2011 Annual Report (3 April 2012) - Grange Resources

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