Orbite Technologies Inc (EORBF)

[nagoya1]

Orbite Announces HPA Update and Second Quarter 2016 Results
MONTREAL, QUEBEC--(Marketwired - July 28, 2016) - Orbite Technologies Inc. (TSX:ORT)(OTCQX:EORBF)

("Orbite", or the "Company") today filed its financial statements for the second quarter ended June 30th, 2016. The Company reported a loss before net finance expense and taxes of $1.8 million for the quarter, a decrease from a loss of $3.5 million for the comparable quarter in the prior year, attributable mainly to lower general and administrative expenses, as well as an increase in other income of $1.0 million.

As at June 30th, 2016, the Company had aggregate cash and short-term investments balance of $5.6 million, and positive working capital (current assets less current liabilities) of $6.4 million. Subsequent to June 30th, 2016, the Company drew the remaining $2.1 million on the $4.9 million 2016 Investissement Quebec ("IQ") bridge loan. As a result, the Company has, on a pro-forma basis, cash and short-term investments of $7.7 million.

All dollar amounts are in Canadian dollars unless stated otherwise.

Highlights - Second Quarter and Subsequent Events

Corporate & Financing

-- During the quarter, the Company completed financings for an aggregate
amount of $16 million. The funds raised enabled the Company to award the ontracts towards the completion of Orbite's High Purity Alumina (HPA)
plant and reaccelerate construction as described below.

-- On May 12th, 2016, the Company announced the appointment of Charles
Taschereau Vice-President and Chief Operating Officer of the Company.

HPA Plant Construction

-- Fjordtech Industries Inc., who was awarded the contract for the
remaining piping mechanical work, commenced work during the week of July 4th, and is proceeding as planned. Installation of the piping for the plant's cooling water system was completed on schedule, and Fjordtech is now concentrating on the crystallization sector piping installation, to be followed by installation of the piping for the digestion sector.

-- The contract for the remaining electrical and instrumentation work,
awarded to Electro Kingsey who commenced work on July 11th, is also
proceeding as per schedule and is being completed concurrently with the
completion of the piping installation by Fjordtech. Installation of
electrical and instrumentation was also completed for the cooling water
system. Work will now proceed in the crystallization and digestion
sectors of the plant.

-- Both contracts are being carried out on a fixed-price basis with penalty
provisions for late delivery, and stipulate an 8 week project timeline,
with work continuing over the present construction holidays. The
contracts respect the revised project budget.

-- Isolation Morissette has completed the insulation work on the steam
piping and the calcination system (decomposer & calciner), also under a
fixed price contract. Insulation work is now 75% complete.

-- All other construction is complete (civil and structural, major
mechanical installation, decomposer and calciner installation), or
materially complete (ventilation).

Commissioning & Start-up

-- As reported on June 21st, commissioning and cold start-up activities of
the decomposer and calciner units were completed successfully.

-- Additional cold testing was successfully conducted over the last few
weeks. Alumina product (SGA) was successfully fluidized in both
reactors, and up to 5 tonnes per day was successfully transferred from
the decomposer to the calciner via the sealpot assembly system. Control
and stability over the transfer of material through the seal pot was
tested, and the sealing of the toric discharge device was verified.

-- Commissioning and start-up of the cooling water system is commencing and
will be completed by August 1st.

-- Field service personnel from Outotec (decomposer and calciner) and
Sandvik (calciner system heating elements) will be mobilizing on site
the week of August 1st, to commence commissioning and startup of the
steam superheater and the heating elements in the calciner and
decomposer. Initial heating up of the decomposer and calciner is
forecast for mid-August.

Management commentary

"Following the completion of our financing with Investissement Quebec, we were able to reaccelerate construction work at our HPA plant," stated Glenn Kelly, CEO of Orbite. "Work is progressing on schedule and on budget to meet the timeline communicated to shareholders previously, while commissioning activities continue to meet expectations. Consequently, we reiterate our expectation of commencing commercial production in Q3 of this year."

Continued highlights

Samples



-- To date, 27 samples have been shipped to prospective customers,
including one 50kg commercial sample. Two further commercial samples
have been ordered (3 in total, to date). A further 21 samples are to be
shipped to 20 additional prospective customers.

AGM - Board of Directors

-- On Jun 22th, 2016, the Company held its annual meeting of shareholders.
All Directors put forward by the Company were voted in office.

IP

-- During the quarter, seven notices of allowance were received.
Additionally, seven new patents were granted, for a total of 14 new
intellectual property rights.

-- The newly awarded IP covers notably the HPA production process, Red Mud
Monetization, and magnesium extraction and recovery.

-- Coverage was expanded in the U.S., Russia, Australia, Japan and Canada.

Summary of Q2 2016 Financial Results

Revenues and earnings

The Company is a development stage company and has no revenues.

Net loss for Q2 2016 decreased by $1.8 million to $1.9 million, as compared to the same period in the prior year. The decrease in net loss during the quarter is principally due to proceeds received or receivable from the insurance claim for a 2014 incident at the HPA plant, resulting in a positive change in Other Income of $1.0 million, as well as a $0.5 million reduction in general and administrative expense.

HPA plant operations

HPA plant operations include administration, operating and maintenance costs for the HPA plant in Cap-Chat. HPA plant operation expenses remained relatively stable at $1.1 million during the quarter ended June 30th, 2016 compared to the second quarter in 2015.

General and administrative charges

General and administration charges consist mostly of personnel related costs (salaries and benefits), share-based payment expenses, consulting, accounting, business development, legal, and investor relation costs relating to head office activities. General and administrative charges decreased by $0.5 million during the quarter compared to the same period in 2015. This decrease is due mainly to a decrease in salaries, share-based payments, investor relations and communication, partially offset by an increase in consulting and professional fees.

Financial position

Cash and short-term investments and working capital

As at June 30th, 2016, the Company had aggregate cash and short-term investments balance of $5.6 million, and positive working capital (current assets less current liabilities) of $6.4 million.

Subsequent to quarter end, the Company drew the remaining $2.1 million on the $4.9 million 2016 IQ bridge loan. As a result, the Company has, on a pro-forma basis, cash and short-term investments of $7.7 million.

Financing activities

-- On May 5th, 2016, the Company concluded a $4.9 million bridge loan with
IQ, collateralized against the Company's investment tax credits
receivable ("ITC") for the 2016 financial year which are expected to
total $6.5 million.

-- On May 6th, 2016, the Company closed a non-brokered private placement
totaling $1.0 million.

-- On May 11th and June 27th, 2016, the Company received payments totaling
$3.6 million from tax authorities in Quebec for 2014 investment tax
credits ("ITC"), used to pay down a portion of the Company's revolving
credit facility and term loan A on a prorated basis.

-- On May 19th, 2016, the Company completed an equity financing in the
amount of $5 million with Ressources Quebec inc. ("Ressources Quebec"),
a subsidiary of IQ.

-- On June 1st, the Company completed a $5.0 million debt financing with
IQ.

A more comprehensive description of the Company's financing activities is provided in the Company's MD&A and other filings on www.sedar.com.

Property, plant, and equipment

The Company recorded a net increase in Property, plant, and equipment ("PP&E") of $11.9 million in the first six months of 2016 compared to December 31st, 2015, mainly attributable to investment in the HPA plant.

Cash Flow Statement

Cash Flows from Operating Activities

Cash flows used in operating activities remained stable at $4.3 million. An increase in Other Income and lower General and Administrative expense were offset by a decrease in non-cash working capital items.

Cash Flows from Financing Activities

Cash flows from financing activities in Q2 2016 decreased by $3.2 million as compared to the same period in the prior year. This decrease is due mainly to lower proceeds received from the issuance of Convertible debentures partially offset by the issuance of shares, warrantsand the exercise of options.

Cash Flows used in Investing Activities

Cash flows used in investing activities decreased by $3.8 million. During the quarter, the Company focused on raising the funds required to complete its HPA facility. During this period, the Company had de-mobilized external contractors on site and generally reduced construction activities to preserve working capital.

Conference call

Orbite management will hold a conference call and provide a live audio webcast today, July 28th, 2016 at 10:00 a.m. to discuss the Company's financials and provide an update on the Company's HPA plant.

The call will be held in English. The Q&A session will be in English and French.

CONFERENCE CALL DETAILS:



Date: July 28th, 2016
Time: 10:00 a.m. (EDT)
Dial in number: [phone]
[phone]
Webcast: http://bit.ly/29R80yd
Taped replay: [phone]
[phone]
[phone]
Encore password: 47838647
Available until: 12:00 midnight (EDT), Thursday, August 4th, 2016

Notice to Reader

The information provided in this press release is entirely qualified by the disclosures in the Company's Consolidated Interim Financial Statements and Management Discussion & Analysis (MD&A) for the quarter ended June 30, 2016, which are available at www.orbitetech.com and under the Company's profile at www.sedar.com.