The Orocobre Limited
(ASX: ORE) share price is up 1.2% in response to its December 2018 report. Is now the time to buy ORE shares?
Orocobre is a resources business that is listed on the ASX and Toronto stock exchange. It’s building an Argentinian-based industrial chemicals and minerals operation through the construction and activities of its portfolio of lithium, potash and boron projects & facilities in the Puna region of northern Argentina.
What did the Orocobre December 2018 report say?
Olaroz Lithium Facility
Production was up 65% compared to the last quarter, reaching 3,782 tonnes of lithium carbonate.
It also reported the second-best quarter of sales which were up 41% to 3,019 tonnes. Quarterly sales revenue was down 20% to US$32 million with an average realised price of US$10,587 per tonne.
Orocobre signed three pivotal agreements with joint venture partner Toyota Tsusho, a Toyota subsidiary. It includes a new Olaroz Shareholders Agreement, Sales and Marketing agreement and Orocobre Management Agreement.
Other announcements
Orocobre and its joint venture partners have given approval to the final investment decision for the Stage 2 Expansion of the Olaroz Lithium Facility, which will increase production capacity by 25,000 tonnes per annum.
Construction of ponds, roads and camp upgrades started in the last quarter.
Borax Argentina overall sales volume in the December quarter was up 14% on the September quarter to 10,741 tonnes with revenue slightly lower due to a marginally lower average price per tonne.
Orocobre said it had US$216.7 million net cash at the end of December 2018.
Is Orocobre a buy?
Orocobre shares have fallen nearly 50% over the past year, so arguably it is now much better value.
I think investors got too swept up in the lithium battery hysteria in 2017 and 2018. Just because demand for something is expected to grow doesn’t mean that prices of the product/mineral will increase. Profit growth is not guaranteed at all.
Having said all that, if you’ve been looking to buy Orocobre shares for a while then now seems to be the best time to buy since mid-2017.
But I prefer businesses that don’t sell commodity products and have control of the prices they charge. That’s why I’m more attracted to the shares mentioned in the free report below.
3 ASX shares with reliable growing profits
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