RB Energy (TSX:RBI, Stock Forum) announced today that the company had brought its Quebec Lithium Plant back online after a scheduled maintenance and upgrade shutdown which was expected to allow it to produce commercial volumes of technical-grade material and enable volume production of battery-grade material.
According to the news release, repairs and updates included a re-line of the rod mill, modifications to the grizzly in the crushing circuit and the tie-in of the new primary optical ore sorter. Commissioning of the ore sorter is anticipated to be completed over the next couple of months.
The company also announced that the minor road diversion through the open pit is nearing completion with the construction of a natural gas pipeline to the mine site well underway which is expected to significantly reduce costs by switching from trucked-in propane to natural gas.
However, the unexpected commissioning issues associated with the kiln and combined with the conversion of technical to battery-grade lithium carbonate have postponed commissioning timelines and delayed production of commercial volumes of lithium carbonate for sale.
Therefore the company announced it does not expect to hit its original 2014 production targets and anticipates that commercial production levels will not be realized until the final quarter of 2014 with name plate production possibly being delayed until Q1 2015.
These delays have caused an accelerated depletion of the company's coffers that were not anticipated, therefore the company is searching out additional sources of funding to complete the commissioning, achieve commercial production and realize positive operating cash flow.
If financing cannot be found, the company may have to delay, postpone or interrupt operations of the Quebec Lithium project until a solution can be found.
Company president and CEO, Rick Clark, commented on the company's present predicament, “We are at a critical time in our commissioning efforts at the Quebec Lithium operation. The important step of maintaining continuous production will be achieved after overcoming our unexpected operational challenges.”
He went on to illustrate, “Our toes are on the finish line and we are committed to completing the commissioning process as quickly and efficiently as possible. To achieve this, we are engaged in financing discussions with various parties to secure our short term cash flow requirements.”
Then he concluded, “We are in a unique position in this very exciting and growing power storage market. Lithium is the cornerstone of this market and Quebec Lithium is the only hard rock lithium operation in North America and at full production will be one of the largest producers in the world.”
RB Energy was in the news recently when the company announced AGM voting results in the middle of June.
Shares fell 33.33% on the news to $0.34 per share.
Currently there are 263.3m outstanding shares with a market cap of $89.5 million.