Orocobre Share Price Steady on AGM Presentation | ASX:ORE

At the time of writing, the share price of Orocobre Ltd [ASX:ORE] is trading at $3.00, down .66%.

At the recent general meeting, the company announced the full impact of COVID-19 and progression of the Olaroz lithium project.


Source: Optuma

Key points from ORE AGM presentation

The Olaroz lithium project is located in Argentina. According to the company, Stage 1 is expected to recommence ramp up in FY21.

While Stage 2 is expected to commence production in H2 CY22.

By FY22, Orocobre is aiming to produce lithium carbonate and lithium hydroxide for the battery market.

The global market for lithium-ion batteries is rapidly expanding. Expected to grow from US$44.2 billion in 2020 to US$94.4 billion in 2025.

Here are some key points drawn from the presentation:

  • Q4 FY20 costs are down by 22% from Q1 FY20, Stage 2 will drive costs even lower, Orocobre to remain in the bottom quartile of global cost curve
  • Brine concentration is higher
  • Recoveries are higher Product quality is significantly improved
  • Reagent usage is lower
  • Established management team and Board have delivered outstanding success in controlling COVID-19 infection at operations
  • Fully funded with ~US$255 million cash, of which ~US$60 million has been set aside for finance guarantees

Perhaps most interesting is their lithium market commentary:

ORE expansion project

Source: Newswire.com

With the company targeting 2022 for Stage 2, ORE could be in the sweet spot from a long-term supply/demand perspective.

ORE share price chart

Looking at the ORE share price chart, the price broke through a long-term downtrend line, usually a positive sign.

ORE asx

Source: Optuma

At the time of writing, the ORE share price hovered just below the resistance level of $3.00.

If it breaks through this, $3.37 may come into focus. If the price tumbles back, then the level of $2.42 may be enough to halt the drop.

If the EV revolution gathers steam, the world will need more lithium — so the market commentary from ORE is particularly interesting.

A supply demand divergence would be a boon for companies like ORE.

If you want our reasoning on why lithium could be due for a strong finish to 2020 (and three lithium companies which could benefit), you can read that report right here.


Carl Wittkopp,
For Money Morning

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

Money Morning Australia