ANNUAL REPORT 2023 GRANGE RESOURCES LIMITEDANNUAL REPORT2023Burnie Office - Tasmania (Registered Office) 34A Alexander Street Burnie, TAS 7320PO Box 659Burnie, TAS 7320 +61 (3) 6430 0222 grr.info@grangeresources.com.au 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 2038. 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 term 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 the strategic options 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 Chairperson (resigned on 6 September 2023)Tianxiao Shen Non-Executive Director (appointed on 21 December 2023)Michael Dontschuk Non-Executive Director (resigned on 20 March 2024)Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Chief Executive Officer / Managing DirectorChongtao Xu Executive Director (appointed on 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 REGISTRYAutomic GroupLevel 5, 126 Phillip StreetSydney, NSW 2000AUDITORSPricewaterhouseCoopers2 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. The Board has reviewed our five key strategic drivers that underpin the development of Grange’s business. These focus on: Delivering 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 Driving shareholder value. Grange’s business and operational planning is directed to enact these strategies.DELIVERING SUSTAINABLE LIFE-OF-MINE-PLAN The Life-of-Mine-Plan is a key to underpin investment decisions and to optimise business execution. Early 2024, the Company announced the completion of the Definitive Feasibility Study (DFS) into underground mining below North Pit and its integration with the Company’s current opencut mine at Savage River in Tasmania. The robust financial outcomes of the DFS demonstrate that an underground mine is technically and economically viable for the North Pit ore body. The findings of the DFS have been integrated with the transition from opencut mining to demonstrate the effective implementation of the underground project alongside the current operation.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; and investment in our geotechnical model and controls. 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 2024 and Grange will continue to invest in stripping Centre Pit and North Pit to deliver future high-grade ore. Focused condition monitoring and maintenance will enable us to sustain and extend the life of our valuable infrastructure and assets. 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. These are 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.2024 PRIORITIES3 OPERATIONAL OVERVIEW• Achieved over 2,235 days Lost Time Injury Free before 1 Lost Time Injury occurred in Q2. LTI free for the remainder of the year.• Mining activities have focused on waste stripping on the east wall of North Pit with the implementation of the refined pit design.• Ore delivered from the main ore zone at Centre Pit supporting approximately 2.59 million tonnes of concentrate production during the year.• Pellet production of 2.34 million tonnes for the year compared to 2.52 million tonnes for the prior year.• Definitive feasibility study for underground mining in North Pit and integration into the current life-of-mine plan completed (see market release dated 28 February 2024). • Completed the High Efficiency Mixer installation at Port Latta Pellet Plant to enable the improvement of binder addition and pellet quality.• Optimisation of the Intermediate Air System to Furnace 4 continues. Furnace 4 has run without anthracite throughout 2023, resulting in a reduction of C02-e emissions from the combustion of coal.FINANCIAL OVERVIEW • Total iron ore product sales of 2.64 million tonnes for the year compared to 2.57 million tonnes for the prior year. • Profit after tax of $150.1 million for the year compared to $171.7 million for the prior year.• Average realised product price (FOB Port Latta) of $212.83 per tonne for the year compared to $203.18 for the prior year.• Unit C1 cash operating costs of $136.65 per tonne for the year compared to $120.64 for the prior year.• Cash and liquid investments of $282.6 million at the end of year compared to $298.6 million at the end of the prior year.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. 2023 OVERVIEW2GRANGE RESOURCES ANNUAL REPORT 2023 MAGNETITEMagnetite 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.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. 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.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 2038. 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. As well as this profitable magnetite operation, Grange owns 100% in of the Southdown magnetite mining project near Albany in Western Australia. ABOUT THE GRANGE BUSINESS5ABOUT THE GRANGE BUSINESSBUILD 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 Company acknowledges that the world is moving to a low-carbon future and has developed a road map to reduce emissions across our operations and the tonnes of CO2/tonne of pellet produced. 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.With the decarbonisation of the steel industry and evolution of the “Green Steel” market, this will position Grange with an opportunity to obtain a potential “Green Premium” for our low CO2 high quality products. Whilst this is yet to be confirmed, we expect that the industry will evolve and with the planned reduction of our emissions, Grange will be well positioned to take advantage of any new green premiums as they evolve.DRIVE SHAREHOLDER VALUEGrange will continue to demonstrate consistency of financial performance to ensure sustainable long-term growth of the Company. With the completion of the DFS and integration of the underground plan with the current opencut mine at Savage River, Tasmania, the Company will be able to extend its current life-of-mine and reduce its cost profile once the underground mine is in full production. This will position the Company well during cycles of lower iron ore prices. With the world moving to a low-carbon future, the Company’s road map to reducing emissions across the operations and the reduction in CO2-e tonnes per tonne of product will also position the Company well in realising any additional value the market will place on low-carbon iron ore pellets.The Company will focus on developing a framework that will optimise the allocation of capital. The framework will ensure capital is allocated and managed to maximise sustainable returns.4GRANGE RESOURCES ANNUAL REPORT 2023 GRANGE RESOURCES ANNUAL REPORT 2023
CHAIRPERSON’S &
CHIEF EXECUTIVE OFFICER’S
REVIEW
Dear Shareholders,
Our strong results in FY2023 were achieved through a focused
strategy on capital expenditure, supported by a continued focus
on productivity and safety. The financial discipline has enabled us
to invest in mine development initiatives while at the same time
delivering 2 cents per share fully franked. 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 position us well, managing
and responding to changes and capturing opportunities to grow
shareholder value over time. We maintain a relentless focus on the
health and safety of our people and support the communities in
which we operate.
2023 REVIEW
The iron ore market was resilient throughout 2023. The iron ore
price dipped in Q2 and Q3 to a low of under US$100 per tonne in
May 2023 with concerns over the issues in the property sector in
China and cooling global economic growth. The price subsequently
rebounded and reached its highest level of approximately US$145
per tonne at the end of 2023.
We have achieved over 2,235 days Lost Time Injury Free before 1
Lost Time Injury occurred in Q2. The Company remained LTI free for
the remainder of the year. The Company delivered another strong
year of financial results. We achieved a profit after tax of $150.1
million (2022: $171.7million), on revenues from mining operations
of $614.7 million (2022: $594.6 million) from improved iron ore
prices with average product prices of $212.83 per tonne (2022:
$203.18 per tonne) (FOB Port Latta). Total iron ore product sales
of 2.64 million tonnes (2022: 2.57 million tonnes) were achieved.
Increased in C1 cash operating costs of $136.65 per tonne (2022:
$120.64 per tonne). A final dividend of 2 cents per share dividends
or $23.2 million declared for shareholders this year. Cash and liquid
investments positioned at $282.6 million (2022: $298.6 million) at
the end of the year.
Mining activities have continued to focus on the cutbacks in both
North Pit and Centre Pit. Ore from the main ore zone in Centre Pit
has been delivered throughout the year. This has been blended
with existing stockpiles to sustain production and yield high
quality pellets. The cutback on the east wall of North Pit continues
with the implementation of the refined pit design. The current
mining of ore in Centre Pit and waste removal in North Pit will
progress further in 2024. We have made strategic and exciting
investments into the North Pit Underground development. The
Definitive Feasibility Study into underground mining in North Pit
has been completed and the results have been integrated into the
operational life-of-mine plan. The study confirms the technical and
economic viability of underground block cave mining at Savage
River. The integration will see the current North Pit open pit mining
6
transition to an underground block cave mine over the next five
years. The integrated new life-of-mine plan delivers and sustains a
mine life of 15 years with excellent financial returns, a substantial
reduction of mining costs of 30% in operation costs. The study also
confirmed a significant (80 per cent) reduction in carbon emissions
at the Savage River Mine with the application of electric mining
equipment and material handling systems underground. This is
in line with the Company’s Environmental, Social and Governance
(ESG) initiatives to develop Green Pellet production. Based on the
progression of the study, Grange has entered a contract to extend
the current exploration decline by 1,500m in 2024. The extension
to the decline will provide access to the extraction level horizon
and provide essential data to finalise mine designs to a construction
ready stage. The extension will also provide new underground drill
platforms that Grange plans to utilise for further underground
exploration with a view to enhance the long-term underground
mining opportunities. There were also a number of improvement
projects in the pellet plant at Port Latta. This installation of High
Efficiency Mixer will enable the delivery of more homogeneous
blending of bentonite and concentrate equally across all furnace
lines. This in turn will serve to improve our control and final pellet
quality consistency. Optimisation of the Intermediate Air System
continued in 2023, balancing air from the Intermediate Air and the
Main Blower System. Furnace stability has significantly improved,
and Furnace 4 is now running consistently and delivering high
rates and quality. Work continues on embedding system changes
and undertaking the engineering study to apply modifications to
the other furnace lines. Furnace 4 has been operating without the
addition of anthracite. This has seen a reduction in our anthracite
use at Port Latta and consequently a reduction in CO2-e emissions
associated with the combustion of coal.
During 2023 the Company completed the reacquisition of SRT’s 30%
interest in the Southdown Project. Grange now holds 100 per cent
ownership in the Project. Progress of the definitive feasibility study
on a 5 Mtpa development case is under review.
Climate change is a major 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. The
baseline report demonstrates Grange’s commitment to aligning
the business, where appropriate, to the sustainable development
goals. 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 involves 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.Our executive team is driving this change, with the full support of the Board, reinforcing the importance of mindsets and behaviours that ensure everyone, everywhere in our operations feels safe, valued and empowered.OUTLOOK There is no doubt we are navigating through turbulent times. The geopolitical landscape has become more complex and volatile, and the economic outlook remains challenging. Global growth is expected to slow with significant uncertainties in 2024. The iron ore pellet market remains uncertain. China, the world’s top steel producer lacks confidence in its economy. Deceleration in economic activities in China protracted its property sector’s weakness. Steel markets are weak and iron ore prices have fallen by over 15% since January. An escalation in tensions in the Middle East could drive higher energy prices. Weaker than expected global demand and trade pose further downside risks. Geopolitical risks in the region, including an escalation of Russian invasion of Ukraine are elevated. Despite the uncertain conditions that we currently face, the long-term outlook for our sector remains positive. We continued building 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. Decarbonisation ambitions for the sector provide a unique opportunity for us. Our focus is on growing our business while decarbonising, providing a high quality, low impurity iron ore pellet product to our customers that supports the transition to a low-carbon economy, and delivering attractive returns to our shareholders. 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 ensuring permits and project assets remain in good standing of the Southdown project in Western Australia in all tenements, by:• Optimising the integration and transition of the Life-of-Mine Plan from opencut to underground.• Producing high grade ore from Centre Pit • Delivering on secured off-take agreements • Maintaining access to ore with continuing investment in mine development • Maintaining critical process infrastructure • Continuing focus on improving productivity and implementing cost control projects 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 aging infrastructure• Project evaluation and development costs and delivery• Management of risks associated with underground mining and the transitionWe will continue to explore options along the value chain. We’ll continue our focus on our strategy, building an environment of trust where everyone feels safe, respected and empowered to drive our performance and enable us to keep delivering for all our stakeholders in 2024.THANK YOUOn behalf of Grange’s Board, once again, 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 best place us for a prosperous future. And to our shareholders, thank you for your continued support.Michelle Li Honglin ZhaoChairman Chief Executive Officer7 SAFETY PERFORMANCEGrange operations have achieved over 2,235 days Lost Time Injury Free (LTIFR) before 1 Lost Time Injury in Q2 and maintained LTI free for the remainder of the year. Unfortunately, one injury during the year did require a sterile recovery period for sutures. While it was the first LTI in over six years, the team has embedded key learnings from this incident into continually improving the safety of the workplace. Management is continuing to maintain a focus on lead indicators, hazard identification and risk management. This has helped Grange manage through a period of major improvement projects and working in multi-stage mining pits and ending with a better than industry standard lag indicators for 2023 and fewer reportable incidents. The workforce is highly commended for these results given the level of new employees and short-term contractors involved during the period. While there were more Disabling Injuries (DIs) during 2023 than the previous year, the bulk of these were short term injuries where the injured workers all actively contributed to worthwhile tasks, primarily training, while away from normal duties. It is noticeable that contractors make up a large part of these statistics.2023 saw us introduce the Hexagon HxGN MineProtect Operator Alertness System (OAS) and commence the roll-out of the Hexagon Collision Avoidance System (CAS) for our large mining fleet. OAS in particular has successfully given us an advantage on fatigue management for our operations workforce and is minimizing the risks of this significant hazard. For the first time in the history of the operation management can help tired operators identify fatigue before an incident occurs. This system is industry best practice and promises to reduce injuries from fatigue and reduced awareness, another continuous improvement milestone for Grange.9KEY OPERATING AND FINANCIAL HIGHLIGHTSCONCENTRATE PRODUCED2.59MtPELLETS PRODUCED2.34MtC1 CASH OPERATING COSTA$137/tIRON ORE PRODUCT SALES2.64Mt NPATA$150MCASH AND LIQUID INVESTMENTSA$283MAVERAGE REALISED PRICE (FOB PORT LATTA) US$142/tCONSOLIDATED SALES REVENUE (AVERAGE AUD:USD=0.6675)A$614MEPS (DILUTED) 12.96centsDIVIDENDA$23M8GRANGE RESOURCES ANNUAL REPORT 2023 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. Anthracite was identified as having the
highest emissions per joule of energy.
As part of our strategic vision to reduce carbon emissions across
the operation we commenced a furnace efficiency upgrade program
to remove the requirement for anthracite and reduce total energy
requirement at Port Latta. During 2023 we reduced anthracite usage
by 1,646 tonnes reducing the emissions produced by the burning of
coal by 4,307 tonnes.1
In late 2021, Grange become a founding member and core partner
of the Heavy Industry Low Carbon Transition Cooperative Research
Centre (HILT-CRC). We continue to work with HILT-CRC to
investigate decarbonised production of green iron products from
magnetite ores. This encompasses consideration of technologies,
data and demonstration at sufficient scale to support end-use
adoption of products, such as:
• Low-carbon
induration routes,
full
replacement of natural gas with hydrogen and electrically
generated heat.
including partial
to
•
Increased domestic pre-processing of magnetite concentrate
prior to export.
• Unlocking new ore bodies through low-carbon processing routes
using low-carbon heat sources (hydrogen, electrification or solar
thermal.
• New methods to lower the energy requirements and CO2
intensity for beneficiation, calcining and induration for Green
Pellets (BF and DRI), spanning blending, use of renewables and
hydrogen.
In 2021, Grange completed a study on the use of Hydrogen at Port
Latta. 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-funded by the Tasmanian Government and in collaboration with
Hatch, was aimed at investigating the feasibility of the conversion
of 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). Current program works
include energy efficiency studies, aligned with reduced carbon
emissions for future energy requirements.
Grange has extended the research into hydrogen as a heat source.
It was determined that heat could be recovered from pellets
discharging from the furnaces. This, combined with electrical
resistance heaters and supplemented by hydrogen could achieve
the required heat input for pellet induration. This path significantly
improved the financial and commercial outcomes and is the
preferred path that Grange is continuing to research and develop.
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, in alignment with our
carbon reduction roadmap.
Grange produced emissions in the order of 0.12 t CO2/Mt of pellet
production in 2023. This places the Company in the second quartile
of the emissions curve and in 22nd place of pellet producing assets
in 2023.
SCOPE 1 & 2 SITE EMISSIONS CURVE - PELLETS, 2023
2
1This is reflected in Grange’s NGERs reporting for FY2023.
2Source: CRU
11
NORTH PIT UNDERGROUND DEVELOPMENT PROJECT In early 2024, the Company completed the Definitive Feasibility Study (DFS) into the potential for underground mining below North Pit and its integration with the Company’s current opencut mine at Savage River Tasmania. The robust financial outcomes of the DFS demonstrate that an underground mine is technically and economically viable for the North Pit ore body. The findings of the DFS have been integrated with the transition from opencut mining to demonstrate the effective implementation of the underground project alongside the current operation (see market release dated 28 February 2024).DFS SUMMARY • Definitive Feasibility Study presents a technically achievable and financially favourable outcome with a 30% average reduction in operating costs compared to current open pit mining costs. The underground mine will transition North Pit from opencut to an underground block cave and sub level cave mine over the next five years.• Total open pit and underground scheduled ore production of 90.2 million tonnes of ore at approximately 45% DTR, returning a concentrate quality above 65% Fe. Total estimated opencut and underground production of 40.8 million tonnes of magnetite concentrate over 15 years.• The underground mine will deliver 64 million tonnes of ore and produces 28 million tonnes of concentrate with an iron grade of over 66% over 15 years. Production from underground will ramp up over the five years with forecast sales of 2.9 million tonnes of iron ore products from 2029.• Integration with the current opencut mining operation delivers excellent projected financial returns with a post-tax NPV of ~A$775 million from the generation of ~A$2,122 million in cash returns over the next 15 years. An internal rate of return of 34% based on an average product price of approximately A$177/tonne and achieves a payback period of 6.4 years from the commencement of development in 2025.• Capital investment estimate in the underground mine is ~A$891 million with preproduction capital investment of ~A$416 million supported by existing infrastructure. This is to be funded from existing cash reserves and forecast future cash flows.• Carbon emissions targeted to reduce by 80% at the Savage River Mine, with the application of electric mining equipment and material handling systems underground. This is in line with the Company’s Environmental, Social and Governance (ESG) initiatives to develop Green Pellet Production.• Savage River’s total Ore Reserve has increased by 12.5 million tonnes to 109 million tonnes through the integration of the underground operation. The demonstrated ore continuity provides potential for further increases to mine life with the extraction of the high-grade resource at greater depth.• Over two kilometres of exploration decline has been completed. This reduces the risk for many technical and cost elements of the project, with a further commitment for additional decline development and geotechnical investigation drives in 2024. The Company is now proceeding with engineering planning work, finalisation of the development application and extension of the existing exploration decline. Final board and regulatory approval for construction is expected towards the end of 2024.10GRANGE RESOURCES ANNUAL REPORT 2023 GRANGE RESOURCES ANNUAL REPORT 2023
EXPLORATION AND EVALUATION
MINERAL RESOURCES
There was no diamond drilling completed in 2023 on surface or
underground for resource definition. Two geotechnical holes were
drilled as cover holes to inform potential hazards for a planned vent
rise.
The Centre Pit Mineral Resource has been updated since the last
annual report with a new geological and statistical estimation
utilising the 2022 Centre Pit drilling program. The result for the
Centre Pit Resource is an increase in Mineral Resource tonnes with
a decrease in DTR grade. The quantum of change is not considered
significant to Savage River’s total Mineral Resources or Ore
Reserves.
The Mineral Resource stands at 472 million tonnes at 44.4% DTR,
maintaining our resource from the 2022 annual report, with a small
reduction due to mining depletion. The decrease in total Mineral
Resource is considered minor given the quantum of the total
Mineral Resources, annual mine production levels, and the ongoing
nature of exploration activities.
Further resource definition drilling of North Pit from underground
is expected to commence in 2024. 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.
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 2023. The
mining of ore throughout the year focused on ore supply from
North Pit North Pit in Q1-Q2 and Centre Pit in Q3-Q4. The Mineral
Resource has been depleted since the previous estimate dated 31
December 2022 as a result of mining offset by updates from the
drilling program. Ore Reserves have increased due to inclusion of
underground ore reserves in North Pit with minor offsets by 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 do
not currently meet the required level of technical planning and
economic viability hurdle at the time of last review.
A summary of the total Mineral Resources for Savage River as at
31 December 2023
As at December 2023
As at December 2022
Tonnes
(Mt)
Grade
% DTR1
Tonnes
(Mt)
Grade
% DTR1
Measured
Indicated
Inferred
Total
169.1
161.2
141.5
471.8
52.0
42.6
37.5
44.4
173.0
172.6
139.4
485.0
51.5
41.8
37.4
44.5
• Mineral resources are reported above a cut-off grade of 15% DTR.
ORE RESERVE
A summary of the Ore Reserve for Savage River as at
31 December 2023
As at December 2023
As at December 2022
Tonnes
(Mt)
Grade
% DTR1
Tonnes
(Mt)
Grade
% DTR1
Proved
Probable
Total
34.7
74.5
109.2
45.7
44.1
44.6
69.0
27.7
96.7
49.3
40.1
46.7
• Ore Reserves are reported above a cut-off grade of 15% DTR for Opencut and
28%-30% DTR for Underground.
Ore Reserves have increased by 12.5 million tonnes due to the
inclusion of the underground Ore Reserves. Opencut Ore Reserves
reduced with a large proportion now transferred and planned to
be mined from underground. All underground Ore Reserves have
been classified as Probable due to the inherent mixing that occurs in
caving operations and lower confidence in the dilution and recovery
modifying factors.
A detailed statement of the Mineral Resources and Ore Reserves can
be found in the ASX announcement dated 28-February-2024. 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 continues to believe that responsible occupational Health
and Safety management with sound environmental and social
responsibility (HSE) practices are integral to an efficient and
successful company. Our “Safety and Environment Management
System” (SEMS), which supports OHS & ESR policies and defines
the required standards to which any Grange facility must operate,
is continually monitored and updated to reflect any changes in the
WHS regulations or WHS best practice. The OHS policy is reviewed
and signed off annually by our executive team and leads us towards
continual improvement of our Safety Systems.
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.
With the increased focus towards managing psychosocial hazards
at work, and the introduction of a Code of Practice on the topic,
Grange’s integrated OHS & ESR Management Systems have been
bolstered by a review of the risk assessments covering this hazard.
During 2023 we released the revised “Supervisor’s Handbook”
into the MOS toolbox with consultation and training with key
stakeholders. This work is an excellent reference to SEMS, our
Mission Statement and our Safety Principles.
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 Board has been monitoring a 3-year HSE Strategic Plan which
culminated in 2023. During this year a new strategic plan will be
developed and completed for introduction in 2024. 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 effectiveness of our systems and safety management in general
is well demonstrated by the consistent and measurable positive
record book entries received after each WST inspector visit to our
operational sites.
During 2023 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.
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 continued
further development, saving considerable costs, while
maintaining a high standard of response and continuing to
improve 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.
1 DTR (Davis Tube Recovery) is the percentage of material recovered using a laboratory scale version of the ore beneficiation process that separates magnetic from
non-magnetic fractions. It is the most appropriate assay technique for determination of magnetite recovery from ore at Savage River
12
13
GRANGE RESOURCES ANNUAL REPORT 2023
• 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.
• Development continued on the highwall scaling excavator which
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
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 2023 with our other lead indicators,
dedicated Area Inspections covering all areas on site, formalised
Task Observations for management and key personnel comprising
our Lead Indicator Key Performance Indicators (KPI’s). The lead
indicators have been strengthened by the addition of specific “KPIs”
for the recommenced underground workings with our underground
team and PYBAR.
Completion and tracking of lead indicators utilises 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 excellent lost time injury (LTI) free record, seeing
us now with only 1 LTI in more than 6 years.
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 2023 Grange have continued to train in the “ICAM” (Incident
Cause Analysis Method) investigation process and developed a
“Safety Dashboard” for collation of information from 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 provides an outlet for GMIRM (Global Mining Industry Risk
Management) training sponsored by the Chief inspector of Mines
and we will continue this interaction during 2024.
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 2023 and have budgeted to continue GMIRM training in 2024
All GMIRM seminars were, and will be, 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.
Internally, Grange has reviewed the HSR “Workgroups” to include
an electrical workgroup and HSR/Deputy at Port Latta, and in 2024
will look at similar for the Savage River Concentrator workers.
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 completed the 2020-2023 three-
year Strategic Plan for HSE, and the development of the 2024-2026
three-year Strategic Plan for HSE.
The new plan aims to consolidate safety improvements and target
areas of lesser performance with a focus on training and safety
leadership while recognising the shift towards underground mining
at Savage River.
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 RESPONSIBILITY
Grange 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 2023 we continued to host several work
experience students to have a week each on site and we hosted
several school tours.
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 and 2024. Additionally, our HSE
team has worked as an active member with the Minerals Council
Australia “Fatality Prevention Project”
14
ENVIRONMENTAL
LEGISLATIVE APPROVAL
Grange obtained approvals to operate in 1996 and 1997 under
the Land Use Planning and Approvals Act 1993 (LUPA) and the
Environmental Management and Pollution Control Act 1994
(EMPCA) as well as the Goldamere Pty Ltd (Agreement) Act 1996 and
Mineral Resources Development Act 1995. This approval covers an
expected mine and processing life at Savage River, gangue removal
and concentrating at Savage River, and pelletising at Port Latta.
The original land use permit conditions for Savage River and Port
Latta are contained in Environmental Protection Notices 248/2 and
302/2 respectively.
Grange received planning approval from the Waratah Wynyard
Council and the Tasmanian Environment Protection Authority
for the construction of South Deposit Tailings Storage Facility in
March 2014 under PCE 8808, as well as federal approval under the
Environment Protection and Biodiversity Conservation Act 1999 in
April 2014 under EPBC approval 6393. South Deposit cutback was
approved in August 2014 but is now largely regulated under the
Centre Pit Expansion and South Deposit Backfill Dump through
DA 216/2021 and Permit Conditions-Environmental No. 10995. In
January 2020, approval was granted under Environment Protection
Notice 10006/2 for the North Pit Underground exploration decline.
GOLDAMERE ACT
The Goldamere Pty Ltd (Agreement) Act 1996 (referred to as the
Goldamere Act) makes provisions for Grange’s operation under
Tasmanian legislation and provides a framework for Grange to
repay the Tasmanian Government for the purchase of the mine
through remediation works. The Goldamere Act relieves Grange
of any environmental liability in relation to legacy contamination,
pollutants or pollution caused by operations prior to the date of
the Goldamere Agreement (Royal Ascent received 16th) December
1996). 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. Notwithstanding, Grange is required to operate to Best
Practice Environmental Management (BPEM). 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.
PLANNING APPROVALS
Grange obtained planning approval subject to a series of
environmental permit conditions in 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, Waratah Wynyard
Council, and the Tasmanian EPA in relation to planning, and
environmental approval for the underground project. A development
application submission was made to Waratah Wynyard Council on
29 February 2024 for the underground project. A 28-day public
advertising period of the Environmental Impact Statement is
expected in April 2024.
ENVIRONMENTAL MANAGEMENT PLANS
The EMP was first approved by the (then) Department of
Environment Parks, Heritage and the Arts when Savage River
and Port Latta operations re-commenced in October 1997. A later
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 etc.
Amendments can also be made to reflect changing operational
circumstances and an increasing knowledge base 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 to EPA.
Revised EMPs reflect BPEM, current mine planning, and focus
on closure requirements and rehabilitation. A revised EMP was
submitted to the EPA in November 2022, and an updated ERP was
provided to EPA in October 2023.
The Tasmanian EPA issued EPN 10006/2 in January 2020 enabling
the construction of the Exploration Decline for the North Pit
Underground Project. The EMP and ERP have been updated to
reflect the relevant changes that underground mining methodology
will introduce.
SAVAGE RIVER REHABILITATION PROJECT
(“SRRP”)
The Savage River Rehabilitation Project (SRRP), initiated in 1997 as
a collaboration between the government and the mining company,
with the objective to mitigate the effects of historical pollution at
Savage River. Grange has upheld this partnership model established
by the SRRP and has been actively involved in addressing the
legacy pollution issues at Savage River and Port Latta.
The Goldamere Act set out the financial provisions for the SRRP and
delineated the duties of a collaborative Management Committee.
This Committee consists of two members from the EPA, one from
Mineral Resources Tasmania (part of the Department of State
Growth), and two from Grange Resources Tasmania. Funding
15
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 2023 to map across process and reporting improvements to align to the ESG core metrics. Grange published its 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 appropriate, to the sustainable development goals. 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.17for the SRRP is allocated across two accounts: the Environment Protection Fund, which is an interest-bearing statutory Trust, and the Purchase Price account, which represents the debt owed to the Crown and is gradually settled by Grange over time through remediation works. Grange representatives meet with representatives from SRRP on a regular basis to develop and implement remediation works at Savage River and Port Latta. Grange has collaboratively contracted with the SRRP for works including construction, management and development of waste rock dump covers, acid drainage 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. The SRRP Strategic Plan is publicly available via the EPA Tasmania website. PRINCIPAL ENVIRONMENTAL ISSUESWASTE ROCK, TAILINGS AND WATER MANAGEMENT – SAVAGE RIVER• Water, tailings and waste rock management at Savage River are principal environmental issues that entail several key strategies such as:- 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 to ensure regulatory compliance in these areas. • Grange continued to progress design and construction work for the Main Creek Tails Dam closure during 2023. It is expected that the closure process will take approximately one more year 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 in relation 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 related to mine closure include waste rock dump maintenance, tailings management, future use of infrastructure and a five-year post life of mine monitoring and maintenance plan. All of these aspects have been addressed in the ERP, which is submitted to EPA on an ongoing 3-yearly basis.16GRANGE RESOURCES ANNUAL REPORT 2023 SOUTHDOWN
MAGNETITE PROJECT
The Southdown Magnetite Project (“Southdown” or “the Project”),
is situated 90km from the city of Albany in Western Australia. In
2023, the Company completed the agreement with its joint venture
partner, SRT to reacquire SRT’s 30 per cent interest in the Project.
The transaction settled in July 2023. Grange now holds 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, the current project base case
is to produce 5 Mt of high-grade magnetite concentrate per annum
with scalable options to produce up to 10 Mt per annum.
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. Progress on the DFS is under review.
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 opencut 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 supply options for the construction and operation of
the mine include a mix of recycled wastewater from the Water
Corporation’s Wastewater Treatment Plant and groundwater
from local borefields, or from a seawater desalination plant
planned for Cape Riche, which already has environmental
approvals. Electricity supply options for the project continue to
focus on maximising access to renewable energy.
· 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 hydraulic
face shovels. Ore and some surrounding waste will be selectively
mined on multiple flitches with hydraulic excavators. All pit material
with be hauled with 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.
19
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.18GRANGE RESOURCES ANNUAL REPORT 2023 GRANGE RESOURCES ANNUAL REPORT 2023
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.
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. Supply and connection options for
the project continue to focus on maximising access to renewable
energy.
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.
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.
WATER
The Project has environmental approval to construct and operate
a 12GL/a seawater desalination plant at Cape Riche, approximately
25km from the mine site. 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.
Alternative water sources have been investigated and it has been
identified that the reduced water supply 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.
20
MINERAL RESOURCES AND ORE RESERVES - SOUTHDOWN MAGNETITE PROJECTMINERAL RESOURCESThe Mineral Resource estimate for the Southdown Magnetite Project as at 31 December 2023 is as follows: As at 31 December 2023Tonnes (Mt)Grade %DTR*Measured423.037.8Indicated86.838.7Inferred747.130.9Total1,256.933.7* Davis Tube Recovery – a measure of recoverable magnetiteMineral Resources are reported above a cut-off of 10% DTRORE RESERVESThe current Ore Reserve for the Southdown Magnetite Project as at 31 December 2023 is based on the pit design and mining schedule developed during the Feasibility Study and includes modifying metallurgical factors and plant recovery. ROM (Mt)DTR* (%)Proven384.635.6Probable3.141.7Total387.735.6An additional 24.4 Mt of Inferred Resources is included within the designed pit.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.21 GRANGE RESOURCES ANNUAL REPORT 2023
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 2023 corporate governance statement
was approved by the Board on 20 February 2024.
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 in the Corporate Governance and
Policies section in the About Us area. This facilitates transparency about Grange’s corporate governance practices and assists shareholders
and other stakeholders to make informed judgments.
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 2023. 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.
Principles and
Recommendations
Reference
2.4
Departure
Explanation
A majority of the Directors are not
independent directors.
The Board is currently comprised of four non-
executive Directors, and two executive Directors,
three are independent. Accordingly, a majority of
Directors are not independent.
7.3(a)
A separate internal audit function has not
been formed
The Board monitors the need for an internal audit
function. The Company has not had an internal
audit function for the past financial year. Due to the
size of the Company, the Board does not consider it
necessary to have an internal audit function.
The Company is currently reviewing the possibility of
an internal audit function.
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
GRANGE RESOURCES LIMITEDABN 80 009 132 405AND CONTROLLED ENTITIESGENERAL 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, 7320 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 28 February 2024. The directors have the power to amend and reissue the financial statements.FINANCIAL REPORT - 31 DECEMBER 2023Directors’ report 24Auditor’s independence declaration 38Consolidated statement of comprehensive income 40Consolidated statement of financial position 41Consolidated statement of changes in equity 42Consolidated statement of cash flows 43Notes to the consolidated financial statements 45Directors’ declaration 67Independent auditor’s report to the members of Grange Resources Limited 68AUSTRALIA’S MOST EXPERIENCED MAGNETITE PRODUCER23FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2023
DIRECTORS’ REPORT
The 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 2023.
DIRECTORS
The 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
Yan Jia
Honglin Zhao
Chongtao Xu
Chairperson
Non-Executive Director, Deputy Chairperson (resigned on 6 September 2023)
Managing Director
Executive Director (appointed on 1 March 2023)
Michael Dontschuk
Non-Executive Director (resigned on 20 March 2024)
Ajanth Saverimutto
Non-Executive Director
Tianxiao Shen
Non-Executive Director (appointed on 21 December 2023)
INFORMATION ON DIRECTORS
MICHELLE LI, PhD, GAICD
Independent Non-executive Chairperson, Member of the Audit and
Risk Committee, Member of the Remuneration and Nomination
Committee.
MICHAEL DONTSCHUK BSc (Hons), FFTP, GAICD
Independent Non-executive Director, Chairperson of the Audit and
Risk Committee, Chairperson 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, GAICD
Non-executive Deputy Chairperson
Ms Jia is currently employed by Jiangsu Huanyu Data Holdings Co. Ltd.
Ms Jia is a former Director of the Administration Department
of 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.
Ms Jia resigned from the Board on 6 September 2023.
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.
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 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.
Mr Dontschuk resigned from the Board on 20 March 2024.
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 Managing Director of ASX listed Wildcat Resources, a mineral
exploration company. Mr Saverimutto’s previous positions include
President and Director of privately held Black Mountain Metals,
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.
24
CHONGTAO XUExecutive DirectorMr 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 specialises in investment of upstream and downstream processes for steel producers.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.Mr Xu was appointed to the Board on 1 March 2023. TIANXIAO SHENNon-executive Director, Member of the Remuneration and Nomination Committee.Tianxiao Shen is currently the deputy general manager of Shagang International (Singapore) Pte. Ltd., a subsidiary of Jiangsu Shagang Group, China’s largest private-owned steel conglomerate. Ms. Shen has extensive experience in raw material procurement and trade, company management, and supply chain operation management and investment planning.Ms Shen was appointed to the Board on 21 December 2023.COMPANY SECRETARYMR PIERS LEWIS, BComm, CA, AGIA Mr Lewis has more than 25 years’ global corporate experience. Mr Lewis is currently company secretary of Almonty Industries Inc. and serves as chairman of Aurumin Limited and on the Board of Noronex 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. 25FINANCIAL REPORT
GRANGE RESOURCES ANNUAL REPORT 2023
PRINCIPAL ACTIVITIES
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
Dividends paid during the financial year were as follows:
Fully franked final dividend for
the year ended 31 December
2022 - 2.0 cents per share
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
2023
$’000
23,147
-
-
2022
$’000
-
23,147
KEY METRICS
Key revenue metrics for the year ended 31 December 2023 and the
preceding 2022 year were as follows:
2023
2022
Iron Ore Pellet Sales (dmt)
2,503,588
2,429,700
Iron Ore Concentrate Sales
(dmt)
24
1,853
Iron Ore Chip Sales (dmt)
139,010
136,760
Total Iron Ore Product Sales (dmt)
2,642,622
2,568,313
Average Realised Product Price
(US$/t FOB Port Latta)*
Average Realised Exchange Rate
(AUD:USD)
Average Realised Product Price
(A$/t FOB Port Latta)
142.06
141.28
0.6675
0.6953
212.83
203.18
115,734
*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.
23,147
138,881
Since the end of the financial year the directors have recommended
the payment of a 2.0 cent final dividend of $23.1 million. The final
dividend was declared NIL conduit foreign income and will be paid
on 28 March 2024.
OPERATING AND FINANCIAL REVIEW
KEY HIGHLIGHTS
MINING OPERATIONS
• Pellet production of 2.34 million tonnes for the year compared to
2.52 million tonnes for the prior year.
• Total iron ore product sales of 2.64 million tonnes for the year
compared to 2.57 million tonnes for the prior year.
• Profit after tax of $150.1 million for the year compared to $171.7
million for the prior year, on revenues from operations of $614.7
million compared to $594.6 million for the prior year.
• Average realised product price (FOB Port Latta) of A$212.83 per
tonne for the year compared to A$203.18 per tonne for the prior
year.
• Unit C1 cash operating costs of $136.65 per tonne for the year
compared to $120.64 for the prior year.
• Cash and liquid investments of $282.6 million at the end of year
compared to $298.6 million at the end of the prior year.
SAFETY PERFORMANCE
A focus on safety has been maintained across the business with
over 236 days Lost Time Injury Free achieved.
Key operating metrics for the year ended 31 December 2023 and
the preceding 2022 year were as follows:
Total BCM Mined
Total Ore BCM
Concentrate Produced (t)
Weight Recovery (%)
Pellets Produced (t)
Pellets Stockpile (t)
“C1” Operating Cost (A$/t
Concentrate Produced)
2023
2022
17,529,864
15,466,534
1,033,932
2,589,144
44.4
1,280,501
2,624,865
45.2
2,341,654
2,518,232
136,791
298,725
136.65
120.64
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 continued to focus on the cutbacks in both
North Pit and Centre Pit. Ore from the main ore zone in Centre Pit
has been delivered throughout the year. This has been blended
with existing stockpiles to sustain production and yield high quality
pellets. The cutback on the east wall of North Pit continues with the
implementation of the refined pit design. The current mining of ore
in Centre Pit and waste removal in North Pit will progress further
in 2024.
NORTH PIT UNDERGROUND
DEVELOPMENT PROJECT
The Definitive Feasibility Study into underground mining in North
Pit has been completed and integrated into the operational life of
mine plan. The study included a detailed assessment of risk and
confirms the technical and economic viability of underground block
cave mining at Savage River. In February 2024, the Board approved
the plan to transition the current North Pit opencut mine to an
underground block cave mine.
The integration will see the current North Pit open pit mining
transition to an underground sub-level and block cave mine over
the next five years. The feasibility study forecasts production of
approximately 64 million tonnes of ore, producing 28 million tonnes
of concentrate at iron grade of more than 66 per cent supporting
the mine life at Savage River beyond 2037.
The feasibility confirmed a reduction in the long-term unit operating
costs of more than 30 per cent in line with the PFS findings. The
study also confirmed a significant (80 per cent) reduction in carbon
emissions at the Savage River Mine can be achieved in accordance
with Grange’s decarbonisation plan.
NET CASH FLOWS FROM FINANCING ACTIVITIES
Net cash outflows from financing activities for the period were
$25.2 million (2022 outflow: $145.6 million), principally related to
the payment of 2023 final dividend ($23.1 million) and repayment of
lease liabilities ($2.0 million).
FINANCIAL REPORT
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 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 zero CO2-e (Scope 1 and 2) emissions by 2035.
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project, situated 90km from the city of
Albany in Western Australia, is an advanced project with over 1.2
billion tonnes of high quality resource and access to established
infrastructure.
During the year, the Company completed the reacquisition of
SRT’s 30% interest in the Project. Grange now holds 100 per cent
ownership in the Project.
Progress of the definitive feasibility study on a 5 Mtpa development
case is under review.
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group
during the financial year.
Based on the progression of the study, Grange has entered a
contract to extend the current exploration decline by 1,500m in
2024. The underground development has been awarded to mining
contractor PYBAR Mining Services who have already commenced
mobilisation to site. The extension to the decline will provide access
to the extraction level horizon and provide essential data to finalise
mine designs to a construction ready stage. The extension will
also provide new underground drill platforms that Grange plans to
utilise for further underground exploration with a view to enhance
the long-term underground mining opportunities.
PORT LATTA IMPROVEMENT PROJECTS
The High Efficiency Mixer was safely and successfully commissioned
in the pellet plant at Port Latta. This installation will enable
the delivery of more homogeneous blending of bentonite and
concentrate equally across all furnace lines. This in turn will serve
to improve our control and final pellet consistency.
Optimisation of the Intermediate Air System continued during
the quarter, balancing air from the Intermediate Air and the Main
Blower System. Furnace stability has significantly improved, and
Furnace 4 is now running consistently and delivering high rates
and quality. Work continues on embedding system changes and
undertaking the engineering study to apply modifications to the
other furnace lines.
Furnace 4 has been operating without the addition of anthracite.
This has seen a reduction in our coal use at Port Latta and
consequently a reduction in CO2-e emissions associated with the
combustion of coal. This is an excellent result and is in accord with
Grange’s decarbonisation plan to phase out the use of coal over the
next three years as other furnaces are upgraded.
FINANCIAL POSITION
Grange’s net assets increased during the year to $1,031.3 million
(31 December 2022: $904.01 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 $50.6 million and $82.1 million respectively.
• An increase in inventories of $16.9m
• An increase in trade receivables by $16.2 million
• A decrease in trade and other payable $17.3 million
• A decrease in financial assets by $17.4 million
• An increase in deferred tax liability by $36.4 million.
STATEMENT OF CASH FLOWS
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net cash inflows from operating activities for the year were $267.1
million (2022: inflows $196.9 million), increased compared to prior
year mainly due to higher quantities sold and higher prices achieved
compared to previous year.
NET CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflows from investing activities for the period were
$241.9 million (2022: outflows $396.2 million), principally related to
expenditures for mine properties and development ($104.4 million),
property, plant and equipment of ($153.8 million) and proceeds
from term deposits $16.3 million.
26
27
GRANGE RESOURCES ANNUAL REPORT 2023
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.
On 19 February 2024, the Board approved the plan to transition
from North Pit open pit to underground mining over the next five
years.
• 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
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 integration and transition of the Life of Mine Plan
from opencut to underground
• Producing high grade ore from Centre Pit
• Delivering on secured off take agreements
• 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 MAGNETITE 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 FOLLOW-
ING:
• Optimise timing of sales to the fluctuations in iron ore prices and
demands from different markets
• Focused 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
28
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 environmental aspects such as acid mine
drainage management, river water quality, the management of the
storage of hazardous materials and rehabilitation of mine sites, etc.
The Group is subject to significant environmental legislation and
regulation in respect of its mining, processing and exploration
activities as set out below:
SAVAGE RIVER AND PORT LATTA OPERATIONS
The Group obtained approvals to operate in 1996 and 1997 under
the Land Use Planning and Approvals Act 1993 (LUPA) and the
Environmental Management and Pollution Control Act 1994 (EMPCA)
as well as the Goldamere Agreement Act 1996 and Mineral Resources
Development Act 1995. The original 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 Agreement Act 1996 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 Act (Royal Ascent received 16th) December 1996).
Grange received planning approval from the Waratah Wynyard
Council and the Tasmanian Environment Protection Authority
for the construction of South Deposit Tailings Storage Facility in
March 2014 under PCE 8808, as well as federal approval under the
Environment Protection and Biodiversity Conservation Act 1999 in
April 2014 under EPBC approval 6393. South Deposit cutback was
approved in August 2014 but is now largely regulated under the
Centre Pit Expansion and South Deposit Backfill Dump through
DA 216/2021 and Permit Conditions-Environmental No. 10995. In
January 2020, approval was granted under Environment Protection
Notice 10006/2 for the North Pit Underground exploration decline.
SOUTHDOWN MAGNETITE PROJECT
The Southdown Magnetite Project 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 2007The 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 (SAFEGUARD MECHANISM) RULE 2015 The Safeguard Mechanism applies to designated large facilities and is triggered when the facility exceeds 100,000t 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 OPPORTUNITIESPHYSICAL RISKS• Concentrated rainfall event causing flooding • Rising sea levels and reduced rainfall causing groundwater scarcityRISK 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 servicesThe 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. As part of the Group’s strategy to reduce carbon emissions across our operations, Grange will reduce the tonnes of CO2/t of pellet produced. With the decarbonisation of the steel industry and evolution of the “Green Steel” market, this will position Grange with an opportunity to obtain a potential “Green Premium” for our low CO2 high quality products. Whilst this is yet to be confirmed, we expect that the industry will evolve and with the planned reduction of our emissions, Grange will be well positioned to take advantage of any new “Green” premiums as they evolve. The Group will continue to explore opportunities to reduce carbon emissions in its production processes. 29FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2023
FINANCIAL REPORT
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 2023, and the number of meetings attended by each director were:
Full Board
Nomination and Remuneration
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
7
4
7
7
7
6
1
7
4
7
7
7
6
1
5
-
-
5
-
-
-
5
-
-
5
-
-
-
7
-
-
7
7
-
-
7
-
-
7
7
-
-
M Li
Y Jia
H Zhao
M Dontschuk
A Saverimutto
C Xu
T Shen
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
(please refer to pages 24 to 25 for details about each director)
Non-executive directors
Michelle Li
Yan Jia (resigned on 6 September 2023)
Michael Dontschuk (resigned on 20 March 2024)
Ajanth Saverimutto
Tianxiao Shen (appointed 21 December 2023)
Executive directors
Honglin Zhao
Position
Managing Director
Chief Executive Officer
Chongtao Xu (appointed 1 March 2023)
Executive Director
Other key management personnel
Position
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
Board, it’s Committees and individual Directors; and
• Reviewing governance arrangements pertaining to remuneration
matters.
The Charter is reviewed annually, and remuneration strategies are
reviewed regularly.
(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;
Steven Phan
Ben Maynard
Chief Financial Officer
Chief Operating Officer
• competitive and reasonable, enabling the Company to attract
and retain key talents who share the same values with Grange
Resources; and
(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 Remuneration and Nomination Committee is composed of
Mr Michael Dontschuk (Independent Non-executive Director and
Committee Chairperson), Dr Michelle Li (Independent Non-executive
Chairperson) and Ms Tianxiao Shen (Non-executive Director).
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
30
• 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.
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.
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.
There are no guaranteed fixed pay increases included in any
executives’ contracts.
• Mine development (weighting 20%)
• Downstream process improvement (weighting 15%)
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.
VARIABLE REMUNERATION
- LONG TERM INCENTIVE (“LTI”)
a) Deferred Cash
A 3 year deferred cash long term incentive program applicable to
H Zhao, S Phan and B Maynard 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.
A 3 year deferred cash long term incentive started in 2023 for C Xu.
The deferred cash scheme is to reward selected executive directors
and senior employees with a cash payment which is linked to the
Company satisfying performance hurdles and subject to ongoing
employment with Grange. The deferred cash component
is
determined by measuring the Company’s progress made on:
• Development of mineral assets (weighting 35%)
• 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.
b) Rights to Grange Shares
The Company granted performance rights in 2022 and 2023 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 for performance
rights granted in 2022 and vesting date of 31 December 2025 for
performance rights granted in 2023.
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.
(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)
(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.
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. The current base fees were
reviewed with effect from 1 June 2021.
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.
$ million
$ million
Cents
$ million
Cents
2019
368.6
77.3
6.71
23.1
25.0
2020
526.3
203.2
17.64
23.1
29.5
2021
781.7
321.6
27.84
162.0
75.5
2022
594.6
171.7
14.84
138.9
84.5
Board of Directors
Chairperson (1)
Deputy Chairperson
Non-executive Director
Audit and Risk Committee
Chairperson
Committee Member
Remuneration and Nomination Committee
Chairperson
2023
614.7
150.1
12.97
23.1
46.5
$210,000
$92,000
$81,000
$15,750
$10,500
$15,750
$7,500
Committee Member
(1) The Chairperson is not paid any additional amounts for Committee membership.
31
GRANGE RESOURCES ANNUAL REPORT 2023
(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 2023
Salary &
Fees
*
$
210,000
67,864
101,349
91,500
2,617
473,330
Non-Executive
Directors
M Li
Y Jia(1)
M Dontschuk(5)
A Saverimutto
T Shen(2)
Sub-total
Non-Executive
Directors
Executive Directors
Fixed Remunerations
Non-
monetary
benefits
*
Annual
leave
^
Long
Service
Leave
**
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
Super
annuation
***
$
-
-
10,895
-
-
10,895
Variable Remunerations
STI
*
LTI Cash
**
LTI RIghts
****
Total
Performance
Related
%
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
-
-
-
-
-
-
$
210,000
67,864
112,244
91,500
2,617
484,225
911,506
280,262
-
-
-
-
-
27%
15%
26%
25%
H Zhao (4)
C Xu(3)
Key Management
S Phan
Ben Maynard
Sub-total Key
Management
Personnel
591,107
121,927
(19,263)
(94,575)
63,579
111,654
33,072
104,005
193,996
11,767
10,712
1,872
20,893
34,619
6,403
-
382,080
424,765
-
11,035
5,538
7,161
14,416
20,136
41,096
45,687
72,206
17,101
78,999
19,012
66,769
71,428
604,703
672,726
1,591,948
139,232
9,645
(58,151)
171,255
297,478
75,588
242,202
2,469,197
25%
TOTAL
2,065,278
139,232
9,645
(58,151)
182,150
297,478
75,588
242,202
2,953,422
21%
(1) Y Jia resigned on 6 September 2023
(2) T Shen was appointed to non-executive director on 21 December 2023
(3) C Xu was appointed to executive director on 1 March 2023. The amounts are
inclusive of remuneration earned in the current year prior to this appointment which
totalled $32,826
(4) Granting of 2023 performance rights to H Zhao to be approved in the upcoming
annual general meeting.
(5) Mr Dontschuk resigned on 20 March 2024
Table 2: Remuneration for the year ended 31 December 2022
* 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.
Fixed Remunerations
Variable Remunerations
Salary &
Fees
*
$
210,000
99,499
105,291
91,671
506,461
Non-
monetary
benefits
*
$
-
-
-
-
-
Annual
leave
^
$
-
-
-
-
-
Long
Service
Leave
**
$
-
-
-
-
-
Super
annuation
***
STI
*
LTI Cash
**
LTI
RIghts
****
$
-
-
8,778
-
8,778
$
-
-
-
-
-
$
-
-
-
-
-
$
-
-
-
-
-
Performance
Related
%
-
-
-
-
Total
$
210,000
99,499
114,069
91,671
515,239
Non-Executive
Directors
M Li
Y Jia
M Dontschuk
A Saverimutto
Sub-total
Non-Executive
Directors
Executive Directors
H Zhao
557,648
53,506
23,208
22,112
57,159
113,923
71,410
21,561
920,527
22%
Key Management
S Phan
B Maynard (1)
Sub-total Key
Management
Personnel
360,454
400,722
-
12,732
5,167
(3,865)
12,611
17,868
36,947
41,074
70,397
78,261
36,927
15,490
545,558
41,129
16,353
596,709
23%
23%
1,318,824
58,673
32,075
52,591
135,180
262,581
149,466
53,404 2,062,794
23%
TOTAL
1,825,285
58,673
32,075
52,591
143,958
262,581
149,466
53,404 2,578,033
18%
(1) FY 2022 Remuneration table has been adjusted to include non-monetary benefits for B Maynard
Refer to 2023 remuneration table for other footnote references
32
Table 3: Relative proportions linked to performanceThe relative proportions of remuneration that are linked to performance and those that are fixed are as follows:Fixed RemunerationAt Risk - STIAt Risk - LTINameDec-23Dec-22Dec-23Dec-22Dec-23Dec-22Executive DirectorsH Zhao73% 78% 12% 12% 15% 10% C Xu85% -12% -3% -Key Management PersonnelS Phan74% 77% 12% 13% 14% 10% B Maynard75% 77% 12% 13% 13% 10% (vii) Contractual arrangements with executive KMPsComponentsCEO descriptionSenior executive descriptionFixed remuneration$656,000Range between $227,500 and $472,000Contract durationOngoing contractOngoing contractNotice by the individual/company3 months1 to 3 monthsTermination of employment (without cause)Entitlement to pro-rata STI for the year. Unvested LTI will remain on foot subject to achievement of the performance hurdles at the original date of testing.The board has discretion to award a greater or lower amount.Entitlement to pro-rata STI for the year. Unvested LTI will remain on foot subject to achievement of the performance hurdles at the original date of testing. The board has discretion to award a greater or lower amount.Termination of employment (with cause) or by the individualAll discretionary incentives not payable and all unvested LTI will lapse.Vested and unexercised LTI can be exercised within a period of 30 days from termination.All discretionary incentives not payable and all unvested LTI will lapse.Vested and unexercised LTI can be exercised within a period of 30 days from termination.(viii) Service agreementsOn 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. 33FINANCIAL REPORT
GRANGE RESOURCES ANNUAL REPORT 2023
FINANCIAL REPORT
(ix) Details of STI and LTI (share-based payment) held by key management personnel
Performance based remuneration granted and forfeited during the year.
% of Target STI % of Maximum STI
% Maximum STI
Total STI
PERFORMANCE CONDITIONS FOR EACH 2022 AND 2023 TRANCHE ARE AS FOLLOWS:
Tranche 1
Performance Level
Annualised Grange TSR Compared to TSR of the
ASX 300 Metals and Mining TR Index
% of Tranche Vesting
Short Term Incentive
2023
H Zhao
C Xu
S Phan
B Maynard
TOTAL
Total STI Bonus
(Cash)
Maximum
Opportunity $
157,471
43,690
91,608
101,842
394,611
STI amounts are inclusive of superannuation.
Awarded %
Awarded %
Forfeited %
Awarded $
Stretch
> Index TSR + 9% TSR CAGR
85%
95%
95%
93%
71%
79%
79%
78%
29%
21%
21%
22%
111,654
34,619
72,206
78,999
297,478
Between Target and Stretch
> Index TSR + 2% TSR CAGR & < ''Index TSR + 9% TSR CAGR
Target
Index TSR + 2% TSR CAGR
Between Threshold and Target
> Index TSR & < Index TSR + 2% TSR CAGR
Threshold
Below Threshold
= Index TSR
< Index TSR
Note: a Gate TSR being positive applies to this metric (will not pay out if TSR is not >0%)
Long Term Incentive
Total LTI Bonus (Cash)
Share-based Payment rights
Tranche 2
2023
H Zhao
C Xu
B Maynard
S Phan
TOTAL
Share-based compensation
Maximum
Opportunity $
-
18,204
-
-
18,204
Awarded %
Awarded $
Value Granted $
Awarded $
-
97%
-
-
-
17,731
-
-
17,731
208,340
-
120,033
107,972
436,345
-
-
-
-
In May 2022 and December 2023 Grange Resources Limited (Parent
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 of 31
December 2024 for those granted in May 2022 and vesting date of
31 December 2025 for those granted in November 2023.
Executive KMP participate, at the board’s discretion, in the LTIP
comprising annual grants of rights which are subject to TSR
hurdles (tranche 1) and series of non-market based business
objectives (tranche 2 and 3). Executive KMP is required to have
continued service at a minimum of one year to become eligible for
any performance rights.
Feature
Opportunity/Allocation
Description
CEO - 50% of Fixed Remuneration; Other Key Management Personnel - 40% 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
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
Tranche 3
Strategic Area
Southdown Project
Southdown Project
Capital Management
= 6% ROE
< 6% ROE
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.
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:
100%
Pro-rata
50%
Pro-rata
25%
0%
% of Tranche Vesting
100%
Pro-rata
50%
Pro-rate
25%
0%
% of Tranche Vesting
16.67%
16.67%
33.33%
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
Grant Date
Tranche 1
Vesting and
Exercise Date
Expiry Date
Exercise Price
Value per Rights
at Grant Date
Performance
Achieved
Vesting
%
Measurement Period
Performance rights granted in May 2022 - 22 February 2022 to 30 December 2024
19 December 2023
31 December 2025
15 years from grant
Cessation of employment in other cases will generally result in pro-rate forfeiture of the
rights
19 December 2023
31 December 2025
15 years from grant
Tranche 2
Performance rights granted in December 2023 - 1 January 2023 to 30 December 2025
Tranche 3
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
19 December 2023
31 December 2025
15 years from grant
Nil
Nil
Nil
$64,988
To be determined
$259,950
To be determined
$111,407
To be determined
-
-
-
-
-
34
35
GRANGE RESOURCES ANNUAL REPORT 2023
Grant Date
Tranche 1
11 May 2022
27 May 2022
30 May 2022
Tranche 2
11 May 2022
27 May 2022
30 May 2022
Tranche 3
11 May 2022
27 May 2022
30 May 2022
Vesting and
Exercise Date
Expiry Date
Exercise Price
Value per Rights
at Grant Date
Performance
Achieved
Vesting
%
31 December 2024
24 May 2037
31 December 2024
24 May 2037
31 December 2024
24 May 2037
31 December 2024
24 May 2037
31 December 2024
24 May 2037
31 December 2024
24 May 2037
31 December 2024
24 May 2037
31 December 2024
24 May 2037
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
-
-
-
-
-
-
-
-
-
RECONCILIATION OF PERFORMANCE RIGHTS HELD BY EACH KEY MANAGEMENT PERSONNEL
2023 Name and
Grant Date
H Zhao
B Maynard
S Phan
Balance at
the Start
of the year
Unvested
140,342
80,680
74,707
Performance
rights granted
in 2023
Vested
Number
Vested %
Exercised
Number
828,099
477,102
429,160
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year
Vested
Balance at
the end of
the year
Unvested
-
-
-
968,441
557,782
503,867
Maximum
value yet to
vest $
130,251
84,237
77,596
SHAREHOLDINGS
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:
31 December 2023
Balance 1 January
2023
Director of Grange Resources Limited
On vesting rights
On market
purchases
On market
disposals
Other
Balance 31
December 2023
M Li
M Dontschuk
H Zhao
Y Jia
A Saverimutto
C Xu
T Shen
Key Management Personnel
B Maynard
S Phan
13,507
13,000
1,727,702
-
-
-
-
68,122
-
1,822,331
-
-
-
-
-
-
-
-
-
-
-
10,000
-
-
-
-
-
-
-
10,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,507
23,000
1,727,702
-
-
-
-
68,122
-
1,832,331
(x) Loans to key management personnel
There were no loans to key management personnel during the year.
(xi) Other transactions with Directors and key management
personnel
Y Jia is an employee of Jiangsu Huanyu Data Holdings Co. Ltd and
T Shen is an employee of Shagang International (Singapore) Pte.
Ltd. These are subsidiaries 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 or approved by the
Grange independent directors.
FINANCIAL REPORT
2023
$
2022
$
267,950
238,750
11,000
22,786
26,650
18,147
Assurance Services
PwC Australia
Audit and review of financial
reports
Other assurance services
Network firms of PwC Australia
Total assurance services
301,736
283,547
Non-Assurance Services
PwC Australia
Taxation compliance services
18,797
-
Total remuneration paid
320,533
283,547
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.
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.
Aggregate amounts of each of the above types of other transactions:
2023
$
2022
$
Sales of Iron Ore Products
Pellets
220,269,938
211,922,470
The following balances are outstanding at the end of the reporting
period in relation to the above transactions:
2023
$
2022
$
Trade receivables (sales of iron ore products)
7,769,554
Pellets
15,241,644
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 AND INSURANCE 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:
36
37
GRANGE RESOURCES ANNUAL REPORT 2023
Auditor’s Independence Declaration
As lead auditor for the audit of Grange Resources Limited for the year ended 31 December 2023, I
declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Grange Resources Limited and the entities it controlled during the
period.
Chris Dodd
Partner
PricewaterhouseCoopers
Melbourne
28 February 2024
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
38
24
39FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2023
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
2023
$’000
2022
$’000
Consolidated
Revenue 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
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Basic earnings per share
Diluted earnings per share
Note
4,5
6
7
8
9
10
11
24
32
32
2023
$’000
614,744
(394,690)
220,054
(5,053)
(15,570)
3,870
203,301
15,915
(4,121)
215,095
(64,991)
150,104
-
150,104
Cents
12.97
12.96
2022
$’000
594,555
(334,027)
260,528
(4,634)
(20,930)
(4,480)
230,484
21,784
(3,442)
248,826
(77,091)
171,735
-
171,735
Cents
14.84
14.84
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes
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
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
Note
12,2
13
14
2
2
16
17
18
15
19,2
17
20
17
21
20
23
24
109,706
74,612
179,816
175,030
539,164
1,363
248,475
2,096
443,038
10,009
704,981
1,244,145
50,380
1,442
25,560
77,382
773
53,938
80,726
135,437
212,819
1,031,326
331,513
(1,977)
701,790
1,031,326
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
40
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
41
GRANGE RESOURCES ANNUAL REPORT 2023
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Issued capital
$’000
Reserves
$’000
Retained earnings
$’000
Total equity
$’000
Balance at 1 January 2022
331,513
(2,273)
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 22)
Dividends paid (note 25)
Balance at 31 December 2022
-
-
-
-
-
-
-
-
53
-
331,513
(2,220)
541,979
171,735
-
871,219
171,735
-
171,735
171,735
-
(138,881)
574,833
53
(138,881)
904,126
Issued capital
$’000
Reserves
$’000
Retained earnings
$’000
Total equity
$’000
Balance at 1 January 2023
331,513
(2,220)
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 22)
Dividends paid (note 25)
Balance at 31 December 2023
-
-
-
-
-
-
-
-
243
-
331,513
(1,977)
574,833
150,104
-
904,126
150,104
-
-
(23,147)
701,790
243
(23,147)
1,031,326
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
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
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
Cash and cash equivalents at the end of the financial year
Note
31
16
18
25
12
2023
$’000
611,719
(312,843)
298,876
13,830
(257)
(45,341)
-
267,108
(104,401)
(153,791)
11
-
16,281
(241,900)
(23,147)
(2,040)
(25,187)
21
108,411
1,274
109,706
2022
$’000
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)
(138,881)
(6,670)
(145,551)
(344,850)
443,890
9,371
108,411
150,104
150,104
Proceeds (payments) for term and security deposits
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
42
43
NOTE 1. SUMMARY OF MATERIAL
ACCOUNTING POLICIES
judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed
in Note 3.
FINANCIAL REPORT
The accounting policies that are material to the Group are set out
below. The accounting policies adopted are consistent with those of
the previous financial year, unless otherwise stated.
(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 2023:
• AASB 2023-2 Amendments to Australian Accounting Standards
– Definition of Accounting Estimates International Tax Reform –
Pillar Two Model Rules [AASB 112].
• AASB 2021-5 Amendments to Australian Accounting Standards
– Deferred Tax related to Assets and Liabilities arising from a
Single Transaction [AASB 112].
• AASB 2021-2 Amendments to Australian Accounting Standards
– Disclosure of Accounting Policies Definition of Accounting
Estimates [AASB 7, AASB 101, AASB 108, AASB 134 & AASB
Practice Statement 2].
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 2023 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
(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 2023 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 29.
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 30.
(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
45
44GRANGE RESOURCES ANNUAL REPORT 2023 GRANGE RESOURCES ANNUAL REPORT 2023
Note 1. Summary of Significant Accounting Policies (continued)
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.
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,
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
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.
• amount of any non-controlling interest in the acquired entity,
and
• acquisition-date fair value of any previous equity interest in the
DISTRIBUTION INCOME
Distribution income from short term managed funds is recognised
when the right to receive the income has been established.
acquired entity
46
(G) LEASES
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 discounted using the Group’s
incremental borrowing rate and 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 10. 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
(H) 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.
(I) 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
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.
(J) 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
FINANCIAL REPORT
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.
(K) 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.
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.
Grange Resources Limited and
controlled entities have
its wholly-owned Australian
implemented the tax consolidation
47
GRANGE RESOURCES ANNUAL REPORT 2023
Note 1. Summary of Significant Accounting Policies (continued)
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.
(L) 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.
(M) 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 to 17 years
4 to 17 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.
48
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(q).
(N) EXPLORATION AND EVALUATION
Exploration and evaluation expenditure comprise costs which are
directly attributable to:
• 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.
(O) 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(q).
(P) 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.
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.
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.
(Q) 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.
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 on the Group’s asset recoverable value.
FINANCIAL REPORT
(R) INVESTMENTS AND OTHER FINANCIAL
ASSETS
The Group’s other financial assets consist of:
• Term deposits with maturity of over three months from the date
of acquisition.
• 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.
(S) 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.
(T) 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
(U) BORROWINGS
All borrowings are initially recognised at the fair value of the
consideration received,
initial
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.
49
GRANGE RESOURCES ANNUAL REPORT 2023
Note 1. Summary of Significant Accounting Policies (continued)
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.
(V) 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 with 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
Decommissioning and
the
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.
The amortisation or ‘unwinding’ of the discount applied 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.
(W) 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.
50
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 (32).
(X) 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.
(Y) 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.
(Z) 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.(AA) PARENT ENTITY FINANCIAL INFORMATION The financial information for the parent entity, Grange Resources Limited, disclosed in note 33 has been prepared on the same basis as the consolidated financial statements, except as set out below. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE ENTITIESInvestments 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. (AB) 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.51FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2023
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.
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)
AMOUNTS RECOGNISED IN PROFIT OR LOSS
During the year, the following gains/(losses) were recognised in
profit or loss:
Fair value 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
2023
$’000
2022
$’000
-
(98)
(68)
2,353
(68)
2,255
The Group holds the following financial instruments
(A) MARKET RISK
Financial Assets
Cash and Cash Equivalent
Trade and other receivables
Other financial assets
Financial Liabilities
Trade and other payables
Other financial assets (current)
Term deposits
Derivatives
Other financial assets (non-current)
Derivatives
2023
$’000
2022
$’000
109,706
82,956
176,393
369,055
50,380
50,380
2023
$’000
108,411
66,159
193,761
368,331
67,723
67,723
2022
$’000
172,900
2,130
175,030
190,200
1,977
192,177
1,363
1,584
NET DEBT RECONCILIATION
This section sets out an analysis of net debt and the movements in
net debt for each of the periods presented.
Net debt reconciliation
Cash and cash equivalents
Liquid investments
Lease liability
Net cash, cash equivalent and
liquid investments/ (debt)
2023
$’000
109,706
172,900
(2,215)
2022
$’000
108,411
190,200
(6,482)
280,391
292,129
(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:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net US dollar surplus
2023
$’000
85,078
57,728
(119)
142,687
2022
$’000
59,461
48,293
(773)
106,981
GROUP SENSITIVITY
Based on the financial instruments held at 31 December 2023,
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 $9.1 million
higher / $11.1 million lower (2022: $6.8 million higher / $8.3 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
(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.
FINANCIAL REPORT
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.
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 2023, there
are $0.18 million in trade receivables (2022 $0.18 million) 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.
2023 - Consolidated
Trade and other payables
Lease liabilities
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
50,380
951
51,331
-
525
525
-
714
714
-
100
100
-
-
-
2022 - Consolidated
Trade and other payables
Lease liabilities
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
67,723
3,493
71,216
-
940
940
-
1,459
1,459
-
814
814
-
-
-
Total
contractual
cash flows
$’000
50,380
2,290
52,670
Total
contractual
cash flows
$’000
67,723
6,706
74,429
Carrying
amount
liabilities
$’000
50,380
2,215
52,595
Carrying
amount
liabilities
$’000
67,723
6,482
74,205
(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.
52
53
GRANGE RESOURCES ANNUAL REPORT 2023
Note 2. Financial Risk Management (continued)
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
Derivatives (current)
Derivatives (non-current)
2023
$’000
3,233
185
75
3,493
2,130
1,363
3,493
2022
$’000
3,548
-
13
3,561
1,977
1,584
3,561
(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.
The following table presents the group’s assets and liabilities
measured and recognised at fair value at 31 December 2023 and
31 December 2022.
2023
Financial Assets
Derivative financial
Instruments
Trade receivables -
embedded derivatives
2022
Financial Assets
Derivative financial
Instruments
Trade receivables -
embedded derivatives
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
3,493
15,799
19,292
-
-
-
3,493
15,799
19,292
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
3,561
7,698
11,259
-
-
-
3,561
7,698
11,259
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 2023 the net realisable value exceeded
cost for all significant inventory balances.
(B) TRANSITION TO UNDERGROUND MINING
With the approved plan to transition from open pit to underground
mining in 2027, the Group has completed a formal estimate of the
recoverable amount of the Group’s Savage River cash generating
unit (CGU).
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 and
capital expenditures. 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.
ASSESSMENT OF CGU RECOVERABLE VALUE
(I) METHODOLOGY
The recoverable amount of each CGU has been estimated using a fair
value less costs of disposal basis. The costs of disposal have been
estimated by management based on prevailing market conditions.
The fair value assessment is categorised within level 3 in the fair
value hierarchy. An impairment loss is recognised for a CGU when
the recoverable amount is less than the carrying amount.
Fair value is estimated based on the net present value of estimated
future cash flows for a CGU. Future cash flows are based on a
number of assumptions, including commodity price expectations,
foreign exchange rates, reserves and resources and expectations
regarding future operating performance and capital requirements
which are subject to risk and uncertainty. An adverse change in one
or more of the assumptions used to estimate fair value could result
in a reduction of the CGU’s fair value.
(II) KEY ASSUMPTIONS
The key assumptions which are used by the Directors in determining
the recoverable amount for the Group’s Savage River CGU were in
the following ranges at 31 December 2023:
as at 31
December
2023
2025 - 2029
2024
Long Term
2030+
US$147.54
US$110.12
-US$143.57
US$116.41
-US$123.86
$0.6819
$0.7038
$0.6950
8.29%
Assumptions
Iron ore pellets
(FOB Port Latta)
(US$ per DMT)
AUD:USD
exchange rate
Post-tax real
discount rate
COMMODITY PRICES AND FOREIGN EXCHANGE RATES
Commodity prices and foreign exchange rates are estimated with
reference to analysis performed by an external party and are
updated at least once every six months, in-line with the Group’s
reporting dates. The iron ore pellet price assumptions are
based market indices adjusted for premiums supported by sales
arrangements achieved by the Group, net of freight.
OPERATING PERFORMANCE (PRODUCTION, OPERATING
COSTS AND CAPITAL COSTS)
Life of mine production, operating cost and capital cost assumptions
are based on the Group’s most recent life of mine plan approved by
the Board. The underground mine will transition the current North
Pit opencut mining to an underground block cave and sub-level
cave mine over the next 5 years. The transition to underground
mining has been integrated with the current opencut mining
operations. Total capital investment in the underground mine is
expected to be approximately $891 million over several years with
the majority of the investment expected to be made between 2025
to 2029. The underground mine is expected to deliver a substantial
reduction in life-of-mine operating costs of 30%. Once in production,
the underground mine will reduce carbon emissions by 80% at
the Savage River Mine in line with the Company’s Environmental,
Social and Governance (ESG) initiatives to develop Green Pellet
Production. Mineral resources and ore reserves not in the most
recent life of mine plan are not included in the determination of
recoverable amount.
While the Group acknowledges that factors such as future changes
to the regulatory framework in response to climate change could
impact future recoverability, these factors have not been included
in our assumptions. While the Group acknowledges that the world
is moving to a low-carbon future and it must address the risks and
opportunities that climate change may bring, the Group has not
identified any immediate financial impacts of climate change risk
in the short term.
DISCOUNT RATE
To determine the recoverable amount, the estimated future cash
flows have been discounted to their present value using a post-tax
real discount rate that reflects a current market assessment of the
time value of money and risks specific to the asset.
(III) IMPACTS
The Group has not identified any impairment to its net assets
carrying value as at 31 December 2023.
(IV) SENSITIVITY ANALYSIS
It is estimated that changes in the following key assumptions would
have the following approximate impact on the fair value of the
Savage River CGU as at 31 December 2023:
FINANCIAL REPORT
Decrease in fair value resulting from:
US$1 per dmt decrease in iron ore pellet prices
(FOB Port Latta)
$20.68 million
$0.01 increase in the AUD:USD exchange rate
$42.10 million
1% increase in estimated operating costs
$15.71 million
25 bps increase in the discount rate
$17.96 million
(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
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.
(E) 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.
54
55
GRANGE RESOURCES ANNUAL REPORT 2023
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 one reportable segment, being the exploration, evaluation and development of mineral resources and iron ore mining
operations. 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.
Ore Mining
Property Development
2023
$’000
2022
$’000
2023
$’000
2022
$’000
Total
2023
$’000
2022
$’000
Revenue from external customers
614,744
580,294
Timing of Revenue Recognition
At a point in time - pellets
Over time - freight
562,416
52,328
521,839
58,455
-
-
-
14,261
614,744
594,555
14,261
-
562,416
52,328
536,100
58,455
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
Indonesia
Malaysia
Turkey
Property Development
Australia
Total Revenue
2023
$’000
2022
$’000
36,078
261,251
257,940
59,695
1,199
(1,419)
614,744
38,520
355,369
167,294
-
4,893
14,218
580,294
-
614,744
14,261
594,555
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 $220.3 million / 35.8% of mining revenue (2022: $211.9 million / 36.5%).
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 2023 and 31 December 2022. The total costs incurred during the current and comparative periods
to acquire segment assets were also predominately incurred in Australia.
FINANCIAL REPORT
NOTE 5. REVENUE FROM OPERATIONS
From mining operations
Sales of iron ore
From property development
Sales of property
2023
2022
Revenue from
Contracts with
Customers
Other Revenue
/ (Loss)
Total Revenues
Revenue from
Contracts with
Customers
Other Revenue
/ (Loss)
Total Revenues
603,759
10,985
614,744
609,515
(29,221)
580,294
-
-
-
603,759
10,985
614,744
14,261
623,776
-
(29,221)
14,261
594,555
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
Depreciation and amortisation expense
Land and buildings
Plant and equipment (including
right of use of assets)
Computer equipment
2023
$’000
204,807
150,989
(5,064)
52,328
23,150
2022
$’000
180,339
141,710
(448)
58,455
19,464
55,474
25,463
9,414
8,982
(152,223)
(136,222)
57,332
(1,517)
-
394,690
21,133
2,535
12,616
334,027
1,655
48,815
5,004
55,474
1,481
23,473
509
25,463
NOTE 7. ADMINISTRATIVE EXPENSES
Salaries
Consultancy Fee
Others
2023
$’000
3,600
1,444
9
5,053
2022
$’000
2,881
1,208
545
4,634
Income from sale of royalty
tenements
Rent Income
Other income
Loss on the disposal of property,
plant and equipment and mine
properties and development
Loss on derecognition of right of
use of assets
Provision for rehabilitation -
change in estimate
2023
$’000
8,000
191
440
(3,558)
2022
$’000
-
161
163
(17)
(810)
(4,030)
(393)
(757)
3,870
(4,480)
On 28 July 2023, several royalties on tenements in Grange
Resources Limited, Barrack Mines Pty Ltd, Horseshoe Gold Pty
Ltd and Grange Administrative Services Pty Ltd were sold for cash
consideration of $8,000,000.
NOTE 9. FINANCE INCOME
Interest income received or
receivable
Exchange gains on foreign currency
deposit
Gain on financial instruments
Distribution income
2023
$’000
14,638
2022
$’000
9,729
1,277
9,371
-
-
15,915
2,255
429
21,784
56
57
GRANGE RESOURCES ANNUAL REPORT 2023
NOTE 10. FINANCE EXPENSES
NOTE 12. CASH AND CASH EQUIVALENTS
NOTE 14. INVENTORIES
NOTE 15. RECEIVABLES
Provisions: unwinding of discounts
- Decommissioning and Restorations
Interest charges on lease liabilities
Other interest charges
Loss on financial instruments
2023
$’000
2,981
160
912
68
4,121
2022
$’000
1,911
1,047
484
-
3,442
NOTE 11. INCOME TAX EXPENSE
Cash at bank and in hand
Short-term deposits
Cash and Cash Equivalents
Cash and cash equivalents as per
statement of cash flows
2023
$’000
3,303
106,403
109,706
2022
$’000
9,074
99,337
108,411
109,706
108,411
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 2023
the weighted average interest rate on the Australian dollar accounts
was 5.17% (31 December 2022: 3.39%) and the weighted average
interest rate on the United States dollar accounts was 8.15% (31
December 2022: 5.78%).
(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
2023
$’000
57,729
323
14,895
1,665
74,612
2022
$’000
48,727
325
8,120
1,249
58,421
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.
2023
$’000
2022
$’000
35,478
38,961
-
(22,622)
(6,812)
-
28,666
16,339
36,422
60,861
(97)
(109)
36,325
64,991
60,752
77,091
215,095
248,826
64,528
74,648
312
64,840
536
75,184
Trade receivables - embedded derivative due to quotation period
exposure is considered as level 2 in fair value hierarchy (note 2)
(97)
(109)
Security deposits comprises of restricted deposits that are used for
monetary backing for performance guarantees.
248
151
64,991
2,016
1,907
77,091
(A) IMPAIRED TRADE RECEIVABLES
Information regarding the impairment of trade and other receivables
is provided in note 2.
5,429
5,246
1,629
1,574
(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.
(a) Income tax expense
Current tax
Tax refund on capitalised mining
costs - Tailing Storage Facility
Tax refund receivable on North Pit
Underground Decline
Total current tax expense
Deferred income tax
Increase in net deferred tax
liability
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% (2022: 30%)
Tax effect of amounts which
are not deductible (taxable) in
calculating taxable income:
Sundry Items
Movement in unrecognised
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%
58
FINANCIAL REPORT
2023
$’000
10,009
2022
$’000
8,988
Stores and spares
Ore stockpiles
Work in progress
Finished goods (at lower of cost
and net realisable value)
2023
$’000
59,504
84,528
11,591
24,193
2022
$’000
47,656
83,155
2,848
29,245
179,816
162,904
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 $5.06 million in 2023 and
a credit of $0.4 million in 2022 were recognised for the movements
in inventories (note 6).
Security deposits
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 2023
Cost
Accumulated depreciation and impairment
Net book amount
Year ended 31 December 2023
Opening net book amount
Additions
Acquisition of remaining interest in Southdown
(note 30)
Disposal- net book value
Depreciation charge
Transfer from assets under construction
Transfer to mine properties and development
Other transfers
Closing net book amount
At 31 December 2023
Cost
Accumulated depreciation and Impairment
Net book amount
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 from assets under construction
Transfer to MP&D
Other transfers
Closing net book amount
At 31 December 2022
Cost
Accumulated depreciation and impairment
Net book amount
Land and
Building
$’000
Plant and
Equipment
$’000
Computer
Equipment
$’000
Assets Under
Construction
$’000
50,584
(33,948)
16,636
16,636
-
15,737
-
(1,656)
2,474
-
-
33,191
68,804
(35,613)
33,191
406,836
(330,425)
76,411
76,411
-
2
(12)
(47,080)
137,166
-
-
166,487
528,880
(362,393)
166,487
10,056
(9,355)
701
701
-
1
-
(5,007)
6,290
-
-
1,985
15,879
(13,894)
1,985
104,081
-
104,081
104,081
91,510
-
-
-
(145,930)
(356)
(2,493)
46,812
46,812
-
46,812
Land and
Building
$’000
Plant and
Equipment
$’000
Computer
Equipment
$’000
Assets Under
Construction
$’000
54,929
(40,004)
14,925
14,925
-
-
(1,485)
3,211
(15)
-
16,636
50,584
(33,948)
16,636
364,749
(311,398)
53,351
53,351
-
-
(20,281)
44,307
(966)
-
76,411
406,836
(330,425)
76,411
9,702
(8,992)
710
710
-
(17)
(513)
521
-
-
701
10,056
(9,355)
701
68,194
-
68,194
68,194
85,588
-
-
(48,039)
(623)
(1,039)
104,081
104,081
-
104,081
Total
$’000
571,557
(373,728)
197,829
197,829
91,510
15,740
(12)
(53,743)
-
(356)
(2,493)
248,475
660,375
(411,900)
248,475
Total
$’000
497,574
(360,394)
137,180
137,180
85,588
(17)
(22,279)
-
(1,604)
(1,039)
197,829
571,557
(373,728)
197,829
Prior year costs and accumulated depreciation were amended to reflect the impact of assets disposal at gross and movements of assets
under construction account. No impact on the net book value.
59
GRANGE RESOURCES ANNUAL REPORT 2023
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
2023
$’000
117
1,979
2,096
1,442
773
2,215
2022
$’000
189
6,764
6,953
4,284
2,198
6,482
Additions to the right-of-use assets during the 2023 financial year
were Nil (2022 - $5.90 million).
The total cash outflow from repayment of leases in 2023 excluding
interest repayment was $2.04 million (2022 - $6.67 million).
(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)
2023
$’000
2022
$’000
(73)
(1,736)
(1,809)
160
302
(60)
(3,193)
(3,253)
1,047
297
NOTE 18. MINE PROPERTIES AND
DEVELOPMENT
Mine properties and development
Opening net book amount
Current year expenditure capitalised
Change in rehabilitation estimate
Change in discount rate
Amortisation Expense
Transfer to PPE
Disposal
Closing net book amount
Deferred stripping costs
Opening net book amount
Current year expenditure capitalised
Amortisation expense
Closing net book amount
2023
$’000
2022
$’000
163,108
356
39
(178)
(9,414)
(61)
(3,547)
150,303
197,844
152,223
(57,332)
292,735
179,622
623
16,994
(26,132)
(8,982)
983
-
163,108
82,755
136,222
(21,133)
197,844
NOTE 19. TRADE AND OTHER PAYABLES
Trade payables
Contract Liabilities
Tax payable
Other payables
2023
$’000
38,249
2,662
6,224
3,245
50,380
2022
$’000
45,003
2,662
16,184
3,874
67,723
(A) RISK EXPOSURE
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
2023
$’000
19,131
3,299
3,130
25,560
2022
$’000
17,793
2,891
1,323
22,007
Mine properties and development (at
cost)
Accumulated amortisation and
impairment
Net book amount
Deferred stripping costs (net book
amount)
Total mine properties and
developments
2023
$’000
2022
$’000
659,205
664,105
(508,902)
(500,997)
150,303
163,108
292,735
197,844
443,038
360,952
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 $19.1 million (2022 $17.8 million) is presented as
current, since the group does not have an unconditional right to
defer settlement for any of these obligations. However, based on
past experience, the group does not expect all employees to take
the full amount of accrued leave or require payment within the next
12 months.
60
The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.2023$’0002022$’000Current leave obligations expected to be settled after 12 months9,5818,894Movements in provision for decommissioning and restoration (current) are set out below2023$’0002022$’000Balance at beginning of year1,3231,487Payments(342)(138)Transfers from non-current provisions2,149(26)Balance at the end of the year3,1301,3232023$’0002022$’000Provisions (Non-Current)Leave obligations2,8642,598Employee benefits98181Decommissioning and restoration77,76477,58680,72680,365Movements in provision for decommissioning and restoration are set out below2023$’0002022$’000Balance at beginning of the year 77,58685,235Change in estimate1,068(8,630)Unwinding of discount 2,9811,911Transfers to current provisions (2,149)26Rehabilitation work completed(1,722)(956)77,76477,586The main component of the provision for decommissioning and restoration costs is for the Group’s obligation to rehabilitate the Savage River and Port Latta sites for the disturbance caused by its operations. The rehabilitation provision also includes an obligation under the Tasmanian Goldamere Pty Ltd Act 1996 to repay the Tasmanian Government for part of the purchase of the mine through expenditure on remediation.NOTE 21. DEFERRED TAX ASSETS (LIABILITIES)The balance comprises temporary differences attributable to:2023$’0002022$’000Deferred Tax AssetsProperty, plant and equipment 15,150 16,572 Decommissioning and restoration 22,396 21,954 Employee benefits7,617 7,039 Foreign exchange- 353 Trade Receivables56 56 Trade payable14 - Total deferred tax assets45,233 45,974 Deferred tax liabilitiesMine properties and development(91,013)(55,912)Foreign exchange(270)- Inventory(6,838)(6,368)Derivatives(1,048)(1,068)Trade Payables- (141)Prepayments(2)(1)Total deferred tax liabilities(99,171)(63,490)Total net deferred tax assets (liabilities)(53,938)(17,516)61FINANCIAL REPORT
GRANGE RESOURCES ANNUAL REPORT 2023
NOTE 22. SHARE-BASED PAYMENT
In May 2022 and December 2023, 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 and 31 December 2025.
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
a Black Scholes Option Pricing. The fair value at the grant date was
estimated using the following assumptions:
2023 Performance Rights
Grant Date
The life of performance rights (years)
Share price at grant dates
Expected volatility
Dividend yield
Risk free interest rates
TSR at measurement dates
(tranche 1 only relative to index)
The assessed fair value at grant date of options
granted in 2023
Tranche 1
Tranche 2
Tranche 3
19 December 2023
19 December 2023
19 December 2023
2
$0.435
60%
9.2%
3.8%
-46.2
$0.091
2
$0.435
60%
9.2%
3.8%
N/A
$0.364
2
$0.435
60%
9.2%
3.8%
N/A
$0.364
2022 Performance Rights
Tranche 1A
Tranche 2A
Tranche 1B
Tranche 2 B
Tranche 1C
Tranche 2C
Grant Date
10 May 2022
10 May 2022
27 May 2022
27 May 2022
30 May 2022
30 May 2022
The life of performance rights (years)
Share price at grant dates
Expected volatility
Dividend yield
Risk free interest rates
TSR at measurement dates
(tranche 1 only relative to index)
The assessed fair value at grant date of
options granted in 2022
2.6
$1.220
55%
3.3%
2.9%
61.6%
2.6
$1.220
55%
3.3%
2.9%
N/A
2.6
$1.550
55%
3.3%
2.9%
96.7%
2.6
$1.550
55%
3.3%
2.9%
N/A
2.6
1.585
55%
3.3%
2.9%
98.8%
2.6
1.585
55%
3.3%
2.9%
N/A
$0.889
$1.120
$1.211
$1.451
$1.229
$1.486
NOTE 23. CONTRIBUTED EQUITY
NOTE 24. RETAINED EARNINGS
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 2023 / 31 Dec 2023
Number of Shares
$’000
1,157,338,698
331,513
Retained earnings attributable to owners of Grange Resources
2023
$’000
2022
$’000
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
574,833
150,104
(23,147)
701,790
541,979
171,735
(138,881)
574,833
62
NOTE 25. DIVIDENDS
Fully franked final dividend for the
year ended 31 December 2022 - 2.0
cents per share
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
2023
$’000
23,147
-
-
2022
$’000
-
23,147
115,734
23,147
138,881
Since the end of the financial year the directors have recommended
the payment of a 2.0 cent final dividend of $23.1 million. The final
dividend was declared NIL conduit foreign income and will be paid
on 28 March 2024.
FRANKED DIVIDENDS
The final dividends recommended after 31 December 2023 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 2023.
FINANCIAL REPORT
NOTE 27. 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
Greater than one year but
not later than 5 years
Later than 5 years
2023
$’000
514
1,671
1,696
3,881
2022
$’000
386
1,584
2,482
4,452
(B) CAPITAL EXPENDITURE COMMITMENTS
Capital expenditure obligations at the end of the reporting period
but not recognised as liabilities are as follows:
31 December
2023
$’000
31 December
2022
$’000
Within one year
2023
$’000
9,642
2022
$’000
46,967
Franking credits available for
subsequent reporting periods
Based on a tax rate of 30%
(2022 - 30%)
103,818
87,262
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. REMUNERATION OF AUDITORS
During the period 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
Non-Assurance Services
PwC Australia
Taxation compliance services
Total remuneration paid
2023
$
2022
$
267,950
11,000
22,786
301,736
238,750
26,650
18,147
283,547
18,797
320,533
-
283,547
(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
2023
$’000
26,897
6,936
2022
$’000
55,353
15,690
33,833
71,043
(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 (2022: $2,012,963), in relation to the rehabilitation of the
Highway Reward project.
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 $3,268,311 (2022: $3,174,542).
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 (2022: $2,800,000). This amount
is a guarantee against the purchase price outstanding with the
Tasmanian government as specified in the Goldamere Agreement.
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 (2022:
$1,000,000).
63
GRANGE RESOURCES ANNUAL REPORT 2023
Note 27. Commitments and Contingencies (continued)
A Bank guarantee has been provided by Grange Resources Limited
for the lease of office in Perth, Western Australia for $39,182 (2022:
$39,182).
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 28. 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 29.
(C) KEY MANAGEMENT PERSONNEL
COMPENSATION
Short term employee benefits
Post-employment benefits
Long-term benefits
Long-term incentives
2023
$
2,038,303
171,255
(58,151)
317,790
2022
$
1,672,153
135,180
52,591
202,870
2,469,197 2,062,794
FY2022 key management compensation has been adjusted to
include non-monetary benefits for B Maynard.
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 (2022: 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
28 February 2024, holds 47.93% (24 February 2023: 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.
(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:
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.
(D) TRANSACTIONS WITH RELATED PARTIES
During the year the following transactions occurred with related
parties:
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.
Sales of iron ore products
2023
$
220,269,938
2022
$
211,922,470
LOANS TO/FROM RELATED PARTIES
There were no loans to or from related parties at the current and
previous reporting date.
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, 1,033,515 dry metric tonnes of iron ore products
were sold to Shagang in accordance with the terms of the long term
off-take agreements (2023 Contract Year (1 April 2022 to 31 March
2023): 1,027,521) (2022 contract year (1 April 2021 to 31 March
2022): 707,049 dmt).
(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:
2023
$
2022
$
Trade receivables (sales of iron
ore products)
Pellets
7,769,554
15,241,644
64
NOTE 29. 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.
Name
Ever Green Resources Co., Limited (1)
Grange Tasmania Holdings Pty Ltd(2)
Beviron Pty Ltd(2)
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 Pty Ltd
Grange Resources Investments Pty Ltd
Percentage of equity
interest held by the Group
2022
%
100
100
100
100
100
100
100
100
100
100
100
100
100
2023
%
100
100
100
100
100
100
100
100
100
100
100
100
100
(1) Ever Green Resources Co., Limited is incorporated in Hong Kong, and registered as
a foreign company under the Corporations Act 2001.
(2) Deregistration applications for Beviron Pty Ltd and Grange Tasmania Holding Pty
Ltd were lodged with Australian Securities Investment Commission.
Grange Resources is in the process of simplifying its organisational
structure by deregistration of three entities which are:
• Ever Green Resources Co. Limited (EVG) – a Hong Kong
incorporated holding entity which is a 100% subsidiary of Grange
Resources Limited (GRL)
• Grange Tasmania Holdings Pty Ltd (GTH) - a company
incorporated in Australia. 90% of the issued ordinary shares in
GTH are held by Ever Green with the remaining 10% held by GRL;
• Beviron Pty Ltd (Beviron) – a company incorporated in Australia
which is a 100% subsidiary of GTH.
The organisational restructuring involved the transfer of ordinary
issued shares in Grange Resources (Tasmania) Pty Ltd to Grange
Resources Limited and the deregistration of Ever Green Resources Co.
Limited, Grange Tasmania Holdings Pty Limited and Beviron Pty Ltd.
NOTE 30. 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
% Interest
2023
100.00
31.15
30.00
30.00
30.00
15.00
2022
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
FINANCIAL REPORT
principal place of business of the joint venture is at Norton Rose
Fullbright, Level 6, 60 Martin Place, Sydney, New South Wales, 2000.
The Southdown Magnetite Project, situated 90km from the city of
Albany in Western Australia, is an advanced project with over 1.2
billion tonnes of high quality resource and access to established
infrastructure. Progress of the definitive feasibility study on a 5
Mtpa development case is under review.
During the year, the Company completed the reacquisition of 30%
interest in the Project. Grange Resources Limited now holds 100
per cent ownership in the Project. The reacquisition was as an
acquisition of asset and the consideration paid of $15.1 million and
transfer duty $0.8 million of were allocated to identifiable assets
and liabilities as follows:
Property, plant and equipment
Other assets
Liabilities
Total acquisition costs
2023
$’000
15,740
139
(16)
15,863
NOTE 31. RECONCILIATION OF PROFIT
AFTER INCOME TAX TO NET CASH
INFLOW FROM OPERATING ACTIVITIES
Profit for the year
Unwinding of discount
Depreciation and amortisation
Mine properties and development
amortisation
Other non-cash income
Interest expense
Proceeds from sale of property, plant
and equipment
Loss on disposal of property plant and
equipment
Loss on derecognition of right of use
assets
Loss (gain) on financial instruments
Net unrealised foreign exchange gain
Change in operating assets
and liabilities
Increase 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 in provision for
income tax payable
Net cash inflow from operating
activities
2023
$’000
150,104
2,981
55,552
2022
$’000
171,735
1,911
25,532
66,746
30,115
(145)
815
(11)
3,558
(1,022)
484
1
18
810
4,030
68
(1,274)
(2,255)
(9,371)
(16,191)
(34,347)
(16,912)
36,422
(7,383)
(903)
60,861
13,622
1,928
(540)
(9,960)
(62,926)
267,108
196,945
65
GRANGE RESOURCES ANNUAL REPORT 2023
NOTE 32. EARNINGS PER SHARE
NOTE 33. PARENT ENTITY INFORMATION
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
2023
Cents
2022
Cents
12.97
14.84
12.96
14.84
(A) RECONCILIATIONS OF EARNINGS USED IN
CALCULATING EARNINGS PER SHARE
Basic earnings 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
2023
$’000
2022
$’000
150,104
171,735
150,104
171,735
(B) WEIGHTED AVERAGE NUMBER OF SHARES
USED AS THE DENOMINATOR
2023
Number
2022
Number
1,157,338,698 1,157,338,698
Weighted average number of ordinary
shares used as the denominator in
calculating basic earnings per share
Weighted average number of ordinary
shares used as the denominator in
calculating diluted earnings per share
Weighted average number of ordinary shares in calculating diluted
earnings per shares includes options of 1,042,018 over ordinary
shares.
1,158,380,716 1,157,486,563
(A) SUMMARY FINANCIAL INFORMATION
The individual financial statements for the parent entity show the
following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders' equity
Contributed equity
Reserves
Retained profits
Profit (loss) for the year
Total comprehensive income for the year
2023
$’000
2022
$’000
8,090
860,602
7,588
38,988
1,514
1,074,811
20,351
52,023
392,475
392,475
31,244
31,434
397,705
599,069
821,614 1,022,788
787,207
(178,650)
787,207
(178,650)
(B) CONTINGENT LIABILITIES OF THE PARENT
ENTITY
OTHER CONTINGENT LIABILITIES
Pursuant 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 34. EVENTS OCCURRING AFTER
THE REPORTING PERIOD
On 19 February 2024, the Board approved the plan to transition
from North Pit open pit to underground mining over the next five
years.
66
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 2023 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 directorsMichelle LiChairperson of the Board of Directors28 February 202467FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2023
FINANCIAL REPORT
Independent auditor’s report
To the members of Grange Resources Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Grange Resources Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 31 December 2023 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2023
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
structure of the Group, its accounting processes and controls and the industry in which it operates.
Audit scope
Audit scope
Key audit matters
Key audit matters
• Our audit focused on where the Group made
• Our audit focused on where the Group made
subjective judgements; for example, significant
subjective judgements; for example, significant
accounting estimates involving assumptions and
accounting estimates involving assumptions and
inherently uncertain future events.
inherently uncertain future events.
•
•
•
•
Amongst other relevant topics, we communicated
Amongst other relevant topics, we communicated
the following key audit matters to the Audit and
the following key audit matters to the Audit and
Risk Committee:
Risk Committee:
−− Carrying value assessment for the Savage
−− Carrying value assessment for the Savage
River cash generating unit (CGU)
River cash generating unit (CGU)
−− Accounting for the cost of rehabilitation
−− Accounting for the cost of rehabilitation
These are further described in the Key audit
These are further described in the Key audit
matters section of our report.
matters section of our report.
Key audit matters
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
particular audit procedure is made in that context.
Key audit matter
Key audit matter
How our audit addressed the key audit matter
How our audit addressed the key audit matter
Carrying value assessment for the Savage River
Carrying value assessment for the Savage River
cash generating unit (CGU)
cash generating unit (CGU)
(Refer to note 3(b))
(Refer to note 3(b))
The carrying value assessment of the Savage River
The carrying value assessment of the Savage River
CGU, which consists of the mine and pelletising plant,
CGU, which consists of the mine and pelletising plant,
was a key audit matter given the significance of the
was a key audit matter given the significance of the
carrying amount to the consolidated statement of
carrying amount to the consolidated statement of
financial position and the significant judgements and
financial position and the significant judgements and
assumptions required in estimating the fair value
assumptions required in estimating the fair value
associated with the approved plan to transition from
associated with the approved plan to transition from
open pit to underground mining in 2027.
open pit to underground mining in 2027.
There were a number of factors in the assessment
There were a number of factors in the assessment
requiring judgement by the Group including:
requiring judgement by the Group including:
• the pellet (final product) price and the AUD/USD
• the pellet (final product) price and the AUD/USD
exchange rates
exchange rates
• the discount rate
• the discount rate
• estimation uncertainty associated with forecast of
• estimation uncertainty associated with forecast of
We developed our understanding of the process by
We developed our understanding of the process by
which the cash flow forecasts were prepared, tested
which the cash flow forecasts were prepared, tested
the mathematical accuracy of the discounted cash flow
the mathematical accuracy of the discounted cash flow
model, and assessed that the methodology utilised to
model, and assessed that the methodology utilised to
determine the recoverable amount was consistent with
determine the recoverable amount was consistent with
Australian Accounting Standards.
Australian Accounting Standards.
We satisfied ourselves that the operating and capital
We satisfied ourselves that the operating and capital
expenditure forecasts were consistent with the board
expenditure forecasts were consistent with the board
approved life of mine plan
approved life of mine plan
We assessed:
We assessed:
• the long term pellet price and AUD/USD exchange
• the long term pellet price and AUD/USD exchange
rate assumptions by agreeing them to analysis
rate assumptions by agreeing them to analysis
performed by external parties and comparing them
performed by external parties and comparing them
to economic and industry forecasts
to economic and industry forecasts
• the discount rate by assessing the cost of capital for
• the discount rate by assessing the cost of capital for
the Group, assisted by PwC valuation experts, and
the Group, assisted by PwC valuation experts, and
comparing the rate to market data
comparing the rate to market data
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
68
68
69
69
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GRANGE RESOURCES ANNUAL REPORT 2023
FINANCIAL REPORT
Key audit matter
How our audit addressed the key audit matter
operating and capital expenditure
The Group prepared a discounted cash flow model
(‘the model’) to determine the recoverable amount of
the Savage River CGU balance, which requires a
number of assumptions as described in Note 3b.
• the reasonableness of disclosures made in the
financial report in line with requirements of
Australian Accounting Standards
Accounting for the cost of rehabilitation
(Refer to note 20)
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.
The net present value of the cost of rehabilitation is
recorded as a provision of $77.8 million (non-current)
and $3.1 million (current), for a total of $80.9 million.
Given the financial significance of this balance and the
judgments involved in accounting for the cost of
rehabilitation, this was a key audit matter.
To assess the accounting for the cost of rehabilitation,
we performed the following procedures, amongst
others:
• Obtained the Group’s calculation of the
rehabilitation provision. We checked the
mathematical accuracy on a sample of calculations
and whether the timing of the cash flows in the
rehabilitation models was consistent with the latest
life of mine plan.
• Assessed whether the discount rates used in the
rehabilitation models were reasonable by
comparing them to market data.
• Where external and internal experts were used by
the Group to estimate remediation costs, we
assessed our ability to use their estimates,
considering their objectivity, competency and
capability and assessing that the scope of work
they performed was appropriate for the purposes of
the estimate.
• We compared the Group’s significant assumptions
on rehabilitation costs to other similar costs in the
business or external data where appropriate.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 31 December 2023, but does not include
the financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other
information we obtained included the Directors' Report, Corporate Governance Statement. We expect
the remaining other information to be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon through our opinion on the financial
report. We have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
professional judgement to determine the appropriate action to take.
Responsibilities of the directors for the financial report
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
auditor's report.
Report on the remuneration report
Report on the remuneration report
Our opinion on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 31
We have audited the remuneration report included in the directors’ report for the year ended 31
December 2023.
December 2023.
70
70
71
71
71
GRANGE RESOURCES ANNUAL REPORT 2023
In our opinion, the remuneration report of Grange Resources Limited for the year ended 31 December
2023 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 Auditing Standards.
PricewaterhouseCoopers
Chris Dodd
Partner
Melbourne
28 February 2024
72
72
73FINANCIAL REPORT GRANGE RESOURCES ANNUAL REPORT 2023
TENEMENT SCHEDULE
As at 28 February 2024
PROSPECT
TASMANIA
Savage River
TENEMENT
INTEREST
2M/2001
14M/2007
11M/2008
4M/2019
EL30/2003
EL8/2014
100% (1)
100% (1)
100% (1)
100% (1)
100% (1)
100% (1)
WESTERN AUSTRALIA
Southdown
M70/1309
100% (3)
G70/217
R70/61
L70/185
L70/186
L70/188
L70/201
L70/225
M52/801
ML 1571
ML 1734
ML 1739
ML 10028
ML 1758
100%
100%
100%
100%
100$ (2)
100$ (2)
100$ (2)
15% (4) (5)
30% (6)
30% (6)
30% (6)
30% (6)
30% (6)
Wembley
QUEENSLAND
Mt Windsor JV
Notes:
1. Held by Grange Resources (Tasmania) Pty Ltd.
2. Under application.
3. Subject to conditional purchase agreement with Medaire Inc.
4. Subject to 1% Net Smelter Return royalty with Lac Minerals (Australia) NL.
5. Subject to joint venture agreement with Aragon Resources Pty Ltd.
6. Subject to joint venture agreement with Thalanga Copper Mines Pty Limited.
LIST OF SIGNIFICANT ASX
ANNOUNCEMENTS
From 1 January 2023 through to 30 January 2024
Date
Announcement
25-Jan-24
GRR - Quarterly Report for 3 months ended
31 December 2023
02-Jan-24
Board Update
22-Dec-23
Company Update
21-Dec-23
Initial Director's Interest Notice
21-Dec-23
Director Appointment
27-Oct-23
GRR - Quarterly Report for 3 months ended
30 September 2023
06-Sep-23
Final Director's Interest Notice
06-Sep-23
Board Update
25-Aug-23
Half Yearly Report and Accounts
25-Aug-23
Appendix 4D - Half Year Ending 30 June 2023
24-Aug-23
Board Update
26-Jul-23
GRR - Quarterly Report for 3 months ended
30 June 2023
23-May-23
Change of Director's Interest Notice
09-May-23
Constitution
09-May-23 Results of Meeting
09-May-23
AGM Presentation
08-May-23
Amended Annual Report
27-Apr-23
GRR - Quarterly Report for 3 months ended
31 March 2023
11-Apr-23
Annual Report to Shareholders
11-Apr-23
Notice of Annual General Meeting/Proxy Form
31-Mar-23
Savage River Mineral Resources and
Ore Reserves Update
28-Mar-23
Date of AGM
01-Mar-23
Initial Director's Interest Notice
01-Mar-23
Director Appointment
24-Feb-23
Corporate Governance Statement
24-Feb-23
Appendix 4G
24-Feb-23
Dividend/Distribution - GRR
24-Feb-23
Grange Full Yr Statutory Accts 12 Months Ended
31 Dec 2022
24-Feb-23
Grange Resources Limited Appendix 4E -
31 December 2022
27-Jan-23
GRR - Quarterly Report for 3 months ended
31 December 2022
11-Jan-23
Ceasing to be a substantial holder
FINANCIAL REPORT
ASX ADDITIONAL INFORMATION
information required by the Australian Securities
Additional
Exchange Limited and not shown elsewhere in this report is as
follows. The shareholder information set out below was applicable
as at 30 January 2024 except where otherwise indicated.
ORDINARY SHARES
Twenty Largest Shareholders as at 30 January 2024
The twenty largest holders of ordinary fully paid shares are listed
below:
Name
Shagang International Holdings Ltd
(Hong Kong)
Pacific International Co
(Hong Kong)
Acadian Asset Management LLC
(United States)
DFA Australia Ltd. (Australia)
Dimensional Fund Advisors LP
(United States)
Realindex Investments Pty Ltd.
(Australia)
Macquarie Investment
Management Ltd. (Australia)
Vinva Investment Management Ltd.
(Australia)
Rathvale Pty Ltd (Australia)
Vanguard Investments Australia
Ltd. (Australia)
LSV Asset Management (United
States)
Credit Suisse AG (Switzerland)
Swinnerton, John (Australia)
ABN AMRO Bank NV (Netherlands)
Stubbe, E.F.L. (Netherlands)
State Street Global Advisors,
Australia, Ltd. (Australia)
American Century Investment
Management, Inc. (United States)
Goldman Sachs International
(Collateral Account)
(United Kingdom)
Saxo Bank A/S (Denmark)
Interactive Brokers - Private
Clients (Various Countries)
Sub-total
Number
%
554,762,656
47.9
31,234,348
26,041,764
22,030,176
19,473,676
15,807,859
15,086,095
9,206,998
8,795,750
8,740,249
8,291,000
7,200,936
5,600,000
5,489,704
5,300,000
4,871,110
4,444,410
4,353,379
4,198,938
4,128,020
2.7
2.3
1.9
1.7
1.4
1.3
0.8
0.8
0.8
0.7
0.6
0.5
0.5
0.5
0.4
0.4
0.4
0.4
0.4
765,057,068
66.1
74
75
GRANGE RESOURCES ANNUAL REPORT 2023
DISTRIBUTION OF EQUITY SECURITIES
Analysis of number of shareholders by size and holding:
UNQUOTED SECURITIES
Security Code
Security Name
GRRAU
Performance
Rights
Total
Holders
Total
Holdings
3
295,728
DISTRIBUTION OF UNQUOTED
SECURITIES
Analysis of number of security holders by size and holding:
Ordinary
Shares
Director
Options
Employee
Options
Other
Options
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - and over
Total
-
-
2
1
3
-
-
-
-
0
-
-
-
-
0
-
-
-
-
0
SUBSTANTIAL UNQUOTED
SECURITY HOLDERS
An extract of the Company’s Register of Substantial Unquoted
Securityholders as at 30 January 2024 is set out below:
Name
Mr Honglin Zhao
Mr Ben Maynard
Mr Thanh Steven Phan
Number of Performance Rights
140,343
80,679
74,706
Ordinary
Shares
Director
Options
Employee
Options
Other
Options
1 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - and over
1,705
5,464
3,480
554
Total
11,203
-
-
-
-
0
-
-
-
-
0
-
-
-
-
0
The number of shareholders holding less than a marketable parcel
of Ordinary Shares at 30 January 2024 was 1,767.
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 30 January 2024 is set out below:
Name
Shagang International Holdings
Ltd (Hong Kong)
Number of Fully
Paid Ordinary
Shares
Voting
Power
554,762,656
47.9%
SECURITIES SUBJECT TO
VOLUNTARY ESCROW
The following securities are subject to voluntary escrow:
Class of Security
Fully Paid Ordinary Shares
Number of
Securities
Escrow
period ends
Nil Not applicable
76
GRANGE RESOURCES LIMITEDBOARD OF DIRECTORSMichelle Li ChairpersonYan Jia Non-Executive Director, Deputy Chairperson (resigned on 6 September 2023)Tianxiao Shen Non-Executive Director (appointed on 21 December 2023)Michael Dontschuk Non-Executive Director (resigned on 20 March 2024)Ajanth Saverimutto Non-Executive DirectorHonglin Zhao Chief Executive Officer / Managing DirectorChongtao Xu Executive Director (appointed on 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 REGISTRYAutomic GroupLevel 5, 126 Phillip StreetSydney, NSW 2000AUDITORSPricewaterhouseCoopers2 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. ANNUAL REPORT 2023 GRANGE RESOURCES LIMITEDANNUAL REPORT2023Burnie Office - Tasmania (Registered Office) 34A Alexander Street Burnie, TAS 7320PO Box 659Burnie, TAS 7320 +61 (3) 6430 0222 grr.info@grangeresources.com.au