The West Australian cited Mr Richard Mehan MD of Grange as saying that the combination of market speculation over a future acquisition and the recent iron ore price rally has provided Grange Resources with an overdue market revaluation.
Sparking a price query from the Australian Securities Exchange, there was a small correction yesterday in which Grange dropped 2� to 33� but the Perth based magnetite producer rose more than 20 per cent to 35� on Monday on heavy volumes.
Mr Mehan attributed the price rise to the recent rise in the iron ore price.
He said that "We're a pure iron ore stock now and when the iron ore price is high Savage River has good margins. And it's about time the market recognized our value."
Iron ore hit USD 144.90 a tonne yesterday up from USD 115 per tonne at the start of December.
Grange was hit hard when the iron ore price collapsed to three-year lows of less than USD 90 per tonne in September. Its share price plunged to 3 1/2 year.
The adverse market conditions also played a part in the company's decision to put the USD 2.9 billion Southdown magnetite project near Albany on ice in November. That has opened the door for Grange, now cashed up, to acquire another project.
Mr Mehan said there was nothing specific on the radar yet, however it was something the board and senior management were actively perusing.
He said that "We don't have the expenditure requirements on Southdown after the revision and we have a good balance sheet, so it makes sense to look around. It's been discussed but it's still early days."