2 Lithium Players On The Rise – ORE and GXY

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Orocobre Ltd (ASX: ORE)

Orocobre Ltd (ASX: ORE) is a leading ASX listed company which is producing high grade, high value lithium chemicals for the growing global battery and technical markets. The company recently revealed that the company’s production from Olaroz Lithium Facility for the September quarter increased by 7 percent to 2,293 tonnes of lithium carbonate as compared to the previous corresponding period, however, it was down by 36% compared to the June quarter due to lower seasonal evaporation and a scheduled two-week maintenance outage. The company achieved the Quarterly sales revenue of US$32 million, which is 36% higher as compared to the previous corresponding period. Company reported that the overall sales volume of Borax Argentina in the September quarter was decreased by 11% to 9,407 tonnes as compared to the June quarter. The company is expecting that the full year production of FY19 will be higher than FY18. The company is also having a high expectation from the December quarter as production is believed to be up than what was noted in September quarter. In FY 2018, the company reported Record underlying net profit of US$25.7 million.  

In the last six months, the share price of the company decreased by 33.57 percent as on 1 November 2018, and traded at a very high PE level of 332.140x. ORE’s shares traded at $4.190 (+12.634% intraday) with a market capitalization of circa $972.44 million as on 2 November 2018.

Galaxy Resources Ltd (ASX: GXY)

Galaxy Resources Ltd (ASX: GXY) recently reported that the total mining volumes from Mt Cattlin Operations decreased by 8 percent in the September quarter compared to previous quarter resulting from a delay in receiving permits to allow planned mining access east of Floater Road. During the September quarter, the Company started an approximately 30,000m drill program to support the exploration, resource and reserve development at Mt Cattlin. Galaxy Resources has also bagged a binding agreement with POSCO; and this is with regards to sale of a package of tenements that are located in Argentina. The group has earmarked this transaction for a total cash consideration of about US $ 280 million.

As at 30 June 2018, the company was having cash of $45.1 million with zero debt. In the first half of FY 2018, the company reported the revenue of $88.4 million which is 682 percent higher than the corresponding previous period. The EBITDA of the company increased by 2,878% to $42.4M as compared to corresponding previous period due to an increase in the average realized price of US$90/dmt and a reduction in share-based payment expense of US$6.1m. The average cash margin per dmt sold increased by 140% over the previous half-year mainly due to higher realized selling price. A total of 6 shipments were completed in the first half of FY18 for an aggregate 90,019 dmt of product sold.

In the last six months the share price of the company decreased by 27.62 percent as on 1 November 2018, and it traded at a PE level of 37.190x. GXY’s shares traded at $2.580 (up 13.2%) with a market capitalization of circa $929.15 million as on 2 November 2018.


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