SEPTEMBER QUARTER 2018 KEY HIGHLIGHTS(1)
OLAROZ LITHIUM FACILITY (ORE 66.5%)(2)
September quarter
-- Production for the quarter was 2,293 tonnes of lithium carbonate, up
7% on previous corresponding period (PCP)(3) but down 36% quarter on
quarter (QoQ) due to a previously announced shutdown of the plant for
two weeks (ASX June Quarterly Report - 31 July 2018) and seasonally
lower evaporation rates
-- Quarterly sales revenue of US$32 million, up 36% on PCP with realised
average price achieved of US$14,699/tonne on a free on-board basis
(FOB)(4). It is expected that the pricing achieved in the December
quarter will be below that achieved in the September quarter, however
the pricing achieved for the December half year is not expected to be
materially less than the June half year
-- Total sales of 2,144 tonnes of lithium carbonate up 3% on PCP
-- Cash costs for the quarter (on cost of goods sold basis)(5) were
US$4,640/tonne
-- Record gross cash margins of US$10,059/tonne were up 62% on PCP
LITHIUM GROWTH PROJECTS
-- A US$40 million early works program is underway as part of the Stage 2
expansion with the construction of evaporation ponds, expanded
industrial water supply, production bores, roads, camp infrastructure
and accommodation. The US$40 million forms part of the total capital
expenditure of US$285 million for Stage 2. The expansion will add
25,000 tonnes per annum (tpa) of lithium carbonate and bring Olaroz
total production capacity to 42,500tpa. Through 30 September 2018
approximately US$10 million of the approved US$40 million has been
spent
-- All material matters to permit Orocobre and Toyota Tsusho Corporation
(TTC) final approvals for both the Stage 2 expansion and Naraha
Lithium Hydroxide Plant have been completed with the exception of the
Naraha EPC contract with the preferred contractor, Veolia. TTC is the
manager of the Naraha joint venture. The terms of the EPC contract are
expected to be agreed during this quarter thereby allowing for the
integrated and concurrent development of both projects
BORAX ARGENTINA
-- Overall sales volume in the September quarter was down 11% on the June
quarter to 9,407 tonnes with sales revenue down by a similar magnitude
while the average price per tonne achieved was in line with the June
Quarter
-- Revenue was impacted by a slower than anticipated commencement of
sales to the Brazil agriculture market. Delayed September volumes have
been recovered in October
-- The Tincalayu Expansion Project feasibility study is under internal
review
CORPORATE
-- Orocobre corporate had available cash of US$308.7 million after
supporting the Advantage Lithium capital raise (US$4M), Cauchari JV
expenditure and early expenses on the Naraha Lithium Hydroxide Plant.
Including SDJ and Borax cash and project debt, net group cash is
US$221.7 million
-- Mr Martin Perez de Solay has been appointed as Orocobre's new Managing
Director and Chief Executive Officer and will commence in these roles
following the upcoming Annual General Meeting and a transition period
with the current Managing Director and CEO Richard Seville
CAUCHARI JOINT VENTURE
(ADVANTAGE LITHIUM OPERATOR 75% / OROCOBRE 25%)
-- During the September quarter the joint venture partners released a
Phase 3 drilling program update regarding the brine sampling of
diamond core holes CAU20 and CAU21 in the NW Sector of the Cauchari JV
property. The results from CAU20 and CAU21 clearly demonstrated the
Phase 3 infill drilling and resource conversion program is on track to
deliver Measured and Indicated Resources by early 2019
-- On 31 August Advantage Lithium released a NI43-101 complaint
Preliminary Economic Assessment (PEA) for the Cauchari JV project.
Orocobre did not release the results of this study as the use of
inferred resources in the PEA does not comply with guidance provided
by ASX and ASIC on disclosure of information of this nature
-- A Phase 3 Definitive Feasibility Study is planned for completion in
the first half of 2019
OLAROZ LITHIUM FACILITY
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