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Core Exploration’s pre-feasibility study delivers robust economics for Grants Lithium Deposit

Pre-Feasibility study (PFS) points to a low-cost lithium operation generating significant surplus cashflow.
project area
The PFS confirms Grants as a simple but high value operation

Core Exploration Ltd (ASX:CXO) has delivered the pre-feasibility study (PFS) for the Grants Lithium Deposit, a key component of its Finniss Lithium Project, near Darwin in the Northern Territory.

The PFS clearly demonstrates Finniss Project economics to be compelling, with globally competitive cash costs that result in high operating margins and rapid capital payback.

Moreover, existing road infrastructure will provide access for daily road train movements of concentrate product for shipment to the Darwin Port, located 88 kilometres from the project area.

Core’s Grants lithium deposit is expected to generate a net present value (NPV) of $140 million (pre-tax) with an internal rate of return (IRR) of 142% at an average concentrate price of US$649 per tonne.

Interestingly, the NPV is anticipated to increases to $246 million if the current spot concentrate price of US$895 per tonne is realised.

READ: Core Exploration expands lithium JORC resource by 70%

The PFS points to a low-cost lithium operation generating significant surplus cashflow with the following highlights:

• $346 million in revenue and over $168 million in free cashflow (pre-tax), with a rapid payback period of less than 12 months;

• Initial operational mine life of 26 months, producing a high-quality spodumene concentrate of 5% lithium oxide;

• 1 million tonnes per annum processing plant, producing 225,000 tonnes per annum concentrate grading 5% lithium oxide;

• Low capital cost of $53.5 million (including contingencies of 15%); and

• Operating costs of less than US$279 per tonne concentrate ($372 per tonne), including royalties, generating a robust operating margin of more than US$370 per tonne.

READ: Core Exploration strengthens China relationship with $1.4 million raise

Core managing director Stephen Biggins said: “The results of the pre-feasibility study are highly encouraging and puts the Finniss Project on track to become the Northern Territory’s first producing lithium mine.

“The PFS confirms Grants as a simple but high value operation, with minimal spend required on infrastructure thanks to its simple mineralogy and location near Darwin Port.

“With the successful PFS under our belt, we will now look to complete a definitive feasibility study on Grants before the end of the year, while also progressing our development initiatives at the adjacent BP33 deposit, which has considerable potential to further enhance the robustness of the Finniss Project.

“On behalf of the board, I would like to thank everyone involved in this process for their support and for their hard work to-date. We look forward to further progressing Grants into production in 2019.”

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