Grange Approves A$287m Savage River Underground Mine

Grange Resources (ASX:GRR)' board approved a lower-capital underground mine at its Savage River iron ore pellet operations in Tasmania to extend production, after the larger Block Cave design could not be funded at the required scale.

The North Pit Underground Project will proceed as a Sub-Level Cave, at a significantly lower initial capital requirement than the previously considered Block Cave, which remains an option for a future decision. Underground capital expenditure is A$287 million, with A$234 million of sustaining capital over a mine life of ~10 years. Base case economics, at a flat US$90/t for 62% Fe fines and A$1.00 = US$0.68, give a project NPV of A$357 million (8.3% real, after tax) and an IRR of 43%, with an average C1 cash cost of A$132 per tonne and all-in cost of A$164 per tonne against an average product price of A$181. All environmental approvals are in place. Underground mining is forecast to start in Q1 2027, extending production and pellet supply continuity to 2035. Grange cites weaker iron ore prices, rising costs and reduced risk appetite as the reasons the Block Cave could not be funded.

Mining contracts have not yet been awarded. The release describes the project as projected to be fully funded in its highlights but largely self-funded elsewhere. Extension beyond 2040 depends on a future Block Cave or open-pit decision not yet taken.