Orocobre Limited Quarterly Report of Operations for the Period Ended 30 September 2018



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


— Record gross cash margins of US$10,059/tonne were up 62% on PCP


— 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


— 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


— 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


— 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



— 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



— 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


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