The Orocobre Limited (ASX: ORE) share price has fallen in early trade in response to its June 2019 quarter report numbers.
Orocobre is a resources business that is listed on the ASX and Toronto stock exchange. It’s building a 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.
Orocobre’s June 2019 Quarter Olaroz Report
Orocobre’s production for the June 2019 quarter was 3,455 tonnes which was 4% lower than the June 2018 quarter but 12% higher than the March 2019 quarter.
In terms of sales, Orecobre sold 3,387 tonnes which was 4% higher than the quarter a year ago but 4% lower than last quarter.
But the real changes were in the sale price and cost per tonne. The average price received was US$8,220 per tonne down by 40% compared to the June 2018 quarter and down by 13% compared to the last quarter. Which is why revenue was down 17% over the quarter to US$27.8 million and down 37% compared to the June 2018 quarter.
The average price was affected in the quarter because the market remained under pressure from Chinese exporters.
Cost of sales per tonne were US$4,493 which was sadly 18% higher than the June 2018 quarter and 7% higher than the last quarter.
Other News
Construction of the Naraha Lithium Hydroxide Plant is expected to commence in early in the second half of 2019 with commissioning to commence during the first half of 2021.
Construction of key items for the second stage of the Olaroz Lithium Facility such as ponds, secondary liming plant, roads and camp upgrades have continued to advance.
For Borax Argentina, the overall sales volume for the quarter was 11,758 tonnes which was up 10% over the quarter after deducting 2,312 tonnes of low value mineral sales in the March quarter. Sales revenue was up 12% over the quarter and the average price received was up 3% over the quarter excluding the low value mineral sales.
At June 2019, the net group cash at 30 June 2019 was US$181 million.
There were positives and negatives in this update, but I’m generally not a fan of owning resource businesses because they don’t have much control over the prices they receive for their commodity, which is why I prefer the idea of owning the shares in the free report below instead.
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