The priorities of each project are laid out in the Managing Directors Review on p2 of the Annual Report, so we don't have to rely on Wealth's information, even though he is right.
"SARCO Alumina Refinery Laos Highest Unlock significant value via both corporate transaction and development
"Suplejack Gold Project NT High Increase gold resource via exploration
"Both alumina and gold are among the best performing commodities and are forecast to remain robust in the long run. We believe through careful planning and development we can add significant value at a lost cost to ORD shareholders.
"Secondly, we made a decision to manage low priority projects for the purpose of cost control and value add.
"Copper Flats Copper Project WA Lowest/non-core Farm out
"West Wyalong Gold Project NSW Low Study potential for gold mineralization"
This is most likely the sensible approach to unlocking the value in ORD over time. The Copper Flats JV with GRAM is waiting on Chinese regulatory approval, and as much as I would love to see them get on with it, we won't be needing the $3m for drilling Suplejack until next season.
I have had high hopes for Copper Flats since investing in ORD nearly 3 years ago, but have since come to realise that Laos is the big priority for early development, closely followed by Suplejack, and in fact pretty much as Frank has laid out in his review. I am concerned about the objective to farm out Copper Flats. I hope this means just to the JV company with GRAM and not to any other entity. If it comes to anything Copper Flats should be big and I would like ORD to be as fully participated in it as possible.
ORD has been a patience tester for quite a while, particularly on not getting the drilling happening at Suplejack this year which I found disappointing. But this market is providing the opportunity to accumulate cheaply till one day the value of the Laos alumina refinery is unlocked through the SARCO ipo and the gold resource at Suplejack is greatly increased.
VAN Price at posting:
4.8¢ Sentiment: LT Buy Disclosure: Held
