Materials

Grange Resources to pay $115.73m in fully franked dividends

Tue 26 Apr 22, 4:40pm (AEST)
Iron Ore 6 Mining
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Key Points

  • Grange Resources has released a quarterly report
  • After weak iron ore prices at the end of last year, 2022, has seen iron ore prices rise 17%
  • The company will pay a dividend of 10 cents per share

Grange Resources (ASX: GRR) has slid -4.15% today after unveiling the company’s quarterly report for the period ending 31 March. 

It could be a case of unlucky timing for the miner. Today’s been rough for materials companies, with the S&P/ASX 200 Materials index falling -4.8%

Despite today’s drop, Grange – which operates iron ore mining and pellet production projects – is still up 68.21% year-to-date. 

Iron ore prices recover

“Iron ore prices strengthened throughout the first quarter of 2022 from a period of weakness in the last quarter in 2021,” says CEO Honglin Zhao.

“We continue to see strong demand for our high-grade, low-impurity iron ore pellets.” 

Iron Ore prices are up about 17% since the start of 2022. 

Iron Ore prices over the last year
Iron Ore prices (USD/t) over the past year. Source: Trading Economics. 

Pellet sales decrease; received prices increase

The company’s iron ore pellet sales decreased about -26% for the quarter to 479kt, compared with 647kt for the December quarter. The company chalked the loss down to annual scheduled maintenance.

While sales numbers declined, the average received prices for the pellets lifted about 26.8% to $307.72/t, up from $226.71 for the December quarter. 

Cash operating costs increased slightly for the recent quarter, up to $104.24/t. By comparison, the previous period has operating costs of $103.69/t. 

Iron Ore 11 Mining

Cash and liquid investments

As of March 31, the company has $356.93m of cash and liquid investments, along with trade receivables of $63.39m. 

At the end of the December quarter, the company had cash and liquid investments of $463.48 million and trade receivables of $18.82 million. 

Dividends

Thanks to what Zhao describes as “a strong cash position,” the company will pay a fully-franked final dividend of 10 cents per share, representing a total value of $115.73m.  

Next catalysts

The company is currently progressing optimisation studies for the life-of-mine plan at the Savage River project, along with the definitive feasibility study of the Southdown magnetite project. 

Grange Resources share price over the last year  - 26-04-2022
Grange Resources share price over the last year, with the S&P/ASX 200 Materials index shown in red.

 

Written By

Jed Herne

Content & Strategy

After graduating with a 99.4 ATAR, Jed won 3 scholarships to Curtin University, where he earned his Bachelor's degree and served as a Student Ambassador. He is primarily interested in long-term passive index funds as a vehicle for financial independence. Outside of covering financial news, Jed is a published author, podcaster, and has an unhealthy obsession with bouldering.

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