Grange has the option to sell iron ore or leave it in the ground. So GRR can be valued with an option price model. Iron ore has a volatility of about 30%. Over the next 10 years Grange will produce 25 million tonnes at a cost of perhaps $160/tonne. So the strike price of the iron ore is $4 billion. The market price of the ore is also about $4 billion at current prices. Using an online calculator for american options with 10% interest rate and 10% dividend yield, the option to sell the iron ore is worth about $0.96 billion.
Ann: Appendix 4D - Half Year Ending 30 June 2022, page-203
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38.0¢ |
Change
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Mkt cap ! $439.7M | |||
| Open | High | Low | Value | Volume |
| 38.5¢ | 39.0¢ | 38.0¢ | $588.4K | 1.533M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 19994 | 38.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 38.5¢ | 129870 | 1 |
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