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- Lithium chemicals producer Orocobre (ORE) has entered a trading halt this morning ahead of a $156 million capital raise
- Proceeds from the raise will be used to fully fund the stage two development of ORE’s Olaroz lithium facility
- But Orocobre says the coronavirus has continued to cause operational restrictions, impacting costs, production volumes and the stage two expansion at Olaroz
- The company’s statutory consolidated group net loss for FY20 is US$67.1 million (around A$92 million), down from a profit of US$65.4 million (approximately A$90 million) in the previous corresponding period
- Over the period, the company produced 11,922 tonnes of lithium carbonate, which is down five per cent following COVID-19 shutdowns
- The company has also signed a memorandum of understanding (MoU) with Toyota’s and Panasonic’s joint venture, Prime Planet Energy & Solutions
- The agreement is for the supply of battery-grade lithium hydroxide and lithium carbonate for use in PPES’ battery production supply chain
- Orocobre last traded for $2.90 per share on August 27
Lithium chemicals producer Orocobre (ORE) has entered a trading halt this morning ahead of a $156 million capital raise.
The company aims to raise $126 million through a placement and a further $30,000 through a share purchase plan (SPP).
Proceeds from the raise will be used to fully fund the stage two development of the Olaroz lithium facility, as well as the plant’s stage one ramp up.
The placement issue price is $2.52 per share and represents a 13.1 per cent discount to Orocbre’s closing price of $2.90 on Thursday, August 27.
2020 financial year
Orocobre says it has so far been successful in preventing COVID-19 workforce infection and transmission. However, the virus has caused operational restrictions, which has impacted costs, production volumes and stage two expansion of Olaroz and continues to do so.
The company’s statutory consolidated group net loss for FY20 is US$67.1 million (around A$92 million), down from a profit of US$65.4 million (approximately A$90 million) in the previous corresponding period (PCP).
The company also produced 11,922 tonnes of lithium carbonate, which is down five per cent on the PCP following COVID-19 shutdowns and operating capacity restrictions, meaning the company could only match sales during 2H FY20.
“In the second half of the year, management of COVID-19 has been paramount and we have been successful in preventing transmission of the virus within our operations,” Managing Director and CEO Martín Pérez de Solay said.
“Our expansion plans continue to be delayed due to restrictions on personnel movement and we are working to mitigate the impact where possible,” he added.
Memorandum of understanding (MoU)
The company has also signed a memorandum of understanding (MoU) with Prime Planet Energy & Solutions (PPES).
PPES is a joint venture between Toyota and Panasonic and specialises in the production of automotive battery cells.
The agreement is for the supply of battery-grade lithium hydroxide and lithium carbonate for use in PPES battery production supply chain.
Under the MoU, Orocobre will supply up to 30,000 tonnes of lithium carbonate equivalent per year by 2025, with the first deliveries commencing 2021.
“This MoU is a major development for Orocobre and will underpin the current expansion of the Olaroz lithium facility. Having such a large volume of production under set pricing structures will also remove the volatility of product pricing and is
expected to deliver improved results,” Martín said.
“We are pleased to further develop our long-standing relationship with Toyota group companies and look forward to working with them for many years to come,” he added.
Company shares will be paused until Tuesday, September 1, or when the company releases the outcome of the placement. Orocobre last traded for $2.90 per share on August 27.
