Wednesday, June 29, 2022

OROCOBRE LTD NPV (OTCMKTS:OROCF) Breaks Higher on Strong Data

OROCOBRE LTD NPV (OTCMKTS:OROCF) is a very interesting player in the commodities space. OROCF just popped on a strong breakout move that constituted a true breakout above the key, major moving averages (the 50-day, 100-day, and 200-day) all at once, and on strong volume. The catalyst was quite clear: OROCF just announced its financial results, highlighted by a profit of US$19.4 million impacted by impairment of Borax Argentina of US$8.1 million, and sale of assets of US$14.8 million. That compares with a prior year fiscal loss of $22M.
OROCF Managing Director and CEO, Richard Seville said: “In 2017, Orocobre came to the fore as a mainstream, profitable, low-cost producer of lithium carbonate. We continued to develop and expand our customer base as we produced 11,682 tonnes of lithium carbonate (~5-6% of global supply) from one of the lowest cost bases in our industry.” With such excitement emerging about the lithium market once again this year, the company’s positioning and newfound success stoked traders into action this week, driving shares of the stock higher.
OROCOBRE LTD NPV (OTCMKTS:OROCF) trumpets itself as a company building a substantial Argentinian-based industrial minerals company through the construction and operation of its portfolio of lithium, potash and boron projects and facilities.
OROCF explores for and develops lithium, potash, and salar mineral properties primarily in Argentina. Its flagship project is the Salar de Olaroz lithium project that covers 63,000 hectares of tenements located in the northwest province of Jujuy.
The company also produces boron minerals and refined chemicals. Orocobre Limited is headquartered in Milton, Australia.
According to company materials, “Orocobre Limited (Orocobre) is a dynamic global lithium carbonate supplier and an established producer of boron. Orocobre is dual-listed on the Australia and Toronto Stock Exchanges (ORE.AX), (ORL.TO). Orocobre’s operations include its Olaroz Lithium Facility in Northern Argentina, Borax Argentina, an established Argentine boron minerals and refined chemicals producer and a 35% interest in Advantage Lithium.”
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As noted above, we saw very strong action on OROCF on Thursday. The stock has been strong, but the action this week has been exceptional for shareholders of the stock. And the movement is not without clear cause, as the company hit the wires with what appears to be a very solid set of data.
Further comments from the company’s CEO included: “The year was not without challenge, however, with pond management setbacks at Olaroz and inclement weather testing our ability to sustain operations and our broad production levels. These issues enabled us to further analyse and improve our operational processes as we adapt and manage our operations for long-term, sustainable, high-quality output.”
“Global market fundamentals for lithium remain intact with strong demand growth, tight supply and attractive pricing. In meeting market demand Orocobre will grow organically through a staged series of expansions at Olaroz for select partners in the battery market.”
OROCF apparently plans to expand from here, commencing a Phase 2 at Olaroz “which will see production double at its Olaroz facility, coupled with a 10,000 tonne per annum lithium hydroxide plant to be constructed with partner Toyota Tsusho Corporation.  These projects are achievable without the need to raise further capital, though are subject to achievement of Phase 1 production milestones.”
The chart shows 22% piled on for shareholders of the company during the trailing week. This is emblematic of the stock. OROCF has a history of dramatic rallies. Furthermore, the name has registered increased average transaction volume recently, with the past month seeing above 100% above its longer run average levels.
Earning a current market cap value of $645.03M, OROCF has a significant war chest ($42.5M) of cash on the books, which stands against about $1.7M in total current liabilities. OROCF is pulling in trailing 12-month revenues of $44.8M. In addition, the company is seeing top line growth, with y/y quarterly revenues growing at 1.7%. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $OROCF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $OROCF, either long or short, and we have not been compensated for this article.

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