Orocobre raise to expand Olaroz lithium project

Orocobre's Olaroz lithium brine project in Argentina. Pic: Supplied

Lithium chemicals producer Orocobre is set to raise $126 million by way of an institutional placement through Canaccord and UBS.

The offer price of $2.52 per new share represents a 13.1 per cent discount to the company’s Thursday evening close price of $2.90.

Orocobre says the proceeds will be used to shore up its balance sheet and provide sufficient funding for stage 2 expansions at its Olaroz lithium complex in Argentina, which have been hampered by the COVID-19 pandemic.

The stage two expansions will bring production of lithium carbonate at the facility to 42,500 tonnes per annum, up from 25,000 tonnes currently.

The mining company confirmed the capital raising as it reported a net loss of $US67.1m, driven by $US44.8m in impairments and foreign exchange losses.

Orocobre also announced it has signed an agreement with Prime Planet Energy & Solutions, a joint venture between Toyota and Panasonic that produces automotive battery cells, for the long-term supply of 30 kilotonnes of lithium carbonate equivalent.