BRISBANE, Australia,
April 27, 2017 /CNW/ -- Orocobre
Limited (ORE:ASX ORL:TSX) (Orocobre or the Company)
will hold a teleconference to discuss the results of the
March 2017 Quarterly Report.
Details of the call are provided below:
Date: 28 April 2017
Time: 9.00am (AEST)
Participant code: 467687
Participants Dial-in: 1 800 558 698 or +61 2 9007
3187
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Location
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Location
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Australia
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+612 9007
3187
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Italy
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800 793
500
|
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0800 820
030
|
Australia Toll
Free
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1 800 558
698
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Japan
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0053 116
1281
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Taiwan
Thailand
UAE
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008 0112
7397
001800 156
206
3275
800 035
702705
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4001 200
659
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Malaysia
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1800 816
294
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USA
UK
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1855 8811
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020 791
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1800 948
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South
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MARCH QUARTER 2017 HIGHLIGHTS
OLAROZ LITHIUM FACILITY (ORE 66.5%)
- Production of 2,784 tonnes* of lithium carbonate, in line with
guidance provided in February
2017
- Sales revenue up 19% on December
2016 quarter (QoQ) to US$32.1
million* on sales of 3,142 tonnes
- Average FOB price received up 13% QoQ to US$10,211/tonne FOB with higher priced contracts
reflecting firmer market conditions
- Cash cost of production of US$3,565/tonne, up only 1% QoQ despite lower
production volumes
- Gross cash margins up 21% QoQ to US$6,646/tonne reflecting an operating margin of
65% (up from 61% in December 2016
quarter)
- During the quarter, VAT refunds of approximately US$10.1 million were received with total VAT
refunds of approximately US$17. 1
million having been received to date
- SDJ made the scheduled project finance repayment of
US$13.9 million according to the
financing arrangements with Mizuho Bank Ltd and JOGMEC
- Brine volumes were rebalanced through the pond system,
increasing area under evaporation by ~20%. In addition,
enhancements are being made to physical infrastructure and pond
management with additional internal and external resources
- Test work has commenced with two specialized engineering firms
to finalise the process engineering for a 10,000 tonne per annum
battery grade lithium hydroxide plant in Japan
- Ausenco appointed to undertake engineering design studies for
the Olaroz phase 2 expansion
- 2H FY17 production guidance remains 5,500 – 6,000 tonnes and
pricing is expected to be approximately US$10,000 per tonne FOB in the June 2017 quarter
* all figures 100% Olaroz Project
basis
BORAX ARGENTINA
- Sales volume in the March quarter was up 10% on the December
quarter to 9,672 tonnes
CORPORATE
- Orocobre Group had available cash of US$30.6 million at the end of the quarter being
the same cash on hand as at 31 December
2016. Orocobre Group cash as of today is approximately
US$33.3 million and would on a
pro-forma basis be US$37.3 million,
following the completion of the LSC transaction as detailed
below
- Orocobre successfully divested a number of lithium brine
exploration projects to Canada's
Advantage Lithium Corp. (TSXV:AAL) (Advantage Lithium) for 46.3
million AAL shares (equating to approximately US$25 million), 2.55 million warrants while
retaining a direct (50% declining to 25%) interest (plus 1%
royalty) in the Cauchari Project
- Orocobre executed an agreement for the sale of exploration
tenure at Salinas Grandes to LSC Lithium Limited (TSXV:LSC) for
US$4 million which will be paid on
close of the transaction and a further US$3
million will be paid in three annual tranches. Orocobre will
also receive properties located adjacent to Olaroz and a 2% royalty
on future production from Salinas Grandes
OLAROZ LITHIUM FACILITY
For more information on Olaroz please click here
The Olaroz Lithium Facility is located in the Jujuy province of
Argentina. Together with partners,
Toyota Tsusho Corporation (TTC) and Jujuy Energia y Mineria
Sociedad del Estado (JEMSE), Orocobre is now operating the first
large scale lithium brine plant to be commissioned in approximately
20 years.
The Olaroz Lithium Facility joint venture is operated through
Argentine subsidiary Sales de Jujuy SA (SDJ SA). The effective
equity interests are: Orocobre 66.5%, TTC 25.0% and JEMSE 8.5%.
PRODUCTION, SALES AND GUIDANCE
PRODUCTION AND SALES
Production for the quarter was 2,784 tonnes and in line with
revised half-yearly guidance. Production levels were affected by
above average rainfall during the summer months.
Sales revenue was US$32.1 million
on sales of 3,142 tonnes with some shipments scheduled for December
being delivered in the March quarter due to a strike at Antofagasta
Port and delays related to customs clearance over Christmas.
Cash operating costs of US$3,565/tonne were only up 1% QoQ despite lower
production levels.
With stable costs and increased sales prices, gross cash margins
increased to US$6,646/tonne in the
March quarter up from US$5,477/tonne
in the December quarter and overall gross operating margins
increased to 65%.
Sales de Jujuy S.A. remains strongly operating cashflow
positive.
Metric
|
March
quarter 2017
|
December
quarter 2016
|
Change QoQ
(%)
|
Production
(tonnes)
|
2,784
|
3,529
|
-21%
|
Sales
(tonnes)
|
3,142
|
2,995
|
5%
|
Average price
received (US$/tonne)
|
10,211
|
9,007
|
13%
|
Cost of production
(US$/tonne)1
|
3,565
|
3,530
|
1%
|
Revenue
(US$M)
|
32.1
|
27.0
|
19%
|
Gross cash margin
(US$/tonne)
|
6,646
|
5,477
|
21%
|
Gross cash margin
(%)
|
65%
|
61%
|
7%
|
1. Excludes royalties
and head office costs
|
UPDATE ON POND MANAGEMENT
A problem with pond management was identified in mid-February
when errors in the inventory model were detected.
Investigations showed that although the total lithium brine
inventory was correct the profile through the pond system was
incorrect and would result in lower forecasted production than
previously expected.
Further investigation showed that the ponds were being operated
with some ponds underfilled and some ponds overfilled due to poor
control of brine volume transfer between ponds. Combined,
this resulted in a significantly reduced concentration effect for
the system and a consequential build-up of inventory in the lower
concentration ponds, as well as a lack of inventory in the harvest
ponds.
In response, the Company has undertaken a number of steps to
rectify the issue and improve pond operating practice and
controls. These have included:
- A rapid rebalancing of brine volumes through the ponds which
resulted in a ~20% increase to the area subject to solar
evaporation and a reduction in brine depths in overfilled ponds.
This has resulted in improved pond utilisation and concentration
efficiency
- Modifications to brine transfer systems which will see the
increased use of pumps to deliver scheduled brine volume transfers
between ponds. The first of the new pumps has already been
installed and the plan will see an additional five pump stations
installed. Improvements in brine transfer systems are
expected to cost approximately US$1.5 million
Additionally, a number of improvements have been made, or are
planned, to the management processes through augmenting the
Operating and Process departments with the creation of new
positions of Pond Operations Superintendent and a Senior Pond
Process Engineer respectively. The external recruitment of a highly
experienced person for the former position is advanced and the
latter position has been filled internally. As part of the
process described above, a number of external expert consultants
have been retained to improve pond operating practices, undertake
training and develop monitoring, control and sampling
systems.
These changes are expected to deliver major improvements to the
operating performance of the pond system.
GUIDANCE
As previously advised at the half year results, the process of
re-establishing the correct inventory profile (volume and
concentration) will take approximately six months in total, and as
such, is expected to be completed in August this year. The
duration of the re-profiling is due to the pond system having
significant inertia and the process occurring during the low
evaporation time of the year.
The Company continues to expect half year production (2H FY17)
to be in the range of 5,500 – 6,000 tonnes. While production
is expected to rise significantly in 1H FY18, a formal forecast
cannot be provided until a bathymetric survey has been completed to
provide a more accurate estimate of brine volumes across primary,
intermediate and harvest ponds and a more precise basis for FY18
production modelling.
The bathymetric survey commenced in mid-April and will take
approximately 6-8 weeks to complete. A feature of this technology
is that it uses sonar to measure the profile of the salt
precipitating at the base of the ponds beneath the brine.
PROJECTS
Orocobre previously advised that production in the purification
circuit was limited by thickener residence time post the purified
product crystallisers. The thickener is the final step in the
purification circuit prior to product entering the drying circuit.
To solve this issue hydrocyclones have been installed to remove
solids loading from the thickener and increase the overall capacity
of this solids/liquids separation stage.
Initial results indicate that the hydrocyclones are operating as
expected and have removed around 50% of the solids that were
previously overloading the thickener. The hydrocyclone
project was completed on budget for US$1.45
million.
Prior to installation of the hydrocyclones, the purification
circuit has achieved a maximum throughput rate of 43 tonnes per day
(tpd) and runs consistently at 35-40 tpd (73-83% of
nameplate). The hydrocyclones are expected to allow the
purification circuit to achieve nameplate capacity of approximately
48 tonnes per day.
The primary circuit consistently runs above nameplate capacity
with a maximum achieved throughput of 66 tpd, some 35% above
nameplate.
BRINE INVENTORY
At the end of the March quarter 2017, brine inventory was
approximately 39,000 tonnes of lithium carbonate equivalent.
MARKET AND SALES
Lithium carbonate sold in the March quarter totalled 3,142
tonnes, a 5% increase on the December quarter. Lithium
carbonate prices increased to US$10,211/tonne (FOB1) for the
quarter, an increase in excess of $US1,000/tonne to the weighted average price
achieved in the December quarter (US$9,004/tonne FOB [1]).
The price achieved is a result of higher pricing in short term
contracts this quarter compared to last, and an increased price
moving into CY2017.
LITHIUM MARKET
It remains the Company's view that short-term market
fundamentals remain strong.
The supply side remains tight with new supply of spodumene
concentrate from hard rock producers in Australia being delayed, or in one very recent
case, direct shipping ore (DSO) has been supplied. The DSO will
require more processing in China
in order to produce a suitable spodumene concentrate, and the
acceptance of this lower grade form further illustrates the strong
demand for lithium and impact of supply delays of high grade
concentrate from hard rock operations and lithium carbonate from
brine operations.
The Chinese domestic spodumene and lepidolite market was equally
tight in recent months as the cold weather hindered
production. With alack of raw material from imported and
domestic sources, lithium carbonate producers in the Qinghai province reportedly shut down and/or
decided to prolong maintenance periods (Asian Metals, March
2017).
While Chinese domestic spodumene concentrate is expected to
become increasingly available as the weather warms up in
China, recent annual production
has not exceeded 10,000 tpa lithium carbonate equivalent
(LCE). China's minimal
domestic supply and the slow ramp up of imported materials, mean
any new conversion capacity is unlikely to be well utilized until
supply improves.
MARKET GROWTH
Research, development and the rapid expansion of lithium-powered
products supports the views of customers that there will be
significant growth in the battery market over the next few years
which will be a key demand driver for lithium carbonate and
hydroxide.
Lithium carbonate from the Olaroz Lithium Facility is sold to a
range of markets across a spread of geographies. It is Orocobre's
intention to continue to cultivate a diverse customer base, end use
and geographic sales base. However, the pace of growth of the
battery market is expected to increasingly impact on our customer
mix in the future, particularly once the purification circuit
approaches design production rates and the planned lithium
hydroxide plant is operational in Japan.
ARGENTINE EXPORT DATA
Orocobre recently undertook an investor road show during which a
number of groups indicated they have been following the
''Administracion Federal de Ingresos Publicos'' (AFIP) export
statistics from Argentina. The
Company recommends a degree of caution be applied to the
interpretation of AFIP data.
- Over the longer term the actual exports and the AFIP export
data will broadly be in line but "live" monthly and quarterly data
is subject to variability
- The variability could be due to corrections to AFIP numbers
made post export, such as changes to volume or price data, exports
not recorded in the month of export (early or late) and duplicate
counting of exports
- By way of example the AFIP data for the month of December 2016 overstated the volume exported. The
March quarter demonstrated variations in January and March
- It is common for customs data in any country to be reviewed and
corrected on an ongoing basis, hence variability between customs
data systems and actuals will occur
The graph below illustrates the actual volume of exports versus
the reported AFIP exports for January
2016 to March 2017.
The Company recommends a degree of caution be applied when
viewing and interpreting AFIP export data as this data is variable
and may not be an accurate reflection of SDJ SA's exports of
lithium carbonate from Argentina
particularly when analysing shorter data periods in isolation from
the historical data set.
LITHIUM HYDROXIDE PLANT IN JAPAN
UPDATE ON PROGRESS
During the Scoping Studies for the expansion of the Olaroz
Lithium Facility, construction of a lithium hydroxide monohydrate
(LiOH*H2O) plant in Argentina was
considered. Based on the chemical composition of the "99.0%"
lithium carbonate produced from the primary circuit, basic process
design and quotations were received for supply of major equipment
for a 17,500 tonne per annum LiOH*H2O plant from three specialized
engineering firms that have designed and constructed similar plants
in several parts of the world. A decision, based on these studies
and results, was taken to refine the project scope to building a
plant in Japan at a reduced scale
of 10,000 tonnes per annum.
A visit to the laboratories and pilot plant installations of the
three pre-qualified companies was completed in January, as well as
several meetings with their subsidiaries in Japan. Two
companies have been shortlisted and are both undertaking test work
with Olaroz "99.0%" primary Li2CO3 and lime from Japanese
suppliers. This will permit the process engineering design to
be finalised. After the test work has been finalized one of the
companies will be selected as the Engineering partner. Part
of the selection criteria is that the plant would be turn-key
including commissioning and personnel training with process,
product quality and performance guarantees.
Lithium hydroxide currently sells at a significant premium
compared to lithium carbonate. One tonne of lithium carbonate
makes approximately 1.1 tonnes of lithium hydroxide monohydrate
with an approximate conversion cost of US$2,500/tonne.
CAPITAL REQUIREMENTS AND TIMING
The capital cost of the lithium hydroxide plant in Japan will be approximately US$30 million prior to any government
incentives. It is expected that the funding will involve
project debt and potentially offtake financing. The project is also
eligible for government incentives of at least 50% of the expected
capital expenditure. Orocobre does not anticipate the need to raise
equity capital for this project.
Subject to joint venture approvals and finalisation of financing
and permitting, construction could commence in November 2017 with commissioning 12 months
later.
EXPANSION STUDY FOR OLAROZ
The Phase 2 expansion investment decision remains dependent on
achieving Phase 1 design production rates and the expansion being
funded without further equity capital (i.e. funded by project
finance and Stage 1 operating cashflow).
REVISED SCOPE OF PHASE 2 EXPANSION STUDIES
On 15 December 2016, Orocobre
announced the results of scoping studies into the expansion of
Olaroz and the proposed doubling of production at a cost of
US$190 million including US$25 million contingency. Subsequently,
these plans have been simplified to remove the purification circuit
from the incremental production. The resultant product mix is
17,500 tonne per annum Battery Grade lithium carbonate (>99.5%)
from the existing purification circuit, and 17,500 tonne per annum
Industrial Grade lithium carbonate (avg. 99.0%), of which ~9,000
tonne per annum will be used to feed the planned 10,000 tonne per
annum lithium hydroxide plant in Japan.
This simplified strategy results in lower capital expenditure of
approximately US$160 million
including a US$25 million contingency
and lower implementation risk as the project is based around a
simple duplication of the bores, ponds and primary circuit of Phase
1 at Olaroz. It should be noted that the full cost of the pond
system contained within the total capital expenditure estimate for
Phase 2 is US$75 million.
In late 2016, following site visits, five engineering firms were
pre-qualified for the Olaroz lithium carbonate expansion, and
following receipt of proposals Ausenco has been selected.
The process to obtain the necessary permits and approvals for
Phase 2 has commenced and is running concurrently with engineering
and design work. The expansion studies are not managed by the
SDJ operating team but by consultants and a dedicated study
manager.
BORAX ARGENTINA
The focus in FY17 for Borax Argentina is to increase production
rates and reduce unit costs following the optimisation projects at
Tincalayu and Campo Quijano, improve
efficiencies, build suitable inventory levels, improve response
times and delivery performance, and reinforce Borax's value
proposition as the producer integral to a customer's security of
supply strategy.
OPERATIONS
Sales volumes in the March quarter 2017 were up 10% on the
December quarter to 9,672 tonnes of combined product. There were no
tonnes of tincal ore sold this quarter.
COMBINED PRODUCT
SALES VOLUME BY QUARTER*
|
Previous Year
Quarters
|
Recent
Quarters
|
June 2015
|
9,558
|
June 2016
|
9,274
|
September
2015
|
8,124
|
September
2016
|
11,940
|
December
2015
|
10,078
|
December
2016
|
8,767
|
March 2016
|
8,006
|
March 2017
|
9,672
|
*Combined product
sales volumes include borax chemicals, boric acid and boron
minerals and does not include sale of tincal ore of 2,061 tonnes in
June 2015 quarter.
|
SAFETY AND ISO CERTIFICATION
Safety milestone
The Tincalayu mine site has recently achieved a significant
milestone of 450 days of operation without a lost time injury.
ISO RE-CERTIFICATION
Audits have been completed for the Maintenance of Certification
(ISO 9001 Quality Standard) and Re-certification of the
Environmental Standard (ISO 14001). The audits included a
review of the eco-efficiency management "ECOSELLO" which provides
recognition of sustainable practices.
The audits were across all operational sites: Campo Quijano; Tincalayu, Sijes and
Porvenir.
The audits revealed two Minor Conformities in ISO 14001 and
three Minor Conformities in ISO 9001. This is a strong result that
demonstrates the improvement in management systems at Borax sites
and is the first time the two standards have been audited
simultaneously.
TINCALAYU EXPANSION STUDY
A study commenced in Q2 CY16 to evaluate a potential expansion
of the Tincalayu refined borates operation from its current
production capacity of 30,000 to 100-120,000 tonnes per annum and
an integrated 40,000 tonne boric acid plant.
It is anticipated that the potential expansion will further
enhance efficiencies in the production of refined borates at
Tincalayu and contribute to improved manufacturing unit costs.
Approvals have been received for a new gas pipeline to supply the
expanded plant and initial cost estimates are under review.
The feasibility study will be completed during the September
quarter.
MARKET CONDITIONS
Market conditions remain challenging in the core South American
markets of Argentina and
Brazil. Borax Argentina continues to grow strong long term
relationships with key customers while also continuing to expand
the customer base. The continued focus on production efficiencies
has cushioned the effect of market pricing remaining at the bottom
of the price cycle.
CORPORATE AND ADMINISTRATION
ADVANTAGE LITHIUM TRANSACTION
During the March quarter 2017, Orocobre completed the sale of a
suite of exploration assets to Advantage Lithium Corp
(TSV:AAL) after the successful closing of a C$20,000,000 capital raising undertaken by AAL
and the satisfaction of all other conditions in the transaction
documentation.
Following the completion of the transaction, Orocobre will hold
46,325,000 (35%) of the issued shares of AAL and will also hold
2,550,000 warrants exercisable at C$1. Orocobre did not participate in the
capital raising.
Pursuant to the terms of the sale agreements, Orocobre has
retained a 50% interest in the Cauchari Project. AAL has the right
to increase its interest to a total of 75% by the expenditure of
US$5,000,000 or production of a
Feasibility Study and will commence a drill program at Cauchari in
late April.
Upon the closing of the sale, Richard
Seville and Rick Anthon from
Orocobre were appointed to the board of AAL.
SALINAS GRANDES
During the quarter Orocobre executed an agreement for the sale
of exploration tenure at Salinas Grandes to LSC Lithium Limited
(TSXV:LSC).
Pursuant to the Orocobre-LSC Agreement, LSC will acquire mining
properties located at Salinas Grandes in Salta and Jujuy provinces,
Argentina ("Salinas Grandes
Tenements"), which were held by Orocobre.
As consideration for the sale of the Salinas Grandes Tenements,
LSC will:
- Pay to Orocobre US$7 million,
with US$4 million payable at closing
and a further US$3 million payable by
way of three annual tranches of US$1
million;
- Transfer to Orocobre three properties located at Olaroz
("Olaroz Tenements") adjacent to current project properties
covering approximately 3,821 hectares, thus strengthening
Orocobre's position at its flagship project; and
- Grant to Orocobre a 2% royalty on the brine concentrate
produced from Salinas Grandes Tenements, calculated on the same
basis as the royalties paid by Sales de Jujuy at the Olaroz Lithium
Facility to the Jujuy Provincial Government.
Completion of the transaction is anticipated in May.
FINANCE
VAT
VAT refunds of approximately US$10.1
million have been received by SDJ during the quarter with
approximately US$17.1 million of VAT
refunds received to date.
All VAT claims through and including December 2016 have now been received.
Further claims of approximately US$4M relating to January and February 2017 have been submitted to the
Argentine tax authorities. Total remaining VAT refund entitlement
amounts to US$12 million on a
discounted basis and US$18.4 million
on a pre-discounted basis.
CASH BALANCE, DEBT POSITION AND STANDBY LETTERS OF
CREDIT
Orocobre Group had available cash of US$30.6 million at the end of the quarter being
the same cash on hand as at 31 December
2016 following guarantee releases of approximately
US$3.1 million. During the
quarter, approximately US$1.7 million
was provided to Borax Argentina to support a build of inventory,
capital expenditure and an increase in aged debtors.
Following the end of the quarter, a reduction in the overdraft
facilities in Argentina permitted
a further release of security deposits. Orocobre Group cash as of
today is approximately US$33.3
million and would, following the completion of the LSC
transaction as detailed above, increase by US$4 million to approximately US$37.3 million.
SDJ is not scheduled to make a further payment of the Mizuho
Bank facility until September 2017
which will be approximately US$14
million. Cash generated from operations and further
receipts of VAT refunds will be applied to the reduction of working
capital facilities, which will in turn facilitate additional
releases of cash to Orocobre through the reduction of SBLCs.
The AR$ remained stable during the quarter and strengthened by
3% from AR$15.89/US$ at 31 December 2016 to AR$15.39/US$ at
31 March 2017.
For more information please
contact:
Andrew Barber
Investor
Relations Manager
T: +61 7 3871
3985
M: +61 418 783
701
E:
abarber@orocobre.com
Please visit www.orocobre.com
ABOUT OROCOBRE LIMITED
Orocobre Limited is listed on the Australian Securities Exchange
and Toronto Stock Exchange (ASX:ORE) (TSX:ORL), and is building a
substantial Argentinian-based industrial chemicals and minerals
company through the construction and operation of its portfolio of
lithium, potash and boron projects and facilities in the Puna
region of northern Argentina. The
Company has built, in partnership with Toyota Tsusho Corporation
and JEMSE, the first large-scale, greenfield brine based lithium
project in approximately 20 years at the Salar de Olaroz with
planned production of 17,500 tonnes per annum of low-cost lithium
carbonate.
The Olaroz Lithium Facility has a low environmental footprint
because of the following aspects of the process:
- The process is designed to have a high processing recovery of
lithium. With its low unit costs, the process will result in low
cut-off grades, which will maximise resource recovery.
- The process route is designed with a zero liquid discharge
design. All waste products are stored in permanent impoundments
(the lined evaporation ponds). At the end of the project life the
ponds will be capped and returned to a similar profile following
soil placement and planting of original vegetation types.
- Brine is extracted from wells with minimum impact on freshwater
resources outside the salar. Because the lithium is in sedimentary
aquifers with relatively low permeability, drawdowns are limited to
the salar itself. This is different from halite hosted deposits
such as Salar de Atacama, Salar de
Hombre Muerto and Salar de Rincon
where the halite bodies have very high near surface permeability
and the drawdown cones can impact on water resources around the
Salar affecting the local environment.
- Energy used to concentrate the lithium in the brine is solar
energy. The carbon footprint is lower than other processes.
- The technology developed has a very low maximum fresh water
consumption of <20 l/s, which is low by industry standards. This
fresh water is produced by reverse osmosis from non-potable
brackish water.
- Sales de Jujuy S.A. is also committed to the ten principles of
the sustainable development framework as developed by The
International Council on Mining and Metals. The company has an
active and well-funded "Shared Value" program aimed at the long
term development of the local people.
The Company continues to follow the community and shared value
policy to successfully work with suppliers and the employment
bureau to focus on the hiring of local people from the communities
of Olaroz, Huancar, Puesto Sey, Pastos Chicos, Catua, Susques,
Jama, El Toro, Coranzulí, San Juan and Abrapampa. The project
implementation is through EPCM (Engineering, Procurement and
Construction Management) with a high proportion of local
involvement through construction and supply contracts and local
employment. The community and shared value policy continues to be a
key success factor, training local people under the supervision of
high quality experienced professionals.
TECHNICAL INFORMATION, COMPETENT PERSONS' AND QUALIFIED
PERSONS STATEMENTS
The Company is not in possession of any new information or data
relating to historical estimates that materially impacts on the
reliability of the estimates or the Company's ability to verify the
historical estimates as mineral resources, in accordance with the
JORC Code. The supporting information provided in the initial
market announcement on 21/08/12
continues to apply and has not materially changed.
Additional information relating to the Company's projects is
available on the Company's website in "Technical Report – Salar de
Olaroz Lithium-Potash Project, Argentina" dated May
30, 2011, (the Olaroz Report), the "Technical Report –
Salinas Grandes Project" dated April 30,
2010 and the "Technical Report – Salar de Cauchari Project,
Argentina" dated April 30, 2010, respectively, which have each
been prepared by John Houston,
Consulting Hydrogeologist, together with, in the case of the Olaroz
Report, Mike Gunn, Consulting
Processing Engineer, in accordance with NI 43-101.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This news release contains "forward-looking information" within
the meaning of applicable securities legislation. Forward-looking
information contained in this release may include, but is not
limited to, the completion of commissioning, the commencement of
commercial production and ramp up of the Olaroz Lithium Facility
and the timing thereof, the cost of construction relative to the
estimated capital cost of the Olaroz Lithium Facility, the meeting
of banking covenants contained in project finance documentation,
the design production rate for lithium carbonate at the Olaroz
Lithium Facility, the expected brine cost and grade at the Olaroz
Lithium Facility, the expected operating costs at the Olaroz
Lithium Facility and the comparison of such expected costs to
expected global operating costs, the estimation and conversion of
exploration targets to resources at the Olaroz Lithium Facility,
the viability, recoverability and processing of such resources, the
potential for an expansion at the Olaroz Lithium Facility and the
outcome of studies currently being undertaken into the proposed
expansion at Olaroz and elsewhere, the capital cost of an expansion
at the Olaroz Lithium Facility; the future performance of the
relocated borax plant and boric acid plant, including without
limitation the plants estimated production rates, financial data,
the estimates of mineral resources or mineralisation grade at Borax
Argentina mines, the economic viability of such mineral resources
or mineralisation, mine life and operating costs at Borax Argentina
mines, the projected production rates associated with the borax
plant and boric acid plant, the market price of borate products
whether stated or implied, demand for borate products and other
information and trends relating to the borate market, taxes
including recoveries of IVA, royalty and duty rate and the ongoing
working relationship between Orocobre and the Province of Jujuy,
TTC and Mizuho Bank.
Such forward-looking information is subject to known and unknown
risks, uncertainties and other factors that may cause actual
results to be materially different from those expressed or implied
by such forward-looking information, including but not limited to
the risk of further changes in government regulations, policies or
legislation; the possibility that required concessions may not be
obtained, or may be obtained only on terms and conditions that are
materially worse than anticipated; that further funding may be
required, but unavailable, for the ongoing development of the
Company's projects; changes in the scope and focus of studies
currently being undertaken with respect to the expansion of the
Company's production facilities, fluctuations or decreases in
commodity prices and market demand for product; uncertainty in the
estimation, economic viability, recoverability and processing of
mineral resources; risks associated with weather patterns and
impact on production rate; risks associated with commissioning and
ramp up of the Olaroz Lithium Facility to full capacity; unexpected
capital or operating cost increases; uncertainty of meeting
anticipated program milestones at the Olaroz Lithium Facility;
general risks associated with the further development of the Olaroz
Lithium Facility; general risks associated with the operation of
the borax plant or boric acid plant; the potential for an expansion
at the Tincalayu operations and the outcome of studies currently
being undertaken into the proposed expansion at Tincalayu a
decrease in the price for borates resulting from, among other
things, decreased demand or an increased supply of borates or
substitutes, as well as those factors disclosed in the Company's
Annual Report for the year ended June 30,
2016 filed at www.sedar.com.
The Company believes that the assumptions and expectations
reflected in such forward-looking information are reasonable.
Assumptions have been made regarding, among other things: the
timely receipt of required approvals and completion of agreements
on reasonable terms and conditions; the ability of the Company to
obtain financing as and when required and on reasonable terms and
conditions; the prices of lithium, potash and borates; market
demand for products and the ability of the Company to operate in a
safe, efficient and effective manner. Readers are cautioned that
the foregoing list is not exhaustive of all factors and assumptions
which may have been used. There can be no assurance that
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. The Company
does not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
[1] Note: Orocobre reports price as "FOB" (Free On Board)
which excludes additional insurance and freight charges included in
"CIF" (Cost, Insurance and Freight or delivered to destination
port) pricing. The key difference between an FOB and CIF
agreement is the point at which responsibility and liability
transfer from seller to buyer. With an FOB shipment, this typically
occurs when the goods pass the ship's rail at the export port. With
a CIF agreement, the seller pays costs and assumes liability until
the goods reach the port of destination chosen by the buyer.
The Company's pricing is also net of TTC commissions.
The intention in reporting FOB prices is to provide clarity
on the sales revenue that flows back to SDJ, the joint venture
company in Argentina.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/march-2017-quarterly-report-and-teleconference-details-300447023.html
SOURCE Orocobre Limited