Orocobre Limited (ASX: ORE) shares are locked in a trading halt after the company announced it intends to raise capital.
The lithium miner, with operations centred in Argentina, says it has a growth strategy to double current lithium carbonate production capacity at its Olaroz project in Argentina and to construct a lithium hydroxide plant in Fukushima, Japan.
For financial year (FY) 2017 Orocobre announced a profit of US$19.4 million and available cash of US$51.6 million.
The company is expecting a record production of lithium carbonate of around 14,000 tonnes for FY 2018.
For the December quarter, Orocobre announced that it achieved a record production of lithium carbonate coming to almost 4,000 tonnes.
That result is a significant improvement on the company's September quarter result, up by 84 per cent on the previous quarter, and puts Orocobre in a good position to achieve its FY 2018 target.
Orocobre also announced revenue for the December quarter of around US$40 million, up 72 per cent on the September quarter.
In addition to increased production, Orocobre has benefited from rising lithium prices and has stated that it expects the price of lithium carbonate for Olaroz to increase by 25 per cent during the second half of FY 2018.
Orocobre is trying to raise capital to expand its Olaroz project, a development in partnership with Japan's Toyota Tsusho.
The lithium miner stated that the expansion of the Olaroz project is expected to cost $340 million.
Orocobre's share of the Phase 2 expansion capital expenditure is to be funded via a $361 million capital raising comprised of a $282 million strategic placement to Toyota Tsusho and an entitlement offer.
Orocobre Limited shareholders have benefited from healthy gains exceeding 50 per cent over the past year, along with other companies with a hand in the lithium sector such as Kidman Resources Ltd (ASX: KDR), Argosy Minerals Limited (ASX: AGY) and Galaxy Resources Limited (ASX: GXY).
Orocobre shares are expected to resume trading on Friday, 19 November.
