On 17 April 2019, Orocobre Limited (ASX: ORE) shared its quarterly report of operation for the period ended 31 March 2019. Orocobre is the only ASX listed company producing high-grade lithium chemicals for global battery markets.
Olaroz Lithium Facility
At Olaroz, the company experienced best March quarter results; Q3 FY19 production at 3,075 tonnes. Following the pond preparation couples with the strategy of managing brine quality, the productipn at the Olaroz was reported to be 10% higher than the previous corresponding period with YTD figure recorded at 9,150 tonnes. The company expects that by the end of FY2019 on 30 June 2019, the full year production of the company will be around 12,470 tonnes, same as FY2018.
The sales revenue in the March 2019 quarter was US$33.4 million which was up by 4% with respect to the December 2018 quarter. The realized average price achieved during the March 2019 quarter was US$9,451/tonne on a free on-board basis (FOB). In the March 2019 quarter, the product pricing got influenced by the direct and indirect impacts of the prolonged market softness of China. As a result, the product pricing in March 2019 quarter was low as compared to the December 2018 quarter. The sales volume in the March 2018 quarter increased by 17% to 3,530 tonnes as compared to December 2018 quarter.
The gross cash margins excluding the export tax were noted as US$5,258/tonne, a fall of 20% as compared to Q2 FY2019 as a result of the lower average price received.
After excluding the recently announced export tax of US$776/t, the cash cost for the quarter was down by 4% to US$4,193/tonne on pcp.
Lithium Growth Projects
By the end of the March 2019 quarter, for building the Naraha Lithium Hydroxide Plant in Japan, the Final Investment Decision was approved by ORE, Toyota Tsusho Corporation (TTC) as well as the Joint Venture (JV) boards. Here, Orocobre would be holding 75% economic interest, and TTC would be managing the operation.
The construction of the key items such as ponds, secondary liming plant, roads and camp upgrades that are required for the Stage 2 Expansion of the Olaroz Lithium Facility is under progress.
There was an increase in the overall sales volume by 21% as compared to the previous December 2018 quarter to 13,041 tonnes along with the sale of 2,312 tonnes of low-value mineral. The sales revenue increased by 4% as compared to the previous December quarter. The average price received also increased by 3.5% with respect to Q2 FY2019 adjusting for the low-value mineral sale.
During the quarter, the MD and the CEO of Orocobre attended Lithium Competitiveness Meeting ‘Mesa de Litio 2019’, chaired by Argentine President Mauricio Macri. In the round table conference issues related to the productivity in the lithium industry was discussed and also the determine what government assistance that will be required to remove blockages affecting industry development.
Also, read the sustainability report for 2018.
Today, the company also issued 145,073 Ordinary Shares and cancelled 316,490 performance rights. The exercise of Performance Rights issued pursuant to the terms of the Orocobre Performance Rights and Option Plan.
There was another announcement as well regarding the change in the Director interest. Richard Phillip Seville, via Ockleston Nominees Pty Ltd ATF The Seville Trust, has acquired 145,073 Ordinary Shares of ORE.
At present, the shares of ORE closed the day’s trading at A$3.590 (17 April 2019), up by 0.28% as compared to its previous closing price. ORE holds a market capitalization of A$936.29 million with approximately 261.53 million outstanding shares.
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