overview of ord - huge potential, page-26

I tried to give an overview of SARCO, but it is not necessary as the company has already published a great presentation on 3/5/2011.

1. MasseyFerguson posted a very resource re infrastructure.

"http://www.adb.org/Documents/Events/Mekong/Proceedings/STF13-Appendix4.pdf

What more could you want... page 9 and 10."

2. Short-term and long-term loans from Chinese banks are exceptional cheap. NFC borrows ONLY between 4.86% and 5.598% as Accaeric quoted.

3. In ORD plan in 2009, minimum JORC resource is 300Mt, Maximum JORC resource is 1,500Mt.

4. Second to Alumina Ltd(AWC) in Australia.

- ORD plan of alumina production: (1.2Mt - 4Mt)
Initial 600,000t as recent announcement.

STAGE 1 STAGE 2 STAGE 3
Smelter(Aluminium metal): Nil Nil 0.5Mt
Alumina Refinery(Alumina):1.2Mt 2.4Mt 4Mt
Integrated Bauxite: 4.3Mt 8.6Mt 14.4Mt
Minimum JORC Compliant Reserves 300Mt 300Mt 300Mt
Project Life 50 years Plus

http://www.ord.com.au/ASX%20Announcements/Roadshow%20Presentation.pdf

- AWC production alumina: around 6Mt.

AWAC (AWC owns 40%) had a record production of 15Mt for the 2010 financial year. 3.8Mt for the March quarter.

- Alumina price:

Published spot and index alumina prices have averaged US$392 per tonne for the first quarter and are currently US$407 per tonne.(Referring AWC 1st quarter report)

http://www.aluminalimited.com/uploads/File/Alumina%20Limited%20Full%20Year%202010.pdf

Although a bit early to compare ORD with AWC, just wanna put some simple factors to get a rough idea what potential ORD will have.

5. ORD Vs AWC.

5.1 Long-term production:
- AWC: 6Mt alumina
- ORD: 2.6Mt alumina (average of Stage 1 and Strage 3)
- Providing ORD get 34% of SARCO post-IPO, production will be reduced to 0.78Mt
(Although it sounds bad, in fact ORD is more likely to get "free carry interest" because of no/less dilution on our ordinary shares - 30% comes from IPO & 70% borrows from Chinese banks.

5.2 Market cap:
- AWC: $5.5b
- ORD: $0.038b

I don't wanna be too opmistic, but ORD does have huge potential on the Laos project no matter it is IPO or developed by JV.

The current management is on the top, Chairman has/had managed multi-billion large organisations, and they do deliver maximum value for our shareholders - Spending generous money to employ top counsulting company SRK, IPO advisor RBC, top accounting firm E&Y, BUT mean to themselves by moving office place to save 60% rent for us.

It is a very small amount of saving, but does reflect the management treat the company as they own.

The management is the key for a company to be successful.