ALLKEM 
SUMMARY
- Olaroz operating revenue of US$33.5M for September quarter 2016
- Gross cash margin of US$5,755/tonne
- Operating cash cost US$3,579/tonne
- Sales de Jujuy S.A. self funded a US$12.8M principal and interest payment for the Mizuho project loan during the September quarter
- Production forecast for FY2017 is >15,000 tonnes
- Expansion studies on track for target of 35,000 - 42,500 tonnes total production
- Borax Argentina September quarter production up 29% quarter on quarter
ARGENTINA - REFORMS
- THIRD LARGEST ECONOMY IN LATIN AMERICA, MEMBER OF G20
-- Pro-business Macri Administration is delivering changes that will allow the Argentinian economy to grow
- FLOAT OF CURRENCY
-- Ends the artificially high exchange rate, Argentinian peso (ARS) has devalued by ~50% against the USD since 18 December 2015
- CAPITAL TRANSFER RESTRICTIONS REMOVED
-- Allows free flow of capital in and out of the country
- REMOVAL OF EXPORT DUTY
-- On most agricultural and industrial products including lithium carbonate, refined and mineral boron products
- REMOVAL OF IMPORT CONTROLS
-- Allows easier and quicker international sourcing of materials and equipment
OPERATIONAL PERFORMANCE
OLAROZ PRODUCTION AND GUIDANCE KEY INDICATORS (100% basis)
- 2016 FY production of 6,903 tonnes
- September quarter production of 3,013 tonnes, with 1,125 tonnes in month of September
- Low operating cash cost in September quarter of US$3,579/t
- September quarter sales revenue of US$33.5M, gross cash margin of US$5,755/t
- December quarter production is forecast to be 3,500 - 4,000 tonnes, FY2017 forecast of >15,000 tonnes
- Forecast operating cash cost (FY18) < US$2,500/t
- Q4 2016 FOB anticipated pricing net of logistics and commissions ~US$10,000
OLAROZ OPERATIONAL IMPROVEMENTS
PROCESS IMPROVEMENT PROJECTS COMPLETED
- Boiler capacity increase
- Centrifuges and polishing filters
- Heat exchangers
- Acid wash circuit/parallel pipes
- Flocculant dosing and settling ponds
- Cooling in purification circuit
- CO2 injection points and diffusor design
- Cyclone bank and thickener throughput (currently underway)
OPERATIONAL OPTIMISATION
- Operational practice
- Logistics
- Reagent usage
- Recovery
BORAX OPERATIONAL PERFORMANCE IMPROVING
- Cash flow positive despite difficult market conditions
- The key Brazilian market is showing signs of improvement in volume and price
- Tincalayu plant upgrade completed on time and materially on budget in April 2016
- Full production rate now achieved after relocation of the borax decahydrate plant to Tincalayu
- Scoping Study underway to expand production from 30,000 tpa to 100-120,000 tpa borax decahydrate equivalent at Tincalayu and 40,000tpa of boric acid. Early indications demonstrate a high level of capital efficiency.
SUMMARY
- Olaroz is a profitable, low cost, high margin producer
- Significant cash to be returned to Orocobre from loans/SBLC
- Production volume growth continues
- Lithium chemical market to remain in deficit
- Olaroz expansion study lifts total production to 35,000 - 42,500 tonnes
- Tincalayu expansion study to realize the potential of Borax Argentina SA
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About Orocobre Limited:
Orocobre Limited is listed on the Australian Securities Exchange and Toronto Stock Exchange (ASX:ORE) (TSE:ORL) (OTCMKTS:OROCF), and is building a substantial Argentinian-based industrial 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 20 years at the Salar de Olaroz with planned production of 17,500 tonnes per annum of low-cost battery grade lithium carbonate.
Source:
Orocobre Limited
Contact:
Richard Seville Managing Director T: +61-7-3871-3985 M: +61-419-916-338 E: rseville@orocobre.com David Hall Business Development Manager T: +61-7-3871-3985 M: +61-407-845-052 E: dhall@orocobre.com
