Orocobre Limited Announces FY21 Results and Implementation

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BRISBANE, Australia, August 25, 2021 (GLOBE NEWSWIRE) – Today, Orocobre Limited (ASX: ORE, TSX: ORL) (Orocobre or the Society), a dynamic global producer of lithium chemicals, reports financial results for the year ended June 30, 2021 (FY21), as well as the finalization of the merger with Galaxy Resources (Galaxy).

Key results:

  • FY21 net after-tax loss of US $ 89.5 million, impacted by US $ 74.9 million of tax rate changes in Argentina and the effects of inflation and devaluation on balances deferred taxes and tax losses
  • Lithium prices are improving, reflecting strong end market and customer demand
  • Managing the impacts of COVID 19 has been very effective
  • Olaroz Stage 2 will be completed in FY22 and will significantly reduce treasury costs and increase volumes
  • Naraha is nearing completion and is awaiting the lifting of COVID-19 travel restrictions for technical staff to begin commissioning
  • Merger with Galaxy to deliver:
    • One of the world’s 5 largest lithium chemicals companies
    • Highly complementary asset portfolio
    • Industry-leading growth profile
    • Synergies unique to this combination
    • Highly experienced board of directors and management team
    • Increased scale and financial capacity

FY21 Results

  • Comprehensive COVID-19 biosecurity protocols have been very effective in limiting infection and transmission from the workforce
  • Group EBITDAIX attributable1 amounted to US $ 2.9 million, compared to a loss of US $ 3.9 million as prices received more than doubled in the second half (compared to the first half), higher sales volumes and costs having been reduced by 12%. The Group will benefit from the more favorable pricing environment that has materialized since the 3rd fiscal quarter
  • Statutory consolidated net loss after tax of US $ 89.5 million for FY21, compared to a loss of US $ 67.2 million for FY 20. The underlying net loss after tax of the group is $ 20. $ 8 million2 after adjustments for tax rate changes, inflation and Argentine peso devaluation and includes US $ 18.8 million of non-cash depreciation and amortization
  • Total lithium carbonate production of 12,611 tonnes is up 6% from previous corresponding period despite COVID-19 disruption
  • Battery-grade lithium carbonate production reached 66% of total production for the June quarter and 48% for the full year, compared to 24% in fiscal year 20
  • Positive operational improvements of the Olaroz Lithium installation:
    • Annual costs of US $ 3,860 / t2 fell 12% year on year despite a full year of COVID-19 costs and ongoing disruptions. Olaroz remains among the cheapest lithium chemical producers in the world
    • Gross operating margins of 23%, or 1,123 USD / tonne, despite lower prices
    • Significant improvements in quality have resulted in very high customer satisfaction rates
    • FY22 sales are contracted with prices linked to market indices and other indicators for approximately 80% of committed volumes.
  • As of June 30, 2021, Orocobre, on a 100% Group basis, had cash of US $ 258.3 million
  • The Naraha lithium hydroxide plant is largely complete and the Phase 2 expansion of the Olaroz lithium plant is nearing 60% complete.

Merger with Galaxy

On April 19, 2021, the Company announced that it had entered into a merger implementing deed with Galaxy Resources Ltd. The merger would result in the issuance of 0.569 Orocobre shares for each Galaxy share.

Since then, all necessary approvals have been obtained to complete the merger effective as of today 25 August 2021.

The merger has created a company that has the potential to be one of the world’s top 5 lithium chemicals companies3 with a highly complementary asset portfolio offering geographic and product diversification across brine, hard rock and vertical integration throughout the supply chain.

The combined company now has a leading growth profile with an improved financial position to optimize and potentially accelerate the development of future projects with the ability and intention to capture more value downstream.

Implementation

A detailed review of the business and reporting structure, cultural integration and communications was conducted with external advisors. Key operating and management positions in the company are in place and the reporting structure has been realigned around the geographic distribution of assets and staff.

Work programs are underway to pool technical knowledge and the development of key projects in order to optimize growth projects.

Debt financing options for phase 1 of Sal de Vida and subsequent phases are being considered to increase balance sheet flexibility.

A series of projects remain in progress and will contribute to the success of the merger of the two companies.

Communication of a detailed strategic plan for growth projects is expected within 6 months, including development paths for the next stages of Naraha, Olaroz, Sal de Vida and the James Bay project.

comments

Orocobre Managing Director and CEO, Mr. Martín Pérez de Solay, said: “Orocobre continued to deliver positive operating margins, despite COVID-19 and weaker market conditions throughout the first half of the year some exercice. This goal was achieved through strong business performance and a focus on costs and operational excellence.

“The completion of the merger now brings together assets and teams with highly complementary skills and knowledge. I would like to welcome Galaxy shareholders, employees and other stakeholders to Orocobre, which, subject to shareholder approval, will change the name of Allkem Limited and change the ticker ASX to AKE.

“The name Allkem recognizes that together we can offer more to stakeholders. With fusion, we will take our commitment to deliver the lithium chemicals that the world increasingly needs to mitigate climate change and carbon emissions further.

“The merger consolidates the combined group’s position in Argentina and provides the opportunity to build on a solid platform there and in our other key jurisdictions globally, including Australia, Japan and the United States. ‘North America. This will give us significant operational, technical and financial flexibility to deliver the full value of our combined portfolio.

“Our operating strategy remains focused on safety, quality and productivity which, combined with disciplined cost management, will further improve operating results, ensuring that we remain a low lithium carbonate producer. cost, ”Mr. Perez de Solay said.

This announcement has been approved by the board of directors of Orocobre Limited

For more information please contact:

André Barbier
Head of Investor Relations
Orocobre Limited
T: +61 7 3720 9088
Telephone: +61 418 783 701
E: [email protected]
W: www.orocobre.com

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Remarks:

Unless otherwise indicated, all financial data in this press release is expressed in US dollars.4.

Orocobre’s results are presented in accordance with international financial reporting standards (IFRS). This report also includes certain non-IFRS financial information, including the following:

  • NCI is the non-controlling interest that represents the equity stake in SDJ PTE
  • EBITDAIX is “Profit before interest, taxes, depreciation and amortization, depreciation and exchange gains / (losses), share of losses of associates and share of profits of joint ventures”
  • EBITIX is “Profit before interest, taxes, depreciation and exchange gains / (losses), share of losses of associates and share of profits of joint ventures”
  • EBTIX is the “profit before taxes, depreciation and exchange gains / (losses), share of losses of associates and share of profits of joint ventures”
  • “Underlying EPS” and “Underlying EBITDAIX” being the statutory profit adjusted for certain one-off and non-recurring items

About Orocobre Limited

Orocobre Limited (Orocobre) is a dynamic global producer of lithium carbonate and an established producer of boron. Orocobre is double listed on the Australian and Toronto Stock Exchanges (ASX: ORE) (TSX: ORL). Orocobre’s interests include its Olaroz lithium facility in northern Argentina, an important JORC resource in the adjacent Cauchari Basin, and Borax Argentina, an established producer of boron minerals and refined chemicals. The company has started an expansion in Olaroz and the construction of the Naraha lithium hydroxide plant in Japan. For more information, please visit www.orocobre.com.

Summary information
The following disclaimer applies to this advertisement and any information it contains (the Information). The information contained in this announcement is general and does not claim to be complete. It should be read in conjunction with Orocobre’s other periodic and continuous information announcements filed with ASX Limited, which are available at www.asx.com.au. You are advised to read this disclaimer carefully before reading or making any other use of this advertisement or any information contained in this advertisement. By accepting this posting, you agree to be bound by the following terms and conditions, including any modification thereof.

Forward-looking statements
This announcement may include forward-looking statements. These forward-looking statements are based on Orocobre’s expectations and beliefs regarding future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are beyond Orocobre’s control, which could cause actual results to differ materially from such statements. Orocobre does not undertake to update or subsequently revise the forward-looking statements made in this announcement, to reflect circumstances or events subsequent to the date of this announcement.

TSX counts
Orocobre is a “Qualifying Interlisted Issuer” for TSX purposes. Orocobre relied on Article 602.1 of the TSX Company Handbook in respect of the Offering on the basis that it has been completed in accordance with ASX standards.


1 see the notes at the end of the version
2 The underlying net loss is calculated after adjusting for the change in fair value, exchange losses, tax effects, merger costs, restructuring and other costs.
3 Based on market capitalization at the close of ASX market on April 16, 2021.
4 Financial data has been converted into US dollars using the average exchange rates for the relevant period in the income statement.



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