Ord River Resources (ASX: ORD) has delivered a resource increase for the bauxite and alumina project in Laos, with a Bankable Feasibility Study the next step in progressing the project.
The new JORC Resource of 226 million tonnes at 26.7% alumina is an increase of 73.8% from the previous resource, including a Measured Resource of 69 million tonnes at 28.1%.
Head of corporate development, Frank Zhu, told Proactive Investors today that the Measured Resource was particularly noteworthy.
"This is a very important upgrade to us, the number itself is significant, the quality of it is also very significant," Zhu
"More importantly in terms of valuation is that we now have 69 million tonnes of Measured Resource, now Measured Resource is the last step before you actually have a Reserve.
"What that means for the project as a whole is that now we can confidently move to the next stage, which is a bankable feasibility study."
The Measured Resource is sufficient to allow for a mining operation that would last 34.5 years at the proposed 600,000 tonne alumina refinery.
The Laos project is held by Sino Australian Resources (SARCO), a joint venture company between Ord River and China Nonferrous Metal Industry's Foreign Engineering and Construction Company (NYSEMKT:NFC).
SARCO has already secured a letter of proposal from China Minsheng Banking Corporation to finance 70% of the total capital required to build the alumina refinery.
Memorandums of Understanding have been secured with NFC for a fixed price and fixed term engineering, procurement and construction contract and a 20 year alumina offtake agreement.
Ord River is heading up work on a potential IPO that would raise equity for the Laos project, including completion of the alumina refinery.
"We are responsible for talking to investors, talking to investment banks, talking to investment banks, talking to due diligence, talking to lawyers and accountants," Zhu told Proactive Investors.
"Our Chinese partner is taking more of a technical role."
Upon completion of a Bankable Feasibility Study, Zhu said Ord River would be able to give a much clearer picture of the project's potential in the Prospectus for the IPO."Once we have all the information we'll be able to tell potential investors what we think it is worth and what the cash flows will look like."