Cavico Corp. (NASDAQ: CAVO), a leading infrastructure development company based in Vietnam, today announced that its majority owned subsidiary, Cavico Infrastructure Development has signed a joint venture agreement with the Investment and Exploitation of Natural Resources Joint Stock Company (IERC), to invest, exploit and market construction stones from Hang Co Mine. According to the agreement, Cavico Infrastructure is responsible for exploiting, processing and marketing the stones and IERC will be responsible for administration of the joint venture and obtaining licensing approvals. The parties have agreed to split the revenues. IERC will receive $0.40 for every cubic meter of stone exploited, processed and sold by Cavico Infrastructure. Cavico Infrastructure will retain the remaining revenue, which it anticipates to be approximately $9.5 million. Cavico Infrastructure also has signed an agreement with IERC to exploit and market construction sand in the Doc Du area, in Vinh Tan village, Binh Thuan province. Cavico will extract sand within 7.63 hectares of land that has 152,600 cubic meters of construction sand reserves at a depth up to 2 meters. Cavico expects to extract approximately 50,000 cubic meters of sand per year for the next three years. The value of this contract is approximately $1.1 million. In addition, Cavico Infrastructure has signed a contract to sell 360,000 cubic meters of block stones from Hang Co Mine to the Dong Bac Company by the end of 2010. The anticipated value of this contract is $3.0 million. Currently, Cavico Infrastructure is also negotiating a sales contract with ITACO Company to sell construction stones for 2011. Both Dong Bac and ITACO are members of the Vietnam National Coal and Mineral Industries Group, also known as Vinacomin. The current price for block stone and construction stones is about $7.50 and $8.80 per cubic meter respectively. Hang Co Mine is located at Vinh Tan village, in the province of Binh Thuan, which is in south central Vietnam. The quarry will be the main provider of construction stones to the Vinh Tan thermoelectricity plant. The total land to be quarried is 4.27 hectares which has 640,300 cubic meters of natural stone reserves at a depth up to 15 meters. Cavico expects to excavate approximately 480,000 cubic meters of block stones annually and should complete the excavation by August 2011.
“We are very pleased to sign the joint venture and the construction contracts with IERC for works at Binh Thuan province,” comments Mr. Hai Thanh Tran, vice president of Cavico Corp. “We are also pleased to have secured such an attractive selling contract with Dong Bac for construction stones for the rest of 2010 and expect to also secure an equally favorable selling contract with ITACO for the following years. Cavico is confident that, with our capacity and mining expertise, this joint venture project will yield higher margins for the company.”About Cavico Corp. Cavico Corp. is focused on large infrastructure projects, which include the construction of hydropower facilities, dams, bridges, tunnels, roads, mines and urban buildings. Cavico is also making investments in hydropower facilities, cement production plants and urban developments in Vietnam. The company employs more than 3,000 employees on projects worldwide, with offices throughout Vietnam and a satellite office in Australia. Founded in 2000, Cavico is a major infrastructure construction, infrastructure investment and natural resources conglomerate headquartered in Hanoi, Vietnam. Cavico is highly respected for its core competency in the construction of mission-critical infrastructure including hydroelectric plants, highways, bridges, tunnels, ports and urban community developments. One of the Company’s primary competitive advantages is its ability to nurture a project “from concept through completion” with a vertical portfolio of interrelated investment, permitting, design, construction management and facility maintenance services. Cavico’s project partners include top multi-national corporations and government organizations. The Company employs more than 3,000 full-time, part-time, and seasonal workers. For more information, visit http://www.cavicocorp.com. Information on the Company’s Web site or any other Web site does not constitute a portion of this release. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company’s ability to obtain the necessary financing to continue and expand operations, to market its construction services in new markets and to offer construction services at competitive pricing, the Company’s ability to complete projects in the time frame specified; anticipated revenue from the projects to attract and retain management, and to integrate and maintain technical information and management information systems; the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. These statements include, without limitation, statements regarding our ability to prepare the Company for growth; the Company’s planned expansions, and predictions and guidance relating to the Company’s future financial performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.