Orbite Provides Corporate Update
LAVAL, Quebec, Jan. 30, 2019 (GLOBE NEWSWIRE) — Orbite Technologies Inc. (NEX: ORT.H) (“Orbite” or the “Company”) today provided an update on its progress in implementing the solutions to resolve the issues encountered with the calcination equipment at its HPA Plant, as part of its plan to emerge from CCAA protection.
Definitions of the capitalized terms used herein can be found at the end of this press release.
Update on Outotec Calcination Equipment
- Following the settlement transaction with the calcination equipment supplier in July, the technical teams of both Outotec and the Company mobilized in August 2018 to progress on the detailed engineering and the order of the materials required for the modifications to the calcination equipment.
- Simultaneously, Orbite completed the design of the changes to the upstream sections of the HPA Plant resulting from the modifications to the calcination equipment.
- The detailed engineering and the order of materials for the modifications to the calcination equipment and to the upstream sections of the HPA Plant are now materially complete.
- All long lead items have been ordered and the critical path remains the delivery and the installation of the refractory bricks and specialty components required for certain modifications inside the decomposer. They have arrived in Quebec and delivery at the site is slated for this week, as originally planned.
- Replacement of the refractory bricks will start during the month of February 2019 and the modifications to the calcination equipment are expected to be completed at the end of March 2019.
- Accordingly, the Company plans on starting up the hydrometallurgical section of the HPA Plant in February 2019 to subsequently re-commence the production of ACH crystals required to feed the pyro metallurgical section (decomposition and calcination) which is expected to be started up at the beginning of the second quarter of 2019.
- The required modifications, to both the calcination equipment and upstream sections of the plant, are being carried out by both Orbite personnel and outside contractors and are progressing as per project plan and within budget. However, disbursements were incurred more slowly than anticipated which allowed Orbite to extend its cash flow until March 2019.
- In order to implement the above, the Company has progressively recalled its engineering and operating/maintenance personnel. The recall and hiring of operating personnel will continue during the first quarter of 2019 in preparation for the start-up of operations.
Update on Financial Situation
- As previously disclosed, the Company is in advanced discussions with third parties for additional funding of approximately $2.7 million.
- According to the Company’s cashflow projections filed with the CCAA Court, such additional funds would extend the cash flow into June 2019 and allow the Company to finalize the modifications to the calcination equipment, start-up the HPA Plant and produce a limited quantity of HPA to demonstrate the Plant’s capacity. It is then expected that the production activities will be put on hold while Orbite emerges from CCAA protection.
- As announced on October 4, 2018, the customary audit of the Government of Québec for the 2016 ITC was completed. Orbite received an additional installment of $3.8 million in December from the Government of Québec towards its 2016 ITC claimed. To date, a total of $8.8 million has been received and deposited in a segregated account and serves as security for the convertible debentures issued in August 2016. The audit for the amounts claimed as ITC for 2017 is now under way.
CCAA Court extends the Stay Period
As announced on July 16, 2018, the CCAA Court issued an order pursuant to the CCAA providing for a Stay Period until February 1, 2019. On January 30, 2019 the CCAA Court granted a motion filed by the Company and issued the following orders:
- extending the Stay Period until March 8, 2019; and
- relieving Orbite from its obligation to call the annual meeting of shareholders on or before March 15, 2019 and directing Orbite to call such annual meeting, as the case may be, by October 31, 2019.
The Company will provide further updates as developments occur.
There can be no guarantees that Company will otherwise be successful in its restructuring efforts and will emerge from CCAA protection.
CCAA: Companies’ Creditors Arrangement Act.
CCAA Court: Quebec Superior Court.
HPA Plant: the Company’s high purity alumina (HPA) plant, in Cap-Chat, Québec.
ACH: aluminum chloride hexahydrate, the precursor to high purity alumina.
ITC: Québec Investment Tax Credits related to equipment purchased by Orbite for manufacturing and processing in the Gaspé region.
Stay Period: Period of time during which there is a stay of all proceedings against the Company.
Orbite Technologies Inc. is a Canadian cleantech company whose innovative and proprietary processes are expected to produce alumina and other high-value products, such as rare earth and rare metal oxides, at one of the lowest costs in the industry, and in a sustainable fashion, using feedstocks that include aluminous clay, kaolin, nepheline, bauxite, red mud, fly ash as well as serpentine residues from chrysotile processing sites. Orbite is currently in the process of finalizing its first commercial high-purity alumina (HPA) production plant in Cap-Chat, Québec and has completed the basic engineering for a proposed smelter-grade alumina (SGA) production plant, which would use clay mined from its Grande-Vallée deposit. The Company’s portfolio contains 15 intellectual property families, including 45 patents and 20 pending patent applications in 11 different countries and regions. The Company also operates a state of the art technology development center in Laval, Québec, where its technologies are developed and validated.
Certain information contained in this document may include “forward-looking information”. Without limiting the foregoing, the information and any forward-looking information include statements regarding projects, costs, objectives and future returns of the Company or hypotheses underlying these items. In this document, words such as “may”,” confident”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or the Company management’s good-faith beliefs with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control. Risks, uncertainties and other factors that could affect anticipated results and future events also include, but are not limited to, those described in the section of the Management’s Discussion and Analysis (MD&A) entitled “Risk and Uncertainties” as filed on July 28, 2017 on SEDAR, including those under the headings “Going Concerns”, Commercial Operation of HPA Plant”, “We will need to raise capital to continue our growth” and “Development Goals and Time Frames” described in the MD&A filed on March 31, 2017.
The Company does not intend, nor does it undertake, any obligation to update or revise any forward-looking information or statements contained in this document to reflect subsequent information, events or circumstances or otherwise, except as required by applicable laws.
FOR MORE INFORMATION, PLEASE CONTACT:
Orbite Technologies Inc.
Geneviève Marchand, Corporate Secretary
Tel.: 450 680-3341