YE December 2025 report has Granger Resources at a PE of 6 on the current price of $0.24 and NTA of $0.92 a share (A$1.1b), which includes net cash & liquid investments of $275.0m plus net working capital of $270.5m on a market cap of $278m. The produce magnetite as a marginal producer with FY25 C1 cost of A$164.69 and sales at A$189.44, but that was at an FX rate of A$0.647 not at the current ~A$0.71 and Iron ore price under US$100 (note they get a higher price than this but it’s indicative of a drop on the FY25 average over US$100), so current production is probably brake even, may even be at a small loss.
NPAT of $46.6m was down from $58.5m YoY with no dividend. A big change from back in 2021 when NPAT was $321m and shareholders received a total of 24c in dividends over FY21 and FY22. Which goes to show how wild earnings can be around Iron ore price movements.
Operationally, the long-standing operations at Savage River in Tasmania are seeing a move from open pit to underground development. Potential future operations at Southdown near Albany in WA, also a magnetite project, are in feasibility studies and seeing equity investor partners.
The economic value is highly dependent on Iron Ore prices, there is very good cash and asset backing for the current share price, but these assets are being used to support on going operations and future planned operations, so investors should not expect any returns based on current assets, only returns they might generate.
There is also the China factor, with significant Chinese control and China based offtake agreements representing 30.5% of sales. Investors need to accept that their interests may not be the top priority of the board.
Hence this remains a well-capitalised marginal Iron Ore (magnetite) play with some additional geo-political spice on the normal risk for Iron Ore producers. It remains my only Iron Ore linked investment and is basically a long-dated option on a dramatic increase in Iron Ore prices for some random reason.
Disc: I own RL
