Replies to post #32606 on Value Microcaps Junior Miners

[Bobwins]

Got a response from Investor relations for Orocobre.

Said still won't be declared commercial production for Q3 so they will attempt to detail revs and accounting complexities that obscure financial results.

Has already forecast Q3 production of 3300-3600 tonnes at $10,000+/tonne.

That equates to gross revs of 33 to $36million dollars and gross margin of $21 to 23million dollars. Up until now, the only results shown in the P&L have been the financial results for the Boron plant, which has barely broken even.

[CPTMatt]

Recent SA article on Orocobre
http://seekingalpha.com/article/3998856-update-lithium-pure-play-lithium-miners

The author is certainly bullish on the sector as a whole but the research he includes on lithium carbonate supply/demand (even though he modifies this a bit with his own estimate) doesn't look good to me. Forecasts of oversupply in 2017 means that lithium prices would certainly end much lower than the $10kt currently being enjoyed.

Maybe Mr. Market is coming to the conclusion that the sky high lithium prices are closer to ending than previously thought and that's the reason for the weakness over the past month?

[Bobwins]

ORL.to/OROCF -.07 to C$3.86

Orocobre selling off with the rest of commodities. Not sure markets understand improving cashflows at Olaroz plant.

ORL got ~$7500/tonne for lithium carbonate in qtr ending 6/30/16. Has issued guidance that many of the original backlog orders were filled in Q2 and Q3 will be closer to spot markets so they are forecasting US$10,000+/tonne for Q3. That's a huge increase in gross revs of over $8million dollars that will increase cashflow by that amount.

Actual financials of Orocobre are fuzzy because they still haven't declared commercial production at Olaroz so not including Olaroz P&L in consolidated results yet. BUT based on forecasted price gains, cashflow should be $8million better in Q3.

Several other catalysts. Should announce results of expansion feasibility study in October. Doubling production capacity will dramatically expand potential cashflow but will require financing. Company has delayed reaching nameplate capacity several times but should reach 17,500 tonnes/annum by 11/16. That should allow them to declare commercial production and include Olaroz in financial results by yearend.