Ord River Resources reports project financing proposal received for SARCO alumina refinery in Laos
Ord River Resources (ASX: ORD) has achieved a major milestone for the production development of the company.
China Minsheng Banking Corporation (CMBC) has stated in a letter of proposal to Sino Australian Resources (SARCO), "It is the bank's intention to provide the necessary project financing SARCO requires."
SARCO has proposed building a US$600 million, 600,000 tonne per annum capacity alumina refinery in Laos.
The large size of the refinery should rank SARCO immediately behind Alumina (ASX: AWC) in size. SARCO plans to close the gap by moving into production, expanding refinery capacity and acquiring new projects.
Highlighting the level of support CMBC is putting behind SARCO, CMBC added, "We believe the project in Laos presents a significant opportunity for SARCO and the Chinese alumina market."
CMBC considers that a 70% lending ratio can be applied to the project.
CMBC is one of the largest privately owned and listed banks in China (listed on the Shanghai Stock Exchange), with a market capitalisation of 160 billion Chinese Yuan.
Ord River said that discussions are continuing with CMBC regarding SARCO's project financing needs, with Ord River also continuing to have dialogues with other financial institutions.
Ord River said, "We plan to secure the best project financing package agreement prior to IPO of SARCO."
SARCO is owned by Ord River (49%) and China Non-Ferrous Metal Industry's Foreign Engineering & Construction Co. Ltd (NFC) (51%).
Importantly, CMBC has a close relationship with NFC, and has financed many of NFC's EPC projects in the past.
