Core Lithium Ltd (ASX:CXO) has secured its first European offtake deal after signing a non-binding offtake term sheet with Transamine Trading for the supply of 50,000 tonnes per annum of spodumene concentrate from the Finniss Lithium Project near Darwin.
This offtake comes in addition to Core’s existing binding offtake agreement with Yahua for 75,000 tonnes per annum.
The term sheet paves the way for a binding offtake agreement, which is anticipated later in 2020 and subject to due diligence and a final investment decision (FID) on the Finniss Project by Core.
Focused on project development
Managing director Stephen Biggins said this was a big step in cementing Core’s relationship with this offtake partner.
“Transamine, among other existing and prospective offtake partners, has recognised the excellent prospects for Core Lithium to become an efficient and reliable supplier of high-quality spodumene concentrate from Darwin, with the support of the Northern Territory Government.
“Core Lithium remains focused on developing the Finniss Lithium Project for the benefit of all stakeholders including the Northern Territory and the growing number of offtake partners and project financiers.
“We are encouraged by the ongoing confidence in lithium demand and project support despite the current challenging environment as we progress towards construction, commissioning and production.”
The initial supply period is for five years, with the option to extend in anticipation of the longer life of mine in a forthcoming revised feasibility study on the Finniss project.
Reinforces confidence in project
The signing of the term sheet with Transamine is the result of in-depth engagement with several potential offtake parties and project financiers, which have accelerated since the recent NT Government approval for mining and production from the project.
The company believes this offtake term sheet reinforces the confidence in the Finniss Project and the long-term demand fundamentals of lithium beyond current COVID-19 challenges.
Core continues to actively negotiate with a number of parties for the remaining planned production.
Suspension from official quotation
The securities of Core have been suspended from ASX quotation immediately under Listing Rule 17.2, at the request of CXO and pending the release of an announcement in relation to a capital raising.
The suspension will remain in place until the beginning of trade on Wednesday, May 20, or when an announcement is released to the market.