The Share Price Of ORE Increased By 5.61% After The Olaroz Stage 2 Expansion Update

  • Nov 29, 2018 AEDT
  • Team Kalkine
The Share Price Of ORE Increased By 5.61% After The Olaroz Stage 2 Expansion Update

On 28 November 2018, Orocobre Limited (ASX: ORE) made an announcement that it has received a green signal from Orocobre, Toyota Tsusho Corporation (TTC) and JV boards for the stage 2 expansion of its Olaroz Lithium Facility. The stage 2 expansion aims to increase the production capacity of the lithium carbonate by 25,000 tonnes per annum (tpa) so that the total production of the Olaroz production capacity reaches 42,500 tpa.

The company is going to build a lithium hydroxide plant in Japan. For that reason, the company got approval from its board of directors and TTC so that the feedstock from the stage 2 will be utilized in this plant. From stage 2, the expectation is to produce lithium carbonate with the technical grade more than 99%.

Further, the company has plans that they will migrate the stage 1 development slowly into 100% production of battery grade lithium carbonate during the development phase of phase 2.

The company also expects that once stage 2 is under full production, then it would be able to produce 17,500 tpa lithium carbonate whose grade meets the requirement of the battery. Also, expectations are such that 9,500 tpa of a technical grade will be produced which will lead to the production of around 10,000 tpa battery grade lithium hydroxide.

The construction of all those key items is in progress which is required in the development of stage 2 which consist of upgradation of ponds, roads, and camp. The expansion cost is expected to be around US$25 million. The source of financing will be in the form of project debt, operating cash flows as well as loan generated from shareholders.

Further, the company has entered into a joint agreement regarding marketing with TTC. Both of them jointly will support in setting the strategic direction based on customer agreement. TTC will be taking care of all the sales. Also, there is an ongoing negotiation made on the Engineering, procurement and construction contract (EPC contract) for the development of the Naraha Lithium Hydroxide Plant. This negotiation is going on with Veolia which is the EPC contractor and TTC as an operator.

In the second half of CY2020, Olaroz and the Naraha Lithium Hydroxide Plant’s will commence.

Since, the inception of the company, the performance of the company is 1725.32%. The performance in the five years and ten years is positive. The five years performance of the company is 96.98%. The performance of the company is 2067.98%. However, the performance of the company since last one year is 32.95%. For the year ended 30 June 2018, the company made a net profit of A$1.920 million. The company maintains a strong balance sheet. The net asset of the company is A$502.104 million which indicates that the company is in a position to clear long-term obligations. The total shareholder’s equity of the company is A$502.104 million. Also, by the end of the net cash available with the company is A$316.681 million.


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