Orbite Technologies: Start of HPA Commercial Production Pushed Back to Q2

Orbite Technologies (TSX:ORT) provided an update on its progress towards the completion and commissioning of its high-purity alumina (HPA) plant. The company reported that costs must be increased by roughly $9.9 million, and that expects the start of commercial production to begin in Q2 of 2016 instead of Q1.
As quoted in the press release:

• As reported by the Company on March 7^th, 2016, the installation of the air, steam, and process piping and utilities around the calcination system, delayed by the installation of the withheld equipment, is now complete.
• However, due to the complexity of the piping involved and the tight quarters for installation, piping installation advanced at one third of the budgeted and standard installation rate.
• A comprehensive review of costs recently incurred to install those systems and those required to complete specialty piping installation, notably in the decomposer and crystallization sectors, indicate that capital costs initially projected must be increased by approximately 9.9M$, to incorporate the impact of the slower installation pace. This brings the revised total external capital cost budget of the project to 56.2M$ from 46.3M$, as previously contemplated.
• Key areas of cost variance between the updated and previous estimate are notably due to additional labor for piping installation and additional engineering and project management fees related thereto.
• Consequently, and in order to limit construction costs and manage its working capital, the Company has ended overtime work and may postpone certain activities, which will push back the start of commercial production into Q2 of 2016 instead of Q1 as previously contemplated.

Orbite CEO, Glen Kelly, said:

We are disappointed by this setback but remain highly committed and focused at reaching commercial production at our HPA production facility.

Click here for the full press release.