority for the Centre Pit
Expansion and South Deposit Backfill Dump through DA 216/2021
and Permit Conditions-Environmental No. 10995 in 2022.
GOLDAMERE ACT
The Goldamere Act makes provisions for Grange’s operation in
Tasmanian legislation. The Goldamere Act limits Grange’s liability
for remediation of contamination, under Tasmanian law, to damage
caused by Grange’s operations, and indemnifies Grange for certain
environmental liabilities arising from past operations. Where
pollution is caused or might be caused by previous operations
and that pollution may be impacting on Grange’s operations or
discharges, Grange is indemnified against that pollution. Grange is
required to operate to Best Practice Environmental Management
(BPEM).
PLANNING APPROVALS
Grange obtained planning approval subject to a series of
environmental permit conditions on 29 January 1997. Planning
approval was issued by the Waratah Wynyard Council for Savage
River and by the Circular Head Council for Port Latta. The approvals
were conditional on the provision of an Environmental Management
Plan (EMP) incorporating an Environmental Rehabilitation Plan
(ERP) prior to the commencement of operations. Various other
studies were also required.
Grange received planning approvals from the Waratah Wynyard
Council for the South Deposit Tailings Storage Facility (SDTSF)
during 2014, construction commenced in July 2014 and operation
commenced in Q4 2018.
Full approval of the Centre Pit Expansion and South Deposit Backfill
Dump was achieved in 2022.
Grange is actively working with contractors and the Tasmanian EPA
on the planning and environmental approvals of the NPUG Project
with submission of an Environmental Impact Statement (EIS)
planned for 2023.
Grange continued through 2022 to implement approved upgrades
to the Port Latta Pelletising Plant including the refurbishment of
Furnace Line 4.
16
ENVIRONMENTAL MANAGEMENT PLANS
The EMP incorporating the ERP and study results were approved by
the (then) Department of Environment Parks, Heritage and the Arts
and operations commenced in October 1997. The latest revision
of the approval documents occurred on 6 October 2000 when
Environmental Protection Notices (EPN) 248/2 and 302/2 were
issued to replace the environmental permit conditions for Savage
River and Port Latta respectively.
Approvals are required from the Tasmanian EPA and relevant
Councils for major infrastructure developments and operational
expansions and changes. These approvals are in the form of
development applications, planning permits, approved EPN’s and
or amendments and reflect changing operational circumstances,
an increasing knowledge base and include approvals designed
to extend operations, amend management plans and provide for
changes to waste rock dumping plans and any proposed treatment
facilities. Such amendments are enacted by the issue of planning
permits, EPN’s or Permit Conditions Environmental (PCE)’s.
An amendment to the EMP was approved for an extension of mine
and pelletising operations In early 2007 to approve the Mine Life
Extension Plan.
EMP and ERP reviews are submitted on a 3-yearly basis. Revised
EMPs reflect BPEM and current mine planning and focus on closure
requirements and rehabilitation. A new EMP was submitted to the
EPA in 2022 with the current ERP due for review in 2023.
The Tasmanian EPA issued EPN 10006/1 in November 2018,
enabling the construction of the Exploration Decline for the North
Pit Underground Project.
GOLDAMERE AGREEMENT
The Goldamere Agreement (which forms part of the Goldamere
Act) provides a framework for Grange to repay the Tasmanian
Government for the purchase of the mine through remediation
works. A significant variation to the Goldamere Agreement was
signed on the 19 December 2014 which extends the Agreement until
24 December 2034. This variation also removed a significant number
of redundant conditions. The amended Goldamere Agreement
provides a framework for Grange to co-manage the Savage River
Rehabilitation Project (SRRP) and carry out contracted works in lieu
of paying the purchase price of the operation to the Government.
The agreement also allows Grange to integrate its rehabilitation
obligations with those of the State under the SRRP.
SAVAGE RIVER REHABILITATION PROJECT
(“SRRP”)
Grange representatives meet with representatives from DPIPWE
on a regular basis to develop and implement remediation works
at Savage River. Grange has contracted with the SRRP for works
including construction, management and development of waste rock
dump covers, acid pipelines and other remediation projects. The
SRRP objective is to capture and treat 65% of the site’s copper load
to remove the possibility of an acutely toxic aquatic environment.
The scope of works to meet this objective has been completed and
costed to feasibility level.
A strategic plan outlining the works required to achieve the objective
and repay Grange’s purchase price debt has been approved by
the Tasmanian Environmental Protection Authority and is being
implemented by the SRRP Committee. This plan is updated annually
to reflect the long-term risks and Grange’s latest mining plan.
Major projects undertaken by the SRRP and Grange during 2022
include final works on the OTD Collection Bund and Transfer
Scheme transferring AMD from the OTD around the MCTD, the OTD
GRANGE RESOURCES ANNUAL REPORT 2022
ENVIRONMENTAL
LEGISLATIVE APPROVAL
Grange obtained environmental and planning approval in 1996 and
1997 allowing it to operate under the Tasmanian Land Use Planning
and Approvals Act 1993 (LUPA), the Tasmanian Environmental
Management and Pollution Control Act 1994 (EMPCA), the Tasmanian
Goldamere Pty Ltd (Agreement) Act 1996 (Goldamere Act) and the
Tasmanian Mineral Resources Development Act 1995. This approval
covers an expected mine and processing life using open-cut mining
at Savage River, gangue removal and concentrating at Savage River
and pelletising at Port Latta.
During 2014 Grange received relevant approvals for the South
Deposit Tailings Storage Facility. Grange obtained approval to
construct an underground exploration drive and a portal to allow
exploration of the North Pit ore body at depth in 2019 and continues
to progress approval to mine the ore using underground mining
through the North Pit Underground project (NPUG). Grange
received planning approval from the Waratah Wynyard Council and
the Tasmanian Environment Protection Authority for the Centre Pit
Expansion and South Deposit Backfill Dump through DA 216/2021
and Permit Conditions-Environmental No. 10995 in 2022.
GOLDAMERE ACT
The Goldamere Act makes provisions for Grange’s operation in
Tasmanian legislation. The Goldamere Act limits Grange’s liability
for remediation of contamination, under Tasmanian law, to damage
caused by Grange’s operations, and indemnifies Grange for certain
environmental liabilities arising from past operations. Where
pollution is caused or might be caused by previous operations
and that pollution may be impacting on Grange’s operations or
discharges, Grange is indemnified against that pollution. Grange is
required to operate to Best Practice Environmental Management
(BPEM).
PLANNING APPROVALS
Grange obtained planning approval subject to a series of
environmental permit conditions on 29 January 1997. Planning
approval was issued by the Waratah Wynyard Council for Savage
River and by the Circular Head Council for Port Latta. The approvals
were conditional on the provision of an Environmental Management
Plan (EMP) incorporating an Environmental Rehabilitation Plan
(ERP) prior to the commencement of operations. Various other
studies were also required.
Grange received planning approvals from the Waratah Wynyard
Council for the South Deposit Tailings Storage Facility (SDTSF)
during 2014, construction commenced in July 2014 and operation
commenced in Q4 2018.
Full approval of the Centre Pit Expansion and South Deposit Backfill
Dump was achieved in 2022.
Grange is actively working with contractors and the Tasmanian EPA
on the planning and environmental approvals of the NPUG Project
with submission of an Environmental Impact Statement (EIS)
planned for 2023.
Furnace Line 4.
Grange continued through 2022 to implement approved upgrades
to the Port Latta Pelletising Plant including the refurbishment of
16
ENVIRONMENTAL MANAGEMENT PLANS
The EMP incorporating the ERP and study results were approved by
the (then) Department of Environment Parks, Heritage and the Arts
and operations commenced in October 1997. The latest revision
of the approval documents occurred on 6 October 2000 when
Environmental Protection Notices (EPN) 248/2 and 302/2 were
issued to replace the environmental permit conditions for Savage
River and Port Latta respectively.
Approvals are required from the Tasmanian EPA and relevant
Councils for major infrastructure developments and operational
expansions and changes. These approvals are in the form of
development applications, planning permits, approved EPN’s and
or amendments and reflect changing operational circumstances,
an increasing knowledge base and include approvals designed
to extend operations, amend management plans and provide for
changes to waste rock dumping plans and any proposed treatment
facilities. Such amendments are enacted by the issue of planning
permits, EPN’s or Permit Conditions Environmental (PCE)’s.
An amendment to the EMP was approved for an extension of mine
and pelletising operations In early 2007 to approve the Mine Life
Extension Plan.
EMP and ERP reviews are submitted on a 3-yearly basis. Revised
EMPs reflect BPEM and current mine planning and focus on closure
requirements and rehabilitation. A new EMP was submitted to the
EPA in 2022 with the current ERP due for review in 2023.
The Tasmanian EPA issued EPN 10006/1 in November 2018,
enabling the construction of the Exploration Decline for the North
Pit Underground Project.
GOLDAMERE AGREEMENT
The Goldamere Agreement (which forms part of the Goldamere
Act) provides a framework for Grange to repay the Tasmanian
Government for the purchase of the mine through remediation
works. A significant variation to the Goldamere Agreement was
signed on the 19 December 2014 which extends the Agreement until
24 December 2034. This variation also removed a significant number
of redundant conditions. The amended Goldamere Agreement
provides a framework for Grange to co-manage the Savage River
Rehabilitation Project (SRRP) and carry out contracted works in lieu
of paying the purchase price of the operation to the Government.
The agreement also allows Grange to integrate its rehabilitation
obligations with those of the State under the SRRP.
SAVAGE RIVER REHABILITATION PROJECT
(“SRRP”)
Grange representatives meet with representatives from DPIPWE
on a regular basis to develop and implement remediation works
at Savage River. Grange has contracted with the SRRP for works
including construction, management and development of waste rock
dump covers, acid pipelines and other remediation projects. The
SRRP objective is to capture and treat 65% of the site’s copper load
to remove the possibility of an acutely toxic aquatic environment.
The scope of works to meet this objective has been completed and
costed to feasibility level.
A strategic plan outlining the works required to achieve the objective
and repay Grange’s purchase price debt has been approved by
the Tasmanian Environmental Protection Authority and is being
implemented by the SRRP Committee. This plan is updated annually
to reflect the long-term risks and Grange’s latest mining plan.
Major projects undertaken by the SRRP and Grange during 2022
include final works on the OTD Collection Bund and Transfer
Scheme transferring AMD from the OTD around the MCTD, the OTD
Cobalt Project, exploring possible Cobalt recovery and Sulphur removal from the OTD and resultant remediation and a stability assessment of the OTD. Planning for an extensive study of the neutralising capacity of South Lens was commenced in 2022.PRINCIPAL ENVIRONMENTAL ISSUESWASTE ROCK, TAILINGS AND WATER MANAGEMENT – SAVAGE RIVER• Water, tailings and waste rock management at Savage River, including: development of waste rock dumps which exclude oxygen to minimise the formation of acid mine drainage and utilisation of these dumps to form seals on old waste rock dumps; subaqueous tailings deposition and maintenance of saturated tailings; providing a centralised water treatment system using a disused pit to eliminate turbidity from mine runoff. Appropriate management and monitoring systems are in place to ensure regulatory compliance in these areas. • Grange continued to progress design and construction work for the Main Creek Tails Dam closure during 2022. It is expected that the closure process will take approximately two more years subject to buttress requirements.AIR EMISSIONS REDUCTION PROGRAM – PORT LATTA• Grange continued to work on quality and measurement systems to improve performance of the Port Latta operations especially with regard to air emissions. In particular, the focus is on the stable operation of furnaces.REHABILITATION PLANSGrange continues to plan for closure and departure on completion of the mining plan. Principal issues in respect of closure include waste rock dump maintenance, tailings management, future use of infrastructure and a five-year monitoring and maintenance plan.17 ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) METRICSDevelopments in global markets for directing investment capital have shifted with traditional profit only focus being challenged when assessing companies’ performance. Grange is committed to aligning the business, where applicable, to the sustainable development goals that provide a roadmap to sustainability and resilience. Grange has adopted an Environmental, Social, and Governance (ESG) framework with 21 core metrics and disclosures as created by the World Economic Forum (WEF) and is establishing an impact measurement plan for each sustainability area which includes, but is not limited to, governance, anti-corruption practices, ethical behaviour, human rights, carbon emissions, land use, ecological sensitivity, water consumption, diversity and inclusion, pay equality and tax payments.ESG REPORTING UPDATESReview across our management systems have occurred through 2022 to map across process and reporting improvements to align to the ESG core metrics. This resulted in Grange publishing the baseline environmental, Social, and Governance (ESG) report in August 2022 and made disclosures on 21 core metrics set by the World Economic Forum (WEF) in its standardised and globally recognised stakeholder Capitalism Metrics ESG framework.The baseline report demonstrates Grange’s commitment to aligning the business, where applicable, to the sustainable development goals provide guidance to sustainability and resilience. The report describes the progress Grange has made against the four pillars of the framework for Governance, Planet, People and Prosperity.Most notably, Grange has developed a road map to reduce emissions. This will involve the reduction in energy used per tonne of product; upgrades to furnaces; recovery of heat in the pellet plant; application of technology and electric vehicles in the mining operation; and alternative fuel sources.18GRANGE RESOURCES ANNUAL REPORT 2022 The Board has endorsed the pursuit of decarbonisation of Grange’s Business with specific targets for CO2-e reduction including:• The elimination of non-renewable coal sources like anthracite, by 2025.• CO2-e emission target reduction of 50% by 2030 reducing emissions to 53kg of CO2-e per tonne of iron ore products.• Target of Zero CO2-e (Scope 1 and 2) emissions by 2035.Grange have also reviewed and updated policies with regard to anti-slavery and anti-bribery and corruption. Grange recognises that our activities can have an impact on human rights locally as well as overseas. We recognise the need to continually assess the Company’s effectiveness in identifying, assessing and responding to potential areas of risk regarding modern slavery and unfair practices in its procurement processes. Grange does not tolerate any form of modern slavery, including forced or compulsory labour and is committed to operating in a transparent, responsible and fair manner throughout our procurement and business processes.19ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) METRICSDevelopments in global markets for directing investment capital have shifted with traditional profit only focus being challenged when assessing companies’ performance. Grange is committed to aligning the business, where applicable, to the sustainable development goals that provide a roadmap to sustainability and resilience. Grange has adopted an Environmental, Social, and Governance (ESG) framework with 21 core metrics and disclosures as created by the World Economic Forum (WEF) and is establishing an impact measurement plan for each sustainability area which includes, but is not limited to, governance, anti-corruption practices, ethical behaviour, human rights, carbon emissions, land use, ecological sensitivity, water consumption, diversity and inclusion, pay equality and tax payments.ESG REPORTING UPDATESReview across our management systems have occurred through 2022 to map across process and reporting improvements to align to the ESG core metrics. This resulted in Grange publishing the baseline environmental, Social, and Governance (ESG) report in August 2022 and made disclosures on 21 core metrics set by the World Economic Forum (WEF) in its standardised and globally recognised stakeholder Capitalism Metrics ESG framework.The baseline report demonstrates Grange’s commitment to aligning the business, where applicable, to the sustainable development goals provide guidance to sustainability and resilience. The report describes the progress Grange has made against the four pillars of the framework for Governance, Planet, People and Prosperity.Most notably, Grange has developed a road map to reduce emissions. This will involve the reduction in energy used per tonne of product; upgrades to furnaces; recovery of heat in the pellet plant; application of technology and electric vehicles in the mining operation; and alternative fuel sources.18GRANGE RESOURCES ANNUAL REPORT 2022 GRANGE RESOURCES ANNUAL REPORT 2022
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project (“Southdown” or “the Project”),
situated 90km from the city of Albany in Western Australia, is a joint
venture between Grange (70%) and SRT Australia Pty Ltd (SRT)
(30%). SRT is jointly owned by Sojitz Corporation and Kobe Steel.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT to reacquire SRT’s 30 per cent
interest in the Project. The transaction is expected to complete in
Q2, 2023. Upon completion, Grange will hold 100 per cent ownership
in the Project.
WORKING WITH THE COMMUNITY
Planning and preparation for the Southdown project has spanned
several years, during which Grange has established a project
office in Albany and has been working closely with key stakeholder
organisations and community members.
Grange will continue to engage stakeholders and the community as
the project progresses through the Albany Project Office, information
sessions, landowner discussions, briefings and presentations and a
range of focused communications.
PROJECT OVERVIEW
Southdown is an advanced project with over 1.2 billion tonnes of
high-quality mineral resources, including 388 million tonnes of ore
reserves. It has access to established infrastructure and involves
the construction and operation of an open pit magnetite mine located
approximately 90 kilometres northeast of Albany, and 10 kilometres
southwest of Wellstead in the Great Southern region of Western
Australia. The Southdown magnetite deposit is approximately 12
kilometres in length with 6 kilometres of this included in the current
study. The magnetite ore will be mined, crushed, ground, screened
and magnetically separated to produce a magnetite concentrate.
With an initial mine life of 28 years, it is anticipated that around 5 Mt
of magnetite concentrate will be exported to international markets
each year.
PROJECT STATUS
In addition to a Definitive Feasibility Study completed in 2012 on
a 10 million tonne per annum (mtpa) case, Grange completed an
updated prefeasibility study (PFS) in the first quarter of 2022 (See
ASX announced on 22 March 2022). This updated PFS has optimised
the project layout and equipment. This involves a smaller 5mtpa
concentrate production operation within the constraints of existing
mineral resources and ore reserves. During 2022, the Company
commenced a Definitive Feasibility Study on the 5 mtpa development
case and is further progressing designs for the optimised site layout,
mine designs, metallurgical test work and pilot plant trials utilising
dry grinding techniques, and port operations and transhipping
methodology.
APPROVALS
The optimised project has remained largely within the area that
has already obtained environmental approvals for development.
Previously, Southdown has been granted primary environmental
approvals by the Western Australian government under the
Environmental Protection Act 1986 (EP Act) and by the federal
government under the Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act). Under the optimised project there
are some modifications to the project that require further approvals
and work is progressing to obtain environmental approvals for
these aspects of the project.
Grange Resources’ referral for modifications to the already approved
Southdown Magnetite Project was submitted on 30 January 2023
to the Environmental Protection Authority (EPA) for environmental
assessment. A new environmental approval will also be sought for
the transhipping component of the project by the Southern Ports
Authority.
KEY COMPONENTS OF THE PROJECT
The Southdown Magnetite Project is proposed to be a pit to port
operation involving:
· The construction and operation of an open cut magnetite mine
and concentrator for producing magnetite concentrate at the
mine site, near Wellstead.
· A 110km underground slurry pipeline to transport the magnetite
concentrate from the mine site to the Port of Albany.
· Once the slurry reaches the Port, it will be dewatered and stored
in a storage shed ready for shipping.
· The recycled water from the dewatering process will be pumped
back to the mine site in a second pipeline following the same
alignment as the slurry pipeline.
· When the concentrate is ready for shipping, it will be loaded
on to a smaller transhipping vessel (TSV) via conveyors and
a shiploader and transported by the TSV to be loaded onto
larger vessels in King George Sound. This process is known as
transhipping.
· Water for the construction and operation of the mine is anticipated
to be sourced from a mix of recycled wastewater from the Water
Corporation’s Wastewater Treatment Plant and groundwater
from local borefields.
· Electricity supply options for the project continue to focus on
maximising access to renewable energy.
PROJECT OVERVIEW
GEOLOGY
The currently defined Resource extends over 11 kilometres of strike,
with variable depths ranging from 50 metres below surface in the
west to 555 metres below surface in the east. The deposit has been
drilled and evaluated since its initial discovery in 1983, including an
extensive program of resource drilling during 2011 for the feasibility
study.
MINING
Mining will be undertaken as a conventional drill, blast, load and
haul cycle. Bulk loading on 12 metre benches will utilise 600-tonne
hydraulic face shovels. Ore and some surrounding waste will be
selectively mined on multiple flitches with 400-tonne hydraulic
excavators. All pit material with be hauled with 220-tonne capacity
rear dump trucks. Ore will be trucked directly from the blasted faces
to either direct tip into the primary crusher or to the ROM stockpile
with waste either sent to WRDs or backfill.
The mining operation will draw heavily on Grange’s existing capability
as Australia’s most experienced commercial producer of magnetite
concentrate, to assist with start-up and ongoing operations.
20
GRANGE RESOURCES ANNUAL REPORT 2022
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project (“Southdown” or “the Project”),
situated 90km from the city of Albany in Western Australia, is a joint
venture between Grange (70%) and SRT Australia Pty Ltd (SRT)
(30%). SRT is jointly owned by Sojitz Corporation and Kobe Steel.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT to reacquire SRT’s 30 per cent
interest in the Project. The transaction is expected to complete in
Q2, 2023. Upon completion, Grange will hold 100 per cent ownership
in the Project.
PROJECT OVERVIEW
Southdown is an advanced project with over 1.2 billion tonnes of
high-quality mineral resources, including 388 million tonnes of ore
reserves. It has access to established infrastructure and involves
the construction and operation of an open pit magnetite mine located
approximately 90 kilometres northeast of Albany, and 10 kilometres
southwest of Wellstead in the Great Southern region of Western
Australia. The Southdown magnetite deposit is approximately 12
kilometres in length with 6 kilometres of this included in the current
study. The magnetite ore will be mined, crushed, ground, screened
and magnetically separated to produce a magnetite concentrate.
With an initial mine life of 28 years, it is anticipated that around 5 Mt
of magnetite concentrate will be exported to international markets
each year.
PROJECT STATUS
In addition to a Definitive Feasibility Study completed in 2012 on
a 10 million tonne per annum (mtpa) case, Grange completed an
updated prefeasibility study (PFS) in the first quarter of 2022 (See
ASX announced on 22 March 2022). This updated PFS has optimised
the project layout and equipment. This involves a smaller 5mtpa
concentrate production operation within the constraints of existing
mineral resources and ore reserves. During 2022, the Company
commenced a Definitive Feasibility Study on the 5 mtpa development
case and is further progressing designs for the optimised site layout,
mine designs, metallurgical test work and pilot plant trials utilising
dry grinding techniques, and port operations and transhipping
methodology.
APPROVALS
The optimised project has remained largely within the area that
has already obtained environmental approvals for development.
Previously, Southdown has been granted primary environmental
approvals by the Western Australian government under the
Environmental Protection Act 1986 (EP Act) and by the federal
government under the Environment Protection and Biodiversity
Conservation Act 1999 (EPBC Act). Under the optimised project there
are some modifications to the project that require further approvals
and work is progressing to obtain environmental approvals for
these aspects of the project.
Grange Resources’ referral for modifications to the already approved
Southdown Magnetite Project was submitted on 30 January 2023
to the Environmental Protection Authority (EPA) for environmental
assessment. A new environmental approval will also be sought for
the transhipping component of the project by the Southern Ports
Authority.
WORKING WITH THE COMMUNITY
Planning and preparation for the Southdown project has spanned
several years, during which Grange has established a project
office in Albany and has been working closely with key stakeholder
organisations and community members.
Grange will continue to engage stakeholders and the community as
the project progresses through the Albany Project Office, information
sessions, landowner discussions, briefings and presentations and a
range of focused communications.
KEY COMPONENTS OF THE PROJECT
The Southdown Magnetite Project is proposed to be a pit to port
operation involving:
· The construction and operation of an open cut magnetite mine
and concentrator for producing magnetite concentrate at the
mine site, near Wellstead.
· A 110km underground slurry pipeline to transport the magnetite
concentrate from the mine site to the Port of Albany.
· Once the slurry reaches the Port, it will be dewatered and stored
in a storage shed ready for shipping.
· The recycled water from the dewatering process will be pumped
back to the mine site in a second pipeline following the same
alignment as the slurry pipeline.
· When the concentrate is ready for shipping, it will be loaded
on to a smaller transhipping vessel (TSV) via conveyors and
a shiploader and transported by the TSV to be loaded onto
larger vessels in King George Sound. This process is known as
transhipping.
· Water for the construction and operation of the mine is anticipated
to be sourced from a mix of recycled wastewater from the Water
Corporation’s Wastewater Treatment Plant and groundwater
from local borefields.
· Electricity supply options for the project continue to focus on
maximising access to renewable energy.
PROJECT OVERVIEW
GEOLOGY
The currently defined Resource extends over 11 kilometres of strike,
with variable depths ranging from 50 metres below surface in the
west to 555 metres below surface in the east. The deposit has been
drilled and evaluated since its initial discovery in 1983, including an
extensive program of resource drilling during 2011 for the feasibility
study.
MINING
Mining will be undertaken as a conventional drill, blast, load and
haul cycle. Bulk loading on 12 metre benches will utilise 600-tonne
hydraulic face shovels. Ore and some surrounding waste will be
selectively mined on multiple flitches with 400-tonne hydraulic
excavators. All pit material with be hauled with 220-tonne capacity
rear dump trucks. Ore will be trucked directly from the blasted faces
to either direct tip into the primary crusher or to the ROM stockpile
with waste either sent to WRDs or backfill.
The mining operation will draw heavily on Grange’s existing capability
as Australia’s most experienced commercial producer of magnetite
concentrate, to assist with start-up and ongoing operations.
ORE CRUSHING AND CONCENTRATION
Ore processing at the mine site consists of crushing and dry
grinding with closed circuit dry magnetic separation, before water
is added to facilitate a further series of magnetic separation steps
to remove non-magnetic material, and reverse floatation to remove
the sulphide mineral Pyrrhotite, which will result in a magnetite
concentrate at around 69.5% iron.
Process waste (tailings) will be produced in dry and wet components,
with the wet tailings mixed with the dry to form an Agglomerated
Tailing and sent to the waste rock dump.
TRANSPORTING THE CONCENTRATE SLURRY
110 KM TO THE PORT
Final magnetite concentrate will be thickened and transported
through a 110 km pipeline to the Port of Albany. Once the
concentrate reaches the Port, it will be filtered and stored ready for
shipping. The excess water will be pumped back to the mine site in
a return water pipeline, which runs parallel to the slurry pipeline.
Around 85% of water pumped with the slurry will be returned to the
mine site for re-use.
The entire length of the pipeline will be buried underground except
a small section that may be exposed to accommodate a walkway/
cycleway over Pt Melville, on the edge of Princess Royal Harbour.
ALBANY PORT
The study has adopted a transhipping methodology with reduced
on-site storage capacity at the Port of Albany. It incorporates the
addition of a new wharf at Albany Port’s Berth 5, a filtration plant, a
concentrate stockpile shed and a ship loading facility. The magnetite
concentrate will be loaded onto a Transhipment Vessel (TSV) and
barged to the larger Cape sized vessels located at an anchorage
point in the King George Sound.
Detailed technical and environmental assessments have been
undertaken to assess the potential landside and waterside
impacts of transhipping in conjunction with the Southern Ports
Authority to identify an appropriate anchorage point, and assess
the environmental, community and visual impacts to facilitate new
environmental and operational approvals.
WATER
With the introduction of dry grinding and a reduced capacity in the
concentrator, the annual make-up water demand has reduced to
approximately 4 gigalitres per year. This can be supplied from a
combination of recycled water from the Water Corporations Albany
waste-water treatment facilities and various potential groundwater
sources in the region. Ground water sources are deep in the
sequence, below a clay layer which will restrict any significant
impact on the surface water table or other users.
Specialised groundwater consultants, Rockwater and GHD, have
been engaged to complete thorough technical and environmental
investigations to understand the groundwater resources in the
region. Each area has been investigated by geological mapping,
geophysics, the drilling of monitoring and test production bores, and
undertaking test pumping to understand the hydraulic properties of
the target aquifer. To date over 150 bores have been drilled for more
than 11,000 metres of drilling. This data has been used to develop
groundwater models to run predictions of water level change and,
together with the environmental baseline studies, provide the
basis for environmental impact assessments and approvals. The
investigations have indicated up to 3.5GL/a can be obtained from
both borefields without adverse effects to native vegetation and
other beneficial users.
POWER
In 2011, Western Power had identified and agreed a transmission line
route for the Project which is covered in the existing EPBC approval
currently in place. Works are ongoing along the transmission
line route, including environmental surveys and assessments,
and landholder and other stakeholder consultation. Supply and
connection options for the project continue to focus on maximising
access to renewable energy.
OPERATIONS
The project is committed to working with stakeholders and the
community in the planning, implementation and operation of its
projects as well as delivering possible future community benefits
including employing local people to work and service the mine,
supporting local and regional economic development and investing
in community initiatives. The Southdown operation will be modelled
on Grange’s existing Savage River operation in Tasmania operating
on a 24/7 basis for 365 days per year.
We acknowledge the Noongar Menang people as traditional
custodians of this region and recognise their continuing connection
to land, water and culture. We pay our respects to Aboriginal
communities and cultures, and to their Elders past, present and
emerging.
MINERAL RESOURCES AND
ORE RESERVES
- SOUTHDOWN MAGNETITE
PROJECT
MINERAL RESOURCES
The Mineral Resource estimate for the Southdown Magnetite Project
as at 31 December 2022 is as follows:
Measured
Indicated
Inferred
Total
As at December 2022
Tonnes (Mt)
Grade %DTR*
423.0
86.8
747.1
1,256.9
37.8
38.7
30.9
33.7
* Davis Tube Recovery – a measure of recoverable magnetite
Mineral Resources are reported above a cut-off of 10% DTR
ORE RESERVES
The current Ore Reserve for the Southdown Magnetite Project as at
31 December 2022 is based on the pit design and mining schedule
developed during the Feasibility Study and includes modifying
metallurgical factors and plant recovery.
Proven
Probable
ROM (Mt)
DTR* (%)
384.6
3.1
35.6
41.7
Total
387.7
An additional 24.4 Mt of Inferred Resources is included within the
designed pit.
35.6
A detailed statement of the Mineral Resources and Ore Reserves can
be found in the ASX announcement dated 28 February 2014. Grange
confirms in reproducing the Mineral Resources and Ore Reserves in
this subsequent report, that it is not aware of any new information
or data that materially affects the information included, and all the
material assumptions and technical parameters underpinning the
estimates in this report continue to apply and have not materially
changed. Grange confirms that all environmental approvals and
tenure have been maintained in compliance and terms extended as
required to retain currency.
20
21
CORPORATE
GOVERNANCE
STATEMENT
Grange is committed to creating and building sustainable value for shareholders and protecting stakeholder interests. The Company
recognises that high standards of corporate governance are essential to achieving that objective.
The Board has the responsibility for ensuring Grange is properly managed so as to protect and enhance shareholders’ interests in a manner
that is consistent with the Company’s responsibility to meet its obligations to all stakeholders. For this reason, the Board is committed to
applying appropriate standards of corporate governance across the organisation.
As part of its commitment to enhancing its corporate governance, and as a listed company, the Board has adopted relevant practices
which are consistent with the Australian Securities Exchange (“ASX”) Corporate Governance Principles. The 2022 corporate governance
statement was approved by the Board in February 2023.
Details of the Company’s corporate governance practices are included in the Corporate Governance Statement and Appendix 4G which
have been announced on the ASX and can be located on our Company’s website www.grangeresources.com.au on the Investors page. This
facilitates transparency about Grange’s corporate governance practices and assists shareholders and other stakeholders make informed
judgments.
Grange considers that its governance practices comply with the majority of the ASX Best Practice Recommendations.
ASX BEST PRACTICE RECOMMENDATIONS
The following table lists the departures from the ASX Best Practice Recommendations applicable to the Company as at the date of its
financial year end, being 31 December 2022. Where the Company considers that it is divergent from these recommendations, or that it is
not practical to comply, there is an explanation of the Company’s reasons set out in the following table.
“Recommendation” Ref
(“Principle No” Ref followed by
Recommendation Ref)
7.3(a)
Departure
Explanation
A separate internal audit function has not
been formed.
An Internal Audit function has not been
established as per recommendation
7.3(a), The Board monitors the need for an
internal audit function having regard to the
size, geographic location and complexity of
the Company’s operations.
The Company’s Management periodically
undertakes an internal review of financial
systems and processes and where systems
are considered to require improvement
these systems are developed. The Board
also considers external reviews of specific
areas and monitors the implementation of
system improvements.
22
CORPORATE
GOVERNANCE
STATEMENT
Grange is committed to creating and building sustainable value for shareholders and protecting stakeholder interests. The Company
recognises that high standards of corporate governance are essential to achieving that objective.
The Board has the responsibility for ensuring Grange is properly managed so as to protect and enhance shareholders’ interests in a manner
that is consistent with the Company’s responsibility to meet its obligations to all stakeholders. For this reason, the Board is committed to
applying appropriate standards of corporate governance across the organisation.
As part of its commitment to enhancing its corporate governance, and as a listed company, the Board has adopted relevant practices
which are consistent with the Australian Securities Exchange (“ASX”) Corporate Governance Principles. The 2022 corporate governance
statement was approved by the Board in February 2023.
Details of the Company’s corporate governance practices are included in the Corporate Governance Statement and Appendix 4G which
have been announced on the ASX and can be located on our Company’s website www.grangeresources.com.au on the Investors page. This
facilitates transparency about Grange’s corporate governance practices and assists shareholders and other stakeholders make informed
judgments.
Grange considers that its governance practices comply with the majority of the ASX Best Practice Recommendations.
ASX BEST PRACTICE RECOMMENDATIONS
The following table lists the departures from the ASX Best Practice Recommendations applicable to the Company as at the date of its
financial year end, being 31 December 2022. Where the Company considers that it is divergent from these recommendations, or that it is
not practical to comply, there is an explanation of the Company’s reasons set out in the following table.
(“Principle No” Ref followed by
Departure
Explanation
“Recommendation” Ref
Recommendation Ref)
7.3(a)
A separate internal audit function has not
An Internal Audit function has not been
been formed.
established as per recommendation
7.3(a), The Board monitors the need for an
internal audit function having regard to the
size, geographic location and complexity of
the Company’s operations.
The Company’s Management periodically
undertakes an internal review of financial
systems and processes and where systems
are considered to require improvement
these systems are developed. The Board
also considers external reviews of specific
areas and monitors the implementation of
system improvements.
22
23
GRANGE RESOURCES ANNUAL REPORT 2022
24
GRANGE RESOURCES ANNUAL REPORT 2022
24
GRANGE RESOURCES LIMITEDABN 80 009 132 405AND CONTROLLED ENTITIESAUSTRALIA’S MOST EXPERIENCED MAGNETITE PRODUCERFINANCIAL REPORTFor the Year Ended 31 December 2022DIRECTORS’ REPORT 26AUDITOR’S INDEPENDENCE DECLARATION 40CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 42CONSOLIDATED STATEMENT OF FINANCIAL POSITION 43CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 44CONSOLIDATED STATEMENT OF CASH FLOWS 45NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 47DIRECTORS’ DECLARATION 71INDEPENDENT AUDITOR’S REPORT TO THE 72 MEMBERS OF GRANGE RESOURCES LIMITEDGENERAL INFORMATIONThe financial statements cover Grange Resources Limited as a Group consisting of Grange Resources Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Grange Resources Limited’s functional and presentation currency.Grange Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:34a Alexander Street, Burnie, Tasmania A description of the nature of the Group’s operations and its principal activities are included in the directors’ report, which is not part of the financial statements.The financial statements were authorised for issue, in accordance with a resolution of directors, on 24 February 2023. The directors have the power to amend and reissue the financial statements. 25FINANCIAL REPORT
INFORMATION ON DIRECTORSMICHELLE LI PHD, GAICD Independent Non-executive Chairperson, Member of the Audit and Risk Committee, Member of the Remuneration and Nomination Committee. Dr Li has more than 30 years of international mining experience, including senior executive roles with mining companies such as Citic Pacific, Rio Tinto and Iluka Resources. Dr Li has a PhD from the University of Queensland and was previously a non-executive Director of Ardiden Limited, Orion Metals Limited and Sherwin Iron Limited. YAN JIA GAICDNon-executive Deputy Chairperson Ms Jia is currently the Director of the Administration Department with the Jiangsu Shagang International Trade Co Ltd, a subsidiary of Jiangsu Shagang Group, China’s largest private steel company. Ms Jia has over ten years’ experience of managerial, human resources, intellectual property and commercial experience in the steel industry and bulk raw material transaction sector. HONGLIN ZHAO Managing Director, Chief Executive Officer Mr Zhao is a former Director of Shagang International (Australia) Pty Ltd, former Director and General Manager of Shagang (Australia) Pty Ltd, and former Director of Jiangsu Shagang Group, ultimate shareholder of Shagang International Holdings Limited and China’s largest private steel company. Mr Zhao has over 40 years’ experience in the industry and was previously the Commander of Project Development Headquarters with Shagang. Mr Zhao has extensive project management and implementation experience and expertise. DIRECTORS’ REPORTThe directors present their report, together with the financial statements, on the consolidated entity (the ‘Group’) consisting of Grange Resources Limited (‘Grange’ or ‘the Company’) and the entities it controlled at the end of, or during, the year ended 31 December 2022.DIRECTORSThe following persons were directors of Grange Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:Michelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonHonglin Zhao Managing Director, Chief Executive OfficerChongtao Xu Executive Director (Appointed 1 March 2023)Michael Dontschuk Non-Executive DirectorAjanth Saverimutto Non-Executive Director26GRANGE RESOURCES ANNUAL REPORT 2022 FINANCIAL REPORT
CHONGTAO XU (APPOINTED 1 MARCH 2023)
Executive Director, Senior Investment Manager
Mr Xu specialises in investment of upstream and downstream
processes for steel producers. Mr Xu is a former head of steel
merger & acquisition division of Shagang Investment Holding Co
Ltd, the investment arm of China’s largest private steel company.
Mr Xu has extensive management experience in private equity
projects. Mr Xu managed a portfolio with the marketable value of
over four billion Australian dollars. Mr Xu holds a Master of Science
(Hons) from University College London
MICHAEL DONTSCHUK BSC(HONS), FFTP, GAICD
Independent Non-executive Director, Chairperson of the Audit and
Risk Committee, Chairperson of the Remuneration and Nomination
Committee
Mr Dontschuk is a finance professional with over 35 years’ experience
in investment, finance, treasury and financial risk management. He
currently is a professional NED and sits on a number of company
boards including Eticore, Public Trustee (Tasmania) and Australia
Ratings.
Previously Mr Dontschuk has been Group Treasurer of Grange
Resources, Group Treasurer of ANZ Bank, Managing Director of
Treasury Corporation Victoria, President and Director of the Finance
and Treasury Association of Australia and has worked extensively in
corporate financial advisory and investment banking including with
Oakvale Capital and Bankers Trust.
AJANTH SAVERIMUTTO BENG (MINING) HONS,
BBUS (ACCOUNTING)
Independent Non-executive Director and Member of the Audit and
Risk Committee
Mr Saverimutto is a Mining Engineer and Accountant with over 25
years’ experience in the resources industry. Mr Saverimutto has
extensive Corporate and Senior Management experience in a number
of ASX-listed and private companies. Currently Mr Saverimutto is
President and Director of Black Mountain Metals, a private, natural
resources company. Mr Saverimutto’s previous positions include
Managing Director of ASX listed Venturex Resources, Managing
Director and Founder of privately held Australian company Salt
Lake Mining.
Mr Saverimutto has held senior operational roles including Mining
Manager for leading international copper producer Freeport
McMoRan (NYSE: FCX), Chief Operating Officer of ASX listed gold
miner Unity Mining and Mining Manager for BHP Billiton – Stainless
Steel Materials.
COMPANY SECRETARY
MR PIERS LEWIS BCOMM, CA, AGIA
Mr Lewis has more than 20 years’ global corporate experience and
is currently the Company Secretary for ASX listed companies Cycliq
Group Limited and Ultima United Limited. Mr Lewis also serves as
Chairman of Digital Wine Ventures Limited and eSense-Lab Ltd and
on the Board of Cycliq Group Limited.
In 2001 Mr Lewis qualified as a Chartered Accountant with Deloitte
(Perth) he has extensive and diverse financial and corporate
experience from previous senior management roles with Credit
Suisse (London), Mizuho International and NAB Capital. Mr Lewis is
also a Chartered Company Secretary.
27
INFORMATION ON DIRECTORSMICHELLE LI PHD, GAICD Independent Non-executive Chairperson, Member of the Audit and Risk Committee, Member of the Remuneration and Nomination Committee. Dr Li has more than 30 years of international mining experience, including senior executive roles with mining companies such as Citic Pacific, Rio Tinto and Iluka Resources. Dr Li has a PhD from the University of Queensland and was previously a non-executive Director of Ardiden Limited, Orion Metals Limited and Sherwin Iron Limited. YAN JIA GAICDNon-executive Deputy Chairperson Ms Jia is currently the Director of the Administration Department with the Jiangsu Shagang International Trade Co Ltd, a subsidiary of Jiangsu Shagang Group, China’s largest private steel company. Ms Jia has over ten years’ experience of managerial, human resources, intellectual property and commercial experience in the steel industry and bulk raw material transaction sector. HONGLIN ZHAO Managing Director, Chief Executive Officer Mr Zhao is a former Director of Shagang International (Australia) Pty Ltd, former Director and General Manager of Shagang (Australia) Pty Ltd, and former Director of Jiangsu Shagang Group, ultimate shareholder of Shagang International Holdings Limited and China’s largest private steel company. Mr Zhao has over 40 years’ experience in the industry and was previously the Commander of Project Development Headquarters with Shagang. Mr Zhao has extensive project management and implementation experience and expertise. DIRECTORS’ REPORTThe directors present their report, together with the financial statements, on the consolidated entity (the ‘Group’) consisting of Grange Resources Limited (‘Grange’ or ‘the Company’) and the entities it controlled at the end of, or during, the year ended 31 December 2022.DIRECTORSThe following persons were directors of Grange Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:Michelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonHonglin Zhao Managing Director, Chief Executive OfficerChongtao Xu Executive Director (Appointed 1 March 2023)Michael Dontschuk Non-Executive DirectorAjanth Saverimutto Non-Executive Director26GRANGE RESOURCES ANNUAL REPORT 2022
GRANGE RESOURCES ANNUAL REPORT 2022
PRINCIPAL ACTIVITIES
DIVIDENDS
During the period, the principal continuing activities of the Group
consisted of the mining, processing and sale of iron ore; and
the ongoing exploration, evaluation and development of mineral
resources.
Dividends paid during the financial year were as follows:
Fully franked interim dividend for half year ended 30 June 2022
- 2.0 cents per share
Fully franked final dividend for the year ended 31 December
2021 - 10.0 cents per share
Fully franked special dividend for year ended 31 December
2021 - 10.0 cents per share
Fully franked interim dividend for half year ended 30 June 2021
- 2.0 cents per share
Fully franked final dividend for the year ended 31 December
2020 - 2.0 cents per share
Total dividends paid
2022
$’000
23,147
115,734
-
-
-
138,881
2021
$’000
-
-
115,734
23,147
23,147
162,028
Since the end of the financial year the directors have recommended the payment of a 2.0 cent per share final dividend of $23.1 million.
This represents a total of $46.3 million (4.0 cents per share) fully franked dividend for the year-end 31 December 2022. The final dividend
was declared NIL conduit foreign income and will be paid on 28 March 2023.
OPERATING AND FINANCIAL REVIEW
KEY HIGHLIGHTS
MINING OPERATIONS
• Achieved a major milestone of over 2,110 days Lost Time
Injury free.
• Pellet production of 2.52 million tonnes for the year compared to
2.60 million tonnes for the prior year.
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to $321.6
million for the prior year, on revenues from operations of $594.6
million compared to $781.7 million for the prior year.
• Average realised product price (FOB Port Latta) of A$203.18 per
tonne for the year compared to A$276.17 per tonne for the prior
year.
• Unit C1 cash operating costs of $120.64 per tonne for the year
compared to $99.73 for the prior year.
• Cash and liquid investments of $298.6 million at the end of year
compared to $463.5 million at the end of the prior year. Decrease
largely due to payment of dividends.
28
SAFETY PERFORMANCE
A focus on safety has been maintained across the business with
over 2,110 days Lost Time Injury Free achieved.
Key revenue metrics for the year ended 31 December 2022 and the
preceding 2021 year were as follows:
2022
2021
Iron Ore Pellet Sales (dmt)
2,429,700
2,507,201
Iron Ore Concentrate Sales (dmt)
1,853
42
Iron Ore Chip Sales (dmt)
136,760
108,130
Total Iron Ore Product Sales (dmt)
2,568,313
2,615,373
Average Realised Product Price
(US$/t FOB Port Latta) *
Average Realised Exchange Rate
(AUD:USD)
Average Realised Product Price
(A$/t FOB Port Latta)
141.28
208.08
0.6953
0.7535
203.18
276.17
*adusted for the costs of freight and final pricing settlements on provisional
settlements as per sales agreements. Pricing is typically finalised in one to three
months after shipment month.
Total sales for the year ended 31 December 2022 was 2.57 million
tonnes of high quality, low impurity iron ore products (2021: 2.62
million tonnes) and reflects sustained production from maintaining
access to high grade ore.
The average iron ore product price received during the year was
$203.18 per tonne of product sold (FOB Port Latta) (2021: $276.17
per tonne).
Please refer to Note 4 of the Financial Report for segment information
for sales to different geographical markets. The sales from long
term off take agreements with Jiangsu Shagang International Trade
Co. Ltd represents 36.5% of total sales for 2022 (2021: 27.7%).
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
PRINCIPAL ACTIVITIES
DIVIDENDS
Key operating metrics for the year ended 31 December 2022 and the
preceding 2021 year were as follows:
Total BCM Mined
Total Ore BCM*
Concentrate Produced (t)
Weight Recovery (%)
Pellets Produced (t)
Pellets Stockpile (t)
2022
2021
15,466,534
13,667,044
1,280,501
2,804,234
2,624,865
2,559,987
FINANCIAL POSITION
Grange’s net assets increased during the year to $904.1 million (31
December 2021: $871.2 million). The key movements in net assets
during the year are a result of the following:
• An increase in property plant and equipment and mine properties
and development of $60.6 million and $98.6 million respectively.
• An increase in other financial assets of $170.6 million due to
45.2
44.4
investment in term deposits
2,518,232
2,597,428
• An increase in trade receivables by $34.3 million
298,725
210,193
• A decrease in income tax payable by $62.9 million
"C1" Operating Cost (A$/t Concentrate
Produced)
120.64
99.73
• A decrease in cash and cash equivalents of $335.5 million
(refer to statement of cashflow) and
*Mining activities have focused on waste stripping in both North Pit and
Centre Pit in 2022.
• A decrease in net deferred tax assets by $60.9 million.
Note: “C1” costs are the cash costs associated with producing iron ore products
without allowance for mine development, deferred stripping and stockpile movements,
and also excludes royalties, sustaining capital, depreciation and amortisation costs.
Mining activities have focused on the cutbacks in both North Pit and
Centre Pit, following the successful completion of North Pit Stage 6.
This ore mining stage yielded large stockpiles to support production
in 2022 and 2023. Mining movement improved significantly over the
later part of the year with completion of some repairs to the truck
fleet and the implementation of modifications to the haul network.
The new Caterpillar 6040 face shovel is working well and six second-
hand Caterpillar 789 trucks have been introduced to the fleet to
support production. The rebuild of the current fleet also continues
with mechanical overhauls on six trucks completed during the year.
Additional replacement equipment is scheduled for delivery in Q1,
2023.
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The North Pit Underground PFS previously demonstrated a
technically and economical feasible underground mining operation
for North Pit. Ore continuity was demonstrated at depth and
highlights the potential for 6 million tonne per annum production rate
with an underground mine life of more than 10 years. The Definitive
Feasibility Study was commenced in 2022, with an amendment
to the location of the extraction level being modelled after the
completion of North Pit Stage 7 open pit mining. Additional drilling
to the north, revisions to geotechnical models were completed and
further exploration is planned as part of the DFS in 2023.
PORT LATTA IMPROVEMENT PROJECTS
The redesigned Furnace Line 4 was commissioned in 2022. The
initial phase involved integration into the operation with completion
of the refractory rebuild. The next phase will be to commission the
intermediate air system which will allow the improvement of air
distribution through the furnace, and is scheduled for Q2, 2023. This
will inform future design modifications to the other furnace lines
and support Grange’s decarbonisation initiatives.
STATEMENT OF CASH FLOWS
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net cash inflows from operating activities for the year were $196.9
million (2021: inflows $498.2 million) due to lower prices compared
to previous year and increase in unit operating costs.
NET CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflows from investing activities for the period were
$396.2 million (2021: outflows $79.6 million) and principally related
to funds invested in term deposits of $191.2 million and expenditures
for mine properties and development of $136.8 million and property,
plant and equipment of $87.7 million.
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net cash outflows from financing activities for the period were
$145.6 million (2021 outflow: $165.3 million) and principally related
to the payment of 2021 final dividend ($115.7 million) and 2022
interim dividend ($23.1 million).
ESG REPORTING AND INITIATIVES
Grange published
its baseline Environmental, Social, and
Governance (ESG) report with disclosures on 21 core metrics set by
the World Economic Forum (WEF) in its standardised and globally
recognised Stakeholder Capitalism Metrics ESG framework.
This new global environment
is challenging the traditional
expectations of corporations and redirecting investment capital.
Grange is committed to aligning the business, where applicable,
to the sustainable development goals that provide a roadmap to
sustainability and resilience.
The baseline report demonstrates Grange’s commitment to aligning
the business, where applicable, to the sustainable development
goals to provide guidance to sustainability and resilience. The report
describes the progress Grange has made against the four pillars of
the framework for Governance, Planet, People and Prosperity.
Most notably, Grange has developed a road map to reduce
emissions. This will involve the reduction in energy used per tonne
of product; upgrades to furnaces; recovery of heat in the pellet
plant; application of technology and electric vehicles in the mining
operation; and alternative fuel sources.
The Board has endorsed the pursuit of decarbonisation of Grange’s
Business with specific targets for CO2-e reduction including:
• The elimination of non-renewable coal sources like anthracite, by
2025.
• CO2-e emission target reduction of 50% by 2030 reducing
emissions to 53kg of CO2-e per tonne of iron ore products.
• Target of net zero CO2-e (Scope 1 and 2) emissions by 2035
29
During the period, the principal continuing activities of the Group
Dividends paid during the financial year were as follows:
consisted of the mining, processing and sale of iron ore; and
the ongoing exploration, evaluation and development of mineral
resources.
Fully franked interim dividend for half year ended 30 June 2022
Fully franked final dividend for the year ended 31 December
Fully franked special dividend for year ended 31 December
Fully franked interim dividend for half year ended 30 June 2021
- 2.0 cents per share
2021 - 10.0 cents per share
2021 - 10.0 cents per share
- 2.0 cents per share
2020 - 2.0 cents per share
Total dividends paid
Fully franked final dividend for the year ended 31 December
2022
$’000
23,147
115,734
-
-
-
138,881
2021
$’000
-
-
115,734
23,147
23,147
162,028
Since the end of the financial year the directors have recommended the payment of a 2.0 cent per share final dividend of $23.1 million.
This represents a total of $46.3 million (4.0 cents per share) fully franked dividend for the year-end 31 December 2022. The final dividend
was declared NIL conduit foreign income and will be paid on 28 March 2023.
OPERATING AND FINANCIAL REVIEW
KEY HIGHLIGHTS
MINING OPERATIONS
Injury free.
• Achieved a major milestone of over 2,110 days Lost Time
• Pellet production of 2.52 million tonnes for the year compared to
2.60 million tonnes for the prior year.
• Total iron ore product sales of 2.57 million tonnes for the year
compared to 2.62 million tonnes for the prior year.
• Profit after tax of $171.7 million for the year compared to $321.6
SAFETY PERFORMANCE
A focus on safety has been maintained across the business with
over 2,110 days Lost Time Injury Free achieved.
Key revenue metrics for the year ended 31 December 2022 and the
preceding 2021 year were as follows:
2022
2021
Iron Ore Pellet Sales (dmt)
2,429,700
2,507,201
Iron Ore Concentrate Sales (dmt)
1,853
42
Iron Ore Chip Sales (dmt)
136,760
108,130
million for the prior year, on revenues from operations of $594.6
Total Iron Ore Product Sales (dmt)
2,568,313
2,615,373
million compared to $781.7 million for the prior year.
Average Realised Product Price
• Average realised product price (FOB Port Latta) of A$203.18 per
(US$/t FOB Port Latta) *
tonne for the year compared to A$276.17 per tonne for the prior
year.
• Unit C1 cash operating costs of $120.64 per tonne for the year
compared to $99.73 for the prior year.
• Cash and liquid investments of $298.6 million at the end of year
compared to $463.5 million at the end of the prior year. Decrease
largely due to payment of dividends.
Average Realised Exchange Rate
(AUD:USD)
Average Realised Product Price
(A$/t FOB Port Latta)
141.28
208.08
0.6953
0.7535
203.18
276.17
*adusted for the costs of freight and final pricing settlements on provisional
settlements as per sales agreements. Pricing is typically finalised in one to three
months after shipment month.
Total sales for the year ended 31 December 2022 was 2.57 million
tonnes of high quality, low impurity iron ore products (2021: 2.62
million tonnes) and reflects sustained production from maintaining
access to high grade ore.
The average iron ore product price received during the year was
$203.18 per tonne of product sold (FOB Port Latta) (2021: $276.17
per tonne).
Please refer to Note 4 of the Financial Report for segment information
for sales to different geographical markets. The sales from long
term off take agreements with Jiangsu Shagang International Trade
Co. Ltd represents 36.5% of total sales for 2022 (2021: 27.7%).
28
GRANGE RESOURCES ANNUAL REPORT 2022
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project, situated 90km from the city of
Albany in Western Australia, is a joint venture between Grange
(70%) and SRT Australia Pty Ltd (SRTA) (30%). SRTA is jointly owned
by Sojitz Corporation and Kobe Steel. This advanced project has 1.2
billion tonnes of high quality resource and has access to established
infrastructure.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT Australia Pty Ltd to reacquire
SRT’s 30 per cent interest in the Southdown Magnetite Project.
The transaction is expected to be completed in Q1, 2023. Upon
completion, Grange will hold 100 per cent ownership in the Project.
During 2022, the Company commenced to carry out a definitive
feasibility study on a 5 Mtpa development case with new technology
and additional testwork. The study is progressing as planned and
the results will be released when completed at the end of March.
All tenements, permits and project assets continue to be maintained
in good order.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group
during the financial year.
There was no significant change in the state of affairs of the
Group that occurred during the year ended 31 December 2022.
Commentary on the overall state of affairs of the Group is set out in
the Operating and Financial Review.
There were no other significant changes in the state of affairs of the
Group during the financial year.
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
Since the end of the financial year the directors have recommended
the payment of a 2.0 cent per share final dividend of $23.1 million.
There were no other matters or circumstances arising since 31
December 2022 that has significantly affected, or may significantly
affect:
i) The Group’s operations in future years; or
ii) The results of those operations in future financial years; or
iii) The Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
Grange’s strategic focus is to generate shareholder value by safely
producing high quality iron ore products from its Savage River and
Port Latta operations in Tasmania and continuing to assess the
feasibility of a major iron ore development project at Southdown,
near Albany in Western Australia. The Group’s current strategic
priorities include:
SAVAGE RIVER AND PORT LATTA OPERATIONS
• Optimising the Life of Mine Plan together with cost reduction
strategies
• Completing the Definitive Feasibility Study for underground
mining in North Pit
• Producing high grade ore from Centre Pit
• Delivering on secured off take agreements
30
• Maintaining access to ore with continuing investment in mine
development
• Maintaining critical process infrastructure
• Continuing focus on improving productivity and implementing
cost control projects
SOUTHDOWN PROJECT
• Completing feasibility study on a 5 Mtpa development case with
new technology and additional testwork
• Ensuring that all tenements, permits and project assets remain
in good standing
RISK MANAGEMENT
The Group continues to assess and manage various business risks
that could impact the Group’s operating and financial performance
and its ability to successfully deliver strategic priorities including:
• Fluctuations in iron ore market and movements in foreign
exchange rates
• Volatility in the energy prices and availability
• Geotechnical risks including wall stability
• Production risks and costs associated with aging infrastructure
• Project evaluation and development
• Health, safety and environment
•
Impacts of climate change on our business
• Risks associated with underground mining
RISK MITIGATION STRATEGIES INCLUDE THE FOLLOWING:
• Optimise timing of sales to the fluctuations in iron ore prices and
demands from different markets
• Focussed program of geotechnical wall monitoring, modelling
and redesign work to mitigate potential stability issues
• Continue disciplined and rigorous review process regarding
budget development and cost control to ensure investment
directed to highest priority areas while reducing overall operating
costs
• Hedging strategies for key energy exposures
• A well developed tool kit to ensure projects are adequately
planned and peer reviewed prior to commitment and execution
• Outstanding safety record is supported by comprehensive safety
system that enables management to develop a resilient safety
culture and ensure our stewardship over the environment
•
Initiatives to progressively decarbonise the operation
ENVIRONMENTAL REGULATION
The mining and exploration tenements held by the Group contain
environmental requirements and conditions that the Group must
comply with in the course of normal operations. These conditions
and regulations cover the management of the storage of hazardous
materials and rehabilitation of mine sites.
The Group is subject to significant environmental legislation and
regulation in respect of its mining, processing and exploration
activities as set out below:
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project, situated 90km from the city of
development
• Maintaining access to ore with continuing investment in mine
Albany in Western Australia, is a joint venture between Grange
• Maintaining critical process infrastructure
(70%) and SRT Australia Pty Ltd (SRTA) (30%). SRTA is jointly owned
by Sojitz Corporation and Kobe Steel. This advanced project has 1.2
billion tonnes of high quality resource and has access to established
infrastructure.
In December 2022, the Company entered into a binding agreement
with its joint venture partner, SRT Australia Pty Ltd to reacquire
SRT’s 30 per cent interest in the Southdown Magnetite Project.
The transaction is expected to be completed in Q1, 2023. Upon
completion, Grange will hold 100 per cent ownership in the Project.
During 2022, the Company commenced to carry out a definitive
feasibility study on a 5 Mtpa development case with new technology
and additional testwork. The study is progressing as planned and
the results will be released when completed at the end of March.
All tenements, permits and project assets continue to be maintained
in good order.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group
during the financial year.
• Continuing focus on improving productivity and implementing
cost control projects
SOUTHDOWN PROJECT
• Completing feasibility study on a 5 Mtpa development case with
new technology and additional testwork
• Ensuring that all tenements, permits and project assets remain
in good standing
RISK MANAGEMENT
The Group continues to assess and manage various business risks
that could impact the Group’s operating and financial performance
and its ability to successfully deliver strategic priorities including:
• Fluctuations in iron ore market and movements in foreign
exchange rates
• Volatility in the energy prices and availability
• Geotechnical risks including wall stability
• Production risks and costs associated with aging infrastructure
There was no significant change in the state of affairs of the
Group that occurred during the year ended 31 December 2022.
Commentary on the overall state of affairs of the Group is set out in
• Project evaluation and development
• Health, safety and environment
the Operating and Financial Review.
•
Impacts of climate change on our business
There were no other significant changes in the state of affairs of the
• Risks associated with underground mining
Group during the financial year.
MATTERS SUBSEQUENT TO THE
END OF THE FINANCIAL YEAR
RISK MITIGATION STRATEGIES INCLUDE THE FOLLOWING:
• Optimise timing of sales to the fluctuations in iron ore prices and
demands from different markets
Since the end of the financial year the directors have recommended
• Focussed program of geotechnical wall monitoring, modelling
the payment of a 2.0 cent per share final dividend of $23.1 million.
and redesign work to mitigate potential stability issues
There were no other matters or circumstances arising since 31
• Continue disciplined and rigorous review process regarding
December 2022 that has significantly affected, or may significantly
budget development and cost control to ensure investment
affect:
directed to highest priority areas while reducing overall operating
i) The Group’s operations in future years; or
ii) The results of those operations in future financial years; or
iii) The Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS OF OPERATIONS
Grange’s strategic focus is to generate shareholder value by safely
producing high quality iron ore products from its Savage River and
Port Latta operations in Tasmania and continuing to assess the
feasibility of a major iron ore development project at Southdown,
near Albany in Western Australia. The Group’s current strategic
priorities include:
SAVAGE RIVER AND PORT LATTA OPERATIONS
costs
• Hedging strategies for key energy exposures
• A well developed tool kit to ensure projects are adequately
planned and peer reviewed prior to commitment and execution
• Outstanding safety record is supported by comprehensive safety
system that enables management to develop a resilient safety
culture and ensure our stewardship over the environment
•
Initiatives to progressively decarbonise the operation
ENVIRONMENTAL REGULATION
The mining and exploration tenements held by the Group contain
environmental requirements and conditions that the Group must
comply with in the course of normal operations. These conditions
and regulations cover the management of the storage of hazardous
• Optimising the Life of Mine Plan together with cost reduction
materials and rehabilitation of mine sites.
strategies
• Completing the Definitive Feasibility Study for underground
regulation in respect of its mining, processing and exploration
mining in North Pit
activities as set out below:
The Group is subject to significant environmental legislation and
• Producing high grade ore from Centre Pit
• Delivering on secured off take agreements
30
SAVAGE RIVER AND PORT LATTA OPERATIONS
The Group obtained approvals to operate in 1996 and 1997
under the Land Use Planning and Approvals Act (LUPA) and the
Environmental Management and Pollution Control Act (EMPCA) as
well as the Goldamere Act and Mineral Resources Development
Act. The land use permit conditions for Savage River and Port
Latta are contained in Environmental Protection Notices 248/2
and 302/2 respectively. The currently approved Environmental
Management Plans were submitted for Savage River and Port
Latta on 21 December 2010. The extension of the project’s life was
approved by the Department of Tourism, Arts and the Environment
on 12 March 2007 and together with the Goldamere Act and the
Environmental Protection Notices, is the basis for the management
of all environmental aspects of the mining leases. The Group
has been relieved of any environmental obligation in relation to
contamination, pollutants or pollution caused by operations prior
to the date of the Goldamere Agreement (December 1996). Grange
received planning approval from the Waratah Wynyard Council and
the Tasmanian Environment Protection Authority for the Centre Pit
Expansion and South Deposit Backfill Dump through DA 216/2021
and Permit Conditions-Environmental No. 10995
During the financial year there were no breaches of licence
conditions.
SOUTHDOWN JOINT VENTURE
The Southdown Joint Venture has not been responsible for any
activities which would cause a breach of environmental legislation.
MOUNT WINDSOR JOINT VENTURE
Grange is a minority partner (30%) in the Mt Windsor project in
North Queensland which is now being rehabilitated for future lease
relinquishment. An ongoing Transitional Environment Program
has been entered into voluntarily to identify and remediate various
sources of pollution on site. A comprehensive plan has been
developed and instigated to manage the leases with relinquishment
expected in 2045.
During the financial year there were no breaches of licence
conditions.
NATIONAL GREENHOUSE AND ENERGY
REPORTING ACT 2007
The National Greenhouse and Energy Reporting Act 2007 requires
the Group to report its annual greenhouse gas emissions and energy
use by 31 October each year. The Group has implemented systems
and processes for the collection and calculation of the data required
and has submitted its annual reports through the Emissions and
Energy Reporting System (EERS) by 31 October each year.
NATIONAL GREENHOUSE AND ENERGY REPORTING (SAFE-
GUARD MECHANISM) RULE 2015
The Safeguard Mechanism applies to designated large facilities
and is triggered when the facility exceeds 100,000 t CO2-e as per
Division 8 of NEGR (Safeguard Mechanism) Rule 2015. The entity
with operational control of a designated large facility is responsible
for meeting safeguard requirements, including that the facility must
keep net emissions at or below baseline emission levels. Grange
has two facilities which trigger the Safeguard Mechanism. The Port
Latta Pelletising Plant has moved to a Production Adjusted Baseline
and the Savage River Mine Site has moved to a Transitional
Calculated Baseline.
RENEWABLE ENERGY (ELECTRICITY) ACT 2000
In recognition that the Renewable Energy Targets scheme may
increase costs to Companies that carry on Emissions Intensive
Trade Exposed (EITE) activities, the exemption provisions under
the Renewable Energy (Electricity) Act 2000 as amended allow a
prescribed person to apply for an exemption certificate in relation to
the electricity supplied to an EITE activity carried on at a site. Subject
to agreement from the prescribed person an exemption certificate
may be traded to the liable entity for the electricity supplied, and
provides the liable entity with exemption from liability for a certain
amount of megawatt-hours of electricity in the given calendar year.
Grange has received exemption certificates under this scheme.
CLIMATE CHANGE RISK AND OPPORTUNITIES
PHYSICAL RISKS
• Concentrated rainfall event causing flooding
• Rising sea levels and reduced rainfall causing groundwater
scarcity
RISK RELATED TO TRANSITION TO A LOW
CARBON ECONOMY
• Policy and legal risks as a result of government regulation of
carbon emissions, resulting in higher energy prices and other
production costs or restricted energy availability.
• Technology, market and reputation risk as a result of change in
consumer expectations and demand for low carbon goods and
services.
The Group identifies and monitors these risks through the enterprise
risk assessment process and continues to identify opportunities for
improvement. The Group acknowledges that the world is moving
to a low-carbon future. The steel market is already starting to
value ‘green steel’ and while our pellets reduce emissions in the
production of steels, the Group will continue to explore opportunities
to reduce carbon emissions in its production processes.
MEETINGS OF DIRECTORS
The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held during the year ended 31
December 2022, and the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and
Risk Committee
M Li
Y Jia
H Zhao
M Dontschuk
A Saverimutto
Attended
13
12
13
13
13
Held
13
13
13
13
13
Attended
6
6
-
6
-
Held
6
6
-
6
-
Attended
6
-
-
6
6
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
Held
6
-
-
6
6
31
GRANGE RESOURCES ANNUAL REPORT 2022
REMUNERATION REPORT
The remuneration report details the key management personnel
remuneration arrangements for the Group, in accordance with the
requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of
the entity, directly or indirectly, including all directors.
(I) KEY MANAGEMENT PERSONNEL DISCLOSED IN THIS
REPORT
Non-executive directors
Michelle Li
Yan Jia
Michael Dontschuk
Ajanth Saverimutto
Executive directors
Position
Honglin Zhao
Managing Director
Chief Executive Officer
Other key management personnel Position
(III) EXECUTIVE REMUNERATION PHILOSOPHY AND
FRAMEWORK
It is the Company’s objective to provide maximum stakeholder
benefit from the retention of a small high-quality executive team
by remunerating Executive Directors and executives fairly and
appropriately with reference to relevant market conditions. To assist
in achieving this objective, the Board attempts to link the nature and
amount of executives’ emoluments to the Company’s performance.
The remuneration framework aims to ensure that remuneration
practices are:
• acceptable to shareholders, transparent and easily understood;
• competitive and reasonable, enabling the company to attract
and retain key talents who share the same values with Grange
Resources; and
• aligned to the Company’s strategic and business objectives and
the creation of shareholder value.
Using external remuneration sector comparative data, the Group
has structured an executive remuneration framework that is
market competitive and complementary to the reward strategy of
the organisation. The framework is reviewed regularly along with
the remuneration strategy review.
Steven Phan
Ben Maynard
Chief Financial Officer
Chief Operating Officer
During the year, the Committee engaged remuneration consultants
Godfrey Remuneration Group to provide advice and market insights
in relation to executive remuneration arrangements.
(II) REMUNERATION GOVERNANCE
The Board has an established Remuneration and Nomination
Committee to assist in overseeing the development of policies and
practices which enable the Company to attract and retain capable
Directors and employees, reward employees fairly and responsibly
and meet the Board’s oversight responsibilities in relation to
corporate governance practices.
The framework provides a mix of fixed and variable pay, and a blend
of short and long term incentives detailed as follows:
FIXED REMUNERATION
Fixed remuneration is reviewed annually by the Remuneration and
Nomination Committee. The process consists of a review of Group
and individual performance, relevant comparative remuneration
externally and internally and, where appropriate, external advice on
policies and practices.
The Remuneration and Nomination Committee is composed of
Mr Michael Dontschuk (Independent Non-executive Director and
Committee Chairperson)and Dr Michelle Li (Independent Non-
executive Chairperson).
Executives are given the opportunity to receive their fixed (primary)
remuneration in a variety of forms including cash and fringe benefits.
It is intended that the manner of payment chosen is optimal for the
recipient without creating any undue cost for the Group.
responsibilities and
The
and Nomination Committee
recommendations on the following:
functions
the Remuneration
include reviewing and making
for
• Equity based executive and employee incentive plans;
• Recruitment, retention, succession planning, performance
measurement and termination policies and procedures for Non-
executive Directors, Executive Directors and Key Management
Personnel;
• The remuneration of the Chief Executive Officer, Chief Financial
Officer and the Chief Operating Officer;
• Periodically assessing the skills required by the Board;
• Recommend processes to evaluate the performance of the
There are no guaranteed fixed pay increases included in any
executives’ contracts.
VARIABLE REMUNERATION – SHORT TERM INCENTIVE (“STI”)
The objective of the STI is to link the achievement of the Company’s
annual operational targets (usually reflected in the approved
budgets) and an individual’s personal targets with the remuneration
received by selected executive directors and senior employees
responsible for meeting those targets. Payments are made as a cash
incentive payable after the financial statements have been audited
and released to the Australian Securities Exchange (“ASX”). 50% of
the STI relates to the achievement of company performance goals
and 50% relates to the attainment of agreed personal performance
goals.
Board, it’s Committees and individual Directors; and
VARIABLE REMUNERATION - LONG TERM INCENTIVE (“LTI”)
• Reviewing governance arrangements pertaining to remuneration
a) Deferred Cash
matters.
The Charter is reviewed annually, and remuneration strategies are
reviewed regularly.
A 3 year deferred cash long term incentive program commenced
in 2019 with the final tranche to be paid in 2024. This long-term
incentive program was replaced by a share-based payment scheme
in 2022.
The deferred cash scheme is to reward selected executive directors
and senior employees with a cash payment which is linked to the
32
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
REMUNERATION REPORT
The remuneration report details the key management personnel
remuneration arrangements for the Group, in accordance with the
requirements of the Corporations Act 2001 and its Regulations.
FRAMEWORK
(III) EXECUTIVE REMUNERATION PHILOSOPHY AND
It is the Company’s objective to provide maximum stakeholder
Key management personnel are those persons having authority and
benefit from the retention of a small high-quality executive team
responsibility for planning, directing and controlling the activities of
by remunerating Executive Directors and executives fairly and
the entity, directly or indirectly, including all directors.
(I) KEY MANAGEMENT PERSONNEL DISCLOSED IN THIS
Non-executive directors
• acceptable to shareholders, transparent and easily understood;
appropriately with reference to relevant market conditions. To assist
in achieving this objective, the Board attempts to link the nature and
amount of executives’ emoluments to the Company’s performance.
The remuneration framework aims to ensure that remuneration
practices are:
• competitive and reasonable, enabling the company to attract
and retain key talents who share the same values with Grange
Resources; and
• aligned to the Company’s strategic and business objectives and
the creation of shareholder value.
Using external remuneration sector comparative data, the Group
has structured an executive remuneration framework that is
market competitive and complementary to the reward strategy of
the organisation. The framework is reviewed regularly along with
the remuneration strategy review.
REPORT
Michelle Li
Yan Jia
Michael Dontschuk
Ajanth Saverimutto
Honglin Zhao
Executive directors
Position
Managing Director
Chief Executive Officer
Other key management personnel Position
Steven Phan
Ben Maynard
Chief Financial Officer
During the year, the Committee engaged remuneration consultants
Godfrey Remuneration Group to provide advice and market insights
Chief Operating Officer
in relation to executive remuneration arrangements.
(II) REMUNERATION GOVERNANCE
The Board has an established Remuneration and Nomination
Committee to assist in overseeing the development of policies and
practices which enable the Company to attract and retain capable
Directors and employees, reward employees fairly and responsibly
and meet the Board’s oversight responsibilities in relation to
The framework provides a mix of fixed and variable pay, and a blend
of short and long term incentives detailed as follows:
FIXED REMUNERATION
Fixed remuneration is reviewed annually by the Remuneration and
Nomination Committee. The process consists of a review of Group
and individual performance, relevant comparative remuneration
externally and internally and, where appropriate, external advice on
corporate governance practices.
policies and practices.
The Remuneration and Nomination Committee is composed of
Mr Michael Dontschuk (Independent Non-executive Director and
Committee Chairperson)and Dr Michelle Li (Independent Non-
Executives are given the opportunity to receive their fixed (primary)
remuneration in a variety of forms including cash and fringe benefits.
It is intended that the manner of payment chosen is optimal for the
executive Chairperson).
recipient without creating any undue cost for the Group.
The
responsibilities and
functions
for
the Remuneration
There are no guaranteed fixed pay increases included in any
and Nomination Committee
include reviewing and making
executives’ contracts.
recommendations on the following:
• Equity based executive and employee incentive plans;
• Recruitment, retention, succession planning, performance
measurement and termination policies and procedures for Non-
executive Directors, Executive Directors and Key Management
Personnel;
• The remuneration of the Chief Executive Officer, Chief Financial
Officer and the Chief Operating Officer;
• Periodically assessing the skills required by the Board;
• Recommend processes to evaluate the performance of the
goals.
VARIABLE REMUNERATION – SHORT TERM INCENTIVE (“STI”)
The objective of the STI is to link the achievement of the Company’s
annual operational targets (usually reflected in the approved
budgets) and an individual’s personal targets with the remuneration
received by selected executive directors and senior employees
responsible for meeting those targets. Payments are made as a cash
incentive payable after the financial statements have been audited
and released to the Australian Securities Exchange (“ASX”). 50% of
the STI relates to the achievement of company performance goals
and 50% relates to the attainment of agreed personal performance
Board, it’s Committees and individual Directors; and
VARIABLE REMUNERATION - LONG TERM INCENTIVE (“LTI”)
• Reviewing governance arrangements pertaining to remuneration
a) Deferred Cash
matters.
reviewed regularly.
The Charter is reviewed annually, and remuneration strategies are
A 3 year deferred cash long term incentive program commenced
in 2019 with the final tranche to be paid in 2024. This long-term
incentive program was replaced by a share-based payment scheme
in 2022.
The deferred cash scheme is to reward selected executive directors
and senior employees with a cash payment which is linked to the
b) Rights to Grange Shares
In 2022 the Company granted performance rights in three tranches
to be settled by issuance of shares to three key management
personnel. Each right is entitled to one equity share with a vesting
date of 31 December 2024. Tranche 1 (with a weighting of 35%), has
a total shareholder return (TSR) hurdle, tranche 2 (35% weighting)
has a return on equity (ROE) hurdle and tranche 3 (30% weighting)
has hurdles relating to non-market business objectives.
Company satisfying performance hurdles and subject to ongoing
is
employment with Grange. The deferred cash component
determined by measuring the Company’s progress made on:
• Development of mineral assets (weighting 35%)
• Mine development (weighting 20%)
• Downstream process improvement (weighting 15%)
• Financial returns (weighting 20%)
• Safety and sustainability (weighting 10%)
The deferred cash component is determined based on the Company’s
performance for the year ended 31 December, with 33.3% payable on
31 December the first following year, 33.3% payable on 31 December
the second following year, and the balance payable on the following
31 December (i.e. 3 years after the relevant calculation date).
Payment of deferred cash is subject to continuing employment with
Grange at the scheduled date of the payment.
(IV) RELATIONSHIP BETWEEN REMUNERATION AND GRANGE RESOURCES PERFORMANCE
The table below shows key performance indicators of Company performance over the past five years.
Revenue from Operations
Net profit after tax
Basic earnings per share
Dividend payments
Share price
(last trade day of financial year)
$ million
$ million
Cents
$ million
Cents
2018
368.20
112.94
9.79
23.10
20.00
2019
368.60
77.30
6.71
23.10
25.00
2020
526.30
203.19
17.64
23.10
29.50
2021
781.70
321.62
27.84
162.00
75.50
2022
594.60
171.74
14.84
138.90
84.50
V) NON-EXECUTIVE DIRECTOR REMUNERATION POLICY
Fees and payments to Non-executive Directors reflect the
responsibilities and demands made on them. Non-executive
Directors’ fees and payments are reviewed periodically by the
Board. The Board also considers comparative market data and if
required the advice of independent remuneration consultants to
ensure Non-executive Directors’ fees and payments are appropriate
and in line with the market. The Chairperson’s fees are determined
independently to the fees of Non-executive Directors based on
comparative roles in the external market.
Board of Directors
Chairperson (1)
Deputy Chairperson
Non-executive Director
Audit and Risk Committee
Chairperson
Committee Member
$210,000
$92,000
$81,000
$15,750
$10,500
The current remuneration was last reviewed with effect from 1
November 2014. The Chairperson’s remuneration is inclusive of
committee fees while other Non-executive Directors who chair a
Committee receive additional yearly fees. The Deputy Chairperson
is also entitled to receive an additional yearly fee
Non-executive Directors’ fees are determined within an aggregate
Directors’ fee pool limit, which is periodically reviewed for adequacy.
Any increase to the aggregate Directors’ fee pool is submitted to
shareholders for approval. The maximum currently stands at
$800,000 per annum and was approved by shareholders at the
Annual General Meeting on 26 November 2010. Non-executive
Directors do not receive performance-based pay.
Remuneration and Nomination Committee
Chairperson
Committee Member
$15,750
$7,500
(1) The Chairperson is not paid any additional amounts for Committee membership.
32
33
GRANGE RESOURCES ANNUAL REPORT 2022
VI) DETAILS OF REMUNERATION
Details of the remuneration of the key management personnel of the Group are set out in the following tables.
Table 1: Remuneration for the year ended 31 December 2022
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
Non-Executive
Directors
M Li
Y Jia
M Dontschuk
A Saverimutto
Sub-total
Non-Executive
Directors
Executive Directors
$
210,000
99,499
105,291
91,671
506,461
$
-
-
-
-
-
$
$
-
-
-
-
$
-
-
-
-
8,778
-
-
-
-
-
8,778
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
$
%
210,000
-
99,499
-
114,069
-
91,671
-
515,239
-
H Zhao
557,648
53,506
23,208
22,112
57,159
113,923
71,410
21,561
920,527
22%
Key Management Personnel
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
360,454
400,722
-
-
12,732
(3,865)
12,611
17,868
36,947
41,074
70,397
78,261
36,927
41,129
15,490
16,353
545,558
591,542
23%
23%
1,318,824
53,506
32,075
52,591
135,180
262,581
149,466
53,404
2,057,627
23%
1,825,285
53,506
32,075
52,591
143,958
262,581
149,466
53,404
2,572,866
18%
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
Table 2: Remuneration for the year ended 31 December 2021
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
Non-Executive
Directors
M Li
Y Jia
D Woodall(1)
M Dontschuk(2)
A Saverimutto(3)
Sub-total
Non-Executive
Directors
Executive Directors
$
193,333
107,749
30,137
96,752
53,375
481,346
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
2,863
-
-
2,863
$
-
-
-
-
-
-
$
-
-
-
-
-
-
H Zhao
541,934
72,943
30,068
20,879
52,839
121,443
94,751
Key Management Personnel
350,295
389,428
-
-
8,141
738
12,192
16,919
34,154
37,969
72,036
80,469
48,996
54,651
$
-
-
-
-
-
$
%
193,333
-
107,749
-
33,000
96,752
53,375
-
-
-
-
484,209
-
-
-
-
934,857
23%
525,814
580,174
23%
23%
1,281,657
72,943
38,947
49,990
124,962 273,948
198,398
-
2,040,845
23%
1,763,003
72,943
38,947
49,990
127,825
273,948
198,398
-
2,525,054
19%
(1) Mr Woodall resigned on 30 April 2021, (2) Mr Dontschuk was appointed Chairperson of the Remuneration and Nomination Committee effective 1 December 2021,
(3) Mr Saverimutto was appointed on 1 June 2021
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
34
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
VI) DETAILS OF REMUNERATION
Details of the remuneration of the key management personnel of the Group are set out in the following tables.
Table 1: Remuneration for the year ended 31 December 2022
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
$
$
-
-
-
-
-
-
8,778
-
-
$
-
-
-
$
%
210,000
-
99,499
-
114,069
-
91,671
-
-
-
8,778
515,239
-
H Zhao
557,648
53,506
23,208
22,112
57,159
113,923
71,410
21,561
920,527
22%
360,454
400,722
-
-
12,732
(3,865)
12,611
17,868
36,947
41,074
70,397
78,261
36,927
41,129
15,490
16,353
545,558
591,542
23%
23%
1,318,824
53,506
32,075
52,591
135,180
262,581
149,466
53,404
2,057,627
23%
1,825,285
53,506
32,075
52,591
143,958
262,581
149,466
53,404
2,572,866
18%
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
Table 2: Remuneration for the year ended 31 December 2021
FIXED REMUNERATION
VARIABLE REMUNERATION
Salary &
fees *
Non-
monetary
benefits *
Annual
leave
* ^
Long
Service
Leave **
Super-
annuation
***
STI *
LTI
Cash **
LTI
Rights
****
Total
Perform-
ance
Related
$
-
-
-
-
-
-
$
-
-
-
-
2,863
$
-
-
-
-
-
-
$
$
%
193,333
-
107,749
-
33,000
96,752
53,375
-
-
-
2,863
-
484,209
-
$
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
-
-
-
$
210,000
99,499
105,291
91,671
506,461
Non-Executive
Directors
M Li
Y Jia
M Dontschuk
A Saverimutto
Sub-total
Non-Executive
Directors
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
Executive Directors
Key Management Personnel
Non-Executive
Directors
M Li
Y Jia
D Woodall(1)
M Dontschuk(2)
A Saverimutto(3)
Sub-total
Non-Executive
Directors
Executive Directors
$
193,333
107,749
30,137
96,752
53,375
481,346
Key Management Personnel
S Phan
B Maynard
Sub-total Key
Management
Personnel
TOTAL
34
H Zhao
541,934
72,943
30,068
20,879
52,839
121,443
94,751
934,857
23%
350,295
389,428
8,141
738
12,192
16,919
34,154
37,969
72,036
80,469
48,996
54,651
525,814
580,174
23%
23%
1,281,657
72,943
38,947
49,990
124,962 273,948
198,398
-
2,040,845
23%
1,763,003
72,943
38,947
49,990
127,825
273,948
198,398
-
2,525,054
19%
(1) Mr Woodall resigned on 30 April 2021, (2) Mr Dontschuk was appointed Chairperson of the Remuneration and Nomination Committee effective 1 December 2021,
(3) Mr Saverimutto was appointed on 1 June 2021
* Short-term benefits as per Corporation Regulations 2M.3.03 (1) Item 6
** Other long-term benefits as per Corporation Regulation 2M.3.03 (1) Item 8
*** Post-employment benefits
**** Equity-settled share-based payments as per Corporation Regulations 2M.3.03(1) Item 11
^ Annual leave liability is expected to be fully settled within one year
35
GRANGE RESOURCES ANNUAL REPORT 2022
Table 3: Relative proportions linked to performance
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Executive Directors
H Zhao
Key Management Personnel
S Phan
B Maynard
Fixed Remuneration
At Risk - STI
At Risk - LTI
Dec-22
Dec-21
Dec-22
Dec-21
Dec-22
Dec-21
78%
77%
77%
77%
77%
77%
12%
13%
13%
13%
14%
14%
10%
10%
10%
10%
9%
9%
(VII) SERVICE AGREEMENTS
On appointment to the Board, all Non-executive Directors sign
a letter of appointment with the Company. The document details
the term of appointment, the role, duties and obligations of the
Directors as well as the likely time commitment and performance
expectations and review arrangements and circumstances relating
to the vacation of office. In addition, it also summarises the major
Board policies and terms, including compensation, relevant to the
office of Director.
Remuneration and other terms of employment for the executives
are formalised in service agreements. Each of the agreements
provides for the provision of fixed pay, performance related variable
remuneration and other benefits. The agreements with executives
are ongoing and provide for termination of employment at any time
by giving three months’ notice or by the Company paying an amount
equivalent to three months remuneration in lieu of notice.
(VIII) DETAILS OF STI AND LTI (SHARE-BASED PAYMENT) HELD BY KEY MANAGEMENT PERSONNEL
PERFORMANCE BASED REMUNERATION GRANTED AND FORFEITED DURING THE YEAR.
2022
H Zhao
S Phan
B Maynard
Total STI Bonus
(Cash)
Total STI Bonus
(Cash)
Total STI Bonus
(Cash)
Share-based
Payment rights
Share-based
Payment rights
Total Opportunity
Awarded
Forfeited
Value Granted
Value Exercised
$
147,554
85,839
95,428
328,821
%
77
82
82
%
23
18
18
$
143,834
103,335
109,094
356,263
$
-
-
-
-
STI amounts are inclusive of superannuation.
SHARE-BASED COMPENSATION
In May 2022 Grange Resources Limited (Parent Company) granted
performance rights in three tranches and to be settled by issuance
of shares to three key management personnel. Each right is entitled
to one equity share with a vesting date of 31 December 2024.
Executive KMP participate, at the board’s discretion, in the LTIP
comprising performance rights which are subject to TSR hurdles
(tranche 1) and series of non-market based business objectives
(tranche 2 and 3).
Feature
Opportunity/Allocation
Description
CEO - 25% of Fixed Remuneration; Other Key Management Personnel - 20% of fixed
remuneration.
Performance Hurdles
Tranche 1 performance rights is subject to a TSR performance vesting conditions
Tranche 2 and 3 performance rights are not subject to a TSR Hurdle and require
a series of non-market based business objectives to be met for the rights to be
exercised.
Exercise Price
$ Nil
Forfeiture and Termination
In the event of a termination of employment by the Company for cause, all unvested
rights will be forfeited unless otherwise determined by the Board.
Cessation of employment in other cases will generally result in pro-rate forfeiture of
the rights.
Measurement Period
22 February 2022 to 30 December 2024
Fair value Measurement at Grant Date
Tranche 1 is estimated using a Monte Carlo Model and Tranche 2 and 3 using black
Scholes Option pricing
36
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
Table 3: Relative proportions linked to performance
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
H Zhao
Executive Directors
Key Management Personnel
S Phan
B Maynard
(VII) SERVICE AGREEMENTS
Fixed Remuneration
At Risk - STI
At Risk - LTI
Dec-22
Dec-21
Dec-22
Dec-21
Dec-22
Dec-21
78%
77%
77%
77%
77%
77%
12%
13%
13%
13%
14%
14%
10%
10%
10%
10%
9%
9%
On appointment to the Board, all Non-executive Directors sign
Remuneration and other terms of employment for the executives
a letter of appointment with the Company. The document details
are formalised in service agreements. Each of the agreements
the term of appointment, the role, duties and obligations of the
provides for the provision of fixed pay, performance related variable
Directors as well as the likely time commitment and performance
remuneration and other benefits. The agreements with executives
expectations and review arrangements and circumstances relating
are ongoing and provide for termination of employment at any time
to the vacation of office. In addition, it also summarises the major
by giving three months’ notice or by the Company paying an amount
Board policies and terms, including compensation, relevant to the
equivalent to three months remuneration in lieu of notice.
office of Director.
(VIII) DETAILS OF STI AND LTI (SHARE-BASED PAYMENT) HELD BY KEY MANAGEMENT PERSONNEL
PERFORMANCE BASED REMUNERATION GRANTED AND FORFEITED DURING THE YEAR.
Total STI Bonus
Total STI Bonus
Total STI Bonus
(Cash)
Share-based
Payment rights
Share-based
Payment rights
Total Opportunity
Forfeited
Value Granted
Value Exercised
(Cash)
$
147,554
85,839
95,428
328,821
(Cash)
Awarded
%
77
82
82
%
23
18
18
$
143,834
103,335
109,094
356,263
$
-
-
-
-
STI amounts are inclusive of superannuation.
SHARE-BASED COMPENSATION
In May 2022 Grange Resources Limited (Parent Company) granted
Executive KMP participate, at the board’s discretion, in the LTIP
performance rights in three tranches and to be settled by issuance
comprising performance rights which are subject to TSR hurdles
of shares to three key management personnel. Each right is entitled
(tranche 1) and series of non-market based business objectives
to one equity share with a vesting date of 31 December 2024.
(tranche 2 and 3).
Opportunity/Allocation
CEO - 25% of Fixed Remuneration; Other Key Management Personnel - 20% of fixed
Performance Hurdles
Tranche 1 performance rights is subject to a TSR performance vesting conditions
Tranche 2 and 3 performance rights are not subject to a TSR Hurdle and require
a series of non-market based business objectives to be met for the rights to be
Forfeiture and Termination
In the event of a termination of employment by the Company for cause, all unvested
rights will be forfeited unless otherwise determined by the Board.
Cessation of employment in other cases will generally result in pro-rate forfeiture of
Measurement Period
22 February 2022 to 30 December 2024
Fair value Measurement at Grant Date
Tranche 1 is estimated using a Monte Carlo Model and Tranche 2 and 3 using black
Scholes Option pricing
Description
remuneration.
exercised.
$ Nil
the rights.
2022
H Zhao
S Phan
B Maynard
Feature
Exercise Price
36
PERFORMANCE CONDITIONS FOR EACH TRANCHE
TRANCHE 1
Performance Level
Annualised Grange TSR Compared to TSR of the ASX 300
Metals and Mining TR Index
% of Tranche Vesting
Stretch
> Index TSR + 9% TSR CAGR
Between Target and Stretch
> Index TSR + 2% TSR CAGR & Index TSR & 0%)
100%
Pro-rata
50%
Pro-rata
25%
0%
TRANCHE 2
Performance conditions
Return on Equity
Stretch
> 15% ROE
Between Target and Stretch
>8% ROE & <15% ROE
Target
8% ROE (Cost of Equity)
Between Threshold and Target
>6% ROE & <8% ROE
Threshold
Below Threshold
=6% ROE
=<6% ROE
TRANCHE 3
Strategic Area
Southdown Project
Southdown Project
Capital Management
Milestone
Complete DFS
Complete Executable Finance Plan
Implement the plan to systematically identify the best use of capital
with rigorous investment decision framework, including dividend
policy.
% of Tranche Vesting
100%
Pro-rata
50%
Pro-rate
25%
0%
% of Tranche Vesting
16.67%
16.67%
33.33%
Future Development
Provide 3 major projects for board review for potential purchase
33.33%
THE TERMS AND CONDITION OF EACH GRANT OF PERFORMANCE RIGHTS ARE AS FOLLOWS:
Grant Date
Tranche 1
Vesting and Exercise
Date
Expiry Date
Exercise
Price
Value per Rights
at Grant Date
Performance Achieved
Vested %
11 May 2022
31 December 2024
24 May 2037
27 May 2022
31 December 2024
24 May 2037
30 May 2022
31 December 2024
24 May 2037
Tranche 2
11 May 2022
31 December 2024
24 May 2037
27 May 2022
31 December 2024
24 May 2037
30 May 2022
31 December 2024
24 May 2037
Tranche 3
11 May 2022
31 December 2024
24 May 2037
27 May 2022
31 December 2024
24 May 2037
30 May 2022
31 December 2024
24 May 2037
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$51,374
$40,231
$36,726
$64,723
$48,204
$44,406
$27,738
$20,659
$22,202
To be determined
To be determined
To be determined
To be determined
To be determined
To be determined
To be determined
To be determined
To be determined
-
-
-
-
-
-
-
-
-
37
GRANGE RESOURCES ANNUAL REPORT 2022
RECONCILIATION OF PERFORMANCE RIGHTS HELD BE EACH KEY MANAGEMENT PERSONNEL
2022
Name and
Grant Date
H Zhao
11 May 2022
S Phan
30 May 2022
B Maynard
27 May 2022
Balance at the
Start of the year
Unvested
Granted as
Compensation
Vested
%
Exercised
Number
Balance at the
end of the year
Vested
Balance at the
end of the year
Unvested
Maximum value
yet to vest
$
-
-
-
140,342
74,707
80,680
-
-
-
-
-
-
-
-
-
140,342
$122,273
74,707
$87,845
80,680
$92,741
SHARE HOLDINGS
The number of shares in the Company held during the period by each Director of Grange Resources Limited and other key management
personnel of the Group, including their personally related parties, are set out below:
Balance 1
January 2022
On vesting rights
On market
purchases
On market
disposals
Other
Balance 31
December 2022
31 December 2022
Director of Grange
Resources Limited
M Li
M Dontschuk
H Zhao
Y Jia
A Saverimutto
Key Management Personnel
B Maynard
13,507
13,000
1,727,702
-
-
68,122
1,822,331
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,507
13,000
1,727,702
-
-
68,122
1,822,331
No directors have relevant options and rights interest at the date of this report.
Y Jia is an employee of Jiangsu Shagang International Trade Co. Ltd which is a subsidiary of the Jiangsu Shagang Group, ultimate
shareholder of Shagang International Holdings Limited. Shagang International Holdings Limited and its affiliates hold 554,762,656 ordinary
fully paid shares in the Company as at the date of this report.
(IX) LOANS TO KEY MANAGEMENT PERSONNEL
There were no loans to key management personnel during the year.
(X) OTHER TRANSACTIONS WITH DIRECTORS AND KEY
MANAGEMENT PERSONNEL
A director, Ms Yan Jia, is an employee of Shagang International
Trade Co. Ltd., which is a wholly owned subsidiary of Jiangsu
Shagang Group (Shagang) to which sales of iron ore products
are made under long-term off-take agreements. Transactions
between Shagang and Grange must be approved by non-associated
shareholders of Shagang, or approved by the Grange independent
directors.
2022
$
2021
$
Sales of Iron Ore Products
Pellets
211,922,470
216,292,463
The following balances are outstanding at the end of the reporting
period in relation to the above transactions:
2022
$
2021
$
Trade receivables (sales of iron ore products)
15,241,644
Pellets
-
Others
15,241,644
19,095,808
(62,961)
19,032,847
(XI) RELIANCE ON EXTERNAL REMUNERATION
CONSULTANTS
In February 2022, the remuneration committee engaged Godfrey
Remuneration Group to provide recommendations regarding
alignment of LTVR approaches with best practices. GRG was paid
$5,000 for this service.
The following arrangements were made to ensure that the
remuneration recommendations were free from undue influence:
• GRG was engaged by, and reported directly to, the chair of the
remuneration committee. The agreement for the provision of
remuneration consulting services was executed by the chair
of the remuneration committee under delegated authority on
behalf of the board.
• The report containing the remuneration recommendations
was provided by GRG directly to the chair of the remuneration
committee; and
• GRG was permitted to speak to management throughout the
engagement to understand company processes, practices and
other business issues and obtain management perspectives.
However, GRG was not permitted to provide any member of
management with a copy of their draft or final report that
contained the remuneration recommendations As a consequence,
the board is satisfied that the recommendations were made free
from undue influence from any members of the key management
personnel.
38
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
2022
Name and
Grant Date
H Zhao
11 May 2022
S Phan
30 May 2022
B Maynard
27 May 2022
SHARE HOLDINGS
31 December 2022
Director of Grange
Resources Limited
M Li
M Dontschuk
H Zhao
Y Jia
A Saverimutto
Key Management Personnel
B Maynard
RECONCILIATION OF PERFORMANCE RIGHTS HELD BE EACH KEY MANAGEMENT PERSONNEL
Balance at the
Start of the year
Unvested
Granted as
Vested
Exercised
Compensation
%
Number
Balance at the
Balance at the
Maximum value
end of the year
end of the year
yet to vest
Vested
Unvested
$
-
-
-
140,342
74,707
80,680
-
-
-
-
-
-
-
-
-
140,342
$122,273
74,707
$87,845
80,680
$92,741
The number of shares in the Company held during the period by each Director of Grange Resources Limited and other key management
personnel of the Group, including their personally related parties, are set out below:
Balance 1
January 2022
On vesting rights
On market
purchases
On market
disposals
Other
Balance 31
December 2022
13,507
13,000
1,727,702
-
-
68,122
1,822,331
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,507
13,000
1,727,702
-
-
68,122
1,822,331
No directors have relevant options and rights interest at the date of this report.
Y Jia is an employee of Jiangsu Shagang International Trade Co. Ltd which is a subsidiary of the Jiangsu Shagang Group, ultimate
shareholder of Shagang International Holdings Limited. Shagang International Holdings Limited and its affiliates hold 554,762,656 ordinary
fully paid shares in the Company as at the date of this report.
(IX) LOANS TO KEY MANAGEMENT PERSONNEL
(XI) RELIANCE ON EXTERNAL REMUNERATION
There were no loans to key management personnel during the year.
CONSULTANTS
(X) OTHER TRANSACTIONS WITH DIRECTORS AND KEY
MANAGEMENT PERSONNEL
In February 2022, the remuneration committee engaged Godfrey
Remuneration Group to provide recommendations regarding
alignment of LTVR approaches with best practices. GRG was paid
A director, Ms Yan Jia, is an employee of Shagang International
$5,000 for this service.
Trade Co. Ltd., which is a wholly owned subsidiary of Jiangsu
Shagang Group (Shagang) to which sales of iron ore products
are made under long-term off-take agreements. Transactions
The following arrangements were made to ensure that the
remuneration recommendations were free from undue influence:
between Shagang and Grange must be approved by non-associated
• GRG was engaged by, and reported directly to, the chair of the
shareholders of Shagang, or approved by the Grange independent
remuneration committee. The agreement for the provision of
2022
$
2021
$
behalf of the board.
Sales of Iron Ore Products
Pellets
211,922,470
216,292,463
The following balances are outstanding at the end of the reporting
period in relation to the above transactions:
Trade receivables (sales of iron ore products)
2022
$
2021
$
15,241,644
-
19,095,808
(62,961)
15,241,644
19,032,847
remuneration consulting services was executed by the chair
of the remuneration committee under delegated authority on
• The report containing the remuneration recommendations
was provided by GRG directly to the chair of the remuneration
committee; and
• GRG was permitted to speak to management throughout the
engagement to understand company processes, practices and
other business issues and obtain management perspectives.
However, GRG was not permitted to provide any member of
management with a copy of their draft or final report that
contained the remuneration recommendations As a consequence,
the board is satisfied that the recommendations were made free
from undue influence from any members of the key management
personnel.
directors.
Pellets
Others
38
In addition to providing remuneration recommendations, GRG
was also engaged to draft the LTVR/Rights documentation and
administration services in relation to the offer. For these services
GRG was paid a total of $24,750
INDEMNITY AND INSURANCE OF OFFICERS
During the financial period, the Company has paid premiums in
respect of Directors’ and Officers’ Liability Insurance and Company
Reimbursement policies, which cover all Directors and Officers
of the Group to the extent permitted under the Corporations Act
2001. The policy conditions preclude the Group from any detailed
disclosures.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the
Corporations Act 2001 for leave to bring proceedings on behalf of the
company, or to intervene in any proceedings to which the company
is a party, for the purpose of taking responsibility on behalf of the
company for all or part of those proceedings. No proceedings have
been brought or intervened in on behalf of the company with leave
of the Court under section 237 of the Corporations Act 2001.
INDEMNITY OF AUDITOR
The Company has entered into an agreement to indemnify its
auditor, PwC, against any claims or liabilities (including legal costs)
asserted by third parties arising out of their services as auditor
of the Company, where the liabilities arise as a direct result of
the Company’s breach of its obligations to the Auditors, unless
prohibited by the Corporations Act 2001.
AUDIT AND NON-AUDIT SERVICES
The Board of Directors has considered the position and, in
accordance with advice received from the Company’s Audit and Risk
Committee, is satisfied that the provision of non-audit services is
compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied
that the provision of non-audit services by the auditor, as set out
below, did not compromise the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the Audit and Risk
Committee to ensure they do not impact the impartiality and
objectivity of the auditor; and
• none of the services undermine the general principles relating to
auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
During the year the following fees were paid or payable for services
provided by the auditor of the parent entity, its related practices and
non-related audit firms:
Assurance Services
PwC Australia
Audit and review of financial
reports
Other assurance services
Network firms of PwC Australia
Total assurance services
Non-Assurance Services
PwC Australia
Taxation compliance services
Total remuneration paid
2022
$'000
2021
$'000
239
27
18
284
-
284
313
102
17
432
8
440
It is the Group’s policy to employ PwC on assignments additional to
their statutory audit duties where PwC’s expertise and experience
with the Group are important. These assignments are principally
tax consulting and advice or where PwC is awarded assignments
on a competitive basis. It is the Group’s policy to seek competitive
tenders on all major consulting assignments. Group policy also
requires the Chairperson of the Audit and Risk Committee to
approve all individual assignments performed by PwC with total
fees greater than $10,000.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF
PRICEWATERHOUSECOOPERS
There are no officers of the company who are former partners of
PricewaterhouseCoopers.
ROUNDING OF AMOUNTS
The company is of a kind referred to in Corporations Instrument
2016/191, issued by the Australian Securities and Investments
Commission, relating to ‘rounding-off’. Amounts in this report have
been rounded off in accordance with that Corporations Instrument
to the nearest thousand dollars, or in certain cases, the nearest
dollar.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under
section 307C of the Corporations Act 2001 is set out immediately
after this directors’ report.
39
GRANGE RESOURCES ANNUAL REPORT 2022
40
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
40
41
GRANGE RESOURCES ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
Consolidated
Revenues from operations
Cost of sales
Gross profit from operations
Administrative Expenses
Exploration and Evaluation Expenditures
Other Income (Expense)
Operating profit before finance costs
Finance Income
Finance Expenses
Profit before income tax expense
Income tax expense
Total comprehensive income for the year
Profit for the year is attributable to:
Non-controlling interest
Owners of Grange Resources Limited
Total comprehensive income (loss) for the year is attributable to:
Non-controlling interest
Owners of Grange Resources Limited
Basic earnings per share
Diluted earnings per share
NOTES
4, 5
6
7
8
9
10
11
24
33
33
2022
$'000
594,555
(334,027)
260,528
(4,634)
(20,930)
(4,480)
230,484
21,784
(3,442)
248,826
2021
$'000
781,662
(337,269)
444,393
(3,883)
(12,611)
11,141
439,040
23,060
(1,210)
460,890
(77,091)
(139,275)
171,735
321,615
-
171,735
171,735
-
171,735
171,735
Cents
14.84
14.84
(645)
322,260
321,615
(645)
321,615
321,615
Cents
27.84
27.84
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes
42
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 31 DECEMBER 2022
NOTES
4, 5
6
7
8
9
10
11
24
33
33
2022
$'000
594,555
(334,027)
260,528
(4,634)
(20,930)
(4,480)
230,484
21,784
(3,442)
248,826
-
-
171,735
171,735
171,735
171,735
Cents
14.84
14.84
2021
$'000
781,662
(337,269)
444,393
(3,883)
(12,611)
11,141
439,040
23,060
(1,210)
460,890
(645)
322,260
321,615
(645)
321,615
321,615
Cents
27.84
27.84
Income tax expense
(77,091)
(139,275)
Total comprehensive income for the year
171,735
321,615
Total comprehensive income (loss) for the year is attributable to:
Non-controlling interest
Owners of Grange Resources Limited
Basic earnings per share
Diluted earnings per share
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes
Consolidated
Revenues from operations
Cost of sales
Gross profit from operations
Administrative Expenses
Exploration and Evaluation Expenditures
Other Income (Expense)
Operating profit before finance costs
Finance Income
Finance Expenses
Profit before income tax expense
Profit for the year is attributable to:
Non-controlling interest
Owners of Grange Resources Limited
42
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Total current assets
Non-current assets
Other financial assets
Property, plant and equipment
Right-of-use assets
Mine properties and development
Deferred tax assets
Receivables
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liability
Provisions
Total current liabilities
Non-current liabilities
Lease liability
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed Equity
Reserves
Retained earnings
Total equity
NOTES
12,2
13
14
2
2
16
17
18
21
15
19,2
17
20
17
21
20
23
24
2022
$'000
108,411
58,421
162,904
192,177
521,913
1,584
197,829
6,953
360,952
-
8,988
576,306
1,098,219
67,723
4,284
22,007
94,014
2,198
17,516
80,365
100,079
194,093
904,126
331,513
(2,220)
574,833
904,126
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
2021
$'000
443,890
24,119
162,001
20,799
650,809
-
137,180
18,540
262,377
43,345
7,984
469,426
1,120,235
120,836
16,920
22,290
160,046
535
-
88,435
88,970
249,016
871,219
331,513
(2,273)
541,979
871,219
43
GRANGE RESOURCES ANNUAL REPORT 2022
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
Issued capital
$’000
Other reserves
$’000
Retained
earnings
$’000
Non-controlling
interest
$’000
Balance at 1 January 2021
331,513
Profit/(loss) after income tax expense for the year
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as owners:
Transactions with non-controlling interests
Dividends paid (note 25)
Balance at 31 December 2021
-
-
-
-
331,513
-
-
-
381,747
322,260
322,260
(1,169)
(645)
(645)
Total equity
$’000
712,091
321,615
321,615
(2,273)
-
(2,273)
-
1,814
(162,028)
541,979
-
-
(459)
(162,028)
871,219
Balance at 1 January 2022
Profit after income tax expense for the year
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Transactions with non-controlling interests
Dividends paid (note 25)
Balance at 31 December 2022
Issued capital
$’000
Other reserves
$’000
331,513
(2,273)
-
-
-
-
-
-
53
-
331,513
(2,220)
Retained
earnings
$’000
Non-controlling
interest
$’000
541,979
171,735
171,735
-
(138,881)
574,833
-
-
-
-
-
-
Total equity
$’000
871,219
171,735
171,735
53
(138,881)
904,126
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
44
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
Issued capital
Other reserves
$’000
$’000
331,513
Retained
Non-controlling
interest
$’000
(1,169)
(645)
(645)
Total equity
$’000
712,091
321,615
321,615
Balance at 1 January 2021
Profit/(loss) after income tax expense for the year
Total comprehensive income/(loss) for the year
Transactions with owners in their capacity as owners:
Transactions with non-controlling interests
(2,273)
-
1,814
Dividends paid (note 25)
Balance at 31 December 2021
331,513
(2,273)
-
-
-
-
-
-
53
-
earnings
$’000
381,747
322,260
322,260
(162,028)
541,979
earnings
$’000
541,979
171,735
171,735
-
(138,881)
574,833
-
-
-
-
-
-
-
-
(459)
(162,028)
871,219
Total equity
$’000
871,219
171,735
171,735
53
(138,881)
904,126
-
-
-
-
-
-
-
-
Issued capital
Other reserves
$’000
331,513
$’000
(2,273)
Retained
Non-controlling
interest
$’000
Balance at 1 January 2022
Profit after income tax expense for the year
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Transactions with non-controlling interests
Dividends paid (note 25)
Balance at 31 December 2022
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
331,513
(2,220)
Note
2022
$’000
2021
$’000
Cash flows from operating activities
Receipts from customers and other debtors (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Interest received
Interest and other finance costs paid
Income taxes paid
Tax refund on capitalised mining costs in South Deposit Tailing Storage Facility
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for mine properties and development
Proceeds from sale of property, plant and equipment
Proceeds from managed funds
Proceeds (Payments) for term deposits
Net cash outflow from investing activities
Cash flows from financing activities
Dividends paid to shareholders
Repayment of lease liabilities
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
32
16
25
561,485
(291,866)
269,619
7,528
(1,047)
(101,777)
22,622
196,945
(87,733)
(136,846)
1
19,493
(191,159)
(396,244)
841,849
(305,541)
536,308
6,442
(304)
(44,286)
-
498,160
(39,996)
(40,074)
-
-
504
(79,566)
(138,881)
(6,670)
(162,028)
(3,222)
(145,551)
(165,250)
(344,850)
443,890
9,371
253,344
183,385
7,161
Cash and cash equivalents at the end of the financial year
12
108,411
443,890
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
44
45
GRANGE RESOURCES ANNUAL REPORT 2022
46
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
NOTE 1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the
consolidated financial statements are set out below. These policies
have been consistently applied for all the periods presented, unless
otherwise stated.
The financial statements are for the consolidated entity consisting of
Grange Resources Limited and its subsidiaries.
(A) BASIS OF PREPARATION
This general purpose financial report has been prepared in accordance
with Australian Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board and the Corporations
Act 2001. Grange Resources Limited is a for-profit entity for the
purpose of preparing the financial statements.
COMPLIANCE WITH IFRS
The consolidated financial statements of the Grange Resources
Limited group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
HISTORICAL COST CONVENTION
These financial statements have been prepared under the historical
costs convention, except for certain assets which, as noted, are at
fair value.
NEW AND AMENDED STANDARDS ADOPTED BY
THE GROUP
The group has applied the following standards and amendments
for the first time for their annual reporting period commencing 1
January 2022:
AASB 2020-3 Amendments to Australian Accounting Standards –
Annual Improvements 2018-2020 and Other Amendments (AASB1,
AASB 3, AASB 9, AASB 116, AASB 137 &AASB 141)
The amendments listed above did not have any impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.
NEW STANDARDS AND INTERPRETATIONS NOT YET
ADOPTED
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 December 2022 reporting
periods and have not been early adopted by the group. These
standards are not expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future
transactions.
COMPARATIVE FIGURES
Where necessary, comparative figures have been adjusted to
conform to changes in the presentation in the current period.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in Note 3.
(B) PRINCIPLES OF CONSOLIDATION
(I) SUBSIDIARIES
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Grange Resources Limited as at 31
December 2022 and the results of all subsidiaries for the year then
ended. Grange Resources Limited and its subsidiaries together are
referred to in this financial report as the Group or the consolidated
entity.
Subsidiaries are those entities over which the Group has control.
The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the
activities of the entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are de-consolidated from the date
that control ceases. Details of subsidiaries are set out in note 31.
The acquisition method of accounting is used to account for business
combinations by the Group (refer to note 1(e)).
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
(II) JOINT ARRANGEMENTS
JOINT OPERATIONS
The Group recognises its direct right to the assets, liabilities,
revenues and expenses of joint operations and its share of any
jointly held or incurred assets, liabilities, revenues and expenses.
These have been incorporated in the financial statements under the
appropriate headings. Details of the joint operations are set out in
note 32.
(C) SEGMENT REPORTING
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for allocating
resources and assessing performance of the operating segments,
has been identified as the Chief Executive Officer.
Refer to note 4 for further information on segment descriptions.
(D) FOREIGN CURRENCY TRANSLATION
(I) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian
dollars, which is Grange Resources Limited’s functional and
presentation currency.
(II) TRANSACTIONS AND BALANCES
All foreign currency transactions during the financial period are
translated into the functional currency using the exchange rate
prevailing at the dates of the transactions. Foreign exchange gains
and losses resulting from the settlement of such transactions and
from the translation at period end exchange rates of monetary
assets and liabilities denominated in foreign currencies are
recognised in the profit and loss, except when they are deferred in
equity as qualifying cash flow hedges and qualifying net investment
hedges or are attributable to part of the net investment in a foreign
operation.
47
46
GRANGE RESOURCES ANNUAL REPORT 2022
Note 1. Summary of Significant Accounting Policies (continued)
Non-monetary items that are measured in terms of historical cost
in foreign currency are translated using the exchange rate as at the
date of the initial transaction. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined.
(III) GROUP COMPANIES
The results and financial position of all the Group entities (none of
which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance sheet,
•
income and expenses for each income statement are translated
at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the dates of the transactions), and
• all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation
of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such
investments, are recognised in other comprehensive income. When
a foreign operation is sold or any borrowings forming part of the
net investment are repaid, a proportionate share of such exchange
differences are reclassified to the income statement, as part of
the gain or loss on sale where applicable. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entities and translated at the
closing rate.
(E) BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the
•
•
fair values of the assets transferred
liabilities incurred to the former owners of the acquired business
• equity interests issued by the Group
•
fair value of any asset or liability resulting from a contingent
consideration arrangement, and
•
fair value of any pre-existing equity interest in subsidiary
Identifiable assets acquired, and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquired
entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the
acquired entity’s net identifiable assets. Acquisition-related costs
are expensed as incurred.
The excess of the
• Consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the
acquired entity
over the fair value of the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the subsidiary acquired, the difference is
48
recognised directly in profit or loss as a bargain purchase. Where
settlement of any part of cash consideration is deferred, the amounts
payable in the future are discounted to their present value as at the
date of exchange. The discount rate used is the entity’s incremental
borrowing rate, being the rate at which a similar borrowing could
be obtained from an independent financier under comparable terms
and conditions.
Contingent consideration is classified either as equity or a financial
liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in
profit or loss.
If the business combination is achieved in stages, the acquisition
date carrying value of the acquirer’s previously held equity interest
in the acquire is remeasured to fair value at the acquisition date. Any
gains or losses arising from such remeasurement are recognised in
profit or loss.
(F) REVENUE RECOGNITION AND OTHER INCOME
Revenue is recognised for the major business transactions as
follows:
SALE OF ORE AND THE RELATED FREIGHT REVENUE
Sales revenue is recognised on individual sales when control
transfers to the customer. In most instances, control passes and
sales revenue is recognised when the product is delivered to the
vessel on which it will be transported. There may be circumstances
when judgment is required when recognising revenue based on the
five-step model below:
(i)
Identify the contract(s) with a customer
(ii)
Identify the performance obligations in the contact
(iii) Determine the transaction price
(iv) Allocate the transactions price to the performance of
obligations in the contract.
(v) Recognise revenue when (or as) the entity satisfies the
performance obligation.
The Group sells a portion of its product on Cost and Freight (CFR).
For CFR contracts passes and sales revenue is recognised when the
product is delivered to the vessel on which it will be transported.
Using the 5-step model above, the Group has determined that
freight services is a separate performance obligation. Therefore, the
revenue for shipping services is recognised as the Group satisfies
the performance obligation over time rather than at point when
product is transferred to the vessel on which the product will be
shipped.
Typically, the Group has a right to payment at the point that control
of the goods passes including a right, where applicable, to payment
for provisionally priced products and unperformed freight services.
Cash received before control passes is recognised as a contract
liability. The amount of consideration does not contain a significant
financing component as payment terms are less than one year.
INTEREST INCOME
Interest income is recognised on a time proportion basis using the
effective interest method.
SALE OF APARTMENTS
Revenue is recognised when control of a good or service transfers
to a customer. In most instances, control passes, and sales revenue
is recognised when legal title of the property is transferred to the
buyer. There may be circumstances when judgment is required
based on the five indicators of control below:
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
Note 1. Summary of Significant Accounting Policies (continued)
Non-monetary items that are measured in terms of historical cost
recognised directly in profit or loss as a bargain purchase. Where
in foreign currency are translated using the exchange rate as at the
settlement of any part of cash consideration is deferred, the amounts
date of the initial transaction. Non-monetary items measured at fair
payable in the future are discounted to their present value as at the
value in a foreign currency are translated using the exchange rates
date of exchange. The discount rate used is the entity’s incremental
at the date when the fair value was determined.
(III) GROUP COMPANIES
The results and financial position of all the Group entities (none of
which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance sheet,
borrowing rate, being the rate at which a similar borrowing could
be obtained from an independent financier under comparable terms
and conditions.
Contingent consideration is classified either as equity or a financial
liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in
profit or loss.
If the business combination is achieved in stages, the acquisition
date carrying value of the acquirer’s previously held equity interest
•
income and expenses for each income statement are translated
in the acquire is remeasured to fair value at the acquisition date. Any
at average exchange rates (unless this is not a reasonable
gains or losses arising from such remeasurement are recognised in
approximation of the cumulative effect of the rates prevailing on
profit or loss.
the transaction dates, in which case income and expenses are
translated at the dates of the transactions), and
(F) REVENUE RECOGNITION AND OTHER INCOME
• all resulting exchange differences are recognised in other
Revenue is recognised for the major business transactions as
comprehensive income.
follows:
On consolidation, exchange differences arising from the translation
of any net investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such
investments, are recognised in other comprehensive income. When
a foreign operation is sold or any borrowings forming part of the
net investment are repaid, a proportionate share of such exchange
differences are reclassified to the income statement, as part of
the gain or loss on sale where applicable. Goodwill and fair value
SALE OF ORE AND THE RELATED FREIGHT REVENUE
Sales revenue is recognised on individual sales when control
transfers to the customer. In most instances, control passes and
sales revenue is recognised when the product is delivered to the
vessel on which it will be transported. There may be circumstances
when judgment is required when recognising revenue based on the
five-step model below:
adjustments arising on the acquisition of a foreign entity are treated
(i)
Identify the contract(s) with a customer
as assets and liabilities of the foreign entities and translated at the
closing rate.
(E) BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for all
business combinations, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the
fair values of the assets transferred
•
•
• equity interests issued by the Group
•
fair value of any asset or liability resulting from a contingent
consideration arrangement, and
•
fair value of any pre-existing equity interest in subsidiary
shipped.
(ii)
Identify the performance obligations in the contact
(iii) Determine the transaction price
(iv) Allocate the transactions price to the performance of
obligations in the contract.
(v) Recognise revenue when (or as) the entity satisfies the
performance obligation.
The Group sells a portion of its product on Cost and Freight (CFR).
For CFR contracts passes and sales revenue is recognised when the
Using the 5-step model above, the Group has determined that
freight services is a separate performance obligation. Therefore, the
revenue for shipping services is recognised as the Group satisfies
the performance obligation over time rather than at point when
product is transferred to the vessel on which the product will be
liabilities incurred to the former owners of the acquired business
product is delivered to the vessel on which it will be transported.
Identifiable assets acquired, and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. The
Group recognises any non-controlling interest in the acquired
entity on an acquisition-by-acquisition basis either at fair value
or at the non-controlling interest’s proportionate share of the
acquired entity’s net identifiable assets. Acquisition-related costs
Typically, the Group has a right to payment at the point that control
of the goods passes including a right, where applicable, to payment
for provisionally priced products and unperformed freight services.
Cash received before control passes is recognised as a contract
liability. The amount of consideration does not contain a significant
financing component as payment terms are less than one year.
are expensed as incurred.
The excess of the
• Consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the
acquired entity
over the fair value of the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the fair value of the
net identifiable assets of the subsidiary acquired, the difference is
48
Interest income is recognised on a time proportion basis using the
INTEREST INCOME
effective interest method.
SALE OF APARTMENTS
Revenue is recognised when control of a good or service transfers
to a customer. In most instances, control passes, and sales revenue
is recognised when legal title of the property is transferred to the
buyer. There may be circumstances when judgment is required
based on the five indicators of control below:
(i)
The buyer has the significant risks and rewards of
ownership and has the ability to direct the use of, and obtain
substantially all of the remaining benefits from the good or
service;
(ii) The buyer has a present obligation to pay in accordance with
the terms of the sales contract. For property disposed of, this
is generally on transfer of legal title, at which time settlement
of the remaining contract price occurs;
(iii) The buyer has accepted the asset;
(iv) The buyer has legal title to the asset; and
(v) The buyer has physical possession of the asset
AASB 15 requires the Group to identify deliverables in contracts with
customers that qualify as ‘performance obligations’. The transaction
price receivable from customers must be allocated between the
Group’s performance obligations under the contracts on a relative
stand-alone selling price basis. Revenue will be recognised at a
point in time when the performance obligations are met.
DISTRIBUTION INCOME
Distribution income from short term managed funds is recognised
when the right to receive the income has been established.
(G) GOVERNMENT GRANTS
Government grants are recognised at their fair value when there
is reasonable assurance that the grant will be received, and all
attaching conditions will be complied with.
When the grant relates to an expense item, it is recognised as income
over the periods necessary to match the grant on a systematic basis
to the costs that it is intended to compensate.
When the grant relates to an asset, the fair value is credited to a
deferred income account and is released to the income statement
over the expected useful life of the relevant asset by equal annual
instalments.
(H) LEASES
I. THE GROUP’S LEASING ACTIVITIES AND HOW THESE
ARE ACCOUNTED FOR
The group leases office spaces, mobile radars, forklifts, and motor
vehicles with lease terms between 1 to 5 years but may have
extension options as described below. Lease terms are negotiated
on an individual basis and contain a wide range of different terms
and conditions.
Leases are recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available for use by
the Group. Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or loss over the
lease period as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period – refer to Note 9.
The right of use asset is depreciated over the shorter of the asset’s
useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease payments included in the measure of the
lease liability comprise:
• fixed payments less any lease incentives
• variable lease payments that are based on an index or rate
• amounts expected to be payable under residual value
guarantees
• purchase option exercise price where lessee is reasonably
certain to exercise
•
lease payments in an optional renewal period if the Group is
reasonably certain to exercise an extension option
• penalties for termination of lease
The lease payments are discounted using the interest rate implicit
in the lease. If that rate cannot be readily determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an asset
of a similar value in a similar economic environmental with similar
terms and conditions.
The Group presents lease liabilities in the statement of financial
position (note 16).
Right-of-use assets are initially measured at cost comprising of the
following:
•
the amount of the initial measurement of the lease liability
• any lease payments made at or before the commencement date
less any lease incentives received
• any initial direct costs, and an
• restoration costs.
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases of less than 12 months and leases of
low-value assets. The Group recognises lease payments associated
with these types of leases as an expense in the profit or loss.
II. EXTENSION OPTIONS
Options for a new lease are stipulated in the office space and mobile
radars lease and are only exercisable by the Group, not the lessor.
Exercising the option will contain similar terms as the initial lease. In
determining the lease term under AASB 16, management considers
all facts and circumstances that create an economic incentive to
exercise the extension option or not exercise a termination option.
The Group reassesses whether it is reasonably certain to exercise
the options if there is a significant event or significant change in the
circumstances within its control.
III. VARIABLE LEASE PAYMENTS
The group is exposed to potential future increases in variable lease
payments based on an index or rate. When adjustments to lease
payments based on an index or rate take effect, the lease liability is
reassessed and adjusted against the right of use asset. The forklift
hire lease contains variable lease payments that are subject to CPI
adjustments, effective on an annual basis.
(I) CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that
are readily convertible to amounts of cash and which are subject to
an insignificant risk of changes in value. Bank overdrafts are shown
within borrowings in current liabilities on the balance sheet.
(J) TRADE AND OTHER RECEIVABLES
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less loss allowance.
As permitted by AASB 9, the Group applies the ‘simplified approach’
to trade receivable balances and the ‘general approach’ to all
other financial assets. The simplified approach requires expected
lifetime credit losses to be recognised from initial recognition of the
receivables. The general approach incorporates a review for any
significant increase in counterparty credit risk since inception.
The expected credit losses (ECL) review include assumptions about
49
GRANGE RESOURCES ANNUAL REPORT 2022
Note 1. Summary of Significant Accounting Policies (continued)
the risk of default and expected credit loss rates. In determining the
recoverability of a trade or other receivable using the ECL model, the
Group performs a risk analysis considering the type and age of the
outstanding receivables, the creditworthiness of the counterparty,
contract provisions, letter of credit and timing of payment.
(K) INVENTORIES
Raw materials and stores, ore stockpiles, work in progress and
finished goods are stated at the lower of cost and net realisable
value. Cost is determined primarily on the basis of weighted average
costs and comprises of the cost of direct materials and the costs of
production which include:
•
labour costs, materials and contractor expenses which are
directly attributable to the extraction and processing of ore;
• depreciation of property, plant and equipment used in the
extraction and processing of ore; and
• production overheads directly attributable to the extraction and
processing of ore
Stockpiles represent ore that has been extracted and is available for
further processing. If there is significant uncertainty as to when the
stockpiled ore will be processed it is expensed as incurred. Where
the future processing of the ore can be predicted with confidence
because it exceeds the mine’s cut-off grade, it is valued at the lower
of cost and net realisable value. Work in progress inventory includes
partly processed material. Quantities are assessed primarily
through surveys and assays.
Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Development work in progress pertains to development and
construction of housing units and comprises expenditures relating
to:
• Cost of acquisition
The cost of acquisition comprises the purchase price of the land
along with any direct costs incurred as part of the acquisition
including legal, valuation and stamp duty costs
• Development and other costs
Cost includes variable and fixed costs directly related to specific
contracts, costs related to general contract activity which can be
allocated to specific projects on a reasonable basis, and other
costs specifically chargeable under the contract.
•
Interest capitalised
Financing costs on the purchase and development of housing
units are also included in the cost of inventory.
(L) INCOME TAX
The income tax expense or benefit for the period is the tax payable on
the current period’s taxable income based on the applicable income
tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to
unused tax losses.
The current income tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the end of the reporting
period in the countries where the Group’s subsidiaries operate
and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
50
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill. Deferred income
tax is also not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted
by the end of the reporting period and are expected to apply when
the related deferred income tax asset is realised, or the deferred
income tax liability is settled.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses, only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses. In assessing the recoverability of deferred
tax assets, the Group relies on the same forecast assumptions used
elsewhere in the financial statements and in other management
reports, which, among other things, reflect the potential impact of
climate-related development on the business, such as increased cost
of production as a result of measures to reduce carbon emission.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and the tax bases of
investments in foreign operations where the Group is able to
control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable
future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability
simultaneously.
its wholly-owned Australian
Grange Resources Limited and
controlled entities have
implemented the tax consolidation
legislation. As a consequence, Grange Resources Limited and its
subsidiaries are taxed as a single entity and the deferred tax assets
and liabilities of the Group are set off in the consolidated financial
statements.
(M) GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the amount
of GST except:
• when GST incurred on a purchase of goods and services is not
recoverable from taxation authority, in which case the GST is
recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
• receivables and payables, which are stated with the amount of
GST included
The net amount of GST recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the
balance sheet.
Commitments and contingencies are presented net of the amount of
GST recoverable from, or payable to, the taxation authority.
Cash flows are included in the Statement of Cash Flows on a gross
basis and the GST component of cash flows arising from investing
and financing activities, which is recoverable from, or payable to, the
taxation authority, are presented as operating cash flows.
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
Note 1. Summary of Significant Accounting Policies (continued)
the risk of default and expected credit loss rates. In determining the
Deferred income tax is provided in full, using the liability method, on
recoverability of a trade or other receivable using the ECL model, the
temporary differences arising between the tax bases of assets and
Group performs a risk analysis considering the type and age of the
liabilities and their carrying amounts in the consolidated financial
outstanding receivables, the creditworthiness of the counterparty,
statements. However, deferred tax liabilities are not recognised if
contract provisions, letter of credit and timing of payment.
they arise from the initial recognition of goodwill. Deferred income
(K) INVENTORIES
Raw materials and stores, ore stockpiles, work in progress and
finished goods are stated at the lower of cost and net realisable
value. Cost is determined primarily on the basis of weighted average
costs and comprises of the cost of direct materials and the costs of
production which include:
•
labour costs, materials and contractor expenses which are
directly attributable to the extraction and processing of ore;
• depreciation of property, plant and equipment used in the
extraction and processing of ore; and
• production overheads directly attributable to the extraction and
processing of ore
Stockpiles represent ore that has been extracted and is available for
further processing. If there is significant uncertainty as to when the
stockpiled ore will be processed it is expensed as incurred. Where
the future processing of the ore can be predicted with confidence
because it exceeds the mine’s cut-off grade, it is valued at the lower
of cost and net realisable value. Work in progress inventory includes
partly processed material. Quantities are assessed primarily
through surveys and assays.
Net realisable value is the estimated selling price in the ordinary
course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Development work in progress pertains to development and
construction of housing units and comprises expenditures relating
to:
• Cost of acquisition
The cost of acquisition comprises the purchase price of the land
along with any direct costs incurred as part of the acquisition
including legal, valuation and stamp duty costs
• Development and other costs
Cost includes variable and fixed costs directly related to specific
contracts, costs related to general contract activity which can be
allocated to specific projects on a reasonable basis, and other
costs specifically chargeable under the contract.
•
Interest capitalised
Financing costs on the purchase and development of housing
units are also included in the cost of inventory.
(L) INCOME TAX
The income tax expense or benefit for the period is the tax payable on
the current period’s taxable income based on the applicable income
tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to
unused tax losses.
GST included
balance sheet.
The current income tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the end of the reporting
period in the countries where the Group’s subsidiaries operate
and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
50
tax is also not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted
by the end of the reporting period and are expected to apply when
the related deferred income tax asset is realised, or the deferred
income tax liability is settled.
Deferred tax assets are recognised for deductible temporary
differences and unused tax losses, only if it is probable that future
taxable amounts will be available to utilise those temporary
differences and losses. In assessing the recoverability of deferred
tax assets, the Group relies on the same forecast assumptions used
elsewhere in the financial statements and in other management
reports, which, among other things, reflect the potential impact of
climate-related development on the business, such as increased cost
of production as a result of measures to reduce carbon emission.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and the tax bases of
investments in foreign operations where the Group is able to
control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable
future.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability
simultaneously.
Grange Resources Limited and
its wholly-owned Australian
controlled entities have
implemented the tax consolidation
legislation. As a consequence, Grange Resources Limited and its
subsidiaries are taxed as a single entity and the deferred tax assets
and liabilities of the Group are set off in the consolidated financial
statements.
(M) GOODS AND SERVICES TAX (GST)
Revenues, expenses and assets are recognised net of the amount
of GST except:
• when GST incurred on a purchase of goods and services is not
recoverable from taxation authority, in which case the GST is
recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
• receivables and payables, which are stated with the amount of
The net amount of GST recoverable from, or payable to, the taxation
authority is included as part of receivables or payables in the
Commitments and contingencies are presented net of the amount of
GST recoverable from, or payable to, the taxation authority.
Cash flows are included in the Statement of Cash Flows on a gross
basis and the GST component of cash flows arising from investing
and financing activities, which is recoverable from, or payable to, the
taxation authority, are presented as operating cash flows.
(N) PROPERTY, PLANT AND EQUIPMENT
Land and buildings and plant and equipment are measured at cost
less, where applicable, any accumulated depreciation, amortisation
or impairment in value. Cost includes expenditure that is directly
attributable to the acquisition of the item. In the event that all or
part of the purchase consideration is deferred, cost is determined by
discounting the amounts payable in the future to their present value
as at the date of acquisition.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as
a separate asset is derecognised when replaced. All other repairs
and maintenance are charged to the income statement during the
reporting period in which they are incurred.
Land is not depreciated. Assets under construction are measured
at cost and are not depreciated until they are ready and available
for use. Depreciation on assets is calculated using either a straight-
line or diminishing value method to allocate the cost, net of their
residual values, over the estimated useful lives or the life of the
mine, whichever is shorter. Leasehold improvements and certain
leased plant and equipment are depreciated over the shorter lease
term.
Other non-mine plant and equipment typically has the following
estimated useful lives:
Buildings
Plant and Equipment
Computer Equipment
10 years
4 to 8 years
3 to 5 years
The assets residual values, useful lives and amortisation methods
are reviewed and adjusted if appropriate, at each financial period
end.
An item of property, plant and equipment is derecognised upon
disposal or when no further economic benefits are expected from
its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement in the
period the asset is derecognised.
The carrying value of property, plant and equipment is assessed
annually for impairment in accordance with note 1(r).
(P) MINE PROPERTIES AND DEVELOPMENT
Mine properties and development represent the accumulation of all
exploration, evaluation and development expenditure incurred by,
not on behalf of, the entity in relation to areas of interest in which
mining of a mineral resource has commenced.
Where further development expenditure is incurred in respect of a
production property after the commencement of production, such
expenditure is carried forward as part of the cost of that production
property only when substantial future economic benefits arise,
otherwise such expenditure is classified as part of the cost of
production.
Costs on production properties in which the Group has an interest
are amortised over the life of the area of interest to which such
costs relate on the production output basis. Changes to the life of
the area of interest are accounted for prospectively.
The carrying value of each mine property and development are
assessed annually for impairment in accordance with note 1(r).
(Q) DEFERRED STRIPPING COSTS
Stripping (i.e. overburden and other waste removal) costs incurred
in the production phase of a surface mine are capitalised to the
extent that they improve access to an identified component of the
ore body and are subsequently amortised on a systematic basis
over the expected useful life of the identified component of the ore
body. Capitalised stripping costs are disclosed as a component of
Mine Properties and Development.
Components of an ore body are determined with reference to life
of mine plans and take account of factors such as the geographical
separation of mining locations and/or the economic status of mine
development decisions.
Capitalised stripping costs are initially measured at cost and
represent an accumulation of costs directly incurred in performing
the stripping activity that improves access to the identified
component of the ore body, plus an allocation of directly attributable
overhead costs. The amount of stripping costs deferred is based
on a relevant production measure which uses a ratio obtained by
dividing the tonnage of waste mined by the quantity of ore mined for
an identified component of the ore body. Stripping costs incurred in
the period for an identified component of the ore body are deferred
to the extent that the current period ratio exceeds the expected
ratio for the life of the identified component of the ore body. Such
deferred costs are then charged against the income statement on a
systematic units of production basis over the expected useful life of
an identified component of the ore body.
(O) EXPLORATION AND EVALUATION
Exploration and evaluation expenditure comprise costs which are
directly attributable to:
Changes to the life of mine plan, identified components of an ore
body, stripping ratios, units of production and expected useful life
are accounted for prospectively.
• research and analysing exploration data
• conducting geological studies, exploratory drilling and sampling
• examining and testing extraction and treatment methods
• compiling pre-feasibility and definitive feasibility studies
Exploration and evaluation expenditure also include the costs
incurred in acquiring rights, the entry premiums paid to gain access
to areas of interest and amounts payable to third parties to acquire
interests in existing projects.
Exploration and evaluation expenditure is charged against profit and
loss as incurred; except for expenditure incurred after a decision to
proceed to development is made, in which case the expenditure is
capitalised as an asset.
Deferred stripping costs form part of the total investment in a
cash generating unit, which is reviewed for impairment if events or
changes in circumstances indicate that the carrying value may not
be recoverable.
(R) IMPAIRMENT OF ASSETS
At each reporting date, the Group assesses whether there is
any indication that an asset, including capitalised development
expenditure, may be impaired. Where an indicator of impairment
exists, the Group makes a formal estimate of the recoverable
amount. Where the carrying amount of an asset exceeds its
recoverable amount the asset is considered impaired and is written
down to its recoverable amount. Impairment losses are recognised
in the income statement.
51
GRANGE RESOURCES ANNUAL REPORT 2022
Note 1. Summary of Significant Accounting Policies (continued)
Recoverable amount is the greater of fair value less costs of disposal
and value in use. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash generating
units).
Where there is no binding sale agreement or active market, fair
value less costs of disposal is based on the best information
available to reflect the amount the Group could receive for the
cash generating unit in an arm’s length transaction. In assessing
fair value, the estimated future cash flows are discounted to their
present value using a post-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset.
An assessment is also made at each reporting date as to whether
there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognised
impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since
the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount.
That increased amount cannot exceed the pre-impairment value,
adjusted for any depreciation that would have been recognised on
the asset had the initial impairment loss not occurred. Such reversal
is recognised in profit or loss.
After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any
residual value, on a systematic basis over its remaining useful life.
The Group assesses where climate risks could have a significant
impact, such as the introduction of emission reduction legislation
that may increase mining and production costs. At present, albeit
climate-related risks should be factored into the commodity price,
this has no direct impact to the Group’s asset recoverable value.
(S) INVESTMENTS AND OTHER
FINANCIAL ASSETS
(I) CLASSIFICATION
The group classifies its financial assets in the following measurement
categories:
•
those to be measured subsequently at fair value (either through
other comprehensive income (OCI) or through profit or loss), and
•
those to be measured at amortised cost.
The classification depends on the entity’s business model for
managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses will either
be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on
whether the group has made an irrevocable election at the time of
initial recognition to account for the equity investment at fair value
through other comprehensive income (FVOCI).
The group reclassifies debt investments when and only when its
business model for managing those assets changes.
(II) RECOGNITION
Regular way purchases and sales of financial assets are recognised
on trade-date, the date on which the group commits to purchase or
sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have
been transferred and the group has transferred substantially all the
risks and rewards of ownership.
52
(III) MEASUREMENT
At initial recognition, the group measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through
profit or loss (FVPL), transaction costs that are directly attributable
to the acquisition of the financial asset. Transaction costs of financial
assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are solely
payment of principal and interest.
DEBT INSTRUMENTS
Subsequent measurement of debt instruments depends on the
group’s business model for managing the asset and the cash
flow characteristics of the asset. There are three measurement
categories into which the group classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual
cash flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Interest
income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising
on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange
gains and losses. Impairment losses are presented as separate
line item in the statement of profit or loss.
• FVOCI: Assets that are held for collection of contractual cash
flows and for selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest, are
measured at FVOCI. Movements in the carrying amount are
taken through OCI, except for the recognition of impairment
gains or losses, interest income and foreign exchange gains and
losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to
profit or loss and recognised in other gains/(losses). Interest
income from these financial assets is included in finance income
using the effective interest
rate method. Foreign exchange gains and losses are presented in
other gains/(losses) and impairment expenses are presented as
separate line item in the statement of profit or loss.
• FVPL: Assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or
loss and presented net within other gains/(losses) in the period
in which it arises.
EQUITY INSTRUMENTS
The group subsequently measures all equity investments at fair
value. Where the group’s management has elected to present fair
value gains and losses on equity investments in OCI, there is no
subsequent reclassification of fair value gains and losses to profit or
loss following the derecognition of the investment. Dividends from
such investments continue to be recognised in profit or loss as other
income when the group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in
other gains/(losses) in the statement of profit or loss as applicable.
Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from
other changes in fair value.
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
(IV) IMPAIRMENT
The group assesses on a forward-looking basis, the expected credit
losses associated with its debt instruments carried at amortised
cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
BORROWING COSTS
Borrowing costs incurred for the construction of any qualifying
asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Other
borrowing costs are expensed.
(T) DERIVATIVES
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured
to their fair value at the end of each reporting period. The accounting
for subsequent changes in fair value depends on whether the
derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged. Changes in the fair value of any
derivative instrument that does not qualify for hedge accounting are
recognised immediately in profit or loss and are included in other
income or other expenses.
The full fair value of a hedging derivative is classified as a non-
current asset or liability when the remaining maturity of the hedged
item is more than 12 months; it is classified as a current asset or
liability when the remaining maturity of the hedged item is less than
12 months.
(U) ORE RESERVES
The Company estimates its mineral resources and ore reserves
based on information compiled by Competent Persons as defined in
accordance with the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves of December 2012
(the JORC 2012 code). Reserves, and certain mineral resources
determined in this way, are used in the calculation of depreciation,
amortisation and impairment charges, the assessment of life of
mine stripping ratios and for forecasting the timing of the payment
of close down and restoration costs.
In assessing the life of a mine for accounting purposes, mineral
resources are only taken into account where there is a high degree
of confidence of economic extraction.
(V) TRADE AND OTHER PAYABLES
Trade payables and other payables are carried at amortised cost
and represent liabilities for goods and services provided to the
Group prior to the end of the financial period that are unpaid. Trade
payables and other payables arise when the Group becomes obliged
to make future payments in respect of the purchase of these goods
and services. The amounts are unsecured and are usually paid
within 30 days of recognition.
less
transaction costs. After
(W) BORROWINGS
All borrowings are initially recognised at the fair value of the
initial
consideration received,
recognition, borrowings are subsequently measured at amortised
cost. Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case the fee
is deferred until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to which it
relates.
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled or
expired. Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the liability
for at least 12 months after the reporting date.
(X) PROVISIONS
Provisions are recognised when the Group has a present obligation,
it is probable that there will be a future sacrifice of economic benefits
and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be recovered
from a third party, for example under an insurance contract, the
receivable is recognised as a separate asset but only when the
reimbursement is virtually certain, and it can be measured reliably.
The expense relating to any provision is presented in the income
statement net of any reimbursement.
If the effect of the time value of money is material, provisions are
discounted using a pre-tax rate that reflects the current market
assessment of the time value of money. Where this is the case, its
carrying amount is the present value of these estimated future cash
flows. When discounting is used, the increase in the provision due to
the passage of time is recognised as a finance cost.
The impact of climate-related matters on remediation of sites is
considered when determining the decommissioning liability. The
Group also constantly monitors new government legislation in
relation to climate-related matters. At the current time, no climate
related matters and legislation that expected to have a material
impact on the Group’s decommissioning liability.
include
restoration provisions
DECOMMISSIONING AND RESTORATION
the
Decommissioning and
dismantling and demolition of infrastructure and the removal
of residual materials and remediation of disturbed areas. The
provision is recognised in the accounting period when the obligation
arising from the related disturbance occurs, whether this occurs
during the mine development or during the production phase, based
on the net present value of estimated future costs. The costs are
estimated on the basis of a closure plan. The cost estimates are
calculated annually during the life of the operation to reflect known
developments and are subject to formal review at regular intervals.
‘unwinding’ of the discount applied
The amortisation or
in
establishing the net present value of provisions is charged to the
income statement in each accounting period. The amortisation of the
discount is shown as a financing cost, rather than as an operating
cost. Other movements in the provisions for close down and
restoration costs, including those resulting from new disturbance,
updated cost estimates, changes to the lives of operations and
revisions to discount rates are capitalised within mine properties
and development, to the extent that any amount of deduction does
not exceed the carrying amount of the asset. Any deduction in excess
of the carrying amount is recognised in the income statement
immediately. If an adjustment results in an addition to the cost of the
related asset, consideration will be given to whether an indication
of impairment exists, and the impairment policy will apply. These
costs are then depreciated over the life of the area of interest to
which they relate.
53
Note 1. Summary of Significant Accounting Policies (continued)
Recoverable amount is the greater of fair value less costs of disposal
(III) MEASUREMENT
fair value, the estimated future cash flows are discounted to their
DEBT INSTRUMENTS
and value in use. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash generating
units).
Where there is no binding sale agreement or active market, fair
value less costs of disposal is based on the best information
available to reflect the amount the Group could receive for the
cash generating unit in an arm’s length transaction. In assessing
present value using a post-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset.
An assessment is also made at each reporting date as to whether
there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognised
impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since
the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount.
That increased amount cannot exceed the pre-impairment value,
adjusted for any depreciation that would have been recognised on
the asset had the initial impairment loss not occurred. Such reversal
is recognised in profit or loss.
After such a reversal the depreciation charge is adjusted in future
periods to allocate the asset’s revised carrying amount, less any
residual value, on a systematic basis over its remaining useful life.
The Group assesses where climate risks could have a significant
impact, such as the introduction of emission reduction legislation
that may increase mining and production costs. At present, albeit
climate-related risks should be factored into the commodity price,
this has no direct impact to the Group’s asset recoverable value.
(S) INVESTMENTS AND OTHER
FINANCIAL ASSETS
(I) CLASSIFICATION
The group classifies its financial assets in the following measurement
categories:
•
those to be measured subsequently at fair value (either through
other comprehensive income (OCI) or through profit or loss), and
At initial recognition, the group measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through
profit or loss (FVPL), transaction costs that are directly attributable
to the acquisition of the financial asset. Transaction costs of financial
assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are solely
payment of principal and interest.
Subsequent measurement of debt instruments depends on the
group’s business model for managing the asset and the cash
flow characteristics of the asset. There are three measurement
categories into which the group classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual
cash flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Interest
income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising
on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange
gains and losses. Impairment losses are presented as separate
line item in the statement of profit or loss.
• FVOCI: Assets that are held for collection of contractual cash
flows and for selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest, are
measured at FVOCI. Movements in the carrying amount are
taken through OCI, except for the recognition of impairment
gains or losses, interest income and foreign exchange gains and
losses which are recognised in profit or loss.
When the financial asset is derecognised, the cumulative gain or
loss previously recognised in OCI is reclassified from equity to
profit or loss and recognised in other gains/(losses). Interest
income from these financial assets is included in finance income
using the effective interest
rate method. Foreign exchange gains and losses are presented in
other gains/(losses) and impairment expenses are presented as
separate line item in the statement of profit or loss.
• FVPL: Assets that do not meet the criteria for amortised cost or
FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or
loss and presented net within other gains/(losses) in the period
•
those to be measured at amortised cost.
in which it arises.
The classification depends on the entity’s business model for
managing the financial assets and the contractual terms of the cash
EQUITY INSTRUMENTS
flows.
The group subsequently measures all equity investments at fair
value. Where the group’s management has elected to present fair
For assets measured at fair value, gains and losses will either
value gains and losses on equity investments in OCI, there is no
be recorded in profit or loss or OCI. For investments in equity
subsequent reclassification of fair value gains and losses to profit or
instruments that are not held for trading, this will depend on
loss following the derecognition of the investment. Dividends from
whether the group has made an irrevocable election at the time of
such investments continue to be recognised in profit or loss as other
initial recognition to account for the equity investment at fair value
income when the group’s right to receive payments is established.
through other comprehensive income (FVOCI).
The group reclassifies debt investments when and only when its
other gains/(losses) in the statement of profit or loss as applicable.
Changes in the fair value of financial assets at FVPL are recognised in
Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from
other changes in fair value.
business model for managing those assets changes.
(II) RECOGNITION
Regular way purchases and sales of financial assets are recognised
on trade-date, the date on which the group commits to purchase or
sell the asset. Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired or have
been transferred and the group has transferred substantially all the
risks and rewards of ownership.
52
(AA) DIVIDENDS
Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial period but not distributed
at balance date.
(AB) EARNINGS PER SHARE (EPS)
(I) BASIC EARNINGS PER SHARE
Basic earnings per share is calculated by dividing:
•
the profit attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares;
• by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary
shares issued during the period and excluding treasury shares.
(II) DILUTED EARNINGS PER SHARE
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
•
•
the after-income tax effect of interest and other financing costs
associated with the dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
(AC) PARENT ENTITY FINANCIAL INFORMATION
The financial information for the parent entity, Grange Resources
Limited, disclosed in note 34 has been prepared on the same basis
as the consolidated financial statements, except as set out below.
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND
JOINT VENTURE ENTITIES
Investments in subsidiaries and joint venture entities are accounted
for at cost in the financial statements of Grange Resources Limited.
Dividends received from associates are recognised in the parent
entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
FINANCIAL GUARANTEES
Where the parent entity has provided financial guarantees in relation
to loans and payables of subsidiaries for no compensation, the fair
values of these guarantees are accounted for as contributions and
recognised as part of the cost of the investment.
(AD) ROUNDING OF AMOUNTS
The Group is of a kind referred to in ASIC Legislative Instrument
2016/191 Class, issued by the Australian Securities and Investments
Commission, relating to the “rounding off” of amounts in the financial
report. Amounts in the financial report have been rounded off in
accordance with the instrument to the nearest thousand dollars, or
in certain cases, the nearest dollar.
GRANGE RESOURCES ANNUAL REPORT 2022
Note 1. Summary of Significant Accounting Policies (continued)
(Y) EMPLOYEE ENTITLEMENTS
WAGES, SALARIES AND SICK LEAVE
Liabilities for wages and salaries, including non-monetary benefits
and accumulating sick leave expected to be settled within 12 months
of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled.
ANNUAL LEAVE
Liabilities for annual leave expected to be settled within 12 months
of the reporting date are recognised in the provision for employee
benefits in respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid when the
liabilities are settled.
LONG SERVICE LEAVE
The liability for long service leave is recognised in the provision for
employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit
method.
Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting
date on corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
DEFINED CONTRIBUTION SUPERANNUATION FUNDS
Contributions to defined contribution funds are recognised as an
expense in the income statement as they become payable.
SHARE-BASED PAYMENTS
Senior Executives of the Group receive remuneration in the form
of share-based payments, whereby employees render services in
exchange for equity instruments (equity-settled transactions).
The fair value of performance rights granted is recognised as an
employee benefits expense with a corresponding increase in equity.
The total amount to be expensed is determined by reference to the
fair value of the options granted.
•
including any market performance conditions
• excluding the impact of any service and non-market performance
vesting conditions
•
Including the impact of any non-vesting conditions
The total expense is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be
satisfied. At the end of each period, the entity revises its estimates
of the number of performance rights that are expected to vest based
on the non-market vesting and service conditions. It recognises the
impact of the revision to original estimates, if any, in profit or loss,
with a corresponding adjustment to equity.
The dilutive effect of outstanding performance rights is reflected as
additional share dilution in the computation of diluted earnings per
share (further details are given in Note 33).
(Z) CONTRIBUTED EQUITY
Ordinary share capital is recognised at the fair value of the
consideration received by the Company. Any transaction costs
arising on the issue of ordinary shares are recognised directly in
equity as a reduction, net of tax, of the share proceeds received.
54
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
Note 1. Summary of Significant Accounting Policies (continued)
(Y) EMPLOYEE ENTITLEMENTS
WAGES, SALARIES AND SICK LEAVE
Liabilities for wages and salaries, including non-monetary benefits
and accumulating sick leave expected to be settled within 12 months
of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled.
ANNUAL LEAVE
Liabilities for annual leave expected to be settled within 12 months
of the reporting date are recognised in the provision for employee
benefits in respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid when the
liabilities are settled.
LONG SERVICE LEAVE
The liability for long service leave is recognised in the provision for
employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit
method.
Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting
date on corporate bonds with terms to maturity and currency that
match, as closely as possible, the estimated future cash outflows.
(AA) DIVIDENDS
Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the
entity, on or before the end of the financial period but not distributed
at balance date.
(AB) EARNINGS PER SHARE (EPS)
(I) BASIC EARNINGS PER SHARE
Basic earnings per share is calculated by dividing:
•
the profit attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares;
• by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary
shares issued during the period and excluding treasury shares.
(II) DILUTED EARNINGS PER SHARE
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
•
the after-income tax effect of interest and other financing costs
associated with the dilutive potential ordinary shares; and
•
the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
DEFINED CONTRIBUTION SUPERANNUATION FUNDS
(AC) PARENT ENTITY FINANCIAL INFORMATION
Contributions to defined contribution funds are recognised as an
The financial information for the parent entity, Grange Resources
expense in the income statement as they become payable.
SHARE-BASED PAYMENTS
Senior Executives of the Group receive remuneration in the form
of share-based payments, whereby employees render services in
exchange for equity instruments (equity-settled transactions).
The fair value of performance rights granted is recognised as an
employee benefits expense with a corresponding increase in equity.
The total amount to be expensed is determined by reference to the
fair value of the options granted.
•
including any market performance conditions
• excluding the impact of any service and non-market performance
vesting conditions
•
Including the impact of any non-vesting conditions
Limited, disclosed in note 34 has been prepared on the same basis
as the consolidated financial statements, except as set out below.
INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND
JOINT VENTURE ENTITIES
Investments in subsidiaries and joint venture entities are accounted
for at cost in the financial statements of Grange Resources Limited.
Dividends received from associates are recognised in the parent
entity’s profit or loss, rather than being deducted from the carrying
amount of these investments.
FINANCIAL GUARANTEES
Where the parent entity has provided financial guarantees in relation
to loans and payables of subsidiaries for no compensation, the fair
values of these guarantees are accounted for as contributions and
recognised as part of the cost of the investment.
The total expense is recognised over the vesting period, which is the
period over which all of the specified vesting conditions are to be
(AD) ROUNDING OF AMOUNTS
satisfied. At the end of each period, the entity revises its estimates
The Group is of a kind referred to in ASIC Legislative Instrument
of the number of performance rights that are expected to vest based
2016/191 Class, issued by the Australian Securities and Investments
on the non-market vesting and service conditions. It recognises the
Commission, relating to the “rounding off” of amounts in the financial
impact of the revision to original estimates, if any, in profit or loss,
report. Amounts in the financial report have been rounded off in
with a corresponding adjustment to equity.
accordance with the instrument to the nearest thousand dollars, or
in certain cases, the nearest dollar.
The dilutive effect of outstanding performance rights is reflected as
additional share dilution in the computation of diluted earnings per
share (further details are given in Note 33).
(Z) CONTRIBUTED EQUITY
Ordinary share capital is recognised at the fair value of the
consideration received by the Company. Any transaction costs
arising on the issue of ordinary shares are recognised directly in
equity as a reduction, net of tax, of the share proceeds received.
54
55
GRANGE RESOURCES ANNUAL REPORT 2022
NOTE 2. FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group’s activities expose it to a variety of financial risks: market
risk (including currency risk, interest rate risk and price risk),
credit risk and liquidity risk. The Group’s overall risk management
program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group has used derivative financial
instruments such as foreign exchange contracts and forward
commodity contracts to manage certain risk exposures. Derivatives
are exclusively used for hedging purposes, i.e. not as trading or
other speculative instruments. The Group uses different methods
to measure different types of risks to which it is exposed. These
methods include sensitivity analysis in the case of interest rate,
foreign exchange and commodity price risks and aging analysis for
credit risk.
Risk management is carried out by the management team following
guidance received from the Audit and Risk Committee.
No events occurred in the current and prior periods that give rise to
material items of income or expense as a result of climate.
The Group holds the following financial instruments:
Financial Assets
Cash and Cash Equivalent
Trade and other receivables
Other financial assets
Short Term Managed Funds
Financial Liabilities
Trade and other payables
2022
$’000
2021
$’000
108,411
66,159
193,761
-
368,331
443,890
31,604
1,207
19,592
496,293
67,723
67,723
120,836
120,836
The carrying amount and movement in Short Term Managed Funds
are set out below:
Short Term Managed Funds
Balance at the beginning of the year
Movement in short term managed
funds
Carrying amount at the end
of the year
2022
$’000
2021
$’000
19,592
19,539
(19,592)
53
-
19,592
NET DEBT RECONCILIATION
This section sets out an analysis of net debt and the movements in
net debt for each of the periods presented.
2022
$’000
108,411
190,200
(6,482)
2021
$’000
443,890
19,592
(17,455)
292,129
446,027
Net debt reconciliation
Cash and cash equivalents
Liquid investments
Lease liability
Net cash, cash equivalents and
liquid investments / (debt)
56
FINANCIAL ASSETS/(LIABILITIES) AT FAIR
VALUE THROUGH PROFIT OR LOSS (FVPL)
The group classifies the following financial assets at fair value
through profit or loss (FVPL)
(i)
(ii)
Short term managed funds
Derivative financial instruments
Short Term Managed Funds
Derivative Financial Instruments
2022
$’000
-
3,561
3,561
2021
$’000
19,539
53
19,592
AMOUNTS RECOGNISED IN PROFIT OR LOSS
During the year, the following gains/(losses) were recognised in
profit or loss:
2022
$’000
2021
$’000
(98)
53
2,353
9,366
2,255
9,419
Fair value gain(loss) on short
term managed funds held at
FVPL recognised in gain/(loss) on
financial instruments
Fair value gain on derivative
financial instrument at FVPL
recognised in gain/loss on financial
instruments
(A) MARKET RISK
(I) FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the US dollar.
Foreign exchange risk arises from commercial transactions, given
that the Group’s sales revenues are denominated in US dollars and
the majority of its operating costs are denominated in Australian
dollars, and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency.
The risk is measured using sensitivity analysis and cash flow
forecasting. The Group’s exposure to US dollar denominated foreign
currency risk at the reporting date, expressed in Australian dollars,
was as follows:
Market risk
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net US dollar surplus
2022
$’000
2021
$’000
59,461
48,293
(773)
106,981
131,360
18,464
56
149,880
GROUP SENSITIVITY
Based on the financial instruments held at 31 December 2022,
had the Australian dollar weakened/strengthened by 10% against
the US dollar with all other variables held constant, the Group’s
post tax profit for the financial period would have been $6.8 million
higher / $8.3 million lower (2021: $7.5 million higher / $9.21 million
lower), mainly as a result of foreign exchange gains/losses on US
dollar denominated cash and cash equivalents, term deposits and
receivables as detailed in the above table
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
NOTE 2. FINANCIAL RISK MANAGEMENT
FINANCIAL ASSETS/(LIABILITIES) AT FAIR
VALUE THROUGH PROFIT OR LOSS (FVPL)
The group classifies the following financial assets at fair value
FINANCIAL RISK MANAGEMENT OBJECTIVES
through profit or loss (FVPL)
(i)
(ii)
Short term managed funds
Derivative financial instruments
commodity contracts to manage certain risk exposures. Derivatives
Derivative Financial Instruments
Short Term Managed Funds
methods include sensitivity analysis in the case of interest rate,
During the year, the following gains/(losses) were recognised in
foreign exchange and commodity price risks and aging analysis for
profit or loss:
AMOUNTS RECOGNISED IN PROFIT OR LOSS
The Group’s activities expose it to a variety of financial risks: market
risk (including currency risk, interest rate risk and price risk),
credit risk and liquidity risk. The Group’s overall risk management
program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group has used derivative financial
instruments such as foreign exchange contracts and forward
are exclusively used for hedging purposes, i.e. not as trading or
other speculative instruments. The Group uses different methods
to measure different types of risks to which it is exposed. These
credit risk.
Risk management is carried out by the management team following
guidance received from the Audit and Risk Committee.
No events occurred in the current and prior periods that give rise to
material items of income or expense as a result of climate.
The Group holds the following financial instruments:
2022
$’000
-
3,561
3,561
2021
$’000
19,539
53
19,592
2022
$’000
2021
$’000
(98)
53
2,353
9,366
2,255
9,419
Fair value gain(loss) on short
term managed funds held at
FVPL recognised in gain/(loss) on
financial instruments
Fair value gain on derivative
financial instrument at FVPL
recognised in gain/loss on financial
instruments
(A) MARKET RISK
(I) FOREIGN EXCHANGE RISK
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to the US dollar.
Foreign exchange risk arises from commercial transactions, given
that the Group’s sales revenues are denominated in US dollars and
dollars, and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency.
The risk is measured using sensitivity analysis and cash flow
forecasting. The Group’s exposure to US dollar denominated foreign
currency risk at the reporting date, expressed in Australian dollars,
2022
$’000
2021
$’000
108,411
66,159
193,761
-
443,890
31,604
1,207
19,592
368,331
496,293
67,723
67,723
120,836
120,836
2022
$’000
2021
$’000
(19,592)
53
Balance at the beginning of the year
19,592
19,539
was as follows:
Short Term Managed Funds
Movement in short term managed
funds
of the year
Carrying amount at the end
NET DEBT RECONCILIATION
-
19,592
Market risk
Cash and cash equivalents
Trade and other receivables
2022
$’000
59,461
48,293
(773)
2021
$’000
131,360
18,464
56
This section sets out an analysis of net debt and the movements in
Trade and other payables
net debt for each of the periods presented.
Net US dollar surplus
106,981
149,880
Financial Assets
Cash and Cash Equivalent
Trade and other receivables
Other financial assets
Short Term Managed Funds
Financial Liabilities
Trade and other payables
are set out below:
The carrying amount and movement in Short Term Managed Funds
the majority of its operating costs are denominated in Australian
2022
$’000
108,411
190,200
(6,482)
2021
$’000
443,890
19,592
(17,455)
292,129
446,027
GROUP SENSITIVITY
Based on the financial instruments held at 31 December 2022,
had the Australian dollar weakened/strengthened by 10% against
the US dollar with all other variables held constant, the Group’s
post tax profit for the financial period would have been $6.8 million
higher / $8.3 million lower (2021: $7.5 million higher / $9.21 million
lower), mainly as a result of foreign exchange gains/losses on US
dollar denominated cash and cash equivalents, term deposits and
receivables as detailed in the above table
Net debt reconciliation
Cash and cash equivalents
Liquid investments
Lease liability
Net cash, cash equivalents and
liquid investments / (debt)
56
(II) PRICE RISK
The Group is exposed to commodity price risk. During current and
prior years, the price of iron ore pellets is based on a price index
used in the market. At this time, the Group does not manage its iron
ore price risk with financial instruments.
Going forward, the Group may consider using financial instruments
to manage commodity price risk given exposures to market prices
arising from the adoption of index based market pricing mechanisms.
Short term managed funds are exposed to price risk arising from
investments held by the fund for which the future prices are
uncertain. The investment manager moderates this risk through
a careful selection of securities within specified limits. The fund
actively maintains a high level of diversification in its holdings, thus
potentially reducing the amount of risk in the fund.
(III) CASH FLOW AND FAIR VALUE INTEREST RATE RISK
The Group’s main interest rate risk arises from cash and cash
equivalents, term deposits and short term managed funds.
For short term managed funds, the interest-bearing financial assets
in each of the Funds expose it to risks associated with the effects of
fluctuations in the prevailing levels of market interest rates on its
financial position and cash flows. The main interest rate risk arises
from the Fund’s investments in bonds.
As at the reporting date, the Group has no variable rate borrowings
outstanding. Borrowings issued at variable rates expose the Group
to cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk if the borrowings
are carried at fair value. The Group’s fixed rate borrowings are
carried at amortised cost.
The Group analyses its interest rate exposure on a dynamic
basis. Various scenarios are simulated taking into consideration
refinancing, renewal of existing positions, alternative financing and
hedging.
Based on these scenarios, the Group calculates the impact on profit
and loss of a defined interest rate shift. No financial instruments are
used to manage interest rate risk.
(B) CREDIT RISK
Credit risk is managed on a Group basis. Credit risk arises from
cash and cash equivalents and deposits with banks and financial
institutions, as well as credit exposures to customers, including
outstanding receivables and committed transactions.
The Group is exposed to a concentration of risk with sales of iron
ore being made to a limited number of customers. The maximum
exposure to credit risk at the reporting date is limited to the carrying
value of trade receivables, cash and cash equivalents and deposits
with banks and financial institutions. As at 31 December 2022, there
are $0.18m in trade receivables (2021 $0.18m) that are past due.
The other classes within trade and other receivables do not contain
impaired assets and are not past due.
(C) LIQUIDITY RISK
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability
to close out market positions. The Group manages liquidity risk
by continuously monitoring forecast and actual cash flows and
matching the maturity profiles of financial assets and liabilities.
MATURITIES OF FINANCIAL LIABILITIES
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period as at the reporting
date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
2022 - Consolidated
Non-derivatives
Trade and other payables
Lease liabilities
Total non-derivatives
Derivatives
Trading derivatives
Total derivatives
2021 - Consolidated
Non-derivatives
Trade and other payables
Lease liabilities
Total non-derivatives
Derivatives
Trading derivatives
Total derivatives
Less than 6
months
$'000
6-12 months
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Total
contractual
cash flows
$'000
Carrying
amount
liabilities
$'000
67,723
3,493
71,216
766
766
-
940
940
1,211
1,211
-
1,459
1,459
1,584
1,584
-
814
814
-
-
-
-
-
-
-
-
6,706
6,706
3,561
3,561
67,723
6,482
74,205
1,207
1,207
Less than 6
months
$'000
6-12 months
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5 years
$'000
Total
contractual
cash flows
$'000
Carrying
amount
liabilities
$'000
120,836
16,912
137,748
995
995
-
212
212
212
212
-
261
261
-
-
-
306
306
-
-
-
-
-
-
-
120,836
17,691
120,836
17,455
138,527
138,291
1,207
1,207
1,207
1,207
57
GRANGE RESOURCES ANNUAL REPORT 2022
Note 2. Financial Risk Management (continued)
(D) CAPITAL RISK MANAGEMENT
When managing capital, the Group’s objective is to safeguard the
ability to continue as a going concern so that the Group continues
to provide returns for shareholders and benefits for other
stakeholders, and to maintain an optimal capital structure to reduce
the cost of capital.
Management
is constantly reviewing and adjusting, where
necessary, the capital structure. This involves the use of corporate
forecasting models which enable analysis of the Group’s financial
position including cash flow forecasts to determine future capital
management requirements. To ensure sufficient funding, a range of
assumptions are modelled.
(E) DERIVATIVES
The Group uses derivative financial instruments, such as foreign
currency and commodity options to hedge its foreign currency risks
and commodity price risks, respectively. Such derivative financial
instruments are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently
remeasured at fair value using valuation techniques which employs
the use of market observable inputs. Derivatives are carried as
financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.
CLASSIFICATION OF DERIVATIVES
Derivatives are classified as held for trading and accounted for at fair
value through profit or loss. They are presented as current assets
or liabilities if they are expected to be settled within 12 months after
the end of the reporting period.
The Group has the following derivative financial instruments:
Electricity fixed forward
Diesel commodity swap
Foreign currency options
Derivative financial instruments
2022
$’000
3,548
-
13
3,561
2021
$’000
500
461
246
1,207
(F) RECOGNISED FAIR VALUE MEASUREMENTS
This section explains the judgements and estimates made in
determining the fair values of the financial instruments that are
recognised and measured at fair value in the financial statements.
To provide an indication about the reliability of the inputs used
in determining fair value, the Group has classified its financial
instruments into the three levels prescribed under the accounting
standards.
Level 1: The fair value of financial instruments traded in active
markets (such as publicly traded derivatives and equity securities)
is based on quoted market prices at the end of the reporting period.
The quoted market price used for financial assets held by the group
is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded
in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques which maximise the use
of observable market data and rely as little as possible on entity-
specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3.
Specific valuation techniques used to value the derivative financial
instruments mainly include determining the fair value of forward
contracts using forward rates at the balance sheet date provided
by the dealers.
58
The following table presents the group’s assets and liabilities
measured and recognised at fair value at 31 December 2022 and 31
December 2021.
2022
Financial Assets
Short Term Managed Funds
Derivative financial
Instruments
Trade receivables –
embedded derivative
2021
Financial Assets
Short-term managed funds
Trade receivables –
embedded derivative
Financial liabilities
Derivatives financial
instruments
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
-
3,561
7,698
-
-
-
-
3,561
7,698
11,259
- 11,259
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
-
19,592
5,177
1,207
25,976
- 19,592
5,177
-
1,207
- 25,976
NOTE 3. CRITICAL ACCOUNTING
ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions
on historical experience and on other various factors, including
expectations of
future events, management believes to be
reasonable under the circumstances. There are no critical
accounting judgements, estimates and assumptions that are likely
to affect the current or future financial years.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that
are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom equal
the related actual results. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
discussed below.
(A) NET REALISABLE VALUE OF INVENTORIES
The Group reviews the carrying value of its inventories at each
reporting date to ensure that the cost does not exceed net
realisable value. Estimates of net realisable value include a number
of assumptions, including commodity price expectations, foreign
exchange rates and costs to complete inventories to a saleable
product. As at 31 December 2022 the net realisable value exceeded
cost for all significant inventory balances.
GRANGE RESOURCES ANNUAL REPORT 2022
Note 2. Financial Risk Management (continued)
(D) CAPITAL RISK MANAGEMENT
The following table presents the group’s assets and liabilities
measured and recognised at fair value at 31 December 2022 and 31
When managing capital, the Group’s objective is to safeguard the
ability to continue as a going concern so that the Group continues
December 2021.
to provide returns for shareholders and benefits for other
stakeholders, and to maintain an optimal capital structure to reduce
2022
the cost of capital.
Management
is constantly reviewing and adjusting, where
necessary, the capital structure. This involves the use of corporate
forecasting models which enable analysis of the Group’s financial
position including cash flow forecasts to determine future capital
management requirements. To ensure sufficient funding, a range of
Derivative financial
Instruments
Trade receivables –
embedded derivative
Financial Assets
Short Term Managed Funds
assumptions are modelled.
(E) DERIVATIVES
The Group uses derivative financial instruments, such as foreign
currency and commodity options to hedge its foreign currency risks
and commodity price risks, respectively. Such derivative financial
instruments are initially recognised at fair value on the date on
which a derivative contract is entered into and are subsequently
Financial Assets
Short-term managed funds
Trade receivables –
embedded derivative
remeasured at fair value using valuation techniques which employs
Financial liabilities
the use of market observable inputs. Derivatives are carried as
financial assets when the fair value is positive and as financial
Derivatives financial
instruments
Level 1
$'000
Level 2
Level 3
$'000
$'000
Total
$'000
-
-
-
-
-
-
-
-
3,561
7,698
-
-
-
-
3,561
7,698
11,259
- 11,259
19,592
5,177
1,207
25,976
- 19,592
5,177
-
1,207
- 25,976
2021
Level 1
$'000
Level 2
Level 3
$'000
$'000
Total
$'000
liabilities when the fair value is negative.
CLASSIFICATION OF DERIVATIVES
Derivatives are classified as held for trading and accounted for at fair
value through profit or loss. They are presented as current assets
or liabilities if they are expected to be settled within 12 months after
the end of the reporting period.
The Group has the following derivative financial instruments:
NOTE 3. CRITICAL ACCOUNTING
ESTIMATES AND JUDGEMENTS
Electricity fixed forward
Diesel commodity swap
Foreign currency options
2022
$’000
3,548
-
13
2021
$’000
500
461
246
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions
Derivative financial instruments
3,561
1,207
on historical experience and on other various factors, including
(F) RECOGNISED FAIR VALUE MEASUREMENTS
This section explains the judgements and estimates made in
determining the fair values of the financial instruments that are
expectations of
future events, management believes to be
reasonable under the circumstances. There are no critical
accounting judgements, estimates and assumptions that are likely
to affect the current or future financial years.
recognised and measured at fair value in the financial statements.
Estimates and judgements are continually evaluated and are based
To provide an indication about the reliability of the inputs used
on historical experience and other factors, including expectations of
in determining fair value, the Group has classified its financial
future events that may have a financial impact on the entity and that
instruments into the three levels prescribed under the accounting
are believed to be reasonable under the circumstances.
standards.
Level 1: The fair value of financial instruments traded in active
The resulting accounting estimates will, by definition, seldom equal
markets (such as publicly traded derivatives and equity securities)
the related actual results. The estimates and assumptions that have
is based on quoted market prices at the end of the reporting period.
a significant risk of causing a material adjustment to the carrying
The quoted market price used for financial assets held by the group
amounts of assets and liabilities within the next financial year are
is the current bid price. These instruments are included in level 1.
discussed below.
The Group makes estimates and assumptions concerning the future.
Level 2: The fair value of financial instruments that are not traded
in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques which maximise the use
of observable market data and rely as little as possible on entity-
specific estimates. If all significant inputs required to fair value an
instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on
observable market data, the instrument is included in level 3.
Specific valuation techniques used to value the derivative financial
instruments mainly include determining the fair value of forward
contracts using forward rates at the balance sheet date provided
by the dealers.
58
(A) NET REALISABLE VALUE OF INVENTORIES
The Group reviews the carrying value of its inventories at each
reporting date to ensure that the cost does not exceed net
realisable value. Estimates of net realisable value include a number
of assumptions, including commodity price expectations, foreign
exchange rates and costs to complete inventories to a saleable
product. As at 31 December 2022 the net realisable value exceeded
cost for all significant inventory balances.
FINANCIAL REPORT
(B) IMPAIRMENT OF PROPERTY, PLANT AND
EQUIPMENT AND MINE PROPERTIES AND
DEVELOPMENT
Where there is an indication of a possible impairment, a formal
estimate of the recoverable amount of each Cash Generating Unit
(CGU) is made, which is deemed to be the higher of a cash generating
unit’s fair value less costs of disposal and its value in use.
numerous uncertainties inherent in estimating ore reserves and
assumptions that are valid at the time of estimation may change
significantly when new information becomes available. Changes in
forecast prices of commodities, exchange rates, production costs or
recovery rates may change the economic status of ore reserves and
may, ultimately, result in the reserves being restated. Such changes
in reserves could impact on depreciation and amortisation rates,
asset carrying values and provisions for rehabilitation.
Significant judgements and assumptions are required in making
estimates of Fair Value. The CGU valuations are subject to variability
in key assumptions including, but not limited to, long‐term iron
ore pellet prices, currency exchange rates, and discount rates. An
adverse change in one or more of the assumptions used to estimate
Fair Value could result in a reduction in a CGU’s recoverable value.
This could lead to the recognition of impairment losses in the future.
At 31 December 2022, the Group determined that there were no
indicators of impairment.
To identify any indications of impairment, Management considers
both external and internal sources as summarised below:
EXTERNAL SOURCES
(i)
The carrying amount of the net assets more than its market
capitalisation
(ii) Market interest rate have increased during the period
(iii) Significant changes with an adverse effect on the entity have
taken place or will take place in the future
(iv) Observable indications that an asset market value has declined
significantly more than that would be expected because of the
passage of time and used
INTERNAL SOURCES
(i) Significant changes have taken place or expected to take place
in the near future which an asset is used or expected to be
used
(ii)
Internal reporting suggests that the economic performance of
an asset is or will be worse than expected
(iii) Obsolescence or physical damage of an asset
(C) STRIPPING COSTS IN THE PRODUCTION
PHASE OF A SURFACE MINE
(INTERPRETATION 20)
The application of Interpretation 20 requires management judgement
in determining whether a surface mine is in the production phase
and whether the benefits of production stripping activities will be
realised in the form of inventory produced through improved access
to ore.
Judgement is also applied in identifying the component of the
ore body and the manner in which stripping costs are capitalised
and amortised. There are a number of uncertainties inherent in
identifying components of the ore body and the inputs to the relevant
production methods for capitalising and amortising stripping
costs and these assumptions may change significantly when new
information becomes available. Such changes could impact on
capitalisation and amortisation rates for capitalised stripping costs
and deferred stripping asset values.
(D) DETERMINATION OF MINERAL RESOURCES
AND ORE RESERVES
Mineral resources and ore reserves are based on information
compiled by a Competent Person as defined in accordance with
the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (the JORC 2012 code). There are
(E) TAXATION
The Group’s accounting policy for taxation requires management
judgment in relation to the application of income tax legislation.
There are many transactions and calculations undertaken during the
ordinary course of business where the ultimate tax determination is
uncertain. The Group recognises liabilities for tax, and if appropriate
taxation investigation or audit issues, based on whether tax will be
due and payable. Where the taxation outcome of such matters is
different from the amount initially recorded, such difference will
impact the current and deferred tax positions in the period in which
the assessment is made.
The Group merged its multiple tax consolidated groups on 6
January 2011 which has impacted the carrying amount of deferred
tax assets and deferred tax liabilities recognised on the balance
sheet. Management has used judgment in the application of income
tax legislation on accounting for this tax consolidation. These
judgments are based on management’s interpretation of the income
tax legislation applicable at the time of the consolidation.
In addition, certain deferred tax assets for deductible temporary
differences have been recognised. In recognising these deferred
tax assets assumptions have been made regarding the Group’s
ability to generate future taxable profits. There is an inherent risk
and uncertainty in applying these judgments and a possibility that
changes in legislation or forecasts will impact upon the carrying
amount of deferred tax assets and deferred tax liabilities recognised
on the balance sheet.
(F) PROVISION FOR DECOMMISSIONING AND
RESTORATION COSTS
Decommissioning and restoration costs are a normal consequence
of mining, and the majority of this expenditure is incurred at the end
of a mine’s life. In determining an appropriate level of provision,
consideration is given to the expected future costs to be incurred,
the timing of these expected future costs (largely dependent on the
life of the mine), and the estimated future level of inflation, with
reference to analysis performed by internal and external experts.
The ultimate cost of decommissioning and restoration is uncertain
and costs can vary in response to many factors including changes
to the relevant legal requirements, changes to mine plan, and the
emergence of new restoration techniques or experience at other
mine sites. The expected timing of expenditure can also change, for
example in response to changes in reserves or to production rates.
Certain rehabilitation activities are undertaken as part of the mining
operations included in the life of mine plan. Should the life of mine
plan be amended in the future to exclude these activities, the
provision for rehabilitation would increase correspondingly.
Changes to any of the estimates could result in significant changes
to the level of provisioning required, which would in turn impact
future financial results. These estimates are reviewed annually and
adjusted where necessary to ensure that the most up to date data
is used.
59
GRANGE RESOURCES ANNUAL REPORT 2022
NOTE 4. SEGMENT INFORMATION
(A) DESCRIPTION OF SEGMENTS
Operating segments are determined based on the reports reviewed
by the Chief Executive Officer, who is the Group’s chief operating
decision maker in terms of allocating resources and assessing
performance.
The Group has two reportable segments:
(i)
Exploration, evaluation, and development of mineral resources
and iron ore mining operations; and
(ii) Development and construction of housing units
The Chief Executive Officer allocates resources and assesses
performance, in terms of revenues earned, expenses incurred, and
assets employed, on a consolidated basis in a manner consistent
with that of the measurement and presentation in the financial
statements.
Exploration, evaluation and development projects (including the
Southdown project) are not deemed reportable operating segments
at this time as the financial performance of these operations is not
separately included in the reports provided to the Chief Executive
Officer. These projects may become segments in the future.
Segment assets and capital are allocated based on where the
assets are located. The consolidated assets of the Group were
predominately located in Australia as at 31 December 2022 and
31 December 2021. The total costs incurred during the current
and comparative periods to acquire segment assets were also
predominately incurred in Australia.
Revenue from external customers
Timing of revenue recognition
At a point in time
Over time - Freight
Total Assets
Total Liabilities
Ore Mining
Property Development
2022
$’000
2021
$’000
580,294
775,481
521,839
58,455
2022
$’000
722,283
53,198
2021
$’000
1,098,219
1,095,526
194,093
247,891
2022
$’000
14,261
14,261
-
2022
$’000
-
-
2021
$’000
6,181
6,181
-
2021
$’000
24,709
1,125
Total
2022
$’000
2021
$’000
594,555
781,662
536,100
58,455
2022
$’000
728,464
53,198
2021
$’000
1,098,219
1,120,235
194,093
249,016
The following table presents revenues from sales of iron ore based
on the geographical location of the port of discharge.
Segment revenues from sale to external customers
Ore Mining
Australia
China
South Korea
Malaysia
Turkey
Property Development
Australia
Total Revenue
2022
$’000
2021
$’000
38,520
355,369
167,294
4,893
14,218
580,294
46,314
551,330
177,837
-
-
775,481
14,261
594,555
6,181
781,662
Sales of iron ore products to Jiangsu Shagang International Trade
Co., Ltd, a wholly owned subsidiary of Jiangsu Shagang Group,
under long-term off-take agreements amounted to $211.9m / 36.5%
of mining revenue (2021: $216.3m / 27.7%).
60
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
NOTE 4. SEGMENT INFORMATION
NOTE 5. REVENUE FROM OPERATIONS
Revenue from
Contracts with
Customers
$’000
2022
Other Revenue/
(Loss)
Total Revenues
$’000
$’000
Revenue from
Contracts with
Customers
$’000
2021
Other Revenue/
(Loss)
Total Revenues
$’000
$’000
From mining operations
Sales of iron ore
609,515
(29,221)
580,294
774,293
1,188
775,481
From property development
Sales of property
14,261
623,776
-
(29,221)
14,261
594,555
6,181
780,474
-
1,188
6,181
781,662
Revenue from contracts with provisional pricing is recognised
based on the estimated forward prices where available which
the Group expects to receive at the end of the quotation period.
Where an estimated forward price is not available, spot prices are
applied as management’s best estimate of the provisional prices.
The quotation period exposure is considered to be an embedded
derivative and forms part of trade receivables. The subsequent
changes in the fair value were recognised in the statement of profit
or loss and other comprehensive income as other revenue (loss).
Changes in fair value over, and until the end of the quotation period,
are estimated by reference to updated forward market prices.
NOTE 6. COST OF SALES
NOTE 8. OTHER INCOME (EXPENSE)
Mining Costs
Production costs
Changes in Inventories
Freight costs
Government royalties
Depreciation and amortisation
expense
Mine properties and development
- Amortisation expense
Deferred Stripping
- Amounts capitalised during the
year
- Amortisation expense
Foreign exchange gain/(loss)
Property costs
Inventory provision
Depreciation and amortisation expense
Land and buildings
Plant and equipment
Computer equipment
2022
$’000
180,339
141,710
(448)
58,455
19,464
2021
$’000
137,837
117,370
(45,485)
53,199
24,752
25,463
18,300
8,982
9,472
(136,222)
(38,941)
21,133
2,535
12,616
-
334,027
54,899
(1,202)
6,396
672
337,269
1,481
23,473
509
25,463
991
17,010
299
18,300
Rent Income
Other Income
Gain (loss) on the disposal of
property, plant and equipment
Loss on derecognition of right of
use of assets
Provision for rehabilitation - change
in estimate
Unwind of net borrowings for the
joint venture
NOTE 9. FINANCE INCOME
Interest income received or
receivable
Distribution Income
Gain on financial instruments
Exchange gains on foreign currency
deposit
2022
$’000
161
163
(17)
2021
$’000
230
237
2,159
(4,030)
-
(757)
5,954
-
2,561
(4,480)
11,141
2022
$’000
9,729
429
2,255
9,371
2021
$’000
5,541
940
9,418
7,161
21,784
23,060
NOTE 7. ADMINISTRATIVE EXPENSES
NOTE 10. FINANCE EXPENSES
Salaries
Consultancy Fee
Others
2022
$’000
2,881
1,208
545
4,634
2021
$’000
2,629
930
324
3,883
Provisions: unwinding of discounts
- Decommissioning and
Restorations
Interest charges on lease liabilities
Other interest charges
2022
$’000
1,911
1,047
484
3,442
2021
$’000
885
304
21
1,210
61
(A) DESCRIPTION OF SEGMENTS
Operating segments are determined based on the reports reviewed
by the Chief Executive Officer, who is the Group’s chief operating
decision maker in terms of allocating resources and assessing
statements.
performance.
The Group has two reportable segments:
(i)
Exploration, evaluation, and development of mineral resources
and iron ore mining operations; and
(ii) Development and construction of housing units
The Chief Executive Officer allocates resources and assesses
performance, in terms of revenues earned, expenses incurred, and
assets employed, on a consolidated basis in a manner consistent
with that of the measurement and presentation in the financial
Exploration, evaluation and development projects (including the
Southdown project) are not deemed reportable operating segments
at this time as the financial performance of these operations is not
separately included in the reports provided to the Chief Executive
Officer. These projects may become segments in the future.
Segment assets and capital are allocated based on where the
assets are located. The consolidated assets of the Group were
predominately located in Australia as at 31 December 2022 and
31 December 2021. The total costs incurred during the current
and comparative periods to acquire segment assets were also
predominately incurred in Australia.
Revenue from external customers
Timing of revenue recognition
At a point in time
Over time - Freight
Total Assets
Total Liabilities
Ore Mining
Property Development
2022
$’000
2021
$’000
580,294
775,481
521,839
58,455
2022
$’000
722,283
53,198
2021
$’000
1,098,219
1,095,526
194,093
247,891
2022
$’000
14,261
14,261
2022
$’000
-
-
-
2021
$’000
6,181
6,181
-
2021
$’000
24,709
1,125
594,555
781,662
Total
2022
$’000
536,100
58,455
2022
$’000
2021
$’000
728,464
53,198
2021
$’000
1,098,219
1,120,235
194,093
249,016
The following table presents revenues from sales of iron ore based
on the geographical location of the port of discharge.
Segment revenues from sale to external customers
Ore Mining
Australia
China
South Korea
Malaysia
Turkey
Property Development
Australia
Total Revenue
2022
$’000
38,520
355,369
167,294
4,893
14,218
2021
$’000
46,314
551,330
177,837
-
-
580,294
775,481
14,261
594,555
6,181
781,662
Sales of iron ore products to Jiangsu Shagang International Trade
Co., Ltd, a wholly owned subsidiary of Jiangsu Shagang Group,
under long-term off-take agreements amounted to $211.9m / 36.5%
of mining revenue (2021: $216.3m / 27.7%).
60
(A) RISK EXPOSURE
The Group’s exposure to interest rate risk is discussed in note
2. The maximum exposure to credit risk at the reporting date is
the carrying amount of each class of cash and cash equivalents
mentioned above.
NOTE 13. TRADE AND OTHER
RECEIVABLES
Trade receivables
Security deposits
Other receivables
Prepayments
2022
$’000
48,727
325
8,120
1,249
58,421
2021
$’000
18,822
370
4,429
498
24,119
Trade receivables include provisionally priced receivables relating
to sales contracts where the selling price is determined after
delivery to the customers, based on the market price at the relevant
quotation point stipulated in the contract (note 5 – Revenue).
The quotation period exposure is considered to be an embedded
derivative and not separated from the entire balance. The entire
balance is accounted for as one instrument and measured at fair
value.
Trade receivables - embedded derivative due to quotation period
exposure is considered as level 2 in fair value hierarchy (note 2).
Security deposits comprises of restricted deposits that are used for
monetary backing for performance guarantees.
(A) IMPAIRED TRADE RECEIVABLES
Information regarding the impairment of trade and other receivables
is provided in note 2.
(B) FOREIGN EXCHANGE AND
INTEREST RATE RISK
Information about the Group’s exposure to foreign currency risk
and interest rate risk in relation to trade and other receivables is
provided in note 2.
(C) FAIR VALUE AND CREDIT RISK
Due to the short-term nature of these receivables, their carrying
amount is assumed to be their fair value. The maximum exposure to
credit risk at the end of the reporting period is the carrying amount
of each class of receivables mentioned above. Refer to note 2 for
more information on the credit quality of the Group’s trade and
other receivables.
GRANGE RESOURCES ANNUAL REPORT 2022
NOTE 11. INCOME TAX EXPENSE
(a) Income tax expense
Current tax
Tax refund on capitalised mining
costs - Tailing Storage Facility
Total current tax expense
Deferred income tax
Decrease in deferred tax assets
Movements in unrecognised
deferred tax
Total deferred tax expense
Total income tax expense
b) Numerical reconciliation of
income tax expense to prima facie
tax payable
Profit from continuing operations
before income tax expense
Tax expense at the Australian tax
rate of 30% (2021: 30%) Tax effect of
amounts which are not deductible
(taxable) in calculating taxable
income:
Sundry Items
Movement in current year net
deferred tax assets relating to
temporary differences
Adjustment to tax of prior period
Total income tax expense
(c) Taxation Losses
Unused taxation losses for which
no deferred tax asset has been
recognised
Potential tax benefit @ 30%
2022
$’000
2021
$’000
38,961
123,329
(22,622)
-
16,339
123,329
60,861
(109)
60,752
77,091
15,946
-
15,946
139,275
248,826
460,890
74,648
138,267
536
75,184
412
138,679
(109)
39
2,016
1,907
77,091
557
596
139,275
5,246
3,733
1,574
1,120
NOTE 12. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Cash and cash equivalents
Cash and cash equivalents as per
statement of cash flows
2022
$’000
9,074
99,337
108,411
2021
$’000
5,240
438,650
443,890
108,411
443,890
Total cash is held in trading accounts or term deposits with major
financial institutions under normal terms and conditions appropriate
to the operation of the accounts. These deposits earn interest at
rates set by these institutions. As at 31 December 2022 the weighted
average interest rate on the Australian dollar accounts was 3.39%
(31 December 2021: 0.31%) and the weighted average interest rate
on the United States dollar accounts was 5.78% (31 December 2021:
1.94%).
62
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
NOTE 11. INCOME TAX EXPENSE
(A) RISK EXPOSURE
NOTE 14. INVENTORIES
NOTE 15. RECEIVABLES
Stores and spares
Ore stockpiles
Work in progress
Finished goods (at lower of cost
and net realisable value)
Properties developed for sale
2022
$’000
47,656
83,155
2,848
29,245
2021
$’000
34,986
91,667
970
22,163
-
162,904
12,215
162,001
Ore stockpiles, work in progress, finished goods and stores and
spares are valued at the lower of weighted average cost and
estimated net realisable value. A credit of $0.4 million in 2022
and a credit of $45.5 million in 2021 were recognised for the
movements in inventories (note 6).
Security deposits
2022
$’000
8,988
2021
$’000
7,984
Non-current security deposits comprise of restricted deposits that
are used for monetary backing for performance guarantees.
(A) RISK EXPOSURE
Information about the Group’s exposure to credit risk, foreign
exchange risk and interest rate risk in relation to security deposits
is provided in note 2. The maximum exposure to credit risk at the
reporting date is the carrying amount of each class of receivables
mentioned above.
NOTE 16. PROPERTY, PLANT AND EQUIPMENT
At 1 January 2022
Cost
Accumulated depreciation and impairment
Net book amount
Year ended 31 December 2022
Opening net book amount
Additions
Disposals - net book value
Depreciation charge
Transfer to MP&D
Closing net book amount
At 31 December 2022
Cost
Accumulated depreciation and Impairment
Net book amount
At 1 January 2021
Cost
Accumulated depreciation and impairment
Net book amount
Year ended 31 December 2021
Opening net book amount
Additions
Disposals - net book value
Depreciation charge
Closing net book amount
At 31 December 2021
Cost
Accumulated depreciation and impairment
Net book amount
Land and Building
$’000
Plant and Equipment
$’000
Computer Equipment
$’000
54,932
(40,007)
14,925
14,925
3,211
-
(1,485)
(15)
16,636
58,128
(41,492)
16,636
492,969
(371,424)
121,545
121,545
80,194
-
(20,281)
(966)
180,492
572,197
(391,705)
180,492
9,754
(9,044)
710
710
521
(17)
(513)
-
701
10,258
(9,557)
701
Land and Building
$’000
Plant and Equipment
$’000
Computer Equipment
$’000
54,284
(39,015)
15,269
15,269
648
-
(992)
14,925
54,932
(40,007)
14,925
454,083
(356,361)
97,722
97,722
39,334
(448)
(15,063)
121,545
492,969
(371,424)
121,545
9,741
(8,738)
1,003
1,003
14
(1)
(306)
710
9,754
(9,044)
710
Total
$’000
557,655
(420,475)
137,180
137,180
83,926
(17)
(22,279)
(981)
197,829
640,583
(442,754)
197,829
Total
$’000
518,108
(404,114)
113,994
113,994
39,996
(449)
(16,361)
137,180
557,655
(420,475)
137,180
(A) ASSETS UNDER CONSTRUCTION
The carrying amounts of the assets disclosed above includes expenditure of $104.1 million (2021: $68.2 million) recognised in relation to
property, plant and equipment which is in the course of construction.
63
2022
$’000
2021
$’000
mentioned above.
The Group’s exposure to interest rate risk is discussed in note
2. The maximum exposure to credit risk at the reporting date is
the carrying amount of each class of cash and cash equivalents
(a) Income tax expense
Current tax
Tax refund on capitalised mining
costs - Tailing Storage Facility
(22,622)
Total current tax expense
16,339
123,329
RECEIVABLES
38,961
123,329
NOTE 13. TRADE AND OTHER
Deferred income tax
Decrease in deferred tax assets
Movements in unrecognised
deferred tax
Total deferred tax expense
Total income tax expense
b) Numerical reconciliation of
income tax expense to prima facie
tax payable
Profit from continuing operations
before income tax expense
Tax expense at the Australian tax
rate of 30% (2021: 30%) Tax effect of
amounts which are not deductible
(taxable) in calculating taxable
income:
Sundry Items
Movement in current year net
deferred tax assets relating to
temporary differences
Adjustment to tax of prior period
-
-
15,946
15,946
139,275
60,861
(109)
60,752
77,091
248,826
460,890
536
412
75,184
138,679
(109)
2,016
1,907
77,091
39
557
596
74,648
138,267
value.
Trade receivables
Security deposits
Other receivables
Prepayments
2022
$’000
48,727
325
8,120
1,249
2021
$’000
18,822
370
4,429
498
58,421
24,119
Trade receivables include provisionally priced receivables relating
to sales contracts where the selling price is determined after
delivery to the customers, based on the market price at the relevant
quotation point stipulated in the contract (note 5 – Revenue).
The quotation period exposure is considered to be an embedded
derivative and not separated from the entire balance. The entire
balance is accounted for as one instrument and measured at fair
Trade receivables - embedded derivative due to quotation period
exposure is considered as level 2 in fair value hierarchy (note 2).
Security deposits comprises of restricted deposits that are used for
monetary backing for performance guarantees.
(A) IMPAIRED TRADE RECEIVABLES
Information regarding the impairment of trade and other receivables
Total income tax expense
139,275
is provided in note 2.
(c) Taxation Losses
Unused taxation losses for which
no deferred tax asset has been
recognised
(B) FOREIGN EXCHANGE AND
INTEREST RATE RISK
5,246
3,733
Information about the Group’s exposure to foreign currency risk
and interest rate risk in relation to trade and other receivables is
Potential tax benefit @ 30%
1,574
1,120
provided in note 2.
(C) FAIR VALUE AND CREDIT RISK
Due to the short-term nature of these receivables, their carrying
amount is assumed to be their fair value. The maximum exposure to
credit risk at the end of the reporting period is the carrying amount
of each class of receivables mentioned above. Refer to note 2 for
more information on the credit quality of the Group’s trade and
other receivables.
NOTE 12. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Cash and cash equivalents
Cash and cash equivalents as per
statement of cash flows
2022
$’000
9,074
99,337
108,411
2021
$’000
5,240
438,650
443,890
108,411
443,890
Total cash is held in trading accounts or term deposits with major
financial institutions under normal terms and conditions appropriate
to the operation of the accounts. These deposits earn interest at
rates set by these institutions. As at 31 December 2022 the weighted
average interest rate on the Australian dollar accounts was 3.39%
(31 December 2021: 0.31%) and the weighted average interest rate
on the United States dollar accounts was 5.78% (31 December 2021:
1.94%).
62
GRANGE RESOURCES ANNUAL REPORT 2022
NOTE 17. RIGHT-OF-USE ASSETS
Movements in mine properties and development are set out below:
This note provides information for leases where the group is a
lessee.
(I) AMOUNTS RECOGNISED IN THE BALANCE SHEET
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Land and buildings
Plant and equipment
Lease liabilities
Current
Non-current
Total lease liabilities
2022
$’000
189
6,764
6,953
4,284
2,198
6,482
2021
$’000
255
18,285
18,540
16,920
535
17,455
Additions to the right-of-use assets during the 2022 financial year
were $5,904,363 (2021 - $18,268,097)
The total cash outflow from repayment of leases in 2022 excluding
interest repayment was $6,670,320 (2021 - $3,221,573)
(II) AMOUNTS RECOGNISED IN THE STATEMENT OF
PROFIT OR LOSS
The statement of profit or loss shows the following amounts relating
to leases:
Depreciation charge of right of use assets
Land and buildings
Plant and equipment
Interest expense
(included in finance cost)
Expense relating to short-term
leases (included in cost of sales)
2022
$’000
(60)
(3,193)
(3,253)
1,047
297
2021
$’000
(75)
(1,964)
(2,039)
304
315
NOTE 18. MINE PROPERTIES AND
DEVELOPMENT
Mine properties and development
(at cost)
Accumulated amortisation and
impairment
Net book amount
Deferred stripping costs (net book
amount)
Total mine properties and
developments
2022
$’000
2021
$’000
664,105
670,898
(500,997)
(491,276)
163,108
179,622
197,844
82,755
360,952
262,377
Mine properties and development
Opening net book amount
Current year expenditure
capitalised
Change in rehabilitation estimate
Change in discount rate
Amortisation Expense
Transfer from PPE
Closing net book amount
Deferred stripping costs
Opening net book amount
Current year expenditure
capitalised
Amortisation expense
Closing net book amount
2022
$’000
2021
$’000
179,622
170,584
623
1,134
16,994
(26,132)
(8,982)
983
163,108
82,755
136,222
(21,133)
197,844
21,913
(4,537)
(9,472)
-
179,622
98,713
38,941
(54,899)
82,755
NOTE 19. TRADE AND OTHER PAYABLES
Trade payables
Contract Liabilities
Tax payable
Other payables
(A) RISK EXPOSURE
2022
$’000
45,003
2,662
16,184
3,874
67,723
2021
$’000
36,613
3,793
79,110
1,320
120,836
Trade payables are non-interest bearing and are normally settled
on repayment terms between 7 and 30 days. Information about the
Group’s exposure to foreign exchange risk is provided in note 2.
NOTE 20. PROVISIONS
Provisions (Current)
Leave Obligations
Employee benefits
Decommissioning and restoration
Property settlement related
provision
2022
$’000
17,793
2,891
1,323
-
2021
$’000
17,630
3,093
1,487
80
22,007
22,290
The leave obligations cover the group’s liabilities for long service
leave and annual leave which are classified as either current or
non-current benefits. The current portion of this liability includes
all of the accrued annual leave, the unconditional entitlements to
long service leave where employees have completed the required
period of service and also for those employees that are entitled to
pro-rata payments in certain circumstances. The entire amount of
the provision of $17.8 million (2021 $17.6 million) is presented as
current, since the group does not have an unconditional right to
defer settlement for any of these obligations. However, based on
past experience, the group does not expect all employees to take
the full amount of accrued leave or require payment within the next
12 months.
64
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
NOTE 17. RIGHT-OF-USE ASSETS
Movements in mine properties and development are set out below:
The following amounts reflect leave that is not expected to be taken
or paid within the next 12 months.
Current leave obligations expected
to be settled after 12 months
2022
$’000
8,894
2021
$’000
10,476
Movements in provision for decommissioning and restoration
(current) are set out below
Balance at beginning of year
Payments
Transfers from non-current
provisions
Balance at the end of the year
Provisions (Non-Current)
Leave obligations
Employee benefits
Decommissioning and restoration
2022
$’000
1,487
(138)
2021
$’000
5,950
(177)
(26)
(4,286)
1,323
1,487
2022
$’000
2,598
181
77,586
80,365
2021
$’000
2,895
305
85,235
88,435
Movements in provision for decommissioning and restoration (non-
current) are set out below
Balance at beginning of the year
Change in estimate
Unwinding of discount
Transfers to current provisions
Rehabilitation work completed
2022
$’000
85,235
(8,630)
1,911
26
(956)
77,586
2021
$’000
68,671
11,422
906
4,236
-
85,235
The main component of the provision for decommissioning and
restoration costs is for the Group’s obligation to rehabilitate the
Savage River and Port Latta sites for the disturbance caused by its
operations. The rehabilitation provision also includes an obligation
under the Tasmanian Goldamere Pty Ltd Act 1996 to repay the
Tasmanian Government for part of the purchase of the mine through
expenditure on remediation.
2022
$’000
2021
$’000
179,622
170,584
163,108
179,622
623
16,994
(26,132)
(8,982)
983
82,755
136,222
(21,133)
197,844
1,134
21,913
(4,537)
(9,472)
-
98,713
38,941
(54,899)
82,755
2022
$’000
45,003
2,662
16,184
3,874
2021
$’000
36,613
3,793
79,110
1,320
67,723
120,836
This note provides information for leases where the group is a
lessee.
(I) AMOUNTS RECOGNISED IN THE BALANCE SHEET
The balance sheet shows the following amounts relating to leases:
Mine properties and development
Opening net book amount
Current year expenditure
capitalised
Change in rehabilitation estimate
Change in discount rate
Amortisation Expense
Transfer from PPE
Closing net book amount
Deferred stripping costs
Opening net book amount
Current year expenditure
capitalised
Amortisation expense
Closing net book amount
2022
$’000
189
6,764
6,953
4,284
2,198
6,482
2021
$’000
255
18,285
18,540
16,920
535
17,455
Right-of-use assets
Land and buildings
Plant and equipment
Lease liabilities
Current
Non-current
Total lease liabilities
NOTE 19. TRADE AND OTHER PAYABLES
Additions to the right-of-use assets during the 2022 financial year
were $5,904,363 (2021 - $18,268,097)
The total cash outflow from repayment of leases in 2022 excluding
interest repayment was $6,670,320 (2021 - $3,221,573)
(II) AMOUNTS RECOGNISED IN THE STATEMENT OF
PROFIT OR LOSS
The statement of profit or loss shows the following amounts relating
to leases:
Trade payables
Contract Liabilities
Tax payable
Other payables
Depreciation charge of right of use assets
(A) RISK EXPOSURE
Land and buildings
Plant and equipment
Interest expense
(included in finance cost)
Expense relating to short-term
leases (included in cost of sales)
NOTE 18. MINE PROPERTIES AND
DEVELOPMENT
Mine properties and development
(at cost)
Accumulated amortisation and
impairment
Net book amount
Deferred stripping costs (net book
amount)
Total mine properties and
developments
2022
$’000
(60)
(3,193)
(3,253)
1,047
297
2021
$’000
(75)
(1,964)
(2,039)
304
315
2022
$’000
2021
$’000
664,105
670,898
197,844
82,755
360,952
262,377
Trade payables are non-interest bearing and are normally settled
on repayment terms between 7 and 30 days. Information about the
Group’s exposure to foreign exchange risk is provided in note 2.
NOTE 20. PROVISIONS
Provisions (Current)
Leave Obligations
Employee benefits
Decommissioning and restoration
Property settlement related
provision
2022
$’000
17,793
2,891
1,323
-
2021
$’000
17,630
3,093
1,487
80
22,007
22,290
all of the accrued annual leave, the unconditional entitlements to
long service leave where employees have completed the required
period of service and also for those employees that are entitled to
pro-rata payments in certain circumstances. The entire amount of
the provision of $17.8 million (2021 $17.6 million) is presented as
current, since the group does not have an unconditional right to
defer settlement for any of these obligations. However, based on
past experience, the group does not expect all employees to take
the full amount of accrued leave or require payment within the next
12 months.
(500,997)
(491,276)
The leave obligations cover the group’s liabilities for long service
leave and annual leave which are classified as either current or
163,108
179,622
non-current benefits. The current portion of this liability includes
NOTE 21. DEFERRED TAX ASSETS
(LIABILITIES)
The balance comprises temporary
differences attributable to:
Deferred Tax Assets
Property, plant and equipment
Mine properties and development
Decommissioning and restoration
Employee benefits
Foreign exchange
Trade Receivables
Prepayments
Total deferred tax assets
Deferred tax liabilities
Mine properties and development
Foreign exchange
Inventory
Derivatives
Trade Payables
Prepayments
Total deferred tax liabilities
Total net deferred tax assets
(liabilities)
2022
$’000
2021
$’000
16,572
-
21,954
7,039
353
56
-
45,974
(55,912)
-
(6,368)
(1,068)
(141)
(1)
(63,490)
17,972
816
24,224
7,174
-
53
1
50,240
-
(1,104)
(5,133)
(363)
(295)
-
(6,895)
(17,516)
43,345
NOTE 22. SHARE-BASED PAYMENT
In May 2022 (various dates) Grange Resources Limited (Parent
Company) granted performance rights in three tranches and to be
settled by issuance of shares to three key management personnel.
Each right is entitled to a one equity share with a vesting date of 31
December 2024.
Tranche 1 requires a total share return (TSR) hurdle while Tranche
2 and Tranche 3 requires a series of non-market-based business
objectives.
The performance rights granted were determined to be an equity
settled shared-based payment transaction. The fair value at grant
date for tranche 1 is estimated using a Monte Carlo model, adjusted
to take account of the Shareholder Return (“TSR”) target required
for the Performance Rights to vest while for tranche 2 and 3 using
Black Scholes Option Pricing. The fair value at the grant date was
estimated using the following assumptions:
The life of the performance
rights (years)
Share price at grant dates
Expected volatility
Dividend yield
Risk free interest rates
TSR at measurement dates
(tranche 1 only and
relative to index)
2.6
$1.220, $1.550, $1.585
55%
3.3%
2.9%,2.6%
61.6%, 96.7%, 98.8%
The fair values of the performance rights at grant date are tranche
1 ($128,331), tranche 2 ($157,332) and tranche 3 ($70,600) and
these are amortised over the life of the performance rights. The
Group has recognised employee benefits expense of $53,404.
64
65
GRANGE RESOURCES ANNUAL REPORT 2022
66
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
NOTE 23. CONTRIBUTED EQUITY
ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the
proceeds of winding up of the Company in proportion to the number
of and amounts paid on the shares held. Ordinary shares entitle
their holder to one vote per share, either in person or by proxy, at
a meeting of the Company. Ordinary shares have no par value and
the Company does not have a limited amount of authorised share
capital.
(A) MOVEMENTS IN ORDINARY SHARE CAPITAL
Balance at
1 Jan 2022 / 31 Dec 2022
Number of
Shares
$’000
1,157,338,698
331,513
NOTE 24. RETAINED EARNINGS
Retained earnings attributable to owners of Grange Resources
Retained earnings
Movements in retained earnings
were as follows
Balance at the beginning of the year
Profit for the year
Dividends paid
Balance at the end of the year
NOTE 25. DIVIDENDS
Fully franked interim dividend for
half year ended 30 June 2022 - 2.0
cents per share
Fully franked final dividend for the
year ended 31 December 2021 -
10.0 cents per share
Fully franked special dividend for
year ended 31 December 2021 -
10.0 cents per share
Fully franked interim dividend for
half year ended 30 June 2021 - 2.0
cents per share
Fully franked final dividend for the
year ended 31 December 2020 - 2.0
cents per share
2022
$’000
2021
$’000
541,979
171,735
(138,881)
574,833
381,747
322,260
(162,028)
541,979
2022
$’000
23,147
115,734
-
-
-
2021
$’000
-
-
115,734
23,147
23,147
138,881
162,028
Since the end of the financial year the directors have recommended
the payment of a 2.0 cent final dividend of $23.1 million. This
represents a total of $46.3 million (4.0 cents per share) fully franked
dividend for the year-end 31 December 2022. The final dividend was
declared NIL conduit foreign income and will be paid on 28 March
2023.
FRANKED DIVIDENDS
The final dividends recommended after 31 December 2022 will
be fully franked out of existing franking credits, or out of franking
credits arising from the payment of income tax in the year ending
31 December 2022.
31 December
2022
$’000
31 December
2021
$’000
87,262
126,937
Franking credits available for
subsequent reporting periods
Based on a tax rate of 30%
(2021 - 30%)
The above amounts are calculated from the balance of the franking
account as at the end of the reporting period, adjusted for franking
credits and debits that will arise from the settlement of liabilities or
receivables for income tax and dividends after the end of the year.
NOTE 26. CARRYING VALUE OF
NON-CURRENT ASSETS
At each reporting date, the Group assesses whether there is any
indication that an asset may be impaired. The Group considers
both internal and external factors when reviewing for indicators of
impairment (Note 3(b)).
At 31 December 2022, the Group determined that there were no
indicators of impairment for Property Plant and Equipment, Mine
Property & Development and Right of Use of Assets due to improved
market capitalisation, strong spot and consensus forecast iron ore
prices, foreign exchange rates, reserves and resources, and asset
performance at 31 December 2022.
In addition to this, the Group is currently undertaking an underground
project to extend the life of mine, reduce the operating costs and
minimise the future capital expenditures.
NOTE 27. REMUNERATION OF AUDITORS
2022
$’000
2021
$’000
Assurance Services
PwC Australia
Audit and review of financial reports
Other assurance services
Network firms of PwC Australia
Non-Assurance Services
PwC Australia
Taxation compliance services
Total remuneration paid
239
27
18
284
-
284
313
102
17
432
8
440
67
66
GRANGE RESOURCES ANNUAL REPORT 2022
NOTE 28. COMMITMENTS AND
CONTINGENCIES
(A) TENEMENT EXPENDITURE COMMITMENTS
In order to maintain the mining and exploration tenements in which
the Group is involved, the Group is committed to meet conditions
under which the tenements were granted. If the Group continues
to hold those tenements, the minimum expenditure requirements
(including
joint venture arrangements) will be
approximately:
interests
in
Within one year
After one year but not later than 5
years
Later than 5 years
2022
$’000
386
1,584
2,482
4,452
2021
$’000
492
1,567
2,445
4,504
(B) CAPITAL EXPENDITURE COMMITMENTS
Capital expenditure obligations at the end of the reporting period
but not recognised as liabilities are as follows:
Within one year
After one year but not later than 5
years
2022
$’000
46,967
-
2021
$’000
17,739
9,218
46,967
26,957
(C) CONTRACTUAL OPERATING
EXPENDITURE COMMITMENTS
Obligations to external parties which arise with respect to
legal supply contracts made by the company (other than lease
agreements).
Within one year
After one year but not more than 5
years
2022
$’000
55,353
15,690
2021
$’000
26,177
26,909
71,043
53,086
(D) BANK GUARANTEES
Bank guarantees have been provided on the Group’s behalf to
secure, on demand by the Minister for Mines and Energy for the
State of Queensland, any sum to a maximum aggregate amount of
$2,012,963 (2021: $2,012,963), in relation to the rehabilitation of the
Highway Reward project.
A Bank guarantee has been provided by Grange Resources Limited,
held by the National Australia Bank, as required under the Capacity
Auction Agreement governed by the Australian Energy Market
Operator Limited (“AEMO”) for the amount of $1,000,000 (2021: Nil).
No material losses are anticipated in respect to the above bank
guarantees and the rehabilitation provisions include these amounts.
(E) CONTINGENT ASSETS AND LIABILITIES
The Group did not have any material contingent assets or liabilities
at the Balance Sheet Date.
NOTE 29. RELATED PARTY
TRANSACTIONS
(A) ULTIMATE PARENT
Grange Resources Limited (Grange) is the ultimate Australian
parent company.
(B) SUBSIDIARIES
Interests in subsidiaries are set out in note 30.
(C) KEY MANAGEMENT PERSONNEL
COMPENSATION
Short term employee benefits
Post-employment benefits
Long-term benefits
Long-term incentives
2022
$’000
1,666,986
135,180
52,591
202,870
2,057,627
2021
$’000
1,667,495
124,962
49,990
198,398
2,040,845
(D) TRANSACTIONS WITH RELATED PARTIES
During the year the following transactions occurred with related
parties:
Sales of iron ore products
2022
$’000
211,922,470
2021
$’000
216,292,463
Sales of iron ore products to Jiangsu Shagang International Trade
Co., Ltd, a wholly owned subsidiary of Jiangsu Shagang Group,
under long-term off-take agreements.
During the year, 867,501 dry metric tonnes of iron ore products
were sold to Shagang in accordance with the terms of the long term
off-take agreements (2022 Contract Year (1 April 2021 to 31 March
2022): 707,049) (2021 contract year (1 April 2020 to 31 March 2021):
860,542 dmt).
A Bank guarantee has been provided by Grange Resources
(Tasmania) Pty Ltd, held by the Tasmanian Government, as required
under Environmental Management and Pollution Control Act 1994
(EMPCA) for the amount of $3,174,542 (2021 $3,170,622).
(E) OUTSTANDING BALANCES ARISING FROM
TRANSACTIONS WITH RELATED PARTIES
The following balances are outstanding at the end of the reporting
period in relation to transactions with related parties:
A Bank guarantee has been provided by Grange Resources
(Tasmania) Pty Ltd, held by the National Australia Bank, as required
under the Goldamere Agreement and applicable Deeds of Variation,
for the amount of $2,800,000 (2021: $2,800,000). This amount
is a guarantee against the purchase price outstanding with the
Tasmanian government as specified in the Goldamere Agreement.
2022
$’000
2021
$’000
Trade receivables (sales of iron ore products)
Pellets
Other
15,241,644
-
15,241,644
19,095,808
(62,961)
19,032,847
68
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
2022
%
100
100
100
100
100
100
100
100
100
100
100
NOTE 30. SUBSIDIARIES
The consolidated financial statements incorporate the assets,
liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1.
Ever Green Resources Co., Limited (1)
Grange Tasmania Holdings Pty Ltd
Beviron Pty Ltd
Grange Resources (Tasmania) Pty Ltd
Grange Capital Pty Ltd
Grange Administrative Services Pty Ltd
Barrack Mines Pty Ltd
Bamine Pty Ltd
BML Holdings Pty Ltd
Horseshoe Gold Mine Pty Ltd
Grange Resources (Southdown) Pty Ltd
Southdown Project Management
Company Pty Ltd
Grange Resources Investments Pty Ltd
Grange ROC Property Pty Ltd (2)
Percentage of equity interest held by the Group
2021
%
100
100
100
100
100
100
100
100
100
100
100
Amounts outstanding under the long term off-take agreement with
Shagang are unsecured whereas amounts outstanding in respect
of spot sales are secured against an irrevocable letter of credit.
All outstanding balances will be settled in cash. The credit balance
of the receivables in the current year represents the final price
adjustments due to the quotation periods and final discharge port
results.
There is no allowance account for impaired receivables in relation to
any outstanding balances with related parties, and no expense has
been recognised during the year in respect of impaired receivables
due from related parties (2021: Nil).
LONG TERM OFF-TAKE AGREEMENT
Grange Resources (Tasmania) Pty Ltd (Grange Tasmania) is
party to a long term off-take agreement (Pellets and Chips) with
Jiangsu Shagang International Trade Co. Ltd (Shagang), a wholly
owned subsidiary of Jiangsu Shagang Group Co. Ltd, who, as at
24 February 2023, holds 47.93% (26 February 2022: 47.93%) of the
issued ordinary shares of Grange.
PELLETS
The key terms of the agreement with Shagang, as advised to the
ASX on 23 April 2021, are as follows:
(i)
The sale of 1 million dry metric tonnes of iron ore pellets per
annum until 2032.
2022
$’000
386
1,584
2,482
4,452
2022
$’000
46,967
-
2021
$’000
492
1,567
2,445
4,504
2021
$’000
17,739
9,218
NOTE 28. COMMITMENTS AND
CONTINGENCIES
(A) TENEMENT EXPENDITURE COMMITMENTS
In order to maintain the mining and exploration tenements in which
the Group is involved, the Group is committed to meet conditions
under which the tenements were granted. If the Group continues
to hold those tenements, the minimum expenditure requirements
(including
interests
in
joint venture arrangements) will be
approximately:
After one year but not later than 5
Within one year
years
Later than 5 years
A Bank guarantee has been provided by Grange Resources Limited,
held by the National Australia Bank, as required under the Capacity
Auction Agreement governed by the Australian Energy Market
Operator Limited (“AEMO”) for the amount of $1,000,000 (2021: Nil).
No material losses are anticipated in respect to the above bank
guarantees and the rehabilitation provisions include these amounts.
(E) CONTINGENT ASSETS AND LIABILITIES
The Group did not have any material contingent assets or liabilities
at the Balance Sheet Date.
NOTE 29. RELATED PARTY
TRANSACTIONS
(A) ULTIMATE PARENT
Grange Resources Limited (Grange) is the ultimate Australian
parent company.
2022
$’000
135,180
52,591
202,870
2021
$’000
124,962
49,990
198,398
2,057,627
2,040,845
2022
$’000
2021
$’000
(B) CAPITAL EXPENDITURE COMMITMENTS
Capital expenditure obligations at the end of the reporting period
but not recognised as liabilities are as follows:
(B) SUBSIDIARIES
Interests in subsidiaries are set out in note 30.
(C) KEY MANAGEMENT PERSONNEL
COMPENSATION
Within one year
After one year but not later than 5
years
(C) CONTRACTUAL OPERATING
EXPENDITURE COMMITMENTS
46,967
26,957
Post-employment benefits
Long-term benefits
Long-term incentives
Obligations to external parties which arise with respect to
legal supply contracts made by the company (other than lease
agreements).
(D) TRANSACTIONS WITH RELATED PARTIES
During the year the following transactions occurred with related
Within one year
After one year but not more than 5
years
parties:
2022
$’000
55,353
15,690
2021
$’000
26,177
26,909
Sales of iron ore products
211,922,470
216,292,463
71,043
53,086
Sales of iron ore products to Jiangsu Shagang International Trade
Co., Ltd, a wholly owned subsidiary of Jiangsu Shagang Group,
under long-term off-take agreements.
(D) BANK GUARANTEES
Bank guarantees have been provided on the Group’s behalf to
secure, on demand by the Minister for Mines and Energy for the
State of Queensland, any sum to a maximum aggregate amount of
$2,012,963 (2021: $2,012,963), in relation to the rehabilitation of the
Highway Reward project.
During the year, 867,501 dry metric tonnes of iron ore products
were sold to Shagang in accordance with the terms of the long term
off-take agreements (2022 Contract Year (1 April 2021 to 31 March
2022): 707,049) (2021 contract year (1 April 2020 to 31 March 2021):
860,542 dmt).
A Bank guarantee has been provided by Grange Resources
(Tasmania) Pty Ltd, held by the Tasmanian Government, as required
under Environmental Management and Pollution Control Act 1994
(EMPCA) for the amount of $3,174,542 (2021 $3,170,622).
(E) OUTSTANDING BALANCES ARISING FROM
TRANSACTIONS WITH RELATED PARTIES
The following balances are outstanding at the end of the reporting
period in relation to transactions with related parties:
A Bank guarantee has been provided by Grange Resources
(Tasmania) Pty Ltd, held by the National Australia Bank, as required
under the Goldamere Agreement and applicable Deeds of Variation,
for the amount of $2,800,000 (2021: $2,800,000). This amount
is a guarantee against the purchase price outstanding with the
Tasmanian government as specified in the Goldamere Agreement.
Pellets
Other
Trade receivables (sales of iron ore products)
2022
$’000
2021
$’000
15,241,644
19,095,808
-
(62,961)
15,241,644
19,032,847
(ii) The price for the iron ore pellets will be based on a price index
used by other market participants as agreed by the parties
having regard to:
(1) Ever Green Resources Co., Limited is incorporated in Hong Kong, and registered
as a foreign company under the Corporations Act 2001.
(2) On 13 February 2023 Grange ROC Property Pty Ltd was deregistered.
Short term employee benefits
1,666,986
1,667,495
a) seaborne iron ore supply and demand conditions
b) available published price benchmarks for iron ore; and
c) product quality differentials.
Transactions between Shagang and Grange must be approved by
non-associated shareholders of Grange, or approved by the Grange
independent directors.
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
There were no trade receivables from or trade payables to related
parties at the current and previous reporting date.
LOANS TO/FROM RELATED PARTIES
There were no loans to or from related parties at the current and
previous reporting date.
NOTE 31. INTEREST IN JOINT
OPERATIONS
Name of Joint Operation
Southdown Magnetite and Associated Pellet
Project(s) – Iron Ore
Reward - Copper / Gold
Highway – Copper
Reward Deeps / Conviction - Copper
Mt Windsor Exploration - Gold / Base
Metals
Durack / Wembley – Exploration Gold
2022
70.00
31.15
30.00
30.00
30.00
15.00
% Interest
2021
70.00
31.15
30.00
30.00
30.00
15.00
The joint operations are not separate legal entities. They are
contractual arrangements between the participants for the sharing
of costs and output and do not in themselves generate revenue and
profit.
Mt Windsor Exploration is a joint venture between BML Holdings Pty
Limited, a subsidiary of Grange Resources Limited, and Thalanga
Copper Mines Pty Ltd. The joint venture was engaged in ore mining
and is now being rehabilitated for future lease relinquishment. The
principal place of business of the joint venture is at 1 Penghana
Road, Queenstown, Tasmania, 7326.
Southdown Magnetite and Associated Pellet Project(s) is a joint
venture between Grange Resources Limited and SRT Australia Pty
Ltd (SRT). The joint venture proposes to mine and export premium
iron ore pellets and concentrates. The principal place of business of
the joint venture is at 34a Alexander Street, Burnie, Tasmania, 7320.
68
69
100
100
100
100
100
100
NOTE 33. EARNINGS PER SHARE
Basic earnings per share
From continuing operations
attributable to the ordinary equity
holders of the Company
Diluted earnings per share
From continuing operations
attributable to the ordinary equity
holders of the Company
2022
Cents
2021
Cents
14.84
27.84
14.84
27.84
(A) RECONCILIATIONS OF EARNINGS USED IN
CALCULATING EARNINGS PER SHARE
Basic earning per share
Profit attributable to the ordinary
equity holders of the Company
used in calculating basic earnings
per share from continuing
operations
Diluted earnings per share
Profit attributable to the ordinary
equity holders of the Company used
in calculating diluted earnings per
share from continuing operations
2022
$’000
2021
$’000
171,735
322,260
171,735
322,260
(B) WEIGHTED AVERAGE NUMBER OF SHARES
USED AS THE DENOMINATOR
Weighted average number of
ordinary shares used as the
denominator in calculating basic
earning per share
Weighted average number of
ordinary shares used as the
denominator in calculating
diluted earning per share
2022
Number
2021
Number
1,157,338,698
1,157,338,698
1,157,486,563
1,157,338,698
Weighted average number of ordinary shares in calculating diluted
earnings per shares includes options of 147,865 over ordinary
shares.
GRANGE RESOURCES ANNUAL REPORT 2022
Note 31. Interest in Joint Operations (continued)
Grange Resources Limited has entered into a binding agreement
with its joint venture partner, SRT Australia Pty Ltd (“SRT”), to re-
acquire SRT’s 30% interest in the Southdown Magnetite Project.
Upon completion of the transaction, Grange will hold 100%
ownership in the Southdown Project.
includes Australian Foreign Investment
Condition precedents
Review Board (FIRB) approval, ministerial consent, and no breach
of seller warranty.
Either party may terminate the SPA if a condition precedent has
not been satisfied or waive by the cut-off date. The cut-off date
for satisfaction of conditions precedent is 180 days of the date of
agreement. SRT can extend cut-off date for FIRB approval condition
by a further 180 days.
The binding agreement also includes:
• Grange to provides SRT with a cash amount, right to future off-
take and cancellation of future royalty obligations.
• Grange has also entered into an off-take rights agreement with
Sojitz Corporation (Sojitz). This provides Sojitz with rights to
acquire up to 30% of future Southdown Project production at
market prices for a period of 20 years plus options for additional
20 years.
• Sojitz has agreed to provide confirmation of its intention to
purchase products from the Southdown Project to support
financing for its development.
NOTE 32. RECONCILIATION OF PROFIT
AFTER INCOME TAX TO NET CASH
INFLOW FROM OPERATING ACTIVITIES
2022
$’000
171,735
1,911
25,532
30,115
(1,022)
484
-
1
18
4,030
(2,255)
(9,371)
2021
$’000
321,615
885
18,400
64,370
(9,196)
21
672
-
447
-
(9,418)
(7,161)
(34,347)
58,863
(903)
60,861
13,622
(540)
(39,664)
15,946
1,914
1,424
(62,926)
79,042
196,945
498,160
Profit for the year
Unwinding of discount
Depreciation and amortisation
Mine properties and development
amortisation
Other non-cash income
Interest expense
Inventory provision
Proceeds from sale of property,
plant and equipment
Loss on disposal of property plant
and equipment
Loss on derecognition of right of
use assets
Gain on financial instruments
Net unrealised foreign exchange
gain
Change in operating assets and liabilities
(Increase) decrease in trade and
other receivables
Increase in inventories
Decrease in deferred tax assets
Increase in trade and other
payables (excluding tax payable)
(Decrease) increase in other
provisions
(Decrease) increase in provision for
income tax payable
Net cash inflow from operating
activities
70
GRANGE RESOURCES ANNUAL REPORT 2022
Note 31. Interest in Joint Operations (continued)
Grange Resources Limited has entered into a binding agreement
with its joint venture partner, SRT Australia Pty Ltd (“SRT”), to re-
acquire SRT’s 30% interest in the Southdown Magnetite Project.
Upon completion of the transaction, Grange will hold 100%
ownership in the Southdown Project.
NOTE 33. EARNINGS PER SHARE
2022
Cents
2021
Cents
Condition precedents
includes Australian Foreign Investment
Review Board (FIRB) approval, ministerial consent, and no breach
Basic earnings per share
From continuing operations
of seller warranty.
attributable to the ordinary equity
14.84
27.84
Either party may terminate the SPA if a condition precedent has
not been satisfied or waive by the cut-off date. The cut-off date
for satisfaction of conditions precedent is 180 days of the date of
agreement. SRT can extend cut-off date for FIRB approval condition
by a further 180 days.
The binding agreement also includes:
• Grange to provides SRT with a cash amount, right to future off-
take and cancellation of future royalty obligations.
• Grange has also entered into an off-take rights agreement with
Sojitz Corporation (Sojitz). This provides Sojitz with rights to
acquire up to 30% of future Southdown Project production at
market prices for a period of 20 years plus options for additional
20 years.
• Sojitz has agreed to provide confirmation of its intention to
purchase products from the Southdown Project to support
financing for its development.
NOTE 32. RECONCILIATION OF PROFIT
AFTER INCOME TAX TO NET CASH
INFLOW FROM OPERATING ACTIVITIES
holders of the Company
Diluted earnings per share
From continuing operations
holders of the Company
attributable to the ordinary equity
14.84
27.84
(A) RECONCILIATIONS OF EARNINGS USED IN
CALCULATING EARNINGS PER SHARE
2022
$’000
2021
$’000
used in calculating basic earnings
171,735
322,260
Basic earning per share
Profit attributable to the ordinary
equity holders of the Company
per share from continuing
operations
Diluted earnings per share
Profit attributable to the ordinary
equity holders of the Company used
in calculating diluted earnings per
share from continuing operations
171,735
322,260
2022
$’000
171,735
1,911
25,532
30,115
(1,022)
484
-
1
18
4,030
(2,255)
(9,371)
2021
$’000
321,615
885
18,400
64,370
(9,196)
21
672
-
-
(B) WEIGHTED AVERAGE NUMBER OF SHARES
USED AS THE DENOMINATOR
Weighted average number of
ordinary shares used as the
denominator in calculating basic
earning per share
Weighted average number of
ordinary shares used as the
denominator in calculating
447
diluted earning per share
2022
Number
2021
Number
1,157,338,698
1,157,338,698
1,157,486,563
1,157,338,698
Weighted average number of ordinary shares in calculating diluted
earnings per shares includes options of 147,865 over ordinary
shares.
(9,418)
(7,161)
Profit for the year
Unwinding of discount
Depreciation and amortisation
Mine properties and development
amortisation
Other non-cash income
Interest expense
Inventory provision
Proceeds from sale of property,
plant and equipment
Loss on disposal of property plant
and equipment
Loss on derecognition of right of
use assets
Gain on financial instruments
Net unrealised foreign exchange
gain
Change in operating assets and liabilities
(Increase) decrease in trade and
other receivables
Increase in inventories
Decrease in deferred tax assets
Increase in trade and other
payables (excluding tax payable)
(Decrease) increase in other
provisions
(Decrease) increase in provision for
income tax payable
Net cash inflow from operating
(34,347)
58,863
(903)
60,861
13,622
(540)
(39,664)
15,946
1,914
1,424
(62,926)
79,042
196,945
498,160
activities
70
NOTE 34. PARENT ENTITY INFORMATION (A) SUMMARY FINANCIAL INFORMATIONThe individual financial statements for the parent entity show the following aggregate amounts:2022$’0002021$’000Balance SheetCurrent Assets1,51436,222Total Assets1,074,811489,115Current liabilities20,35182,241Total liabilities52,023113,983Shareholders' equity Contributed equity392,475392,475 Reserves31,24431,191 Retained profits (losses)599,069(48,534)1,022,788375,132Profit for the year787,207259,972Total comprehensive income for the year787,207259,972(B) CONTINGENT LIABILITIES OF THE PARENT ENTITYOTHER CONTINGENT LIABILITIESPursuant to the terms of an agreement dated 21 November 2003, under which the Company purchased certain tenements comprising the Southdown project, the Company is required to make a further payment of $1,000,000 to MedAire, Inc upon commencement of commercial mining operations from those tenements.NOTE 35. EVENTS OCCURRING AFTER THE REPORTING PERIODSince the end of the financial year the directors have recommended the payment of a 2.0 cent per share, final dividend of $23.1 million. There were no other matters or circumstances arising since 31 December 2022 that has significantly affected, or may significantly affect: i) The Group’s operations in future years; or ii) The results of those operations in future financial years; or iii) The Group’s state of affairs in future financial years. DIRECTORS’ DECLARATIONIn the directors’ opinion: • the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;• the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements;• the attached financial statements and notes give a true and fair view of the Group’s financial position as at 31 December 2022 and of its performance for the financial year ended on that date; and• there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. The directors have been given the declarations required by section 295A of the Corporations Act 2001.Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors ___________________________Michelle LiChairperson of the Board of Directors24 February 2023 71FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2022
72
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
72
73
GRANGE RESOURCES ANNUAL REPORT 2022
74
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
74
75
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
pwc
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 32 to 39 of the directors' report for the
year ended 31 December 2022.
In our opinion, the remuneration report of Grange Resources Limited for the year ended 31 December
2022 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian
iting Standards.
PricewaterhouseCoopers
Partner
Melbourne
24 February 2023
76
77
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
pwc
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 32 to 39 of the directors' report for the
year ended 31 December 2022.
In our opinion, the remuneration report of Grange Resources Limited for the year ended 31 December
2022 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian
iting Standards.
PricewaterhouseCoopers
Partner
Melbourne
24 February 2023
76
77
TENEMENT
INTEREST
PROSPECT
TENEMENT
INTEREST
GRANGE RESOURCES ANNUAL REPORT 2022
TENEMENT SCHEDULE
AS AT 28 FEBRUARY 2023
PROSPECT
TASMANIA
Savage River
2M/2001
14M/2007
11M/2008
4M/2019
EL30/2003
EL8/2014
WESTERN AUSTRALIA
Southdown
M70/1309
G70/217
R70/61
L70/185
L70/186
L70/188
L70/201
L70/225
Wembley
M52/801
Horseshoe Lights
M52/743
Abercromby Well
M53/336
Red Hill
M27/57
Freshwater
M52/278,279,299
M52/295-296
M52/300-301
M52/305-306
M52/369-370
Pilbara
E47/1846
QUEENSLAND
Mt Windsor JV
ML 1571
ML 1734
ML 1739
ML 10028
ML 1758
NORTHERN TERRITORY
Mt Samuel
True Blue
MLC 49
MLC 527
MLC 599
MLC 617
MCC 174
MCC 212
MCC 287-288
MCC 308
MCC 344
MCC 342
MLC 619
Aga Khan
MLC 522
Black Cat
MCC 338-339
MCC316-317
MCC 340-341
30% (13)
30% (13)
30% (13)
30% (13)
30% (13)
0% (14)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
100% (1)
100% (1)
100% (1)
100% (1)
100% (1)
100%(1)
70% (3) (4)
70% (4)
70% (4)
70% (4)
70% (4)
70%(2) (4)
70%(2) (4)
70%(2) (4)
15% (5) (6)
0% (7)
0% (8)
0% (9)
0% (10)
0% (11)
0% (11)
0% (10)
0% (10)
0% (12)
Held by Grange Resources (Tasmania) Pty Ltd.
Under application.
Subject to conditional purchase agreement with Medaire Inc.
Subject to Joint Venture Implementation Agreement with SRT Australia Pty Ltd
Subject to 1% Net Smelter Return royalty with Lac Minerals (Australia) NL
Subject to joint venture agreement with Aragon Resources Pty Ltd
Royalty interest with Horseshoe Metals Limited
Royalty interest with Nova Energy Pty Ltd
Royalty interest with Kanowna Mines Pty Ltd
NOTES:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. Royalty interest with Dampier (Plutonic) Pty Ltd
11. Royalty interest with Billabong Gold Pty Ltd
12. Royalty interest with Fortescue Metals Group Ltd
13. Subject to joint venture agreement with Thalanga Copper Mines Pty Limited
14. Royalty interest with Santexco Pty Ltd
15. Royalty interest with Giants Reef Exploration Pty Ltd
78
GRANGE RESOURCES ANNUAL REPORT 2022
FINANCIAL REPORT
TENEMENT SCHEDULE
AS AT 28 FEBRUARY 2023
PROSPECT
TASMANIA
Savage River
WESTERN AUSTRALIA
Southdown
M70/1309
2M/2001
14M/2007
11M/2008
4M/2019
EL30/2003
EL8/2014
G70/217
R70/61
L70/185
L70/186
L70/188
L70/201
L70/225
Horseshoe Lights
M52/743
Abercromby Well
M53/336
Red Hill
M27/57
Freshwater
M52/278,279,299
M52/295-296
M52/300-301
M52/305-306
M52/369-370
Pilbara
E47/1846
100% (1)
100% (1)
100% (1)
100% (1)
100% (1)
100%(1)
70% (3) (4)
70% (4)
70% (4)
70% (4)
70% (4)
70%(2) (4)
70%(2) (4)
70%(2) (4)
15% (5) (6)
0% (7)
0% (8)
0% (9)
0% (10)
0% (11)
0% (11)
0% (10)
0% (10)
0% (12)
Wembley
M52/801
True Blue
QUEENSLAND
Mt Windsor JV
NORTHERN TERRITORY
Mt Samuel
ML 1571
ML 1734
ML 1739
ML 10028
ML 1758
MLC 49
MLC 527
MLC 599
MLC 617
MCC 174
MCC 212
MCC 308
MCC 344
MCC 342
MLC 619
MCC 287-288
Aga Khan
MLC 522
Black Cat
MCC 338-339
MCC316-317
MCC 340-341
30% (13)
30% (13)
30% (13)
30% (13)
30% (13)
0% (14)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
0% (15)
Held by Grange Resources (Tasmania) Pty Ltd.
Under application.
Subject to conditional purchase agreement with Medaire Inc.
Subject to Joint Venture Implementation Agreement with SRT Australia Pty Ltd
Subject to 1% Net Smelter Return royalty with Lac Minerals (Australia) NL
Subject to joint venture agreement with Aragon Resources Pty Ltd
Royalty interest with Horseshoe Metals Limited
Royalty interest with Nova Energy Pty Ltd
Royalty interest with Kanowna Mines Pty Ltd
10. Royalty interest with Dampier (Plutonic) Pty Ltd
11. Royalty interest with Billabong Gold Pty Ltd
12. Royalty interest with Fortescue Metals Group Ltd
13. Subject to joint venture agreement with Thalanga Copper Mines Pty Limited
14. Royalty interest with Santexco Pty Ltd
15. Royalty interest with Giants Reef Exploration Pty Ltd
NOTES:
1.
2.
3.
4.
5.
6.
7.
8.
9.
78
TENEMENT
INTEREST
PROSPECT
TENEMENT
INTEREST
LIST OF SIGNIFICANT ASX
ANNOUNCEMENTS
FROM 1 JANUARY 2022 THROUGH TO 27 FEBRUARY 2023
Date
Announcement
ASX ADDITIONAL INFORMATION
Additional
information required by the Australian Securities
Exchange Limited and not shown elsewhere in this report is as
follows. The shareholder information set out below was applicable
as at 1 February 2023 except where otherwise indicated.
ORDINARY SHARES
TWENTY LARGEST SHAREHOLDERS AS AT 27 JANUARY 2023
GRR – Quarterly Report for 3 months ended 31
December 2021
Grange Resources Limited Appendix 4E – 31
December 2021
The twenty largest holders of ordinary fully paid shares are listed
below:
Grange Full Yr Statutory Accts 12 Months Ended
31 December 2021
Name
Corporate Governance Statement opens new
window
Number
554,762,656
%
47.9
25 Feb2022
Appendix 4G opens new window
25 Feb 2022
Dividend/Distribution - GRR opens new window
22 Mar 2022
Southdown Magnetite Project Prefeasibility
Study opens new window
23 Mar 2022
Date of AGM opens new window
Notice of Annual General Meeting/Proxy Form
opens new window
GRR - Quarterly Report for 3 months ended 31
March 2022 opens new window
11 May 2022
Results of Meeting opens new window
11 May 2022
AGM Presentation opens new window
Update to Savage River Mineral Resources and
Ore Reserves opens new window
Macquarie Investment Management
Ltd. (Australia)
Annual Report to shareholders opens new
window
Dimensional Fund Advisors LP
(United States)
Shagang International Holdings Ltd
(Hong Kong)
Pacific International Co (Hong Kong)
Realindex Investments Pty Ltd.
(Australia)
DFA Australia Ltd. (Australia)
Acadian Asset Management LLC
(United States)
Vinva Investment Management Ltd.
(Australia)
BlackRock Fund Advisors
(United States)
LSV Asset Management
(United States)
Vanguard Investments Australia Ltd.
(Australia)
Credit Suisse AG (Switzerland)
Swinnerton, John (Australia)
Rathvale Pty Limited (Australia)
Stubbe, E.F.L. (Netherlands)
Norges Bank Investment
Management (Norway)
State Street Global Advisors,
Australia, Ltd. (Australia)
Interactive Brokers - Private Clients
(Various Countries)
First Sentier Investors Ltd.
(Australia)
35,333,399
27,785,852
23,538,026
22,137,322
22,007,307
17,661,462
11,834,090
9,273,321
8,452,120
8,417,027
7,869,069
6,400,000
6,214,400
5,300,000
5,122,245
5,110,102
4,753,767
4,203,524
3.1
2.4
2.0
1.9
1.9
1.5
1.0
0.8
0.7
0.7
0.7
0.6
0.5
0.5
0.4
0.4
0.4
0.4
0.4
AllianceBernstein LP (United States)
4,157,231
Sub-total
790,332,920
68.3
Proposed issue of securities - GRR opens new
window
Notification regarding unquoted securities - GRR
opens new window
Notification of cessation of securities - GRR
opens new window
Change
window
in substantial holding opens new
GRR - Quarterly Report for 3 months ended 30
June 2022 opens new window
Half Yearly Report and Accounts opens new
window
Appendix 4D - Half Year Ending 30 June 2022
opens new window
GRR - ESG Baseline Report August 2022 opens
new window
GRR - ESG Baseline Report August 2022 opens
new window
S&P DJI Announces September 2022 Quarterly
Rebalance opens new window
GRR - Quarterly Report for 3 months ended 30
September 2022 opens new window
Grange Re-acquires
Magnetite Project opens new window
Interest
in Southdown
28 Jan 2022
25 Feb2022
25 Feb2022
25 Feb2022
31 Mar 2022
11 Apr 2022
11 Apr 2022
26 Apr 2022
16 May 2022
1 Jun 2022
7 Jun 2022
10 Jun 2022
26 Jul 2022
29 Aug 2022
29 Aug 2022
29 Aug 2022
31 Aug 2022
2 Sep 2022
27 Oct 2022
12 Dec 2022
11 Jan 2023
27 Jan 2023
Ceasing to be a substantial holder opens new
window
GRR - Quarterly Report for 3 months ended 31
December 2022 opens new window
79
GRANGE RESOURCES ANNUAL REPORT 2022
DISTRIBUTION OF EQUITY SECURITIES
Analysis of number of shareholders by size and holding:
UNQUOTED SECURITIES
Ordinary
Shares
Director
Options
Employee
Options
Other
Options
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - and over
2,006
5,519
3,140
460
Total
11,125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Security Code
GRRAU
Security Name
Performance
Rights
Total
Holders
Total Holdings
3
295,728
DISTRIBUTION OF UNQUOTED
SECURITIES
Analysis of number of security holders by size and holding:
The number of shareholders holding less than a marketable parcel
of Ordinary Shares at 27 January 2023 was 530.
Performance
Rights
Director
Options
Employee
Options
Other
Options
VOTING RIGHTS
All shares carry one vote per share without restriction.
SUBSTANTIAL SHAREHOLDERS
An extract of the Company’s Register of Substantial Shareholders
as at 27 January 2023 is set out below:
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
-
-
2
1
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name
Shagang International Holdings
Ltd (Hong Kong)
Number of fully
paid shares
Voting
power
554,762,656
47.9%
SUBSTANTIAL UNQUOTED
SECURITYHOLDERS
An extract of the Company’s Register of Substantial Unquoted
Securityholders as at 27 January 2023 is set out below:
SECURITIES SUBJECT TO VOLUNTARY
ESCROW
The following securities are subject to voluntary escrow:
Class of Security
Number of paid
Securities
Escrow
period ends
Fully Paid Ordinary Shares
Nil Not applicable
Name
Mr Honglin Zhao
Mr Ben Maynard
Mr Thanh Steven Phan
Number of
Performance
Rights
140,343
80,679
74,706
Voting
Power
47.46%
27.28%
25.26%
80
GRANGE RESOURCES ANNUAL REPORT 2022
DISTRIBUTION OF EQUITY SECURITIES
UNQUOTED SECURITIES
Analysis of number of shareholders by size and holding:
Ordinary
Director
Employee
Other
Shares
Options
Options
Options
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - and over
2,006
5,519
3,140
460
Total
11,125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Security Code
GRRAU
Security Name
Total Holdings
Total
Holders
Performance
Rights
3
295,728
DISTRIBUTION OF UNQUOTED
SECURITIES
Analysis of number of security holders by size and holding:
The number of shareholders holding less than a marketable parcel
of Ordinary Shares at 27 January 2023 was 530.
Performance
Director
Employee
Other
Rights
Options
Options
Options
VOTING RIGHTS
All shares carry one vote per share without restriction.
SUBSTANTIAL SHAREHOLDERS
An extract of the Company’s Register of Substantial Shareholders
Total
as at 27 January 2023 is set out below:
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - and over
-
-
2
1
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name
Shagang International Holdings
Ltd (Hong Kong)
Number of fully
paid shares
Voting
power
554,762,656
47.9%
SUBSTANTIAL UNQUOTED
SECURITYHOLDERS
An extract of the Company’s Register of Substantial Unquoted
Securityholders as at 27 January 2023 is set out below:
SECURITIES SUBJECT TO VOLUNTARY
ESCROW
The following securities are subject to voluntary escrow:
Class of Security
Number of paid
Escrow
Securities
period ends
Fully Paid Ordinary Shares
Nil Not applicable
Name
Mr Honglin Zhao
Mr Ben Maynard
Mr Thanh Steven Phan
Number of
Performance
Rights
140,343
80,679
74,706
Voting
Power
47.46%
27.28%
25.26%
80
GRANGE RESOURCES LIMITEDBOARD OF DIRECTORSMichelle Li ChairpersonYan Jia Non-Executive Director, Deputy ChairpersonMichael Dontschuk Non-Executive Director Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Managing Director / Chief Executive OfficerChongtao Xu Executive Director (appointed 1 March 2023)COMPANY SECRETARYPiers LewisREGISTERED OFFICEGrange Resources Limited ABN 80 009 132 40534a Alexander Street, BURNIE, TAS 7320Telephone: + 61 (3) 6430 0222Email: GRR.Info@grangeresources.com.auSHARE REGISTRYAdvance Share Registry Services Limited110 Stirling HighwayNedlands, WA 6009AUDITORSPricewaterhouseCoopers2 Riverside QuaySOUTHBANK, VIC 3006STOCK EXCHANGEGrange Resources Limited is listed on the ASX Limited (ASX Code: GRR) and the “OTC” Markets in Berlin, Munich, Stuttgart and Frankfurt in Germany (Code: WKN. 917447)WEBSITEwww.grangeresources.com.auThis report has been printed on recycled paper. A
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Burnie Office - Tasmania
(Registered Office)
34A Alexander Street
Burnie, TAS 7320
PO Box 659
Burnie, TAS 7320
+61 (3) 6430 0222
grr.info@grangeresources.com.au
ANNUAL
REPORT 2022