Orocobre Limited ("Orocobre" or "the Company") is pleased to provide a progress report on the construction of the Company's flagship Olaroz lithium project.
The construction of the Olaroz lithium project continues to advance according to schedule and within budget with significant progress made, in particular with earthworks for the evaporation ponds, road construction on the salar, and earthworks for the camp and other infrastructure.
The main road across the salar is currently under construction while 2 kilometres of the auxiliary road to access the bore field from the east has been completed to allow access to the first two (of thirteen) drill platforms where drilling has commenced.
Clearing of vegetation to allow for the construction of evaporation ponds over an area of 4.2 square kilometres is 55% complete and evaporation pond construction is progressing well. Preparation of the site for the camp is well underway. Impact from the seasonal rains at this time of year has in general been positive with increased moisture content providing benefits in soil compaction.
Approximately $65m of the US$229m capital budget has been committed or spent and all major contracts awarded to this point remain on, or under, budget.
Currently 230 construction workers are at site (up from the January figure of 142) with a peak expected of 400 by mid-2013.
The project implementation is through EPCM (Engineering, Procurement and Construction Management) with a high proportion of local involvement through construction and supply contracts and local employment. The unique community and shared value policy continues as a key success factor, training local people with supervision by high quality experienced professionals.
The Olaroz lithium project is being developed by Orocobre (66.5%) with its partners Toyota Tsusho Corporation ("TTC") (25%) and the Jujuy Province mining and energy company, JEMSE (8.5%) with a construction budget of US$229m including contingency. The project is fully funded with up to US$275m of funding available via US$82.8m of equity funding from TTC and Orocobre and US$192m of project finance for Mizuho Corporate Bank. First production is scheduled for the end of the second quarter, 2014.