Ord River Resources (ASX: ORD) has announced that Sino Australian Resources (Laos) Co., Ltd (SARCO), a joint venture company between ORD and China Nonferrous Metal Industry’s Foreign Engineering and Construction Co., Ltd (NYSEMKT:NFC) is investing A$5.3million in a feasibility study.
This study is being carried out by Sinomine Resource Exploration Co., Ltd. There will be a large team of people from China and Laos working on this study. SARCO already has a permanent office in Laos.
In the announcement on 30 October 2009 ORD informed the market that SARCO entered into a JV Agreement with its Lao partner Lao Service Incorporation (NYSE:LSI) to develop the LSI Tenement in conjunction with Yuqida Tenement into a 600,000ton per annum alumina refinery.
The feasibility study is required to make a final investment decision. In the process LSI and SARCO will establish a JV company to hold the LSI Tenement. This will give SARCO a direct 51% interest in the tenement.
ORD’s financial contribution to this budget is limited as disclosed in the past. ORD has spent ahead of NFC in previous years.
The majority of the A$5.3million will be covered by NFC. ORD will maintain its 49% holding in SARCO.
ORD has set aside A$500,000 for its contribution to the project prior to the investment decision. Actual financial contribution from ORD is not expected in the current financial year.
ORD Managing Director Peter Shou commented from Laos, “this is a significant investment in the project by NFC and ORD. We are confident that this feasibility study will be successfully completed and take this project to the investment decision stage."
"Together with Sinomine Resource, NFC and ORD are working very hard to ensure we will have a world class mining, engineering and alumina refinery construction model for this project,” Shou added.
Disclosure: The author holds no positions in the company