Saturday, August 04, 2018 1:27:29 PM
Hi madprophet, yes do your research, visit the company’s web site, read articles and decide. Here are a few highlights I put together:
-Company has a brine salar in Olaroz, Argentina. It partners with Toyota, who owns about 1/3 and is a great protecting partner (I can’t think of a better partner). It also has a 25% stake in a brine salar about 10 km south in Cauchari, which is being developed by partner Advantage Lithium. Both salares are of excellent quantity and quality.
-Partnership with Toyota protects Orocobre from hostile takeovers and from the current lithium sector woes which could some non-producers (explorers) to go bankrupt.
-The plant produces high quality lithium carbonate, which is mostly sold to Japan, Korea and Europe (less to China). Orocobre is one of a handful of junior lithium producers, which includes ALTAF, GALXF, PLS, NMT, TAW, etc. More producers are expected in the next 1-3 years.
-Being the first brine operation in decades, the company had a lot of difficulties in learning how to optimize the plant. It struggled with mass balances, effects of lower evaporation in winter and bad weather, but it learned its lesson and has been improving a lot lately. 2018-18 was a record year at 12.5k tons/yr at record sale prices and lowest production costs. I think production will get to at least 14k tons/yr in 2018-19 thanks to new improvements, but getting to the nameplate capacity of 17.5k tons/yr will likely not happen until the plant expands.
-Company is making a net profit of about $70M/yr, and should achieve at least $80M within the next couple of years (depends on lithium prices, volumes, costs, etc.).
-Current CEO deserves a lot of credit for starting the company, but he also made some big mistakes. He has decided to gradually step down, while remaining in and advisory role while they search for a new CEO.
-Company has an approved and fully funded plant expansion from the current nameplate capacity of 17.5k ton/yr to 42.5k ton/yr. It is cheaper than other projects because it takes advantage of existing facilities and it should be completed by the first half of 2020. There are also plans for new lithium hydroxide plants both in Argentina and in Japan to help diversify type of product (I.e., not just carbonate).
I see Orocobre as a great story and a solid company. I also think that Toyota is behind the sevens making sure that Orocobre does not repeat the mistakes from the past. Unfortunately, the stock has also suffered from the lithium sector woes and is down more than 40% from its peak of last year. I am a long term investor in Orocobre, and I may buy a few more soon. I was not planning to do it, but the SP is screaming buy.
Good luck!
-Company has a brine salar in Olaroz, Argentina. It partners with Toyota, who owns about 1/3 and is a great protecting partner (I can’t think of a better partner). It also has a 25% stake in a brine salar about 10 km south in Cauchari, which is being developed by partner Advantage Lithium. Both salares are of excellent quantity and quality.
-Partnership with Toyota protects Orocobre from hostile takeovers and from the current lithium sector woes which could some non-producers (explorers) to go bankrupt.
-The plant produces high quality lithium carbonate, which is mostly sold to Japan, Korea and Europe (less to China). Orocobre is one of a handful of junior lithium producers, which includes ALTAF, GALXF, PLS, NMT, TAW, etc. More producers are expected in the next 1-3 years.
-Being the first brine operation in decades, the company had a lot of difficulties in learning how to optimize the plant. It struggled with mass balances, effects of lower evaporation in winter and bad weather, but it learned its lesson and has been improving a lot lately. 2018-18 was a record year at 12.5k tons/yr at record sale prices and lowest production costs. I think production will get to at least 14k tons/yr in 2018-19 thanks to new improvements, but getting to the nameplate capacity of 17.5k tons/yr will likely not happen until the plant expands.
-Company is making a net profit of about $70M/yr, and should achieve at least $80M within the next couple of years (depends on lithium prices, volumes, costs, etc.).
-Current CEO deserves a lot of credit for starting the company, but he also made some big mistakes. He has decided to gradually step down, while remaining in and advisory role while they search for a new CEO.
-Company has an approved and fully funded plant expansion from the current nameplate capacity of 17.5k ton/yr to 42.5k ton/yr. It is cheaper than other projects because it takes advantage of existing facilities and it should be completed by the first half of 2020. There are also plans for new lithium hydroxide plants both in Argentina and in Japan to help diversify type of product (I.e., not just carbonate).
I see Orocobre as a great story and a solid company. I also think that Toyota is behind the sevens making sure that Orocobre does not repeat the mistakes from the past. Unfortunately, the stock has also suffered from the lithium sector woes and is down more than 40% from its peak of last year. I am a long term investor in Orocobre, and I may buy a few more soon. I was not planning to do it, but the SP is screaming buy.
Good luck!
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