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Orocobre (ASX:ORE,TSX:ORL) has raised A$32.3 million in an oversubscribed placement. Proceeds will be used to fund Orocobre’s lithium facility joint venture company for its Olaroz project in Argentina.
Orocobre (ASX:ORE,TSX:ORL) has raised A$32.3 million in an oversubscribed placement. Proceeds will be used to fund Orocobre’s lithium facility joint venture company for its Olaroz project in Argentina.
As quoted in the press release:
The proceeds will be used principally to provide funding to the Olaroz Lithium Facility joint venture company, Sales de Jujuy SA (SDJ SA), where Orocobre’s ownership structure requires the Company to contribute 75% of the project funding. Use of funds includes: working capital and capex requirements at the SDJ SA project level during the production ramp up period at the Olaroz lithium facility, financing costs during the ramp up period, and costs incurred in rectifying operational issues and production bottlenecks (US$7m). The funds will be provided to SDJ SA through a shareholder loan mechanism. As discussed in the update announcement on 17 June 2015, production ramp up has been slower than expected due to equipment limitations and early operational issues, however these areas have now been identified and rectified, with the final rectification in the purification circuit anticipated to be completed within 3-4 months. It is expected that the nameplate monthly run rate of 1,450 tonnes will be met during Q4.
The slower than anticipated production ramp up has impacted the working capital position of SDJ SA. During the ramp up period, operating costs of a typically fixed nature have been incurred, whilst lower revenue was received due to slower than anticipated production quantities.
Click here to read the Orocobre (ASX:ORE,TSX:ORL) press release