2011 Annual Report (3 April 2012) - Grange Resources

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GRANGE RESOURCES LIMITED 14 Review of Operations (cont.) Truck Driver Jordan Bonde, Savage River. Overview Review Of Operations Corporate Governance
2011 ANNUAL REPORT 15 Pellet production and sales Pellet production for the year ended 31 December 2011 was 1.98 million tonnes with the lower annualised production rate arising as a result of the June 2010 rock slide at Savage River which temporarily affected ore supply. Pellet sales were 1.7 million tonnes. During the year the average price received for iron ore pellets was A206.02 per tonne, a 30% increase from A$158.47 per tonne for the six month period ended 31 December 2010. In March 2011, agreement was reached with customers, on a pricing mechanism designed to replace the Benchmark system that was in place prior to April 2010. As a result of this agreement, we received $52.1 million, being the difference between what was paid for shipments in 2010 under an interim pricing agreement and what was due using the agreed pricing mechanism. Grange forecasts production of approximately 2.3 to 2.4 million tonnes of concentrate in 2012 and will be able to maintain pellet production to meet all contracted sales requirements during this period. Unit costs rose during 2011 primarily as a result of the reduced pellet production. Regaining access to the main ore zone in the North Pit during the final quarter of 2011 resulted in production levels increasing and C1 unit costs of pellet production falling to below A$90 per tonne. 12 Months 12 Months 6 Months December 2011 December 2010 December 2010 PRODUCTION STATISTICS Mine - Volumes (‘000) Waste Mined (BCM) 13,935 15,935 7,448 Ore Mined (BCM) 1,693 1,214 579 Total Mined (BCM) 15,628 17,149 8,027 Strip Ratio (Ore To Waste) 8:1 13:1 13:1 Concentrator - Volumes (‘000) Ore Crushed (t) 5,766 5,752 2,909 Ore Milled (t) (wet) 5,840 5,621 2,791 Weight recovery (dry) (%DTR) 36.4% 42.8% 39.9% Concentrate Produced (t) 2,019 2,288 1,058 Pellet Plant - Volumes (‘000) Pellets Produced (t) 1,978 2,205 1,000 Concentrate Stockpile (t) 1 11 11 Pellet Stockpile (t) 351 69 69 Sales - Volumes (‘000) Pellets (t) 1,696 2,344 1,175 Concentrate (t) 11 18 18 Chips (t) 66 84 37 Total Sales Volume (t) 1,773 2,446 1,230 SALES REVENUE, CASH OPERATING COSTS (C1) AND OPERATING MARGIN SALES REVENUE Sales of Iron Ore (A$) $410,432 $311,145 $193,334 Average Pellet Price Received (A$/t) $206.02 $127.68 $158.47 CASH OPERATING COSTS (C1) Cash Operating Costs (C1) (A$/t) * $111.68 $81.20 $88.20 Operating Margin (A$/t) $94.34 $46.48 $70.27 * Cash Operating Costs (C1) are the cash costs associated with producing iron ore pellets without allowance for deferred mining and stockpile movements, and also exclude royalties, depreciation and amortisation costs. Directors’ Report Financial Statements Shareholder information
Page 1 and 2: 2011 Annual REPORT Australia’s le
Page 3 and 4: 2011 ANNUAL REPORT 1 WESTERN AUSTRA
Page 5 and 6: 2011 ANNUAL REPORT 3 Investment Mer
Page 7 and 8: 2011 ANNUAL REPORT 5 Higher QUALITY
Page 9 and 10: 2011 ANNUAL REPORT 7 Aaron John and
Page 11 and 12: 2011 ANNUAL REPORT 9 Managing Direc
Page 13 and 14: 2011 ANNUAL REPORT 11 Matt Anderson
Page 15: 2011 ANNUAL REPORT 13 Review of Ope
Page 19 and 20: 2011 ANNUAL REPORT 17 Water bore dr
Page 21 and 22: 2011 ANNUAL REPORT 19 Environmental
Page 23 and 24: 2011 ANNUAL REPORT 21 Review of Ope
Page 25 and 26: 2011 ANNUAL REPORT 23 Land access a
Page 27 and 28: 2011 ANNUAL REPORT 25 Corporate Gov
Page 29 and 30: 2011 ANNUAL REPORT 27 In addition t
Page 31 and 32: 2011 ANNUAL REPORT 29 The policy al
Page 33 and 34: Australia’s leading magnetite pro
Page 35 and 36: 2011 ANNUAL REPORT 33 Grange Resour
Page 37 and 38: 2011 ANNUAL REPORT 35 ◆ ◆ Land
Page 39 and 40: 2011 ANNUAL REPORT 37 REMUNERATION
Page 41 and 42: 2011 ANNUAL REPORT 39 b) Options to
Page 43 and 44: 2011 ANNUAL REPORT 41 Table 2: Remu
Page 45 and 46: 2011 ANNUAL REPORT 43 Rights to Gra
Page 47 and 48: 2011 ANNUAL REPORT 45 During the pe
Page 49 and 50: Statement of Comprehensive Income F
Page 51 and 52: Statement of Changes in Equity For
Page 53 and 54: Notes to the Financial Statements 2
Page 55 and 56: 2011 ANNUAL REPORT 53 the fair valu
Page 57 and 58: 2011 ANNUAL REPORT 55 Deferred tax
Page 59 and 60: 2011 ANNUAL REPORT 57 Recoverable a
Page 61 and 62: 2011 ANNUAL REPORT 59 (w) Ore reser
Page 63 and 64: 2011 ANNUAL REPORT 61 (ab) Contribu
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2011 ANNUAL REPORT 65 31 December 2
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2011 ANNUAL REPORT 67 The Group mer
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2011 ANNUAL REPORT 69 NOTE 7. REVER
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2011 ANNUAL REPORT 71 NOTE 12. TRAD
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2011 ANNUAL REPORT 73 (b) Leased as
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2011 ANNUAL REPORT 75 NOTE 25. DEFE
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2011 ANNUAL REPORT 77 NOTE 30. RETA
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2011 ANNUAL REPORT 79 (iv) Share ho
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2011 ANNUAL REPORT 81 (e) Contingen
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2011 ANNUAL REPORT 83 NOTE 38. RECO
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2011 ANNUAL REPORT 85 The table bel
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2011 ANNUAL REPORT 87 NOTE 41. PARE
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Independent Auditor’s Report to t
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Tenement Schedule as at 29 February
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List of Significant ASX Announcemen
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2011 Annual Report (3 April 2012) - Grange Resources

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