Resource World Magazine

a u g u s t / s e p t e m b e r 2 0 1 6 www.resourceworld.com 33 a u s t r a l i a n u p d at e G r e g B a r n s S alar de Olaroz is a salt lake (salar means salt lake) located in the arid Puna region of Argentina's northwest prov- ince of Jujuy. Today it is home to Orocobre Ltd.'s [ORL-TSX, ASX] Olaroz Lithium Facility which is producing battery-grade lithium carbonate. Once known for treating bipolar conditions, lithium is now a must have commodity for the emerging new energy vehicle industry. Elon Musk, founder of Tesla automobiles says for his company to produce 500 automobiles "we would basically need to absorb the entire world's lithium-ion production". Battery-grade lithium use in portable electronic devices has grown over 20% since 2000. Orocobre's Olaroz Project hosts a JORC/ NI 43-101-compliant measured and indi- cated resource of 6.4 Mt LCE (Lithium Carbonate Equivalent), 19.3 Mt KCl (Potassium chloride) and 1.85Mt (Boron) to only 197 metres in depth. It has a lithium resource grade of 690 mg/l Li with a Mg/ Li ratio of 2.4. The company says the mea- sured and indicated resource of 6.4 Mt LCE "is capable of sustaining current continu- ous production for 40-plus years with only ~15% of the defined resource extracted." The Olaroz Lithium Facility is jointly owned by Orocobre (66.5%), Toyota Tsusho Corp. (25%) and the provincial government's company, JEMSE, (8.5%). The facility was constructed in 2012 at cost of around US $230 million and has been in production since late 2014. The facility has been steadily increasing pro- duction of lithium carbonate from 126 tonnes in the June 2015 quarter to 2,332 tonnes in the March 2016 quarter. The aim is to produce around 17,500 tonnes lithium carbonate annually. The company explains the method of processing. "The processing method begins with the extraction of lithium-rich brine from borefields drilled on the salar. The brine is then transferred to a series of evaporation ponds which utilize solar radiation for concentration and a pre- cipitation process to remove impurities. The concentrated brine is then fed into the lithium carbonate plant which pre- cipitates, micronizes and dries the finished high-quality lithium carbonate product," Orocobre's website notes. Because it is extracting from brine, Orocobre is a low cost producer with a site cash operating cost of around US $2,500/tonne of lithium carbonate. The current price of lithium carbonate is around US 7,500/tonne FOB. The company sells lithium carbonate to customers in Europe, Asia and the US in the chemicals manufacturing, industrial and battery industries as either battery, technical or industrial grade products. "In process" material (recovered from within tanks in the purification circuit) is sold to plants in China for further processing. In its March 2016 quarterly report, the company announced that its board has approved an "expansion study to evalu- ate a potential Stage 2 expansion of 17,500 tpa scheduled to start in Q2 with potential development from CY 17. The Capex cost is anticipated to be 40% (per tonne capac- ity) less than the establishment Capex for Stage 1 (i.e. a total estimated Capex of ~US $140M). The inclusion of lithium hydrox- ide is to be considered," the report said. Still Orocobre has rewarded sharehold- ers well over the past 12 months with TSX share price sitting at $1.33 at the start of July 2015 and at the time of writing (6 July 2016) $4.73. n Orocobre increasing lithium carbonate production TSX: MOZ Contact: Christopher Haldane, Investor Relations Telephone: 416.987.0714 Website: www.marathon-gold.com Newfoundland's Next Gold Camp: 1.3 million oz. and growing

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