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Lithium producer Orocobre signs three agreements with Toyota Tsusho Corporation

Orocobre Limited has signed three agreements with joint venture partner Toyota Tsusho Corporation (TTC). Members of the Orocobre Executive Management team have this week visited TTC’s office in Tokyo to finalize and to sign a new Olaroz Shareholders Agreement; Sales and Marketing Agreement; and Orocobre Management Agreement (for management of the Olaroz Joint Venture).

The new Olaroz Shareholders Agreement formalizes changes to the joint venture that will allow Orocobre to consolidate earnings from Olaroz in reported statutory accounts. Orocobre accounts will be consolidated from 1 January 2019.

Orocobre and TTC agreed on a new joint marketing arrangement for production from both Stage 1 and 2 where the joint partners will work together to set the strategic direction of customer arrangements and commercial terms. As exclusive sales agent, TTC remains responsible for logistical and contractual arrangements with customers and execution of the agreed sales strategy.

A new Management Agreement has been established for the ongoing management of the Olaroz Joint Venture by Orocobre. Under this new agreement, Orocobre will be paid a management fee of 1.5% of gross revenue reported by the Olaroz Joint Venture from 1 July 2019.

Orocobre also announced that Advantage Lithium Corp. engaged engineering consultants GHD, Chile S.A. to commence early engineering geared towards the completion of a Definitive Feasibility Study (DFS) on its flagship Cauchari Project in Jujuy, Argentina. The DFS is expected to be completed by 1H CY19.

Advantage Lithium hold 75% of the Cauchari JV. Orocobre owns 33.5% of Advantage Lithium’s issued capital and 25% directly in the joint venture.

The appointment of GHD follows encouraging Preliminary Economic Assessment (PEA) outcomes and continued positive results from the Phase III resource conversion program. The DFS will provide an appropriate engineering design to produce a Class 3 cost estimate consistent with American Association of Cost Engineers (AACE) principles to build a standalone lithium plant producing 20 thousand tonnes per annum (ktpa) of Lithium Carbonate Equivalent. A report on this work will be prepared in accordance with NI43-101 standards of disclosure and is scheduled for completion in Q4 FY19.

The commencement of early engineering marks another key milestone for the Cauchari Project’s development following positive PEA results. The Phase III drilling program is nearing completion, culminating in 30-day pumping tests on main production targets in the NW Sector and the SE Sector deep sand units. These results will feed into an updated resource estimate which is targeted in Q3 FY19 and expected to bring Cauchari’s resources into the Measured and Indicated categories.

Orocobre Limited is building an Argentinian-based industrial chemicals and minerals company through the construction and operation of its portfolio of lithium, potash and boron projects and facilities in the Puna region of northern Argentina. The company has built, in partnership with Toyota Tsusho Corporation and JEMSE, the first large-scale, greenfield brine-based lithium project in approximately 20 years at the Salar de Olaroz with planned production of 42,500 tonnes per annum of low-cost lithium carbonate.

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