GRANGE RESOURCES LIMITED. — Interim / Quarterly Report 2004

Feb 26, 2004

STOCK EXCHANGE ANNOUNCEMENT

A.C.N. 009 132 405

RANGE

RESOURCES LIMITED

HALF-YEAR RESULTS

26 February 2004

The directors of the Company are pleased to release the half-year financial report for the period ended 31 December 2003. The group generated a consolidated net operating profit of \$2,735,148 after providing for income tax of \$66,937 for the period representing and increase of 390% over the previous corresponding period (2002: loss of \$931,086). The net operating profit was achieved on revenue from ordinary activities of \$12,536,776 representing an increase of 2.928% over the previous corresponding period (2002: \$414,475).

Mining Activities

Reward Deeps and Conviction Project

Mining operations at the Reward Deeps and Conviction Project were interrupted for approximately two weeks in August 2003 as a consequence of a change in mining contractors. Mining recommenced in late August 2003 and gradually increased to full production as the new contractor mobilised personnel and equipment to the mine site. Full production was achieved during September 2003 and was readily maintained throughout the remainder of the period.

Mill operations were not affected during the change in mining contractors in August 2003, as sufficient stockpiles of ore were available to maintain feed to the Thalanga processing plant. During the period 405,847 tonnes of ore grading 4.66% copper were processed through the Thalanga plant for the production of 66,042 tonnes of copper concentrate containing 26.56% copper and 0.8 g/t gold. Copper recovery and concentrate grade were below budget for the period primarily due to variable head grade and process water quality.

Development of access to the Lower Reward Deeps was completed during October 2003 and development within the ore was completed in November 2003. During December 2003 development access to a small ore body, referred to as the Hanging Wall Lens, was commenced.

Ore reserves for the project were updated during the December quarter and as at 31 December 2003 amounted to 788,000 tonnes grading 3.8% copper. Based on the ore reserves the project life is expected to be extended to October 2004 with total concentrate production being increased by approximately 20% from 179,000 tonnes to 215,000 tonnes. Grange's share of concentrate production is now estimated to be 64,500 tonnes over the life of the project.

The Company's third shipment of concentrate comprising of 10,730 tonnes from the Reward Deeps and Conviction Project was exported from Townsville on 29 December 2003. Proceeds of \$5.43 million were received during early January from the sale of this shipment of copper concentrate. The Company's fourth shipment of approximately 10,000 tonnes is scheduled for export from Townsville at the end of March 2004.

Exploration

An underground diamond-drilling programme was commenced in the December quarter with the aim of extending mine life by increasing the resource base. By the end of December 2003 fifteen diamond drill holes, aggregating 1716 metres, had been completed. Targets tested included the Hanging Wall Lens, the Gold Zone, Reward Deeps and Lower Reward Deeps. The drilling was moderately successful and has enabled some additional resources to be delineated in the Hanging Wall Lens, Reward Deeps and Lower Reward Deeps. Results of drilling to test the Lower Reward Deeps deposit at depth were disappointing with generally low grades being recorded. The best intersection recorded from this zone was 13 metres grading 2.27% copper. Further drilling is planned during the current half year.

Freshwater

Grange continued to receive royalties from the Freshwater project during the period. Encouraging drilling results were recorded from the Plutonic East underground mine and the Salmon gold prospect within the Freshwater leases.

Red Hill Project

In July 2003 Placer Dome Asia Pacific commenced and maintained full-scale mining operations at Red Hill. From commencement of mining in February 2003 until the end of the period, total gold produced from the current operation and the trial pit within M27/57 amounted to 51,612 ounces. Based on the current mining schedule it is estimated that royalty payments to Grange should commence during the September 2004 quarter.

Southdown Project

In November 2003 the Company secured the right to acquire the Southdown Magnetite Project ("Southdown") from Global Doctor Pty Ltd, a wholly owned subsidiary of MedAire Inc. Under the terms of the purchase agreement, the total consideration payable for Southdown is \$1.65 million on a staggered purchase arrangement over a period of time up to the commencement of commercial mining operations.

The Southdown project is located approximately 90 kilometres from the Port of Albany on the south coast of Western Australia. It comprises three granted mining leases ML70/433, ML70/718 and ML70/719 covering an area of 1700 hectares on freehold farming property. The magnetite mineralisation is contained within a banded quartz-magnetite-gneiss that varies in thickness from 50 to 100m in the portion of the deposit that has been subject to detailed drilling. The deposit dips at 60 to 65 degrees to the south and has been intersected to vertical depths of at least 150m. The main western part of the deposit is oxidised to approximately 25 to 30 m depth.

Based on data generated from previous exploration drilling, it is anticipated that minimum saleable concentrate grade of 64.6%Fe can be achieved by grinding the ore to 0.15mm and using magnetic separation. At a 30% magnetite cut-off grade the magnetite recovery to concentrate at 64.6%Fe is forecast at 46.9%. Using these parameters the recovered magnetite concentrate would be 25.1 million tonnes (Mt.) from 53.6 Mt. of magnetic mineralisation mined at an overall 1.5:1.0 waste to ore ratio – sufficient to sustain concentrate production of 2mtpa for 12.5 years. At a 15% magnetite cut-off grade the magnetite recovery is forecast at 43% giving a concentrate grade of 63.93%Fe and an overall 0.8:1.0 waste to ore ratio. Additional resources are present which could extend project life.

The Company has commenced a detailed review of the Southdown project to assess its viability.

Corporate Activities

In August 2003 the Company announced its intention to implement an on-market share buyback for the purpose of capital management. Under the terms of the on-market share buyback the maximum number of shares that were to be bought back over a six-month period was 6,675,522. At the end of the period the total shares bought back by the Company pursuant to the on-market share buy-back was 1,322,327 with the total consideration being \$428,336. The on-market share buy-back was completed on 31 January 2004.

During the period the Company arranged a placement of 4,285,715 fully paid ordinary shares at an issue price of \$0.35 each with a one for one free attaching unlisted option (exercisable at 50 cents each on or before 28 November 2006) to The Golden Arrow Fund II. The placement raised \$1.50 million before expenses which further strengthened Grange's financial position and allowed the Company to form a strategic alliance with a cornerstone investor.

Outlook

Grange is well positioned to pursue its strategy of achieving growth through the identification and acquisition new investment opportunities in the resources sector such as the recent acquisition of the Southdown Magnetite Project in Western Australia. Over the previous eighteen month period, Grange has devoted considerable resources to conducting due diligence investigations on several potential investment opportunities that have not met the Company's investment criteria. Grange is currently undertaking some preliminary investigations on several new potential investment opportunities in the resources sector.

The Company has a strong balance sheet including current cash reserves exceeding \$9.60 million. The Company expects to more than double its cash reserves to approximately \$23.0 million by the end of the 2004 calendar year from significant cash flows to be generated from the sale of copper concentrate from the Reward Deeps and Conviction Underground Mine for the remainder of this year (assuming that mining activities at the Reward Deeps and Conviction Underground Mine continue throughout the year without interruption and according to established budgets and the price of copper and the exchange rate remain at around present levels) and royalty receipts from the Freshwater and Red Hill gold projects.

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

ALEC PISMIRIS
Company Secretary

Rule 4.2A.3

APPENDIX 4D

HALF-YEAR REPORT

PERIOD ENDED 31 DECEMBER 2003

GRANGE RESOURCES LIMITED ABN 80 009 132 450

2. RESULTS FOR ANNOUNCEMENT TO THE MARKET

				\$A '000
Revenue from ordinary activities (item 2.1)	Up	2,928%	to	12,537
Profit from ordinary activities after tax attributable to members (item 2.2)	Up	394%	to	2,735
Net profit for the period attributable to members (item 2.3)	Up	394%	to	2,735
DIVIDENDS (item 2.4)	Amount per security			Franked amount per security
Interim dividend	Nil			ΝiΙ
Previous corresponding period	Nil			ΝiΙ
Record date for determining entitlements to the dividend (item 2.5) The Company does not propose to pay a dividend for the current period. (item 2.6)		Not applicable

3. NET TANGIBLE ASSETS

Current period	Previous corresponding period
NIA	NIA

Net tangible assets per ordinary security

4. CONTROL GAINED OVER ENTITIES HAVING MATERIAL EFFECT

Name of entity	Not applicable
Date from which control is gained		Not applicable
Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity since the date in the current period on which control was acquired		Not applicable
Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity for the whole of the previous corresponding period		Not applicable
LOSS OF CONTROL OF ENTITIES HAVING MATERIAL EFFECT
Name of entity		Not applicable
Date from which control is gained		Not applicable

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity since the date in the current period on which control was acquired

Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity for the whole of the previous corresponding period

Not applicable

Not applicable

5. INTERIM DIVIDEND (DISTRIBUTION) ON ALL SECURITIES

Date the dividend is payable
------------------------------	--

+Ordinary securities (each class separately)

Preference ⁺securities (each class separately)

Other equity instruments (each class separately)

Total

6. DIVIDEND OR DISTRIBUTION REINVESTMENT PLANS

The ⁺dividend or distribution plans shown below are in operation.

The last date(s) for receipt of election notices for the $⁺$ dividend or distribution plans

Current period	Previous corresponding period
Not applicable	Not applicable
Nil	Nil
Not applicable	Not applicable
Not applicable	Not applicable
Nil	Nil

Not applicable

Not applicable

7. DETAILS OF ASSOCIATES AND JOINT VENTURE ENTITIES

Name of entity	Percentage of ownership interest held at end of period or date of disposal		Contribution to net profit (loss)
	Current period	Previous corresponding period	Current period	Previous corresponding period
Bamine Pty Ltd	100	100
Barrack Mines Pty Ltd	100	100
BML Holdings Pty Ltd	100	100	3,762	(862)
Grange Capital Pty Ltd	100	100
Horseshoe Gold Mine Pty Ltd	100	100
Surfboard Securities Ltd	100	100
Streetnet Pty Ltd	100	100
Tribune Resources Pty Ltd	100	100
Total			3,762	(862)
Other material interests
Total			3,762	(862)

8. AUDIT

This half-year financial report is based on accounts which have been subject to an audit review.

GRANGE RESOURCES LIMITED

ABN 80 009 132 405

AND CONTROLLED ENTITIES

HALF-YEAR FINANCIAL REPORT

FOR THE PERIOD ENDED 31 DECEMBER 2003

CONTENTS

DIRECTORS' REPORT	3
STATEMENT OF FINANCIAL PERFORMANCE	6
STATEMENT OF FINANCIAL POSITION	7
STATEMENT OF CASHFLOWS	9
NOTES TO THE FINANCIAL STATEMENTS	10
1. Basis of Preparation of the Half-Year Financial Report 2 Operating Profit 3. Income Tax 4. Equity 5. Subsequent Events 6. Segment Information 7. Contingent Assets and Liabilities
DIRECTORS' DECLARATION	13
INDEPENDENT REVIEW REPORT	14

DIRECTOR'S REPORT

Your directors submit their report for the results of Grange Resources Limited ("Grange" or "the Company") for the half-year ended 31 December 2003 ("Balance Date").

DIRECTORS

The names of the directors of the company in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Anthony Bohnenn (Non-executive Chairman) Adam Rankine-Wilson (Managing Director) Alexander Henry Nutter (Technical Director) Hans-Rudolf Moser (Non-executive Director)

REVIEW AND RESULTS OF OPERATIONS

The consolidated net operating profit of the Consolidated Entity after providing for income tax amounted to \$2,735,148 (2002: loss of \$931,000). The result included the following items:

• Mine operating expenses of \$7,115,865
• Amortisation expenses of \$1,105,000
• Board and staff payroll expenses of \$463,908

The Company's activities during the period included the following:

• In July 2003 shareholders of the Company approved the terms of an on-market share buy-back authorising the Company to acquire up to a maximum of 6,675,522 of the fully paid ordinary shares on issue, representing 10% of the capital of the Company over a six month period commencing 1 August 2003. At Balance Date the Company had bought back 1,322,327 shares for a total consideration of \$428,336.
• In July 2003 Gleneagle Gold Limited ("Gleneagle") exercised an option with Horseshoe Gold Mine Pty Ltd ("Horseshoe"), a wholly owned subsidiary of Grange to farmin to the Wembley Project and the joint venture commenced. Under the terms of the joint venture arrangement Gleneagle can earn an 80% interest in the tenements by spending \$500,000 on exploration within 4 years with minimum expenditure levels of \$150,000 during years 1 and 2 of the 4-year earn in period. Gleneagle can elect to withdraw from the agreement after expenditure of \$150,000. Horseshoe's 20% interest is free carried to a decision to mine. Within 60 days after a decision to mine, Horseshoe has the right to elect to contribute pro-rata to expenditure, sell its 20% interest or convert its 20% interest to a royalty of \$20.00 per recovered ounce for the first 40,000 ounces of production and a 3% gross revenue royalty on any production thereafter. Gleneagle has pre-emptive rights on Horseshoe's 20% interest 2003. Pursuant to the completion of the option agreement for the Wembley Project, Horseshoe was issued 200,000 fully paid ordinary shares in Gleneagle as part consideration which are subject to escrow restrictions until 14 April 2004.
• In August 2003 the Company was advised by the manager of the Reward Deeps and Conviction underground project, that operations were placed in a period of transition for approximately two weeks whilst a change in the mining contractor took place. There was a sufficient supply of ore available to keep the Thalanga processing plant operating during the transition of mining contractors at the mine.
• On 6 September 2003, Hillgrove Gold Limited and Grange announced their intention, through an equally and jointly owned nominee, to make an off-market takeover bid for all the fully paid ordinary shares in Selwyn Mines Limited (Receivers and Managers appointed). The bid was designed to secure 1,500 sq. km. exploration and mining tenement package that is located in the Eastern Succession of the Mt. Isa Inlier in North West Queensland.
• On 18 September 2003 the second shipment of 9,989 tonnes of concentrate from the Reward Deeps and Conviction underground mine was exported from Townsville generating revenue of approximately \$5.70 million.

DIRECTOR'S REPORT CONTINUED

REVIEW AND RESULTS OF OPERATIONS CONTINUED

• On 29 December 2003 the third shipment of 10,730 tonnes of concentrate from the Reward Deeps and Conviction underground mine was exported from Townsville generating revenue of approximately \$5.43 million.
• On 10 October 2003 Hillarove Gold Limited and Grange announced they would not proceed with the proposed off-market takeover bid for all the fully paid ordinary shares in Selwyn Mines Limited following an announcement by Ivanhoe Mines that a subsidiary of Ivanhoe Australia had purchased the copper-gold project's mining and exploration leases in Australia from Selwyn Mines Limited.
• On 10 October 2003 the Company announced it had arranged a placement of a maximum of 4,285,715 fully paid ordinary shares at an issue price of \$0.35 each with a one for one free attaching unlisted option (exercisable at 50 cents each on or before 28 November 2006) to raise up to \$1.50 million before expenses of the issue to The Golden Arrow Fund II. The placement which took place in two tranches was approved by shareholders at the Company's annual general meeting and completed during the period.
• In November 2003 the Company secured the right to acquire the Southdown Magnetite Project ("Southdown") from Global Doctor Pty Ltd, a wholly owned subsidiary of MedAire Inc. Under the terms of the purchase agreement, the total consideration payable for Southdown is \$1.65 million on a staggered purchase arrangement over a period of time up to the commencement of commercial mining operations.
• During October 2003, development of access to the Lower Reward Deeps ore body was completed and development within the ore was completed in November 2003. During December 2003 development access to a small ore body, referred to as the Hanging Lens, was commenced.
• Following a comprehensive drilling programme undertaken during the period, ore reserves for the Reward Deeps and Conviction Project were updated during the December guarter and as at 31 December 2003 amounted to 788,000 tonnes grading 3.8% copper. Based on the updated ore reserves the project life is expected to be extended to October 2004 with total concentrate production being increased by approximately 20% from 179,000 tonnes to 215,000 tonnes. Grange's estimated share of copper concentrate production increased from 53,600 tonnes to 64,500 tonnes over the life of the project.
• Full mining production at the Reward Deeps and Conviction Project was achieved during September 2003 and was readily maintained throughout the remainder of the period. During the period 405,847 tonnes of ore grading 4.66% copper were processed through the Thalanga plant for the production of 66,042 tonnes of copper concentrate containing 26.56% copper and 0.8 g/t gold. Copper recovery and concentrate grade were below budget for the period primarily due to variable head grade and process water quality.
• Royalties totalling \$20,103 were earned from the Freshwater project during the period. Encouraging drilling results were recorded from the Plutonic East underground mine and the Salmon gold prospect within the Freshwater leases.
• During the period Placer Dome Asia Pacific commenced and maintained full-scale mining operations at Red Hill. From commencement of mining in February 2003 until Balance Date, total gold produced from the current operation and the trial pit within M27/57 amounted to 51,612 ounces. Based on the current mining schedule it is estimated that royalty payments to Grange should commence during the September 2004 quarter.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Share capital increased \$3,781,000 from the last annual financial report from \$11,106,000 to \$14,887,000 and represents a increase of 34%. Factors contributing to this increase include the following:

• The completion of a share placement comprising of two tranches totalling 4,285,715 fully paid ordinary shares at an issue price of \$0.35 each with a one for one free attaching unlisted option (exercisable at 50 cents each on or before 28 November 2006) to raise up to \$1.50 million before expenses of the issue;
• The on-market share buy-back of 1,322,327 fully paid ordinary shares over the period commencing 1 August 2003 for a total consideration of \$428,336; and
• The profit from ordinary activities of \$2,735,148

DIRECTOR'S REPORT CONTINUED

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Company expects to maintain profitability for the remainder of the 2003/04 financial year with the continuation of production of copper concentrate from the Reward Deeps and Conviction mine.

The Company expects royalty payments from Barrick Gold to continue during the remainder of the 2003/04 financial year from mining activities on the Freshwater leases.

The Company expects royalty payments from Placer Dome Asia Pacific to commence in the September 2004 quarter from mining activities at the Red Hill project.

Grange will undertake a detailed review of Southdown to assess the viability of the Project.

The Company will continue to pursue growth opportunities in the resources sector as demonstrated by acquisition of the Southdown Project.

SIGNIFICANT EVENTS SINCE THE END OF THE REPORTING PERIOD

On 5 January 2004, the Company received proceeds of approximately \$5.43 million from the third shipment (10,730 tonnes) of copper concentrate from the Reward Deeps project exported from Townsville on 29 December 2003.

On 31 January 2004 the on-market share buy-back to acquire up to a maximum of 10% of the capital of the Company concluded. The Company acquired 1,366,677 shares for a total consideration of \$450,700.

On 23 February 2004 the Company announced it had issued 35,000 fully paid ordinary shares pursuant to the exercise of options issued under the Grange Resources Limited Directors' and Officers' Option Plan. The exercise price of these options was 12 cents, resulting in the Company receiving \$4,200.00.

Grange commenced a detailed review of Southdown to assess the viability of the Project.

There were no other events that occurred subsequent to the Balance Date that would significantly effect on the operations of the company, the results of those operations or the state of affairs of the company in future financial years.

ROUNDING

The amounts contained in this report and in the half-year financial report have been rounded to the nearest \$1,000(where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.

Signed in accordance with a resolution of the directors.

Adam Rankine-Wilson Managing Director

Dated this 26th day of February 2004, Perth WA

CONDENSED STATEMENT OF FINANCIAL PERFORMANCE FOR THE HALF-YEAR ENDED 31 DECEMBER 2003

	Notes	CONSOLIDATED
		2003	2002 minimimimimimi
		31 December	31 December
		\$1000	\$000
REVENUES FROM ORDINARY ACTIVITIES	$\overline{2}$	12557	414
Expenses from ordinary activities	$\overline{2}$	(9.717)	(1,333)
Borrowing costs		(16)	(12)
PROFIT/(LOSS) FROM ORDINARY ACTIVITIES BEFORE INCOME TAX EXPENSE		2,802	(931)
INCOME TAX RELATING TO ORDINARY ACTIVITIES	3	[67]
PROFIT/(LOSS) FROM ORDINARY ACTIVITIES AFTER INCOME TAX EXPENSE		2,735	(931)
NET PROFIT/(LOSS) ATTRIBUTABLE TO MEMBERS OF GRANGE RESOURCES LIMITED		2735	(931)
TOTAL REVENUES, EXPENSES AND VALUATION ADJUSTMENTS ATTRIBUTABLE TO MEMBERS OF GRANGE RESOURCES LIMITED AND RECOGNISED DIRECTLY IN EQUITY		[30)
TOTAL CHANGES IN EQUITY OTHER THAN THOSE RESULTING FROM TRANSACTIONS WITH OWNERS AS OWNERS		2.705	(931)
Basic Earnings per share (cents per share)		4.12c	(1.20)c
Diluted Earnings per share (cents per share)		4.12c	(1.20)c

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2003

	Notes CONSOLIDATED
	ASAT	AS AT
	31 DECEMBER 2003	30 JUNE 2003
	\$'000	\$'000
CURRENT ASSETS
Cash Assets	4,147	3,771
Receivables	8,406 15	3,280 42
Prepayments Inventories	188	3,045
TOTAL CURRENT ASSETS	14.381	10.138
NON CURRENT ASSETS
Receivables	315	309
Property Plant & Equipment	281	280
Deferred exploration, evaluation & development costs Investments	3,050 650	4.117
Other	1,656	1.615
TOTAL NON CURRENT ASSETS	5,952	6,321
TOTAL ASSETS	20.333	16/459
CURRENT LIABILITIES
Payables	3331	2,980
Provisions	599	616
TOTAL CURRENT LIABILITIES	3,930	3.596
NON CURRENT LIABILITIES
Provisions	1.516	1757
TOTAL NON CURRENT LIABILITIES	1,516	1757
TOTAL LIABILITIES	5/446	5,353
NET ASSETS	44887 MANA MANA MANA MANA MANA MANA MAN	11,106

CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2003 CONTINUED

	Notes	CONSOLIDATED
		AS AT	AS AT
		31 DECEMBER 2003	30 JUNE 2003
		\$000	\$'000
EQUITY
Contributed Equity	4(a)	31.317	30.271
Reserves		5,874	5.874
Accumulated Losses		(22,304)	(25,039)
TOTAL EQUITY		14,887	11,106

CONDENSED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2003

	Notes	CONSOLIDATED
	2003	2002
	31 December	31 December
	\$000	\$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers	6.546	1,077
Payments to suppliers and employees Interest received	(7,055)	(4, 342)
Interest paid	86 (48)	244 (12)
NET CASH FLOWS FROM OPERATING ACTIVITIES
	(441)	(3,033)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for exploration, evaluation and development	(38)	(664)
Payment for security deposit	(41)	(1,576)
Refund of security deposit		117
Payment for investments	(150)
NET CASH FLOWS FROM INVESTING ACTIVITIES	(229)	(2,123)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from capital raising	1,500
Payment for shares bought back Payment for share issue expenses	(424) (30)	(1,474)
NET CASH FLOWS USED IN FINANCING ACTIVITIES	1,046	(1,474)
NET INCREASE IN CASH HELD	376	(6.630)
Add opening cash brought forward	3.771	12.357
CLOSING CASH CARRIED FORWARD	4.4M	51727

NOTES TO THE CONCISE FINANCIAL STATEMENTS

1. BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT

The half-year financial report does not include full disclosure of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report.

The half-year financial report should be read in conjunction with the annual financial report of Grange Resources Limited as at 30 June 2003. It is also recommended that the half-year financial report be considered together with any public announcements made by Grange Resources Limited during the half-year ended 31 December 2003 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

(a) Basis of Accounting

The half-year financial report is a general purpose report which has been prepared in accordance with the requirements of the Corporations Act 2001, applicable Accounting Standards including AASB 1029 "Interim Financial Reporting" and other mandatory professional reporting requirements (Urgent Issues Consensus Views).

The financial statements have been prepared in accordance with the historical cost convention.

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

(b) Changes in accounting policies

The accounting policies adopted are consistent with those applied in the 30 June 2003 annual financial report.

NOTES TO THE CONCISE FINANCIAL STATEMENTS CONTINUED

	Note	2003	2002
		\$'000	\$000
2. OPERATING PROFIT
The operating profit/(loss) before income tax is arrived at after charging/(crediting) the following items:
Crediting as income :
Sales		12.406
Interest		86	244
Other		45	170
Total income		MANUTE 12.537	414
Charged as expense
Cost of sales		(7, 259)
Mine operating expenditure			(244)
Administration costs		(363)	(861)
Other expenses		(2,113)	(240)
Total expenses		(9,735)	1,345
Total depreciation and amortisation included in total expenses:
Amortisation and depreciation		1.105	148
3. INCOME TAX
The prima facie tax on operating profit differs from the income tax provided in the financial statements as follows:
Operating profit/(loss)		2.802	(931)
Prima facie tax on operating profit/(loss) at 30%		841	(279)
Tax effect of permanent differences
Non-deductible expenses		59	(6,006)
Tax effect of timing differences		(833)	6,285
Income tax expense		67

NOTES TO THE CONCISE FINANCIAL STATEMENTS CONTINUED

Note	ASAT	ASAT
	31 DECEMBER 2003	30 JUNE 2003
	3	S
4. EQUITY
(a) Issued and paid up capital
Ordinary shares- beginning balance	30,271	32.450
Add share issues	1,500	60
Less share buy-backs	(424)	(2,239)
Less share issue expenses	(30)
Total equity at end of period	31.317	30.271

5. SUBSEQUENT EVENTS

On 5 January 2004, the Company received proceeds of approximately \$5.43 million from the third shipment (10,730 tonnes) of copper concentrate from the Reward Deeps project exported from Townsville on 29 December 2003.

On 31 January 2004 the on-market share buy-back to acquire up to a maximum of 10% of the capital of the Company concluded. The Company acquired 1,366,677 shares for a total consideration of \$450,700.

Grange commenced a detailed review of Southdown to assess the viability of the Project.

There were no other events that occurred subsequent to the Balance Date that would significantly effect on the operations of the company, the results of those operations or the state of affairs of the company in future financial years.

6. SEGMENT INFORMATION

The Consolidated Entity operates predominantly in one geographic segment, Australia and one industry segment, mining and exploration.

7. CONTINGENT ASSETS AND LIABILITIES

Since the last annual reporting date, there has been no change of any contingent liabilities or contingent assets

DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Grange Resources Limited, I state that:

In the opinion of the directors:

• (a) the financial statements and notes of the Company:
• (i) give a true and fair view of the financial position as at 31 December 2003 and the performance for the halfyear ended on that date; and
• (ii) comply with Accounting Standard AASB 1029 "Interim Financial Reporting" and the Corporations Regulations $2001$ ; and
• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

Adam Rankine-Wilson Managing Director

Dated this 26^th day of February 2004, Perth WA

EII ERNST & YOUNG

蟹 Central Park 152 St Georges Temace

■ Tel 61894292222 Fax: 63 8 9429 2436

Perth WA 6000 Assimilia

CPO Box M939 Perth WA 6843

Independent review report to members of Grange Resources Limited

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows and accompanying notes to the financial statements for the consolidated entity comprising both Grange Resources Limited (the company) and the entities it controlled during the period, and the directors' declaration for the company, for the period ended 31 December 2003.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the consolidated entity, and that complies with Accounting Standard AASB 1029 "Interim Financial Reporting", in accordance with the Corporations Act $2001$ . This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Review approach

We conducted an independent review of the financial report in order to make a statement about it to the members of the company, and in order for the company to lodge the financial report with the Australian Stock Exchange and the Australian Securities and Investments Commission.

Our review was conducted in accordance with Australian Auditing Standards applicable to review engagements, in order to state whether, on the basis of the procedures described, anything has come to our attention that would indicate that the financial report is not presented fairly in accordance with the Corporations Act 2001, Accounting Standard AASB 1029 "Interim Financial Reporting" and other mandatory financial reporting requirements in Australia, so as to present a view which is consistent with our understanding of the consolidated entity's financial position, and of its performance as represented by the results of its operations and cash flows.

A review is limited primarily to inquiries of company personnel and analytical procedures applied to the financial data. These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance is less than given in an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

Independence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Statement

$(a)$

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of the consolidated entity, comprising Grange Resources Limited and the entities it controlled during the period is not in accordance with:

the Corporations Act 2001, including:

• giving a true and fair view of the financial position of the consolidated entity at 31 December 2003 and of its $\overline{a}$ performance for the period ended on that date; and
• complying with Accounting Standard AASB 1029 "Interim Financial Reporting" and the Corporations $(ii)$ Regulations 2001; and

$(b)$ other mandatory financial reporting requirements in Australia

Commt + Tony

Ernst & Young

$7.7$ idz

V W Tidy Partner Perth Date: 26 February 2004