Ann: GRR - Quarterly Report for 3 months ended 30 September 2018, page-39

Thanks Sam,

Just reading the Dec 2017 resource and reserve update announcement and it seems pretty clearly spelt out that the reserves in that report relate to open pit models.

Bit curious as to why they would be sinking a $15 million exploration decline into the deposit with 83.4Mt of ore reserves remaining. Seems a bit early for this type of expenditure on UG studies.

Say you mine on average 1M BCM pf ore per year and using a density for magnetite of 5, that’s 5Mt of ore.

Based on proved reserves of 26.8Mt that’s 5.36 years of mine life or out to 2022.

Based on proved and probable reserves of 83.4Mt that’s 16.68 years of mine life or out to 2033.

There is no way I would spent $15 million now going UG if my open pit reserves would see me through to 2033.

Even based on proved reserves and a mine life out to 2022 it seems a little early.

This does give me comfort however that the company can still produce a lot of cash before hard decisions need to be made. That’s of course if they are not hiding pit stability issues with the current pit. Esh