Grange Resources Limited

Trading Close to 52-Week Higher Level: Grange Resources Pty Limited (ASX: GRR) informed that the mineral resource has increased for the Savage River Ore Deposits since the previous mineral resource estimate on December 2017 as a result of the first phase of resource drilling for the underground prefeasibility study.

Statement of Comprehensive Income FY18 (Source: Company Reports)

The revenues from mining operations stood at $368.2 million in FY18 as compared to $247.9 million in FY17, an increase of ~48.5%. The net profit after tax stood at $112.9 million in FY18 as compared to $60.7 million in FY17, an increase of ~86% primarily on higher revenues.

Moreover, it has sustained strong cash and cash equivalents position at $204.5 million in FY18 as compared to $168.0 million in FY17, an increase of ~21.7% Y-o-Y.

Strategic focus going forward: The company has an objective of generating shareholder value. It seeks to safely produce high quality iron ore products from its Savage River and Port Latta operations in Tasmania through which it can increase the shareholder value. This is one of the primary strategic focus of the company. Moreover, it has a focus on continuing to assess the feasibility of a major iron ore development project at Southdown, near Albany in Western Australia which might also help in generating the shareholder value.

The stock has increased by 6.78%% during the day’s trade keeping its momentum on the releases of increase in Savage river mineral resources.The stock has generated a YTD return of 43.90%. Also, in the span of previous three months, the stock witnessed the rise of 40.48%. The company’s stock is trading close to the 52-week higher level of $0.320, thus, it can be said that most of growth drivers have been factored in the current trading juncture.

As a result, we have an “Expensive” recommendation on the stock at the current market price of A$0.315 per share.  

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