GRR

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37.5¢ grange resources limited.

Ann: Dividend/Distribution - GRR, page-95

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26/08/21

13:55

Post #: 55593563
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Originally posted by Footmax: ↑

A few things about South Down that we should consider - and I think the feasibility study will consider these as well. These are not alien points and I am sure that we have all mulled them in our minds since the change of wording in GRR announcements on Southdown.

1) GRR owns 70% of the project and have a stated aim of producing 5mil tonnes pa. Given that the total resource is 10 mil tonnes, then it would appear that they are no longer chasing the prospect of selling off 40% of the project. There may be no additional funds coming in to kick start the project.
2) The above does make sense of GRR's inability of off-load the 40% when IO prices were at record levels. It does indicate that GRR was always going to go it alone. Even if they were to sell off the 40%, they would get much less for the resource now.
3) Given that they have not managed to extricate themselves out of the RE venture, maybe they are asking too much for the 40% in SD - though, they may be waiting ror RE prices to go up further to increase the profit margin.
4) Development of Southdown will take a few years - it will not happen over night. GR will not have the funds (assuming there is no selling of the 40% in the original plans) and will have to borrow heavily in order to go forward with development. Any borrowings are never a good thing and it would also mean the suspension of any dividends for the period of the SD development.
5) Maybe, the plan will include selling off the 40% once the project is in a more advanced state - easier to sell and they would get a premium for the project being more advanced. Will they be forced to do this anyway?
6) IO price - will this remain where it is or go up significantly - will it fall? This is the great unknown. Three years from now, the IO price may be down and that makes the whole SD project less attractive.

No doubt, the feasibility study due at the end of the year will cover these aspects. Thing is, that no one should predict with certainty that the project will get off the ground at this point. If the feasibility study results turn out that the SD project is too expensive and the returns are not adequate, what does that mean - will GRR still hold on to the asset waitin for better times or will they try to off-load it all together maybe at a lower price?

The results of the feasibility study will be very interesting. If IO prices do dip by the end of the year, then I suspect that GRR will not go ahead with the project - and logic indicates, they should not either.

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Southdown should stack up on $72 USD plus premium or thereabouts. What the price is later this year is largely irrelevant... Long term forecasts are what matters here. We need to band together and get a strike on the bod so we can spill them before they destroy this one off pile of cash by investing at, or near the top of the cycle.

Savage River absolutely!

In a world of unprecedented leverage, debt and risk, China more so than most, putting all our money in foregone divvis on black and spinning the wheel on Southdown is unacceptable.

GRR Price at posting: 63.5¢ Sentiment: Hold Disclosure: Held
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Ann: Dividend/Distribution - GRR, page-95

Almonty locks in govt agreement for tungsten oxide plant in South Korea

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

BHP dips as WA nickel suspended after A$6B hit; losses eased by US CPI and forewarning

Nanocap Middle Island Resources kicks off Barkly copper-gold drill run – a potential IOCG-style NT project

SKS Technologies wins US$90M award to supply power to international hyperscale data centre in Melbourne

ASX hits all time high out the gate on Friday trades following bullish US inflation data

Immutep reports strong response rate from immunotherapies treating carcinomas

Bitcoin investors need to know the risks

Nimy to raise $1.21M to explore 'newsy' WA targets

Week 27 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

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Buyers (Bids)

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Ann: Dividend/Distribution - GRR, page-95

Top Stories

Almonty locks in govt agreement for tungsten oxide plant in South Korea

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

BHP dips as WA nickel suspended after A$6B hit; losses eased by US CPI and forewarning

Nanocap Middle Island Resources kicks off Barkly copper-gold drill run – a potential IOCG-style NT project

SKS Technologies wins US$90M award to supply power to international hyperscale data centre in Melbourne

ASX hits all time high out the gate on Friday trades following bullish US inflation data

Immutep reports strong response rate from immunotherapies treating carcinomas

Bitcoin investors need to know the risks

Nimy to raise $1.21M to explore 'newsy' WA targets

Week 27 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News