During 2018, the company will continue to focus on developing the Grant deposit into a long-life lithium spodumene concentrate operation.
Binding offtake agreement secures project’s future
Core’s plans have been enhanced by the signing of a binding lithium offtake agreement and a conditional US$20 million prepayment agreement with Ya Hua International Investment and Development Co.
Significantly, Ya Hua is one of China’s largest lithium producers and is wholly-owned by the billion dollar Sichuan Yahua Industrial Group Co Ltd (SHE: 002497).
The offtake agreement is for the supply of one million dry metric tonnes of direct shipping lithium ore from the Grants lithium deposit.
By completing the second tranche of a $2 million share placement, Ya Hua has also become a significant shareholder in Core with a circa 7% holding.
Drilling targets a resource upgrade
Core recently recommenced drilling at Grants deposit to upgrade the confidence level of the initial high-grade lithium resource revealed in 2017 of 1.8 million tonnes at 1.5% lithium.
The resource upgrade is expected in March 2018 and will feed into a pre-feasibility study, which is underway.
High-grade lithium intersections at BP33
Core has confirmed wide and high-grade lithium intersections at the BP33 pegmatite, located 5 kilometres from the Grants deposit.
New high-grade assay results received from diamond drilling completed in late 2017 at BP33 include 36 metres at 1.61% lithium from 135 metres Including 14 metres at 2.05% lithium.
Core is planning drilling at both BP32 and BP32W prospects as soon as the 2018 dry season commences, to test the continuity and grade of these pegmatites adjacent and along strike from the high-grade BP33.
Recent acquisition delivering results
The Finniss and Bynoe projects cover a combined area of over 500 square kilometres of granted tenements near Darwin.
Core’s combination of two major lithium projects in the Northern Territory marked a key commercial milestone in building an expanded lithium project in an ideal location.
Bynoe delivers immediate positive results for Core
Earlier this month, Core received high-grade lithium assay results from drilling that took place at Bynoe in December 2017.
The assays received from the historical pegmatite mines include:
• 10 metres at 1.6% lithium from 83 metres at the Carlton prospect; and
• 5 metres at 2.2% lithium from 70 metres at the Hang Gong prospect, including 1 metre at 3% lithium from 70 metres.
Core will commence follow up drilling of these prospects as soon as the dry season starts.
Pre-feasibility study due this quarter
The Grants pre-feasibility study is continuing, including additional drilling to upgrade the resource.
Core is expected to report the updated resource by the end of the March 2018 quarter and the results of its pre-feasibility study shortly thereafter.
Strong cash position and clarity on project funding
The company is well funded to further its project objectives with circa $4.6 million in cash at the end of the December 2017 quarter.
The funding position was supported by the $2 million placement to Ya Hua completed in late November 2017.
The equity stake taken by Ya Hua signifies a valuable strategic relationship.
It is a strong endorsement of the Finniss Lithium Project and provides substantial clarity on project funding for Core
Project has substantial infrastructure advantages
The company’s plan to develop the Finniss Lithium Project is supported by what is arguably the best logistics chain to China of any Australian lithium project as it is within 25 kilometres of Darwin Port.
It is worth noting that the Darwin Port is Australia’s nearest port to China.
The project also has substantial infrastructure advantages, including being close to sealed road, grid power, gas and rail infrastructure.
Narrative around lithium’s future continues to gain momentum
Elon Musk, chief executive of Tesla Inc (NASDAQ:TLSA) recently outlined his vision for a Tesla Motors semi-trailer truck.
His vision is to be making 100,000 electric semi-trailer trucks a year within four years.
Meanwhile, in the short term, Tesla aims to be producing 5,000 Tesla Model 3 cars per week by late June 2018.
With companies like Tesla cementing electric vehicles in the world’s future, the outlook for lithium demand remains strong.