"Orocobre has struggled to lift production volumes, but may finally be turning the corner.
The stock is well-placed as a pure-play, low-cost, lithium producer about to ramp up and expand production to 42,500tpa LCE. Further upside from Advantage Lithium, and Borax Argentina."
"Looking forward, the promise of a significant Olaroz lithium production increase (production woes hopefully now behind the company) and Toyota Tsusho increasing its share in Orocobre holds out strong hope that Orocobre can finally deliver.
Valuation is currently attractive if Orocobre can succeed with its expansion plans in the indicated time frame.
Risks are fairly low given Orocobre is now in production stage, and mostly revolve around lithium pricing. Certainly, having Toyota Tsusho as a project and equity-off-take partner is a large plus.
My view is that Orocobre is a well-valued, low-risk, solid reward play at this time. Upside should come if it can successfully ramp up and then expand lithium production. Further potential upside from its 29% share in Advantage Lithium, 100% owned Borax Argentina, and planned Naraha lithium hydroxide plant."
ORE Price at posting:
$4.19 Sentiment: Buy Disclosure: Held
