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26.0¢ grange resources limited.

With pellet price premiums rising fast and all other mid caps...

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pilatus

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26/10/16

12:40

Post #: 20133218
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Originally posted by stantrent71 ↑

Notably after the recent Quarterly report there's been somewhat of a change in sentiment and now some more GRR shareholders/posters are beginning to sing from the same hymn book...

@ThinkinLoudly
Their published cost estimates are a wonderful demonstration of random number generation. My hunch is that they have and will continue to manage the message. Dam shame. Cash costs cockup alone cost 9m but there is still done work to understand where the rest of the cash has gone.
@Djingo
This demonstrates why you should not overly focus on cash balance in determining value.
The concentrate inventory falling by 101k is a concern but I suspect this might be a typo (hopefully just missing the 1 in front of 85,949).
@Autosime
Not the report we were hoping for and the rain has hit costs again . The result is a break even one…
So essentially the cash margin that was achieved 86-103 was sucked up in maintenance and remedial work.
@ThinkinLoudly
I'd estimated a cash margin of around A$16.4m. I think the big ticket differences are: 1. I estimated cash margin @ 99.17-72 = 27.17 vs 103 - 87 => 626kt @ 11.17 = -7.011m 2. I estimated sales volume 626kt vs 586kt = -0.64m 3. Inventory investment looks to be around 5.1m vs 4.1m = -1.0m 4. Payment of dividend = -5.8m 5. Approx cash sunk in capex, royalties, overheads and every other mystery : Total cash movement - 6.7m Notional inflow 16.4 Gross outflow = -23.41 less rationalised above -14,451 Unexplained difference = 8,959 6. Maybe we're taxpayers. That might account for some of the unexplained. 7. They bs on about the tailings dam ... it is i think it is a black hole where cash goes and any sin needs to be 'washed' 8. Weather halted production ... bs. They produced about the same pellets this quarter as in March . 9. The real tragedy lies in the ore bcm vs concentrate produced. 328447 bcm -> 567132 t vs 302267 -> 664257. That means a lot of material moved for less payload. Weather my backside! Their definition of cash costs depends on the ambient temperature in the Andes on a windy but sunny day ... never the same definition. Their numbers and excuses are not credible. Hence the huge discount. This morning I thought they were legitimately 4 ~ 5 c undervalued. This afternoon, my hunch is they are destined for single digits. Not happy.
@Big Kahuna 101
Disappointed in results. Will continue to hold for now but sentiment changed to hold
@rocket973
This was a strong quarter for IO prices and increased pellet premiums. One has to wonder what the result would be with a drop in IO prices in 2017 as speculated by analysts. This dog might never have a day in the sun. With this sort of report I wouldn't bother buying more, there are far better stocks on the ASX
@olleydog
What a momentum killer that report was! Costs way to high, no talk of any acquisitions, no talk of flux pellets. Copy and paste of the Southdown part (yawn) The only positive bit really is the pellet price, and we need to hope that it keeps improving because that's the only driver for this SP.
@golddigit
That report knocked my confidence. I checked BOM rainfall figures and the north west of Tasmania had a very wet July but normal August September. Not sure about their weather excuse. I just get the nagging feeling that this is all about providing pellets for the big share holder and they do not give a rats about sp or anything else.
@newcar
Yes, it's become a wucking furry alright and I agree with you that it is just an operational extension of the major holder. It would be nice to see it wound up but that can't happen.
@newB
GRR has no one to blame but their own management team. have a read to the quarterly reports , always dry and lack of details. At such a high ore price they still struggle to increase the cash and get operation sorted.
@ThinkinLoudly
this email -> GRR early this morning ... ---------------------------------------------------------------- Good morning. I am a shareholder of Grange Resources. Yesterday I reviewed the published quarterly statement and would like some assistance better understanding the status of the SDTSF. Can you please assist? 1. In Q4 / 2014, construction of the facility was commenced. In an announcement 29 April 2014 the then managing director identified that construction would take 26 months to completion. If this time-line remains valid, it would suggest construction of the project will be completed in the current calendar year. Will the project be completed this calendar year? 2. Based on various reports and announcements, I would estimate that the SDTSF something of the order of A$86 million to June 30 (inferred from note 12, half yearly report). I have assumed that the A$19.521 million in the half year was predominantly SDTSF construction so an estimate of approximately A$3 to A$4 million per month is the magnitude of that continuing investment. (a) Is it reasonable to assume that approximately $A9.0 million was spent during the current quarter to 30 September 2016 re the SDTSF? (b) Is it reasonable to expect a similar investment in Q4 / 2016? I appreciate your assistance. ----------------------------------------------------------------------
@sailnyssa
Like everyone here I found the latest report extremely disappointing not just because of the result but also the general lack of information. They talk about severe weather etc. but if you read the report closely they don't claim that this negatively affected production. It's just waffle. As @ThinkingLoudly points out, production actually increased. The report states: "Cash operating costs for the quarter of A$86.78/t compared with A$89.11/t for June 2016 quarter. Unit cash operating costs consistent with expectations as the operations undertake important maintenance works to sustain production and improve product quality." Who would have thought with all the carry on about cost reductions over the last 12 months or more that C1 of $87/t was "consistent with expectations". C1 costs in the Sept Quarter last year were $79/t LOL. What are the expectations going forward, not $87/t surely? But what bothers me most is the lack of information.
@joca
Very disappointing for all longterm holders. Very unclear what they are saying "important maintenance works to sustain production and improve product quality." What does improve product quality mean? Our pellet quality has deteriorated so they need to improve the quality? They want to make them better so maybe get more for them. Looks like they made a mistake with the concentrate numbers why has this not been corrected?

@suti1
costs are disappointing. weren't redundancies earlier this year supposed to help on the cost front? rain as someone else has said was 'normal' for Aug/Sep albeit high for July. The only thing left is the iron ore pellet price - still holding up…
But relying totally on commodity prices for share price gains, which now seems to be the case with GRR is fraught with danger.

@medici
GRR's largest shareholder is Shagang Group which is a steel producing company and GRR is run by Shagang's ex employees or employees. IMHO, Shagang doesn't invest GRR to maximize GRR's value. It invests because it will have a better control about the raw material sourcing I guess.

Some posters/shareholders are talking about selling out and giving up on GRR entirely. Might I suggest that's exactly what 'someone(s)' hoping the small shareholders will do. IMO, instead of selling, buy more at these undervalued prices and take as many shares as you can off 'someone' who keeps stacking the sell side. You need the funds to buy more ofcourse, but if you can't buy more, atleast hold & don't give your shares away at these low levels that the GRR sp is being constantly held down to.

This change of sentiment has sparked some on here to start asking questions and many of them good questions too. And why not? As shareholders or potential shareholders, you are well within your rights to ask the hows and whens regarding Return of Investment, Return on Investment and the Wealth Building that investment should bring.

So IMO, buy/hold and ASK MORE QUESTIONS! Ask a ship load of questions about what is going on with your investment in GRR. Pose your questions on here, on other forums, via email and in the wider media if possible. Ask questions of management (as some of you have), stock analysts, journalists (who do stories on GRR) and maybe even governing authorities. Absolutely let it be known to the 'powers that be' that, as shareholders, we are very interested in the decisions being made and closely watching the actions being taken, or not taken as the case may be.

If you have put up your money, then it's fair enough you have your SAY! Do as E.J. Whitten would have done.
***

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With pellet price premiums rising fast and all other mid caps left destructed or extinct on the ASX....its only a mater of time before market forces take over

GRR Price at posting: 11.5¢ Sentiment: Buy Disclosure: Held
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