ORD River Resources is establishing a joint venture (JV) company with China's Guangdong Rising Asset Management Co (GRAM), which will see Aus$10.8 million invested on the Copper Flats Copper Project in Western Australia.
The JV will be established once the companies receive Chinese and Australian regulatory approvals.
The agreement will see Ord vend 100% of Copper Flats and its licences into the new vehicle and retain a 49% indirect interest, with GRAM holding the balance.
In return, GRAM will make an initial Aus$5 million cash contribution to the JV company, as well as an immediate $3 million payment to Ord, along with further contributions, bringing the total to $10.8 million.
GRAM is run by the Guangdong Provincial People’s Government and is the second-largest stakeholder of China Telecom.
The sovereign wealth fund is also controlling stakeholder of China-listed Zhongjin Lingnan Nonfemet which acquired a 50.1% stake in Broken Hill lead and zinc producer Perilya for $45 million in 2009. It also acquired a 19.9% stake in Laos copper and gold miner PanAust for $215 million.
GRAM and its Australian subsidiary Bidco have more recently struck a preliminary in-principle deal to acquire Caledon Resources, owner of the Cook coal mine in the Bowen Basin of Queensland.
It is not the first Chinese deal for Ord, which has previously struck a deal with China Nonferrous Metal Industry’s Foreign Engineering and Construction Co to progress its Bolaven Plateau bauxite project in Laos.
The partners have established JV company Sino Australian Resources which is investing $5.3 million on a feasibility study into the project’s potential development.www.ord.com.au