Grange Resources (ASX:GRR) said its board made a final investment decision for the North Pit Underground Project at its Savage River Iron Ore Pellet Operations in northern Tasmania, according to a Wednesday Australian bourse filing.

The company said base-case economics, at an iron ore price of $90 per tonne for 62% iron fines, show a project net present value of AU$357 million, at 8.3% real after tax, and an internal rate of return of 43%.

The company expects underground mining to begin in the first quarter of 2027.

The project extends production and pellet supply continuity to 2035, with potential to extend beyond 2040 under a future block cave development at Savage River or alternative open-pit options, the filing said.

The company said a staged development approach preserves the option for a block cave, with a decision to be made at a future date.

The company's shares rose 11% in recent Wednesday trade but earlier hit a 52-week low.