2015‌

ANNUAL REPORT

Australia's most experienced magnetite producer

Grange Resources Limited

BOARD OF DIRECTORS

MlchelleLI Non-alcecutlvs Chairman Yan Jle Non-alcecutlvs Deputy Chairman Dmlel Tenardl Non-executive Dlmctor Liming Hu•g Non-executive Director

HangllnZhao Chief Executive Officer ('CEO")and Ex6CUtive Director

COMP.ANY SECRETARY

Piers Lewis

REGISTEREDOFFICE

Grange Reeources LimitedABN 80009 132 405 34aAlexander Street, BURNIE,TAS 7320 Telephone:+ 61 (3) &ISO 0222

Facsimile:+ 61(3) 6432 3390

SHARE REGISTRY

ComputershareInvestor Services Ply Ltd

Yarra Falls

462 Johnston Street, ABBOTSFORD,VIC 3067

AUDITORS

PrlcewaterhouseCoopers Freshwater Place

2 Southbank Boulevard,SOUTHBANK, VIC 3006

STOCK EXCHANGE

Grange Resources Limitedislisted onthe ASX Limited

(ASX Code:GRR) and the·ore·Marketsin Berlin,Munich,

Stuttgart and Frankfurt In Germany (Code:WKN. 917447)

WEBSITE

www.grangeresouroes.com.au

CONTENTS

About Grange

2015 Ovarvi­

.2016 Priorities

About the Grange Business

Chairperaon's and Chief Executiw Officer's Review

Operating and Financial Review Corporate Governance Statement Directors' Report

Auditor's lndepandanca Declaratlon

Financial Statement Tenement Schedule

ASX Addldonal Information

List of Significant ASX AnnouncamantB

2

3

4

5-6

7-19

20

22-33

34

36-69

70

71

72

GRANGe ReSOURCeS LIMI TED // 2015 ANNUAL REPORT

About Grange

OUR BUSINESS

Grange Resources Limited (Grange or the Company), ASX Code: GRR, is Australia's most experienced magnetite pro- ducer with over 48 years of mining and production from its Savage River mine and has a projected mine life beyond 2030.

Grange's operations consist principally of owning and oper- ating the Savage River integrated iron ore mining and pellet production business located in the north-west region of Tas- mania. The Savage River magnetite iron ore mine is a long life mining asset. At Port Latta, on the north-west coast of Tasmania, Grange owns a downstream pellet plant and port facility producing over 2 million tonnes of premium quality iron ore pellets annually, with plans to increase annual pro- duction. Grange has a combination of spot and contracted sales arrangements in place to deliver its pellets to customers throughout the Asia Pacific region.

In addition, Grange is a majority joint venture partner in a major magnetite development project at Southdown, near Albany in Western Australia. The Southdown magnetite project, once developed, is expected to have the capacity to supply over four times the amount of iron ore produced at Savage River, at an annual production rate of 10 million tonnes of premium magnetite concentrate. The Company announced that it was significantly reducing its expenditure on the project from 2013 and continuing its search for an equity partner for a strategic share of the Company's interest in the project.

OUR VISION

We will produce high quality steel making raw materials eco- nomically and effectively. Our operations will be efficient, flex- ible, and stakeholder focused.

OUR VALUES

At Grange we ALL will...

• Work safely

• Lead and act with fairness, integrity, trust and respect

• Be responsible and accountable for our actions

• Utilise our resources efficiently and effectively

• Engage with stakeholders and proactively manage our impact on their environment

• Work together openly and transparently

• Promote an environment in which our people can develop and prosper

  2015 ANNUAL REPORT // GRANGE RESOURCES LIMITED 1

  2015 Overview

  In 2015 we delivered a record year with respect to production and safety, efficiently navigating through a very challenging market.

  We sustained consistent production and continue to see demand for our premium product.

  OPERATIONAL OVERVIEW

  • Achieved a Lost Time Injury (LTI) free record of 1,728 days

    in the first half of 2015

  • Maintained good access to high grade ore and improved production results

  • Concentrate production exceeded 2.6 million tonnes for the second year in a row

  • Achieved a pellet production record of 2.53 million tonnes

  • Continued to invest in the protection and progressive refurbishment of critical core process infrastructure with the change out of the first Autogenous Mill Shell

  • Progressed construction of the South Deposit Tails Storage Facility

  • Improved production and continued cost control disciplines

    to significantly reduce operating costs

  • Preserved balance sheet strength with disciplined operational planning and execution enabling internal funding of critical mine re-development

    FINANCIAL OVERVIEW

• Total sales of 2.36 million tonnes of iron ore products

• Reduction of C1 cash operating costs to AUD$77.18 per tonne

• Average realised product price of US$87.23 per tonne (FOB Port Latta)

• Underlying profit after tax was $50.9 million, after excluding significant non-cash items of $328.7 million arising from an impairment of the carrying value of Savage River assets

• Maintained strong Balance Sheet with cash and term deposits of $138.4 million

2 GRANGE RESOURCES LIMITED // 2015 ANNUAL REPORT