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Orocobre Limited Quarterly Report of Operations for the Period Ended 30 September 2017

BRISBANE, Australia, Oct. 27, 2017 /PRNewswire-AsiaNet/ --

--"The only ASX listed company producing high value lithium chemicals for the 
growing battery and industrial market"

SEPTEMBER QUARTER 2017 KEY POINTS(1) 

OLAROZ LITHIUM FACILITY (ORE 66.5%)(2)
    --Production through the September quarter was 2,135 tonnes of lithium
      carbonate with consecutive increases month on month as brine
      concentration and evaporation rates increased 
    --Production has continued to increase in October, and is on track to
      achieve budget of 1,220 tonnes for the month. Production has averaged 44
      tonnes per day (90% of design) over the past week as brine concentration
      continued to rise in line with modelling 
    --The Company reiterates guidance for the full year of 14,000 tonnes of
      lithium carbonate with production split approximately 45/55 between the
      first and second halves with record production expected in the December
      quarter at a production cost of <US$4,000/tonne 
    --Sales revenue for the September quarter is US$23.2 million on total
      sales of 2,072 tonnes of lithium carbonate 
    --Average FOB price received up 5% quarter on quarter (QoQ) to
      US$11,190/tonne with higher priced contracts reflecting firmer market
      conditions. Prices are expected to continue to exceed US$11,000 per
      tonne FOB in the December FY18 quarter with market conditions remaining
      tight 
    --Cash costs (on cost of goods sold basis) were US$4,987/tonne as a result
      of lower production volumes in July and August and increased soda ash
      unit costs caused by the impact of bad weather in June 
    --Gross cash margins remained strong at US$6,203/tonne and are expected to
      increase as costs reduce to previous levels with increased production
      rates, and normalised soda ash costs and consumption 
    --SDJ SA (SDJ) made a payment of US$14 million (100% basis) to Mizuho Bank
      against the project finance facility.  The Mizuho loan balance has now
      been reduced by US$47 million over the last two years 
    --A review of the Olaroz pond system by a team of experts from the Chilean
      office of multinational engineering group GHD Pty Ltd found there were
      no design faults that would prevent overall plant production of 17,500
      tonnes per year.  The team comprised five professionals covering all
      aspects of pond design and operations with collectively over 75 years of
      pond design and operating experience.  This review refutes
      misinformation and market commentary suggesting the need for substantial
      capital to rectify the Olaroz pond system 
    --Submissions have been made to the Japanese government for substantial
      subsidies and rebates relating to construction costs of the 10,000 tonne
      per annum battery grade lithium hydroxide plant, a response to this
      submission is expected in November

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BORAX ARGENTINA 
    --Overall sales volume in the September quarter was 8,543 tonnes (11,398t
      last quarter). This follows the strategic exit of a loss making, high
      volume mineral product line for the Agricultural market in Brazil 
    --Sales of refined higher product value borates (decahydrate,
      pentahydrate, anhydrous and DOT) were up 26% on volume compared to the
      previous corresponding period 
    --The average sales price increased by approximately 20% with the change
      in product mix 
    --The Tincalayu Expansion Project feasibility study (from 30,000 tonnes to
      120,000 tonnes decahydrate equivalent and 40,000 tonnes of Boric Acid)
      is 90% complete with the various components undergoing internal review

ADVANTAGE LITHIUM AND CAUCHARI
    --Advantage Lithium (ORE 35%) announced results from 48 hours of pump
      tests at drill hole CAU10 with an average lithium grade of 682
      milligrams per litre (mg/l) and a Mg/Li ratio averaging 2.1:1. Sampling
      from the CAU09 rotary hole averaged 662 mg/l lithium with a Mg/Li ratio
      of 2.2:1. These concentrations are significantly above the resource grade

CORPORATE
    --As at 30 September 2017, Orocobre Group had US$46.6 million of available
      cash after providing funding for a working capital build at Borax
      Argentina 
    --The Company executed agreements with Lithium X Energy Corp. for the sale
      of Diablillos tenements for cash and shares with a value of
      approximately US$2m and a 1% net revenue based royalty on future
      production.   The shares have been issued and the cash component will be 
      received in this quarter

OLAROZ LITHIUM FACILITY 

For more information on Olaroz please click here ( 
http://www.orocobre.com/operations/salar-de-olaroz/ )

The Olaroz Lithium Facility is located in the Jujuy province of Argentina. 
Together with partners, Toyota Tsusho Corporation (TTC) and Jujuy Energia y 
Mineria Sociedad del Estado (JEMSE), Orocobre is now operating the first large 
scale lithium chemicals brine based facility to be commissioned in 
approximately 20 years. 

Olaroz produces high quality lithium carbonate chemicals for both the battery 
and industrial markets.  It is the only operation in the world with an 
integrated purification circuit that permits it to produce, if desired, 100% 
battery grade lithium carbonate (+99.5%) on site. 

The Olaroz Lithium Facility joint venture is operated through Argentine 
subsidiary Sales de Jujuy S.A. The effective equity interests are: Orocobre 
66.5%, TTC 25.0% and JEMSE 8.5%. 

PRODUCTION, SALES AND OPERATIONAL UPDATE

PRODUCTION AND SALES

Production for the quarter was 2,135 tonnes.  As in the previous quarter, 
operations continued to be impacted by slow evaporation rates related to winter 
weather conditions and the finalisation of the pond rebalancing process 
previously disclosed.  Since early September, evaporation rates have increased 
significantly resulting in increased brine concentration, increased harvest 
pond inventory and increasing production rates as feed brine concentration has 
risen. This trend has continued into October as discussed later in the report.

Sales revenue for the quarter was US$23.2 million on total sales of 2,072 
tonnes with average sales prices up 5% to US$11,190/tonne3.  Operating costs 
(on a cost of goods sold basis) were US$4,987/tonne, up 17% QoQ due to lower 
production levels and the impact of higher soda ash unit costs. As reported on 
22 June 2017, bad weather in NW Argentina resulted in Olaroz procuring 
alternative sources of soda ash during June and July at significantly higher 
than normal cost.  The soda ash costs resulted in higher inventory unit costs 
being carried forward into July which combined with lower production months of 
July and August resulted in higher costs for the September quarter.  Lower unit 
costs from higher production rates in the month of September are carried 
forward with inventory into October.
 
	
Metric	September quarter 2017	June quarter 2017	Change QoQ (%)		 
Production (tonnes)	2,135		2,536	                -16%			
Sales (tonnes)		2,072		2,566			-19%
Average price received   11,190
(US$/tonne)		10,696		 5%
Cost of sales 
(US$/tonne)(4)		4,987		4,279	                   17%		
Revenue (US$M)		23.2		 27.4			  -15%
Gross cash margin (US$/tonne)	6203	6417	                   -3%
Gross cash margin (%)	55%		60%		           -8%



Five days of plant planned maintenance was brought forward to this quarter to 
minimise the impact later in the year when daily production rates are expected 
to be higher. Costs are expected to decrease to <US$4,000/tonne in the December 
quarter as brine concentration and production increases.

Gross cash margins for the quarter remained strong at US$6,203/tonne with the 
increase in sales prices partially offsetting the increase in costs.  Overall 
gross operating margins remain strong at 55%. SDJ remains strongly operating 
cashflow positive.

OPERATIONAL UPDATE

During the quarter the Olaroz operations recorded the production of a 
cumulative 20,000 tonnes of lithium carbonate since operations commenced in 
2015.  This milestone is testament to the operational team at Olaroz who have 
relentlessly pursued operational excellence in developing the first new brine 
operation in 20 years.  These development and operating skills provide an 
on-going competitive advantage for Orocobre in the multi-phase development of 
Olaroz.

Over the September quarter the focus has remained on pond management both from 
the perspective of inter-pond brine transfer and operational controls and 
monitoring.  The design and upgrade for the improved transfer and pumping 
system required the installation of six new pumps, remote monitoring systems 
and additional water cleaning lines for a revised capital cost of US$2.7m.  
This program is mostly complete and the final two pumps are expected to be 
installed in the first weeks of November in time for increased evaporation 
rates which will necessitate increased inter-pond brine transfers.  

As noted in February, the process of re-establishing the correct inventory 
profile (volume and concentration) would take approximately six months, this is 
now complete and concentrations across the entire pond system are now 
approaching steady state conditions.  With increasing brine concentration, the 
production rate and recovery have risen, and reagent consumption rate has 
decreased.  Production during October is on track to deliver the budget of 
1,220 tonnes for the month the same as produced in July and August combined.  
In the last seven days production has averaged 46 tonnes per day (96% of 
design) and record production is expected for the December quarter.  The 
Company reiterates guidance for the full year of 14,000 tonnes with production 
split approximately 45/55 between the first and second halves of the financial 
year.   

The chart below shows the seasonality of average evaporation rates and the 
historical and forecast harvest pond inventory profile.  The harvest pond 
inventory continues to increase generally in line with expectations and is 
approaching maximum historical levels.  The deviation through October was due 
to one harvest pond being taken out of circuit for maintenance works to recover 
brine storage capacity which had been reduced by the secondary liming process 
which occurs on the brine feed to that pond.  Last week the pond was brought 
back into circuit and it is now being re-filled.  The primary and intermediate 
ponds are showing very good correlation to modelling. The Company is encouraged 
that the measured data across the pond system is much as predicted from the 
pond evaporation and production model.   


Bathymetric surveys are complete and data is being analysed.  The Company does 
not expect any significant changes to inventory levels or production guidance 
from this work, as such brine inventory levels will be reported at half and 
full year results.

Prior to pond management issues and a constraint of feedstock, the purification 
circuit has achieved a maximum throughput rate of 43 tonnes per day (tpd) and 
run consistently at 35-40 tpd (73-83% of nameplate).  Hydrocyclones have been 
installed and are operational, these are expected to allow the purification 
circuit to achieve nameplate capacity of approximately 48 tonnes per day over 
the coming months.

The primary circuit runs consistently above nameplate capacity with a maximum 
achieved throughput of 66 tpd, some 35% above design rate of 48 tpd.  

Carbon dioxide recovery 

Carbon dioxide is used at the Olaroz lithium facility in the production of 
battery grade lithium carbonate. It is currently sourced from near Buenos 
Aires, Cordoba and Mendoza and transported up to 1,800 kilometres by truck.  
Consequently, it is a significant component of reagent costs and the Company is 
installing CO2 recovery systems on various parts of the purification circuit to 
recover CO2 from the production process.

Results from a engineering studies and a trial plant over the last year have 
demonstrated that recovery of up to 50% of total CO2 is possible, and orders 
have now been placed for provision and installation of permanent equipment.  
Capital expenditure on this project is expected to be less than US$2M.  The CO2 
plant is supplied as a package by a specialist manufacturer in Europe.

Installation and operation of the permanent CO2 recovery equipment is expected 
in the June Quarter 2018.

Third party review of pond design

A review of the Olaroz pond system by a team of experts from the Chilean office 
of multinational engineering group GHD Pty Ltd who collectively have more than 
75 years of pond design and management experience has been completed. The 
review concluded that there were no design faults that would prevent overall 
plant production of 17,500 tonnes per year. Since February the Company has 
spent US$2.7 million on the addition of pumps and monitoring systems, and 
considers this work is now effectively complete and has achieved the aim of 
adding robustness to the pond system. Misinformation and market commentary 
suggesting the need for substantial capital to rectify the pond system is 
incorrect. 

MARKET AND SALES

Total volume of lithium carbonate sold in the September quarter was 2,072 
tonnes.  Lithium carbonate prices increased 5% to US$11,190/tonne (FOB) for the 
quarter. The price achieved for the quarter is a result of higher pricing in 
short term contracts compared to last quarter.

Since operations commenced Olaroz has developed a strong customer base of >70 
customers who have tested and accepted the high grade Purified and Prime 
products.  The Purified product regularly tests at 99.9% lithium carbonate and 
is sold to battery and cathode end users.  The Prime product regularly tests at 
99% lithium carbonate and is sold to a variety of technical and industrial end 
users.  Neither of these products require any additional processing for their 
respective markets and uses.

LITHIUM MARKET 

Analysis by Orocobre determined that demand for lithium continued to grow at a 
rate which supply struggled to meet.  Leading into the quarter, existing brine 
producers including SQM, Albemarle, and FMC confirmed ambitious expansions 
amounting to approximately 100kt LCE additional supply by 2020.  However, no 
significant new supply from the majors is thought to have entered the market 
during the quarter, resulting in sustained market tightness. 

Australian hard rock projects continued to steadily ramp-up following what 
Chinese import data showed was a slow start to the year.  Supply of spodumene 
concentrate from Mt Marion & Mt Cattlin was quickly absorbed by Chinese 
conversion plants which otherwise rely on scarce domestic production and/or 
imported lithium carbonate.  Key downstream processors are slowly moving to 
meet growing market demand with expansions announced by Tianqi, Ganfeng, 
Albemarle, Yahua, Ruifu, General Lithium.  However, while those expansions 
would double the current installed conversion capacity it will require over 
US$2.5Bn5 capital (Company Announcements, Asian Metals).  Security of supply 
remains a concern with a number of capital guarantees and offtake agreements 
proposed to finance projects. 

The shift toward partnerships between raw material suppliers and 
compounders/processors that occurred in 2016 appears to have stretched further 
downstream with battery and car manufacturers eager to secure future raw 
material supply needed to meet electric vehicle targets.  It seems likely that 
this form of disintermediation will continue with Volvo, Volkswagen, Jaguar 
Land Rover and BMW all announcing plans to have completely electrified vehicle 
fleets in the future.  

Car manufacturers have been encouraged to accelerate EV expansion plans with 
growing awareness of future raw material supply bottlenecks and the continued 
implementation of regulation requiring the switch to electric vehicles.  China 
continues to develop new policy with the recent proposition of a point system 
in July similar to that employed in California which penalizes internal 
combustion drivers and subsidises EV manufacturers and owners (Industrial 
Minerals).  The European Union has also announced plans to form a consortium 
that seeks to address the lack of battery cell manufacturing capacity which may 
impact the speed new EV's can come to market.  Currently cell manufacturing is 
dominated by Japanese firms like Panasonic and NEC, Korea's LG and Samsung and 
China's BYD and CATL.     

New and varied forms of collaboration between Government and industry provides 
greater certainty that short- and long-term demand for lithium can only grow 
and push EV penetration rates to over 5% p.a. by 2020.  It is the Company's 
expectation that any new lithium supply to enter the market during this time 
will be quickly absorbed, keeping prices above US$10,000 per tonne FOB in the 
short term.  

LITHIUM HYDROXIDE PLANT 

UPDATE ON PROGRESS 

Olaroz industrial grade lithium carbonate and locally sourced Japanese lime 
have been used as feedstock for testing of process design to produce lithium 
hydroxide by two specialised engineering firms. The test work demonstrated that 
a very high-quality lithium hydroxide could be produced from Olaroz lithium 
carbonate using a customised process.  The test work has also highlighted 
opportunities to reduce lithium losses during conversion from carbonate to 
hydroxide.

Contract negotiations are continuing with the two engineering firms to 
determine the preferred contractor.  The selection criteria for choice of 
engineering contractor includes turn-key commissioning and personnel training 
with process, product quality and performance guarantees.  

Capital and operating costs have been supplied by one of the engineering firms 
during the September quarter. Information from the second firm is expected in 
November.

Discussions with TTC are well advanced to determine the optimal joint venture 
structure for ownership and operation of the hydroxide facility.  

Submissions have been made in September to Japanese National and Provincial 
governments for development permits and subsidies for capital costs and results 
from the submission are expected by the end of November.  If successful, the 
subsidy support could amount to up to 50% of total capital costs for 
construction of a lithium hydroxide plant.

Subject to joint venture approvals and finalisation of financing and 
permitting, construction is likely to commence in June quarter 2018 with 
commissioning 12 months later. Orocobre does not anticipate the need to raise 
equity capital for this project.

EXPANSION STUDY FOR OLAROZ

The Phase 2 expansion investment decision remains dependent on achieving Phase 
1 design production rates and the expansion being funded without further equity 
capital (i.e. funded by project finance and Phase 1 operating cashflow).  
Sustainable production rates are expected to be achieved during the current 
summer period (southern hemisphere) and construction is therefore likely to 
commence in the first half of 2018.

REVISED SCOPE OF PHASE 2 EXPANSION STUDIES  

On 15 December 2016, Orocobre announced the results of scoping studies into the 
expansion of Olaroz and the proposed doubling of production at a cost of US$190 
million including US$25 million contingency.  Subsequently, these plans have 
been simplified to remove the purification circuit from the incremental 
production. The resultant product mix is 17,500 tonne per annum Battery Grade 
lithium carbonate (>99.5%) from the existing purification circuit and 17,500 
tonne per annum Industrial Grade lithium carbonate (avg. 99.0%) which will 
provide feedstock for the planned lithium hydroxide plant in Japan.

This simplified strategy results in lower capital expenditure of approximately 
US$160 million including a US$25 million contingency and lower implementation 
risk as the project is based around a simple duplication of bores, ponds and 
primary circuit of Phase 1 at Olaroz. The full cost of the pond system 
contained within the total capital expenditure estimate for Phase 2 is US$75 
million.

Multinational engineering firm, GHD has been appointed to oversee engineering 
design studies for the Olaroz Phase 2 expansion.  

Key permits have been received for water extraction, additional bores and new 
ponds from the Jujuy Provincial Government for the expansion.

Plant layout and pond design is being finalised and soil tests have been 
completed over the new pond area.  Flowsheets, mass balance, an equipment list 
and design criteria have also been completed. Six layout options for the Li2CO3 
plant and three options for the liming plant are currently being considered and 
the preliminary design for the road, pump stations, piping and electricity 
lines to new extraction bore holes were completed.  

BORAX ARGENTINA

The current focus for Borax Argentina has been to restructure its business to 
deliver sustainable operational and financial performance. This is resulting in 
a change in product mix as described below and an improvement in average 
pricing. During these changes it has been necessary for Orocobre to provide 
financial support of US$2.4 million over the quarter for the build of working 
capital.  

OPERATIONS 

Sales volumes in the September quarter 2017 were 8,543 tonnes of combined 
product, a reduction from the previous quarter following the strategic exit of 
a loss making, high volume mineral product line for the Agricultural market in 
Brazil. A decision was made to exit this business as it was no longer 
commercially attractive. Borax has been managing out of this supply arrangement 
during the quarter and a project is underway to develop a new product that 
delivers improved value to customers and the business. 

During the quarter production rates of refined products continued to increase 
month on month (up 26% compared to the previous corresponding period) with 
record production achieved at Tincalayu and the Boric Acid plant at Campo 
Quijano. Costs are expected to decrease as these unit production benefits are 
realised.
 

COMBINED PRODUCT SALES VOLUME BY QUARTER
Previous Year Quarters			Recent Quarters	
December 2015		10,078		December 2016	8,767
March 2016		8,006		March 2017	9,672
June 2016		9,274		June 2017	11,398
September 2016		11,940		September 2017	8,543


TINCALAYU EXPANSION STUDY

A study commenced in Q2 CY16 to evaluate a potential expansion of the Tincalayu 
refined borates operation from its current production capacity of 30,000 to 
100-120,000 tonnes per annum and an integrated 40,000 tonne boric acid plant.

It is anticipated that the potential expansion will significantly increase 
efficiencies in the production of refined borates at Tincalayu and contribute 
provide a step change improvement in unit costs. Approvals have been received 
for a new gas pipeline to supply the expanded plant and initial cost estimates 
are under review.

The study is 90% complete with the various components undergoing internal 
review.    

MARKET CONDITIONS

Market conditions remain challenging, however there are positive signs of 
economic recovery in South America, with a recent press article in "MercoPress" 
forecasting a 10% sales and output growth in the automotive sector in Brazil 
for 2018.

The continued focus on production efficiencies and product mix is required to 
cushion the effect of market pricing remaining at the bottom of the price 
cycle. 

In addition to price pressure the operations are seeing Argentine inflation of 
costs which are exceeding devaluation of the Argentine Peso. Calendar year 2017 
has seen inflation of 17.5% while the Peso has only devalued by 8.9%. 

SAFETY AND COMMUNITY 

SAFETY MILESTONES

The Olaroz site has recently achieved a significant milestone of 330 days of 
operation without a lost time injury (LTI). 

At Borax, the Sijes mine site achieved two years without a LTI, Campo Quijano 
achieved one year without a LTI and Tincalayu achieved six months without a LTI.

SHARED VALUE PROGRAM AND COMMUNITY

During the quarter Richard Seville (MD and CEO) was invited to join an Advisory 
Council with CEADS (Argentine Business Council for Sustainable Development), an 
organization of which Orocobre is a member.  This role will further establish 
Orocobre's position as a leading and responsible lithium producer.  
http://www.ods.ceads.org.ar/  

Sales de Jujuy and Borax Argentina received recognition for their commitment 
and contribution to academia in professional practices and internships.  A 
ceremony was held at the School of Engineering of Universidad Nacional de Salta 
with representatives from both companies, the University and public officials.

Training and support has been provided in the fields of Chemical Engineering, 
Industrial Engineering, IT, Human resources, Laboratory and Electromechanical 
services.

Orocobre group companies also collaborate with Universidad Católica de Salta; 
Siglo XXI, Universidad Nacional de Córdoba, Universidad Nacional de San Juan 
and other international educational institutions.

SDJ General Manager Cristian Saavedra presented at the Seminar on Renewable 
Energy and Sustainable Mining in Jujuy, providing an update on characteristics 
of the lithium process, the current demand in world markets, the expansion of 
the Olaroz plant to meet such demand and the contribution to the development of 
communities. Other participants included Miguel Soler, Secretary of Mining, 
Sandra Giunta, UNJu representative at CIDMEJu and Franco Mignacco, President of 
EXAR.

ADVANTAGE LITHIUM 

As previously announced, Orocobre completed the sale of a suite of exploration 
assets to Advantage Lithium Corp (TSV:AAL) in the March 2017 quarter.  AAL 
remains well funded having raised C$20,000,000 capital in February 2017. 
Orocobre holds 46,325,000 (35%) of the issued shares of AAL and 2,550,000 
warrants exercisable at C$1.  

Orocobre retains a 50% interest in the Cauchari Project of Jujuy province in NW 
Argentina and AAL has the right to increase its interest to a total of 75% by 
the expenditure of US$5,000,000 or production of a Feasibility Study. AAL also 
took a 100% interest in five other lithium properties that were previously held 
by Orocobre totalling 85,543 hectares.

Initial drilling results

During the quarter, Advantage Lithium advised of initial test results from 
drilling and testing at the Cauchari Salar.

Initial results from the first set of composite brine samples from hole CAU10 
in the SE sector of Cauchari (see hole location in Figure below) have returned 
an average lithium grade of 678 milligrams per litre (mg/l) with sample results 
ranging from 585 to 724 mg/l lithium and Mg/Li ratios averaging 2.1:1. These 
concentrations are significantly higher than the resource grade.

Hole CAU10 is part of a two phase program totalling 17 holes which will lead to 
a scoping study. Three drill rigs are engaged on this program.

Sampling from the CAU09 rotary hole averaged 662 mg/l lithium with a Mg/Li 
ratio of 2.2:1 and geological logging of CAU07 indicated high quality sand and 
gravel units similar to the most productive units at Olaroz. Drilling is 
continuing.

Senior Technical Appointments 

Advantage Lithium also strengthened its technical capability with the addition 
of Andy Robb as Technical Advisor and Frits Reidel as a consulting Independent 
Qualified Person. Andy has held significant technical and management roles with 
companies such as BHP Billiton and AMC Consulting. Andy was VP South America 
and Project Director for Enirgi Group Corporation where he had responsibility 
for over 200 Operational and Project staff and was instrumental in the 
completion of the NI43-101 compliant Definitive Feasibility Study for the 
Rincon lithium brine project located in Salta.

Fritz and his team at FloSolutions have vast experience in brine resource 
evaluation, salt-lake exploration, hydrogeology, drilling methods, well 
construction, and testing gained from working on numerous projects such as 
Olaroz, Cauchari (Lithium Americas) and Maricunga.

Drill Hole Location and Details

Exploration Hole 
    Number	

Total 
Depth (m) Installed Depth      Assay Interval(m)	Lithium (mg/l avg) 
Potassium(mg/l avg)   Drilling method	Coordinates Gauss    Kruger Argentine 
Zone3    Posgar Datum	Elevation   mean sea  level (m)	
 Azimuth	    Dip             
Easting	               Northing	
		
CAU10	429	340	50-340	678	6,516	Rotary	3,425,530	7,379,295	3,900	0	-90
CAU09	400	400	60-400	662	6,137	Rotary	3,423,775	7,377,806	3,900	0	-90
CAU07	275	Not installed	Awaiting Results	Diamond	3,421626	7,385,385	3,930	0	-90
*Planned Coordinates - not confirmed by surveying at date of release


CORPORATE AND ADMINISTRATION

DIABLILLOS

Subsequent to the end of the quarter, Orocobre announced the execution of 
agreements with Lithium X Energy Corp. (TSXV:LIX) (OTCQX: LIXXF) ("Lithium X") 
in respect of tenure held by Orocobre subsidiaries, Borax Argentina S.A. 
("Borax") and South American Salars S.A. ("SAS") at the Salar de Diablillos.

Lithium X through its wholly-owned subsidiary, Potasio Litio de Argentina S.A. 
(PLASA) will acquire 2,700 hectares of tenements from Borax over which 
Lithium-X currently holds usufruct rights for the extraction of lithium 
brines.  Lithium-X will also acquire a further 700 hectares owned by SAS which 
had been excluded from the Advantage Lithium transaction (ASX release 28 March 
2017).  These tenements will be consolidated into the PLASA project, Sal de los 
Angeles (SDLA) in Salta Province, Argentina.  

Under the agreement:
    --PLASA acquires mineral title to the Borax and SAS tenements 
    --PLASA grants a usufruct right in favour of Borax over the Borax
      tenements in relation to the extraction of surface ulexite
      mineralisation 
    --PLASA agrees to pay to Borax US$250,000 and to issue 650,000 common
      shares of Lithium X to Borax or its nominee 
    --PLASA acquires the SAS tenements for consideration of US$750,000 payable
      to Orocobre upon certain conditions being met by SAS 
    --PLASA and Borax agree to cancel the existing 1.5% Mine Mouth Royalty6 on
      the Borax held tenements, in consideration of a 1% Net Revenue Royalty
      over the entire SDLA project, and 
    --Orocobre and PLASA mutually release each other from any potential or
      existing claims due to past activities by either party. 

FINANCE

VAT

VAT refunds continue to be received on a timely basis and during the quarter 
approximately US$4.1M was received by SDJ. 

Post the end of the quarter, July's VAT presentation of ~US$1.5M was approved 
and such funds received whilst the August presentation has been submitted for 
approval.

CASH BALANCE, DEBT POSITION AND STANDBY LETTERS OF CREDIT

As at 30 September 2017, Orocobre Group had available cash of US$46.6 million 
and net debt of US$68.4 million. During the quarter, approximately US$2.4 
million was provided to Borax Argentina to support a build of working capital.  
Corporate costs were US$1.8 million and US$0.8 million was paid as a deposit 
for a property acquisition.  Further details of the acquisition will be 
provided upon completion of the transaction.

SDJ made a finance payment to Mizuho Bank in September 2017 of approximately 
US$14 million including principal and interest thereby reducing the outstanding 
principal on this facility to US$144.9M (Original facility US$191.9M).

INFLATION VERSUS DEVALUATION 
The AR$/US$ exchange rate weakened by 4% during the quarter from AR$16.63/US$ 
at 30 June 2017 to AR$17.31/US$ at 30 September 2017 whilst inflation for the 
same period was 5.7%. When looking at specific periods such as the calendar 
year to 30 September, devaluation of the AR$ against the US$ was 8.9% versus 
inflation of 17.5%. This resulted in 8.6% higher than expected US$ costs for 
ARS peso denominated expenses for the period, resulting in higher costs at 
Borax Argentina and to a much lesser extent, SDJ. The effect of inflation and 
devaluation over time generally shows that they cancel each other out.

ANNUAL GENERAL MEETING

The Company will hold its Annual General Meeting at 9am AEST on 24 November at 
L23, 480 Queen Street, Brisbane.  A Notice of Meeting has been released through 
the ASX with explanatory notes, however the following is provided as further 
explanation of the increase in the Remuneration Pool for Directors fees.  

Resolution 6 proposes to increase the Directors fee pool by A$250,000 in order 
to provide scope for the addition of new Directors to the Board and an increase 
for existing Directors whose fees have not been increased since 2014.  It is 
the view of the current Board, that as the Company executes the proposed growth 
strategy the Board may require additional Directors with an expanded variety of 
skills and experience. This resolution will provide suitable scope for 
remuneration of those new Directors.

FOR FURTHER INFORMATION PLEASE CONTACT:

Andrew 
Barber                                                                          
                                                          
Investor Relations 
Manager                                                                         
      
Orocobre 
Limited                                                                         
                                                      
T: +61 7 3871 
3985                                                                            
                 
M:+61 418 783 
701                                                                             
                               
E: 
abarber@orocobre.com                                                            
                                    

ABOUT OROCOBRE LIMITED

Orocobre Limited is listed on the Australian Securities Exchange and Toronto 
Stock Exchange (ASX:ORE) (TSX:ORL), and is building a substantial 
Argentinian-based industrial chemicals and minerals company through the 
construction and operation of its portfolio of lithium, potash and boron 
projects and facilities in the Puna region of northern Argentina. The Company 
has built, in partnership with Toyota Tsusho Corporation and JEMSE, the first 
large-scale, greenfield brine based lithium project in approximately 20 years 
at the Salar de Olaroz with planned production of 17,500 tonnes per annum of 
low-cost lithium carbonate. 

The Olaroz Lithium Facility has a low environmental footprint because of the 
following aspects of the process:
    --The process is designed to have a high processing recovery of lithium.
      With its low unit costs, the process will result in low cut-off grades,
      which will maximise resource recovery. 
    --The process route is designed with a zero liquid discharge design. All
      waste products are stored in permanent impoundments (the lined
      evaporation ponds). At the end of the project life the ponds will be
      capped and returned to a similar profile following soil placement and
      planting of original vegetation types. 
    --Brine is extracted from wells with minimum impact on freshwater
      resources outside the salar. Because the lithium is in sedimentary
      aquifers with relatively low permeability, drawdowns are limited to the
      salar itself. This is different from halite hosted deposits such as
      Salar de Atacama, Salar de Hombre Muerto and Salar de Rincon where the
      halite bodies have very high near surface permeability and the drawdown
      cones can impact on water resources around the Salar affecting the local
      environment. 
    --Energy used to concentrate the lithium in the brine is solar energy. The
      carbon footprint is lower than other processes. 
    --The technology developed has a very low maximum fresh water consumption
      of <20 l/s, which is low by industry standards. This fresh water is
      produced by reverse osmosis from non-potable brackish water. 
    --Sales de Jujuy S.A. is also committed to the ten principles of the
      sustainable development framework as developed by The International
      Council on Mining and Metals. The Company has an active and well
      funded "Shared Value" program aimed at the long term development of the
      local people.

The Company continues to follow the community and shared value policy to 
successfully work with suppliers and the employment bureau to focus on the 
hiring of local people from the communities of Olaroz, Huancar, Puesto Sey, 
Pastos Chicos, Catua, Susques, Jama, El Toro, Coranzulí, San Juan and 
Abrapampa. 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 community 
and shared value policy continues to be a key success factor, training local 
people under the supervision of high quality experienced professionals. 

TECHNICAL INFORMATION, COMPETENT PERSONS' AND QUALIFIED PERSONS STATEMENTS 

The Company is not in possession of any new information or data relating to 
historical estimates that materially impacts on the reliability of the 
estimates or the Company's ability to verify the historical estimates as 
mineral resources, in accordance with the JORC Code. The supporting information 
provided in the initial market announcement on 21/08/12 continues to apply and 
has not materially changed. Additional information relating to the Company's 
Olaroz Lithium Facility is available on the Company's website in "Technical 
Report – Salar de Olaroz Lithium-Potash Project, Argentina" dated May 113, 2011 
which was prepared by John Houston, Consulting Hydrogeologist, together with 
Mike Gunn, Consulting Processing Engineer, in accordance with NI 43-101.

CAUTION REGARDING FORWARD-LOOKING INFORMATION 

This news release contains "forward-looking information" within the meaning of 
applicable securities legislation. Forward-looking information contained in 
this release may include, but is not limited to, the completion of 
commissioning, the commencement of commercial production and ramp up of the 
Olaroz Lithium Facility and the timing thereof, the cost of construction 
relative to the estimated capital cost of the Olaroz Lithium Facility, the 
meeting of banking covenants contained in project finance documentation, the 
design production rate for lithium carbonate at the Olaroz Lithium Facility, 
the expected brine cost and grade at the Olaroz Lithium Facility, the expected 
operating costs at the Olaroz Lithium Facility and the comparison of such 
expected costs to expected global operating costs, the estimation and 
conversion of exploration targets to resources at the Olaroz Lithium Facility, 
the viability, recoverability and processing of such resources, the potential 
for an expansion at the Olaroz Lithium Facility and the outcome of studies 
currently being undertaken into the proposed expansion at Olaroz and elsewhere, 
the capital cost of an expansion at the Olaroz Lithium Facility; the future 
performance of the relocated borax plant and boric acid plant, including 
without limitation the plants estimated production rates, financial data, the 
estimates of mineral resources or mineralisation grade at Borax Argentina 
mines, the economic viability of such mineral resources or mineralisation, mine 
life and operating costs at Borax Argentina mines, the projected production 
rates associated with the borax plant and boric acid plant, the market price of 
borate products whether stated or implied, demand for borate products and other 
information and trends relating to the borate market, taxes including 
recoveries of IVA, royalty and duty rate and the ongoing working relationship 
between Orocobre and the Province of Jujuy, TTC and Mizuho Bank.

Such forward-looking information is subject to known and unknown risks, 
uncertainties and other factors that may cause actual results to be materially 
different from those expressed or implied by such forward-looking information, 
including but not limited to the risk of further changes in government 
regulations, policies or legislation; the possibility that required concessions 
may not be obtained, or may be obtained only on terms and conditions that are 
materially worse than anticipated; that further funding may be required, but 
unavailable, for the ongoing development of the Company's projects; changes in 
the scope and focus of studies currently being undertaken with respect to the 
expansion of the Company's production facilities, fluctuations or decreases in 
commodity prices and market demand for product; uncertainty in the estimation, 
economic viability, recoverability and processing of mineral resources; risks 
associated with weather patterns and impact on production rate; risks 
associated with commissioning and ramp up of the Olaroz Lithium Facility to 
full capacity; unexpected capital or operating cost increases; uncertainty of 
meeting anticipated program milestones at the Olaroz Lithium Facility; general 
risks associated with the further development of the Olaroz Lithium Facility; 
general risks associated with the operation of the borax plant or boric acid 
plant; the potential for an expansion at the Tincalayu operations and the 
outcome of studies currently being undertaken into the proposed expansion at 
Tincalayu a decrease in the price for borates resulting from, among other 
things, decreased demand or an increased supply of borates or substitutes, as 
well as those factors disclosed in the Company's Annual Report for the year 
ended June 30, 2017 filed at www.sedar.com (http://www.sedar.com/) .

The Company believes that the assumptions and expectations reflected in such 
forward-looking information are reasonable. Assumptions have been made 
regarding, among other things: the timely receipt of required approvals and 
completion of agreements on reasonable terms and conditions; the ability of the 
Company to obtain financing as and when required and on reasonable terms and 
conditions; the prices of lithium, potash and borates; market demand for 
products and the ability of the Company to operate in a safe, efficient and 
effective manner. Readers are cautioned that the foregoing list is not 
exhaustive of all factors and assumptions which may have been used. There can 
be no assurance that forward-looking information will prove to be accurate, as 
actual results and future events could differ materially from those anticipated 
in such information. Accordingly, readers should not place undue reliance on 
forward-looking information. The Company does not undertake to update any 
forward-looking information, except in accordance with applicable securities 
laws.


(1) All figures presented in this report are unaudited 
(2) All figures 100% Olaroz Project basis
(3) Note: Orocobre reports price as "FOB" (Free On Board) which excludes 
additional insurance and freight charges included in "CIF" (Cost, Insurance and 
Freight or delivered to destination port) pricing.  The key difference between 
an FOB and CIF agreement is the point at which responsibility and liability 
transfer from seller to buyer. With a FOB shipment, this typically occurs when 
the goods pass the ship's rail at the export port. With a CIF agreement, the 
seller pays costs and assumes liability until the goods reach the port of 
destination chosen by the buyer.  The Company's pricing is also net of TTC 
commissions. 
The intention in reporting FOB prices is to provide clarity on the sales 
revenue that flows back to SDJ, the joint venture company in Argentina.   
(4)Excludes royalties and head office costs
(5)Assumes capital intensity of Tianqi Kwinana plant US$400M for 24ktpa LCE 
conversion plant.	
(6) Mine Mouth Royalty is calculated as revenue less all costs incurred from 
the point of brine extraction.

 
SOURCE: Orocobre Limited