Orbite provides HPA construction update

Orbite Technologies Inc. announced today that a dispute, now resolved, with one of its contractors will push the end of construction of its HPA production facility and start of commercial production into Q1 2016.

An Orbite contractor, in breach of the contract between the parties, withheld from release to Orbite certain parts and equipment in its possession, which are critical to the completion of the calcination system assembly. However, a settlement has now been reached; the equipment was released on December 14th and has arrived in Cap-Chat.

In spite of this, construction in Cap-Chat progressed well, albeit the installation of certain systems and piping is possible only subsequent to installation of the released equipment. Following the dispute settlement, it was determined that working through the Quebec end-of-year construction holiday (December 18th - January 3rd) would not result in commercial production prior to year-end. Furthermore, the construction industry overtime costs associated with working through this period are such that this was deemed a non-beneficial use of funds. Orbite personnel will however continue with commissioning activities, and notably will be proceeding with the cold start-up testing of the calciner and related acid capture system during this period.

"Although the delay is disappointing both for shareholders and the company itself, the fact remains that construction is near complete, system commissioning is progressing well, and we are confident of a successful plant start-up in Q1," stated Glenn Kelly, CEO of Orbite. "We look forward to entering the commercial phase of our development and will report on progress early in the New Year."

Even while the dispute was ongoing, the company was able to meet a number of planned construction milestones and continued with the commissioning of individual systems.

Decomposer and Calciner, and other Major Mechanical -- Mecanique CNC Inc. has completed the installation of all major mechanical equipment and vessels.
-- CNC has completed the installation of the main process piping and equipment attached to the decomposer and calciner.

Steam Piping

-- High temperature steam piping installation is materially complete, except for the portions related to the withheld equipment.

Electrical and Instrumentation

-- Electrical and instrumentation wire pulling is complete. All communications-instrumentation cabinets are installed and tested.
-- Installation of specialized power cables to the calciner and decomposer will be completed after installation of the withheld equipment.

Structural, buildings and foundations

-- Materially complete.

Ventilation and Insulation

-- Ventilation system installation is materially complete. Insulation work will be completed subsequent to the installation of withheld equipment.

Operational Readiness

-- Commissioning of the following sections was completed successfully:
-- Hydroxide feedstock system; first hydroxide feedstock to be delivered this week.
-- Air system to calcination.
-- Steam system to calcination.