GRR 1.71% 57.5¢ grange resources limited.

grr sp breakout imminent

  1. 249 Posts.
    I can't help but feel immensely excited about GRR.

    I think there is something Clark Russell isn't telling us. He has hinted repeatedly his optimism about future share holder value but he is being vague and non-specific. One thing that is in the media is GRR is actively looking for a JV partner with financing. (Another Australian magnetite project chases China funding)

    GRR SP could break out any moment now (Patersons reckons $0.39 back in September but it doesn't take into account what may be about to happen ! - more on that later). Another reason for optimism is that just about all the sellers have been mopped up by the TOP20 holders (now accounting for 93+% of shares). Soon, all people want to do is tobuy the remaining 6+% that they can get their hands on. It's not hard to see panic buying in GRR next year as IO price escalate driven by synchronized global recovery (China, india, North America, Europe and others).

    The only thing holding back GRR SP is any concern about funding for Southdown. The management knows capital raising is OUT-OF-THE-QUESTION. Russell Clark hinted a sensible incremental approach (if coupled with a WISCO type partner - the only way for SP is UP).

    I wouldn't be surprised of a scenario that in January you will hear WISCO will hop into bed with GRR just when the WPG deals falls by the wayside as the extension of their JV agreement expires due to Defence veto. After the capital raising and chopping off the loose ends from the ABM merger, GRR is a natural and perfect JV partner for WISCO.

    WISCO loves magnetite and a secured supply of pellets for the coming decades. That's why Centrex is such a market success even though it has no production track record whatsoever.

    GRR can even become an "Australian" investment vehicle for WISCO to acquire more magnetite resources later on perhaps in the Mid-West which looks promising (just look at GBG, AGO, MMX, MGX) and with plenty of prospective land to explore and long-term infrastructure solutions being implemented like Okajee.

    The marriage proposition is a no-brainer. Even without the Defence deadlock, WPG is just an explorer. GRR is the ONLY large scale experiened magnetite miner / pellet producer in Australia. Infrastructure is all ready to go at South Down with Port of Albany approval coming up soon and pellet processing plant in Malaysia ready and waiting. The fact that RIO kept their stake in GRR may indicate their knowledge of SouthDown's potential (they used to own it).

    In retrospect, WISCO may even think WPG was just a waste of time and too much grief & risk given the infrastructure and approval show-stoppers. Port Bronython is a pipe dream. Their crown jewel magnetite resources in Hawks Nest sit right underneath the flight path of Defence weapons testing. The message has been very clear from FIRB and Defence.
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