Few thing being overlooked here. There is no chance in my mind...

Few thing being overlooked here. There is no chance in my mind that the resource will stay @ 130 Mt in the Short term. Multiply that figure by 6 x for my thoughts. ORD will prove up minimum 1B tonnes I am confident. Mining is easy and at V shallow depth. A lot of it is sub 2m depth.

Management have erred on the side of Caution and surprised to the upside regularly. OPEX will come in under $150 figures above this are rather pessimistic. Look at the land is it hard to mine? I think not.

So running figures of 600K Tonnes @ $400T (again prices are on the way up not down so in the future margins will rise imo.

We get: $240Million...

Assuming ORD has a 25% stake after Tax Y1 and OPEX Profit comes in @ 30 million.

Breaking this down further
Ramp up to 1.2 Mt X $400/T = $480M Gross reduce by $150/T is 300 Million. Applying a hefty 30% tax we get about 200 mill profit (apply a generous sector PE to this and SARCO is already a multi billion dollar company by now, still in its infancy).

Now for that $200 Million Profit ORD's share will retain 25% of this say 50 million profit after tax per annum.

So in a relatively short period ORD will have pocketed 25 million and 50 million in their profit share over the upramp of 2 stages in the refinery.

Given the aggressive development profile and scheduled upramps sector analysis indicates a PE of 20 to be realistic.

So by my calculations of market cap it can be seen where ORD may be in 1/3/5 years time.

Further to this there has been talk of dilution. According to the latest release by ORD 70% of the project will be debt funded. From my discussions with Frank we have very large funds wanting in on the SARCO IPO. That 70% = $420m, the other $180m will be funded from the listing of SARCO on the ASX late 2011/Early 2012.

A key point needs to be mentioned here. ORD is gathering benefit from the rise in Market cap from SARCO without necessarily added dilution from the ORD stable. IF SARCO dilutes, ORD still benefits from the increase in market cap as the project advances. For instance the $420m approximate debt required for SARCO is a real bonus = much less dilution.

The above scenarios would represent ORD and SARCO in the infancy of project development. Recall that SARCO intent on increasing the size of their operations significantly to RIVAL that of AWC limited.

The beauty of ORD is that despite all of the above that is has going for it there are many other irons in the fire. When people say this my initial reaction is yeah yeah yeah heard that all before. I recall a share GMR some of you may be familiar with it. Anyway it's largest shareholder and financial backer is the Royal Group from Abu Dhabi. I did hold shares in the company a few years ago but sold as in my opinion the company (GMR) was too slow to acquire additional gold projects in Africa when the Gold price was well sub $1000 Oz. Since sold out and moved to greener pastures with ORD.. which leads me to their other projests and such high regard I hold them in...

For those unaware ORD has a option to purchase 5/10% of Caledon Resources a coking Coal exporter from QLD'd Bowen basin. The suitor is GRAM (Backer but willing to ACT!). ORD has the option to purchase at anytime in the future and has no FURTHER expenses in the acquisition once their initial stake is purchased. A 10% stake would set ORD back 40m.

GRAM has signed a non solitication agreement and according to management they expect ther deal to go ahead. A takeover offer HAS been launched it is pending chinese approvals and from recent announcements they are expected shortly.

For those unaware on Caledons asset they have a motherload of Coking Coal which is very profitable, extremely. It sells for about $310/T. Admittedly there is a couple of hundred million that needs to be spent developing the Cook mine but remember ORD has NO ONGOING COSTS associated with the project. By 2014 they will be exporting 4 mt of 50/50 split export thermal and coking. CCD will be exporting fro Wiggins in 2014/2015.

Similarly here the figures are mind boggling. But again I am not plucking @ straws. A takeover has been launched and $400m is on the TABLE. Directors have unanimously agreed and recommended the offer to current shareholders. This project alone would see ORD becone a mid tier company in 3 years (in excess of 100m cap).

There are 2 other projects that indeed may shape as company makers in their own right. I am divided on which one I see the most significant and continue to research them albeit with difficulty. On face value the COPPER FLATS project has the benefit of a Jv Partner again in GRAM. They are putting up 10.8 million for 50/50 split to the project.

In 2006/7 the project was drilled with limited scope and did not return with much. Since GRAM have revisited the site and thought there were encouraging signs at CopperFlats. It is thought 400m adjascent to previous drilling lies some interesting veins along a significant strike. Perhaps Wealthcr8or can assist here as he is very competent on this project?. The significance for me here is GRAM STUMPING up with the $$$ this speaks volumes of their commitment.

Suplajack Gold project is another one or ORD's projects, in fact the only one they had pre IPO days. This says a bit in itself. It lies on strike to tanmai's gold mine ( listed asx = tam). Recent drilling has returned significant results and can be found under the thread suplejack drilling I believe. The post was by WealthCr8or. Again his knowledge on these 2 projects is of a solid background. Really their drill results were outstanding but with gold at barely $500 Oz the darn stuff would have been pretty hard to mine back then. ORD also have another tenement that lies under the radar called West Wyalong.

In Summary ORD has the projects to be a standout performer on the ASX over the medium term and beyond (5 years). ORD has good leverage to advanced projects. The first being the IPO of SARCO. ORD have RBC leading them and as I believe it to be they only involve themselves with world class projects. Additionally the IPO of SARCO allows a value to be calculated from ORD's relationship with NFC in this project.

GRAM has been a welcome addition to the ORD networking's also. They appear on the cusp of aquiring a profitable asset with real advantage being no ongoing costs associated with running the business. Similarly in establishing a JV co in proving up some Copper reserves. There is nothing to suggest that this will be there last Jv either.

Forntunately for shareholders the gold price is very strong currently and bullish over the medium term. Suplejack has truly returned some sensational drilling results as previously mentioned. these really need to be looked up they are very good. On this project i expect a large upgrade in the future and many exciting drilling intersections over the coming 6 months.

But perhaps the biggest motivator of All for me in which a significant portion of my portfolio sits is the nature in which management do business. Very methodical in their actions, their cost cutting, reducing rent to reduce cash burn rate is brilliant from a shareholders perspective. Lastweek I spoke at length with Frank. It occured to me the vision that Managament have and on that I can say they are unparrelled, I have spoken to many in my time.

I am confident that they have the connections in the right places. Their major backers NFC, SARCO, GRAM are powerful and WILLING to act. ORD's growth path is poised for aggressive expansion @ under 10cps for me that is a bargain.

My current valuation is $150m + market cap. Moving onto the end of the year and 2012 depending on further details $200m to $500m is achievable and identified in my above post. We are in May now so ORD should rerate solidly over the remaining months. The principle project from my analysis is the SARCO IPO of $600m. My analysis stems from the corresponding price sensitive announcement. It is there for all to see.



Please note all content in my post is available from announcements released to the asx. Do your own research and I would like to hear your thoughts.

I hold ORD.