Grange Resources has secured the eastern 6km extension of the Southdown magnetite deposit from Rio Tinto, a purchase that substantially increases the total magnetite resource available for development.

On completion of the transfer, including options, Rio Tinto's interest in Grange will be increased to 19.9%.

Aeromagnetic surveys and exploration drilling by Rio Tinto support Grange's view that the Southdown deposit extends for about 12km.

The purchase eastern extension will enable the entire deposit to be combined into a single project significantly extending the project life with minimal additional capital expenditure.

Grange's managing director Geoff Wedlock says the agreement with Rio Tinto is an excellent outcome for Grange and its partners.