Orocobre Ltd. reported in late July 2012 that has received Jujuy provincial government approval to develop the Olaroz lithium brine project in Jujuy province, northern Argentina. Following receipt of development approval, the company was granted mining leases for the project.

                Subsequently, Orocobre reported it has purchased Argentine boron minerals and refined chemicals producer Borax Argentina S.A. from Rio Tinto plc entities for $8.5 million. Borax Argentina’s operations are located in Salta and Jujuy provinces.

                Olaroz development: The receipt of the Olaroz project approvals and leases clears the path for Orocobre to finalize proposed financing for the project with Mizuho Bank and associated loan guarantees with JOGMEC, both of Japan, and definitive agreements with its Olaroz project partner, Toyota Tsusho Corp.

                The Olaroz project definitive feasibility study outlines a project with a 40-year life producing 16,400 mt/y of battery-grade lithium carbonate and 10,000 mt/y of potash. Orocobre intends to begin construction in 2012, with commercial production starting in 2014.

                The project is based on a resource of 6.4 million mt of lithium carbonate equivalent. Brine will be pumped from a salar bore field into solar evaporation ponds located on the southwest margin of the salar.

                The project is at an elevation of approximately 3,900 m. The average temperature is approximately 8°C, and average annual precipitation is less than 100 mm. Average wind velocity is approximately 25 km/hr. These conditions, combined with very limited cloud cover, create favorable solar evaporation conditions.

                Purchase of Borax Argentina: Borax Argentina operates three open-pit mines, two concentrators, and a refinery and has two additional deposits that are essentially undeveloped. The refinery produces a variety of boron chemical products, including boric acid, borax decahydrate, borax pentahydrate, anhydrous borax, and boroglas from concentrates and ulexite minerals. One mine also produces mineral concentrates for direct sale.

                Borax Argentina has annual revenue of approximately $23 million and annual production of approximately 35,000 mt of boron-based products and mineral concentrates.

                Orocobre concluded during a due diligence process that although Borax Argentina is currently a relatively small and marginally profitable producer, it is asset-rich in terms of mines, plant, and human resources and has potential to materially improve performance based on processing recovery improvements and plant utilization. Outside the attributes of the assets acquired, the attraction of the purchase for Orocobre was that it provides a growth opportunity within the company’s industrial mineral development strategy and that Borax Argentina’s operations are within Orocobre’s current geographical area of activities and will enhance Orocobre’s management capabilities.