Ann: Orocobre Limited - September 2018 Quarterly Report, page-40

I'm not entirely sure I fully understand what Richard Seville was saying regarding the stage 2 ponds - from experience that probably means that he was being wilfully obscure so as to glide over some uncomfortable facts. My impression was that he was saying that the problem they have with the existing evaporation ponds not being sufficient to keep a steady and adequate supply of concentrate for the stage 1 plant will be temporarily overcome by using the new ponds being built for stage 2 as they come into production before the stage 2 facility is completed and commissioned. However at some point in the future those new ponds will be required to start providing feed to the stage 2 facility which means that the supply of feed into the stage 1 facility will again become unsteady and inadequate.

Why they do not bite the bullet and build additional ponds to top up the permanent supply of feed to the stage 1 is beyond me but I suppose that is the way this lot operate and why after three years they still are leaving tens of millions of dollars of income out in the salar each quarter.

Regarding the $100m debt facility: there is simply no way possible that the Olaroz joint venture securing a $100m debt facility is not reportable information to the market. As far as I can tell there has been no ASX announcement and as such it is reasonable to conclude that the debt facility has not yet been secured. My impression was that in the June quarterly securing the debt facility was effectively given as a condition precedent to the FID for both the stage 2 expansion and the LiOH plant so as such I can only guess that once again Richard Seville is skating over the top of a problem with his statement that the FID is now entirely the call of Orocobre and Toyota Tsusho (I'd take a stab at it and say that Toyota Tsusho will not agree to the FID until the debt facility is secured [and that the bankers behind the debt facility are uncomfortable that stage 1 continues to struggle getting even close to nameplate]). Richard Seville will by on the way out by the end of November and I suspect he is leaving fessing up about further delays to the stage 2 and the LiOH to Manuel.

One final point: in the briefing Richard Seville said that the delay to the completion of the stage 2 expansion and the LiOH plant was 6 months. I need to go back and check on that as I had thought that quite recently he was saying completion was towards the end of calendar 2019 and now he is saying that completion will be towards the end of calendar 2020.