Australia's leading magnetite producer - Grange Resources

Australia’s leadingmagnetite producerSouthdown Magnetite ProjectPre-feasibility Study May 2011

DisclaimerThe material in this presentation (“material”) is not and does not constitute an offer, invitation orrecommendation to subscribe for, or purchase, any security in Grange Resources Limited it (“GRR”) nor does it form the basis of any contract or commitment. GRR makes no representationor warranty, express or implied, as to the accuracy, reliability or completeness of this material.GRR, its directors, employees, agents and consultants, shall have no liability, including liability toany person by reason of negligence or negligent misstatement, for any statements, opinions,information or matters, express or implied, arising out of, contained in or derived from, or for anyomissions from this material except liability under statute that cannot be excluded.Statements contained in this material, particularly those regarding possible or assumed futureperformance, costs, dividends, production levels or rates, prices, resources, reserves or potentialgrowth of fGRR or, industry growth or other trend projections are, or may be, forward lookingstatements. Such statements relate to future events and expectations and, as such, involveknown and unknown risks and uncertainties. Actual results and developments may differmaterially from those expressed or implied by these forward looking statements t t depending di on avariety of factors.May 2011 Slide 2

Overview• Australia’s leading magnetite producer• ASX 300 index company• Strong balance sheet, no net debt• Proven operational performance – tonnes and cashflow• Quality product, high h margins – iron ore pellets• Large integrated mine, concentrator, pellet plant and port facilities• Major magnetite development project in Western Australia• Long term off take agreements• Strong management team with extensive operating expertiseMay 2011 Slide 3

Magnetite – The premium iron oreHigherIron Ore Pellet~65-69% FeQUA ALITYDirect ShippingLump ~63% FeMagnetite Concentrate~67% FeLowerDirect ShippingFines ~58% FeLowerPriceHigherMay 2011 Slide 4

Company SnapshotCurrent key statistics (A$)Ordinary shares onissue2 April 2011 1,153mLast share price 2 April 2011 $0.655Market capitalization 2 April 2011 $755mCash & Receivables 31 March 2011 $156.2mGrange joined the ASX 300 in September 2010Current Ownership Structure46.90%33.70%7.90%11.5%Free floatPMLRGL GroupJiangsuShagangMr Zhiqiang XiMr Neil ChatfieldMr Russell ClarkMr Honglin ZhaoMr Clement KoMr John HoonBoard of DirectorsChairmanDeputy ChairmanManaging Director, CEOExecutive DirectorNon Executive DirectorNon Executive DirectorResearchCitiMacquarieMerrill LynchPatersonsPetra CapitalSouthern Cross EquitiesRBSRBS MorgansMay 2011 Slide 5

Grange’s position is supported by quality assets in Tasmaniaand Western Australia.Southdown Project (70%)• JV with Japanese TradingCompany, Sojitz (30%)• 90km northeast of the Portof Albany• 650 million tonnes ofpremium quality magnetite resource insouthern Western Australia• Targeting 10Mtpa concentrate, to producehigh quality pellets for over 30 years• Infrastructure solutions in place(power, port, water)• Advanced permitting• Potential to increase resources and reservesSavage River (100%)• Northwest Tasmania• Annualised production rateof 2.0 Mtpa premium blastfurnace pellets andconcentrate• Mine life to 2026• 118Mt reserves at 51% DTR• Owner-operated open pit mine, 83km slurrypipeline, coastal pellet plant and port• Dedicated infrastructure – no third partycharges• Extensive operating experience applicable toSouthdown developmentMay 2011 Slide 6

Large Scale OperationsMay 2011 Slide 7

Grange Downstream InfrastructureMay 2011 Slide 8

Grange Port & Shiploading InfrastructureMay 2011 Slide 9

Savage River - Leveraged to priceA$ millio on500450400350300250200150100Margin leverage to price @2.0MtpaMARGINRevenueCosts120 130 140 150 160 170 180 190 200 210 220May 2011 Slide 10

Southdown Magnetite Project Key FactsOwnership • Grange 70%, Sojitz Corporation 30%Resources and • Mineral Resource of 654Mt magnetite at 36.5% DTR 1,2Reserves 1 • Ore Reserve of 388Mt magnetite at 35.5% DTR 1,3Production1Capital CostsOperating CostsMine LifeInfrastructurereProject Status• Targeting 10Mtpa magnetite concentrate for premiumblast furnace pellets• Southdown Mine – A$2,575 million• Kemaman Pellet Plant – A$941 million•

Southdown Magnetite Project Location PlanMay 2011 Slide 12

Southdown Magnetite Project Regional BenefitsA long-term (30 to 50 years) sustainable industry in the Great Southern.• A local workforce (not FIFO)• Over 600 long-term jobs directly created• Work for local contractors and businesses• Injection of ~ $500M annually into local economy• Regional rates ~ $3M per annum• Support for local community groups and events• Significant population and economic growth for City of Albany,Bremmer BayMay 2011 Slide 13

Southdown Magnetite Project PFS Highlightsg• Mine Capex, including infrastructure A$2.57 billion;• Operating costs per tonne of concentrate produced

Southdown Magnetite Project Orebody654 Mt at 36.5% magnetiteMay 2011 Slide 15

Southdown Magnetite Project Orebody PotentialDtil DetailsPFS CaseWestern ResourceShort TermPotentialti Full Western ResourceLong Term PotentialWestern/Eastern ResourceMine Life 19 years 21 years 40 yearsOre (million tonnes) 430 ~575 ~1,200Ore Grade %DTR 37.7% 36.8% 36.5%Concentrate (million tonnes) 158 ~199 ~375Note• Short Term Potential Full Western Resource assumes that further drillingwill move inferred resources to indicated resource and also add tonnagethrough deeper drilling.• Long Term Potential Western/Eastern Resource assumes that furtherdrilling in the eastern side of the magnetic anomaly will establish inferredresource which, following in fill drilling, will add indicated and measuresresourceMay 2011 Slide 16

Southdown Magnetite Project Concentrator Flow SheetMay 2011 Slide 17

Southdown Magnetite Project Product QualitySouthdown MagnetiteConcentrate%Total Fe 68.9SiO 2 1.56Al 2 O 3 1.45CaO 011 0.11MgO 0.16TiO 2 0.38Southdown IronOre %PelletsTotal Fe 67B2 0.54SiO2+Al2O3+TiO2 3.31P

Southdown Magnetite Project Location PlanMay 2011 Slide 19

WaterMay 2011 Slide 20

Port of AlbanyNew Berth LocationMay 2011 Slide 21

Southdown Magnetite Project Environmental PermitsGranted November 2009, amendmentMine Environmental permitrequired in 2011 for 10mtpaPort permits Granted November 2010Water permit Desalination permit expected in 2011May 2011 Slide 22

Southdown Project Australia - Malaysia4. Pellet Plant (7Mtpa)3. Concentrate shipped (10Mtpa)2. 100km slurry pipeline toAlbany Port1. Mine and concentrator targeting10Mtpa of concentrateproduction for over 25 yearsMay 2011 Slide 23

The Kemaman Pellet Plant Location PlanMay 2011 Slide 24

Southdown Magnetite Project Timetable2011 2012 2013 2014Pre-FeasibilityDfiii DefinitiveFeasibilityConstructionProductionMay 2011 Slide 25

Southdown Magnetite Project PFS HighlightsgWhy is this project different to other magnetite projectsbeing built?• Grange’s extensive operating experience and existing IPdramatically reduces execution risk,• The project is well advanced:‣ Major permits for the mine and port are in place;‣ Land tenure is largely secure;‣ Metallurgical test work is well advanced;‣ Power line easements are established and permitted;May 2011 Slide 26

An Opportunity for WAThe Southdown Magnetite Project will delivera new long-term industry for Western Australiaand the Great Southern Region.It will improve local infrastructure,create regional employmentand further develop the City of Albanyas a regional economic centre.May 2011 Slide 27

Positive Outcomes for WA• A new industry in southern Western Australia• State Royalties of ~$50M per annum• State taxes ~ $5M per annum• Port enhancements secure Albany as a commercial port• Better infrastructure for water & power• Partnerships that benefit the State & region• training• community – non FIFO• tourism• environmental eg Commersonia speciesMay 2011 Slide 28

Regional BenefitsA long-term (30 to 50 years) sustainable industry in the Great Southern.• A local workforce (not FIFO)• Over 600 long-term jobs directly created• Work for local contractors and businesses• Injection of ~ $500M annually into local economy• Regional rates ~ $3M per annum• Support for local community groups and events• Significant population and economic growth for City of Albany,Bremmer BayMay 2011 Slide 29

Key ContactsPrimary contact:Russell ClarkManaging Director & Chief Executive Officer+61 8 9327 7901managingdirector@grangeresources.com.auMay 2011 Slide 30

Competent Person StatementSouthdown ProjectThe information in this presentation which relates to the Mineral Resources of the Southdown Project is based on information compiled by JamesFarrell who is a full-time employee of Golder Associates Pty Ltd and a Member of the Australasian Institute of Mining and Metallurgy. James Farrellhas sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity for which he isundertaking to qualify as a Competent Person as defined in the JORC Code (2004). James Farrell consents to the inclusion of this information inthis presentation in the form and context in which it appears.The information in this presentation which relates to the Ore Reserves of the Southdown Project is based on information compiled byMr Ross Bertinshaw who is a full-time employee of Golder Associates Pty Ltd and a Fellow of the Australasian Institute of Mining and Metallurgy.Mr Bertinshaw has sufficient experience in Ore Reserve estimation relevant to the style of mineralisation and type of deposit under considerationand to the activity for which he is undertaking to qualify as a Competent Person as defined in the JORC Code (2004). Mr Bertinshaw consents tothe inclusion in this presentation of the matters based on his information in the form and context in which it appears.May 2011 Slide 31