GRANGE RESOURCES LIMITED. — AGM Information 2003

Nov 24, 2003

FRANGE RESOURCES LIMITED A.C.N. 009 132 405

STOCK EXCHANGE ANNOUNCEMENT

CHAIRMAN'S ADDRESS ANNUAL GENERAL MEETING

25 November 2003

During the 2003 financial year, the Company has pursued a strategy aimed at maximising returns from existing mining operations and identifying new investment opportunities in the Australian resources sector with the potential to deliver long-term growth.

I wish to provide a summary of the Company's major activities during the 2003 financial vear.

FINANCIAL

During the financial year the group reported a consolidated operating loss of \$2.20 million. The result was achieved on group revenue of \$6.44 million. The decrease in Grange's revenue was largely attributable to the completion of mining operations at the Highway Pit and delays in development of the Reward Deeps and Conviction underground mine. The group loss included the following items of significance:

• $\triangleright$ revenue generated from the first shipment of concentrate from the Reward Deeps and Conviction underground mine was \$5,729,542;
• $\triangleright$ royalty income for the year was \$351,020; and
• $\triangleright$ expenditure associated with mining operations at the Reward Deeps and Conviction underground mine totalled \$7,372,935 for the year including mining, transportation, milling, depreciation, amortisation and administration.

At the end of the September 2003 quarter the Company had cash at bank of approximately \$6.60 million. The third shipment of copper concentrate from the Reward Deeps project is due to be exported from Townsville within the next week, which will generate additional revenue of approximately \$5.7 million. This cash together with revenue expected from a further two shipments of copper concentrate from the Reward Deeps project during the current financial year, will result in the Company having in excess of \$20.0 million cash at bank in July 2004.

CORPORATE

During the financial year, the Company continued the implementation of a staged capital management programme which has delivered a significant concentration of wealth to shareholders by reducing the number of shares on issue in the capital of the Company, at the 30 June 2003 to 66,755,221 shares compared to 79,298,595 at 1 July 2002.

In July 2003, shareholders of the Company approved a further on-market share buy-back authorising the Company to acquire a further 10% of its issued capital.

In October the Company announced a placement to the Golden Arrow Fund II. The placement comprised of two tranches. The first tranche involved the issue of 1,428,572 fully paid ordinary shares and 1,428,572 free attaching unlisted options to raise \$0.50 million and was completed on 17 October 2003. The second tranche involves the further issue of a maximum of 2,857,143 fully paid ordinary shares and 2,857,143 free attaching unlisted options to raise an additional $$1.0$ million on or before 28 November 2003.

The Golden Arrow Fund II is a Perth based managed fund specialising in small to medium sized emerging resource companies. The Golden Arrow Fund II fills a niche in the capital markets, providing equity for small and medium sized companies with mainly gold and base metal projects. The Golden Arrow Fund II takes strategic position in companies that it believes have a strong potential for future growth. Directors recognised the value in forming a strategic alliance with a cornerstone investor such as The Golden Arrow Fund II.

UPDATE ON PROJECTS

REWARD DEEPS

Development of the underground mine to extract the Reward Deeps and Conviction ore reserves recommenced during June 2002. By September 2002 a second portal and short decline had been established in the northeast wall of the Highway pit to allow access to additional ore reserves that had been established in the Chimney and B Lens deposits.

Production stoping in the upper levels of the Conviction ore body commenced towards the end of December 2002. Stoping commenced in the B Lens during January 2003, in the Chimney during February 2003 and in Reward Deeps during April 2003.

The Thalanga concentrator commenced treating development ore from the Reward Deeps and Conviction underground mine in October 2002.

Mining operations were interrupted briefly during August 2003 whilst a change in mining contractors took place. Mining recommenced during the last half of August and gradually increased to full production as the new contractor mobilised personnel and equipment to site. Full production was re-established during September 2003. Mill operations were not affected during the change in mining contractors, as sufficient stockpiles of ore were available to maintain feed to the Thalanga processing plant.

Based on current ore reserves the project is scheduled to produce approximately 179,000 tonnes of concentrate containing 27.5% copper by July 2004, of which Grange's share is 53,600 tonnes. To date the Company has exported approximately 20,000 tonnes of concentrate with the third shipment of 10,000 tonnes due for export during December 2003.

The Company is confident that the life of the operation will be extended and drilling programmes are currently underway aimed at increasing the resource base. In addition access to the Lower Reward Deeps deposit has commenced with a drive from the base of the decline on the 1000mRL level.

HIGHWAY & REWARD COPPER MINES

Rehabilitation of the Highway and Reward mine site commenced in 2002 following the completion of mining from the Highway open pit. By the end of June 2003, capping and topsoiling of the Reward and Highway waste rock dumps had been completed and revegetation had commenced. Revegetation of the remainder of the waste rock dumps is planned during the fourth quarter of 2003 when climatic conditions should be more suitable for seed germination and sustainable growth.

FRESHWATER

Over the past several years several small open pit gold mines have been developed within the Freshwater tenements including Salmon, Perch, Trout, Redfin, Bream, Area 4, Dogfish, Catfish, Piranha, and Pigeon. Drilling has been successful in outlining significant underground resources and reserves at Plutonic East. Most of the open pit reserves have now been mined and the bulk of future production from the Freshwater tenements is expected to be from the Plutonic East underground mine. Total royalty income for the financial vear amounted to \$337,251 and comprised of \$84,752 from open pit ore and \$252,499 from underground ore.

During the year Barrick advised that ore reserves at Plutonic East underground mine increased by 20% and mineral resources at Plutonic East being increased by 400%. As a consequence of these significant increases in reserves and resources. Grange expects future rovalty payments to be extended.

RED HILL

Placer Dome Asia Pacific commenced mining operations at Red Hill in February 2003 and by the end of June 2003 the pit had been developed to a depth of 10 metres. The Red Hill ore body will provide approximately half the annual feed (1.5 million tonnes) to the Paddington mill for the next several years.

Based on the current mining schedule it is estimated that rovalty payments to Grange should commence at the end of the second quarter of 2004.

As at 30 June 2003 mineral resources within Red Hill Mining Lease M27/57 and subject to the royalty amounted to 12.5 million tonnes grading 1.53 $g/t$ gold containing 618,000 ounces of gold. Within these resources Placer Dome has estimated ore reserves of 5.3 million tonnes grading 2.14 g/t gold containing $366,000$ contained ounces of gold at a cut off grade of 1.15 g/t gold and a gold price of A\$500/ounce.

OUTLOOK

The Company has a strong balance sheet and expects to further strengthen its financial position with eash flows that will be generated over the next year from its interests in the three following mining operations:

• $\triangleright$ The Reward Deeps/Conviction underground copper mine where mining operations continue with three shipments of copper concentrate expected over the next 9 month period:
• $\triangleright$ The Freshwater Gold Project where the Company has a production royalty and is currently contributing revenue.
• $\triangleright$ The Redhill Gold Project where the Company has a 4% gross revenue royalty and is expected to deliver revenue from June 2004.

Grange is well positioned to actively seek out investment opportunities in the resources sector to complement its existing mining operations and enhance future profitability and cash flows.

Grange throughout the year has evaluated several base metals and precious metals projects. Grange's investment strategy is focused on identifying advanced base metals projects within Australia that require development capital. The outlook for commodities has improved throughout the year due to strong global demand, particularly from China. Base metals prices are expected to improve throughout the next 2 to 3 years.

Grange recently announced the acquisition of the Southdown Magnetite Project from Global Doctor Pty Ltd a wholly owned subsidiary of MedAire Inc via a staggered purchase arrangement. Grange intends to undertake a detailed review of Southdown project to assess its viability. Currently world iron ore production cannot satisfy demand and this problem is accentuated in the Asia/ Pacific area due to the growth in steel making production in China.

The board and management of Grange are committed to enhancing long-term shareholder value through growth achieved via the acquisition of mining projects.

For information in relation to this announcement or the Company visit the Grange website at www.grangeresources.com.au, or alternatively contact Alec Pismiris on $(+618)$ 9321 1118.

ALEC PISMIRIS Company Secretary