ORD River Resources April 21st, 2011 | Author: thetradercentral
Ord River Resources is a minerals exploration and development company with projects in copper, bauxite and gold.
Projects:
•Laos Bolaven Plateau Bauxite
•Copper Flats
•Suplejack
Of considerable interest is the Bolaven Plateau bauxite resource in Laos which has the potential to be as large as Western Australia's Darling ranges. Bolaven Plateau consists of two tenements: Yuquida and LSI.
A large majority of Bauxite is mined and converted into alumina for the production of aluminium metal. Aluminium has the advantages of being considered a "green" resource as a result of its durability and recyclable nature, Aluminium is used in a large number of products resulting in continued strong demand for the resource. China is expected to increase demand for Bauxite considerably over the next decade as its economy continues to grow at record pace.
ORD has entered into a strategic alliance with China NonFerrous Metals to develop the Bolaven Plateau, together the company have formed "Sino Australian Resources Co." Under the alliance ORD has a 49% stake in the company while China Non Ferrous Metals has a 51% stake. Sino Australian Resources have established a Bauxite JORC of 130 mill tonnes. Estimates of the total resource are between 2-2.5 billion tonnes. Sino plan to develop an Alumina refinery producing 600,000 tonnes a year, from there the resource will be directly shipped to markets. The Laos Bauxite project has the strength of close existing infrastructure (Road and Rail which allows for cost efficiency.
Estimated Capex for the refinery is US$ 570 million, which is considerably low when given the potential output for the project and the quality of the resource.
Sino have been drilling relentlessly for the past few months as part of their feasibility study for the Laos Bauxite project. Drilling for Yuqida finished in January this year with a total of 793 holes drilled and 4750 samples. Remaining field work is expected to be completed later in the year with resource calculation for LSI and Yuqida due in the upcoming months. Once resource upgrades have been announced there should be a significant re-rating of the company.
SARCO is most likely to advance through an IPO. The company/project will be of interest to a number of Asian buyers due to the reliance on other continents for bauxite. More importantly the project has a number of key points:
Large Resource
•High demand market
•Relatively small capex
•Close existing infrastructure
•Asian ownership
With resources upgrades due within the coming weeks, ORD is set for a run and re-rating.
Link: http://www.thetradercentral.com/news
VAN Price at posting:
5.3¢ Sentiment: LT Buy Disclosure: Held
