viewCore Lithium Ltd

Core Lithium makes solid progress on road to becoming Australia’s next lithium producer

The company is well-funded to carry out exploration activities aimed at upgrading resources and reserves at the Finniss Lithium Project in the Northern Territory.

Core Lithium Ltd - Core Lithium makes solid progress on road to becoming Australia’s next lithium producer
Core Lithium has raised A$40 million following strong support from global institutions.

Core Lithium Ltd (ASX:CXO) (OTCMKTS:CXOXF) is making solid progress in its aim to become Australia’s next lithium producer through the development of its flagship Finniss Lithium Project in the Northern Territory.

The company’s plans are supported by already established binding and non-binding offtake agreements, one of which may see it become part of Tesla Inc’s (NASDAQ:TSLA) supply chain.

Core has released a new investor presentation outlining its near-future growth potential along with the progress made in 2020.

Aggressive plans

Finniss is Australia’s most advanced lithium project with all necessary government approvals in place and construction plans being formulated.

The company has chalked out an aggressive plan for the year ahead that includes completing a definitive feasibility study in the second quarter and a final investment decision in the third quarter with the intention to start construction in the second half of 2021.

With a capex budget of A$85 million, the company is eyeing annual revenue of A$160 million from minimum production of 175,000 tonnes.

Finniss Lithium Project

The flagship Finniss project is adjacent to world-class infrastructure, being only 25 kilometres from Australia closest port to Asia and nearby Darwin capital city infrastructure.

This project will employ simple dense material separation (DMS), which avoids problems of other new flotation projects burdened by high capex, large debt and high finance costs along with high operating costs.

Deployment of DMS will help the company produce 6% lithium oxide concentrate at 70% recovery with low iron and other contaminants.

Potential to be part of Tesla chain

Earlier this year, the company’s largest shareholder and offtake partner, China’s Sichuan Yahua Industrial Group, signed a deal to supply battery-grade lithium hydroxide to US electric vehicle manufacturer Tesla over the next five years.

It is expected that Core’s near-construction-ready project will be a key source of spodumene concentrate for Yahua to fulfil its mandate with Tesla and other customers.

Yahua currently holds a three-year, 75,000 tonnes per annum offtake agreement with Core.

The news was cheered by investors sending the company’s share price to a record high last month.

Last year, the company secured its first European offtake with the signing of a non-binding Memorandum of Understanding (MOU) with Geneva-based Transamine for around 50,000 tonnes of spodumene concentrate for over five years.

Resource extensions

The company has been granted a mineral lease (ML) for the BP33 deposit within the Finniss Project – the second lithium mineral lease in the Northern Territory awarded to the company after the Grants deposit in 2019.

Drilling has achieved excellent core recovery throughout with a majority of the planned targets intersected as planned.

Geotechnical diamond drilling at Grants and BP33 that will contribute to the DFS has been completed and logging will be completed later this month.

Recent mine planning and resource assessment studies have highlighted opportunities to further extend resources and reserves at Grants and BP33, particularly in light of efficient underground mining methods verified in the pre-feasibility study (PFS).

Besides this, the company is undertaking brownfields exploration of Far West, Shirleys, BP31, Ahoy, Talmina, Talmina W, Saffums and other prospects.

Well-funded for drilling

The company has around A$40 million available to carry out activities to extend and expand the mineral resource estimate with infill and resource drilling, which is expected to restart in the second quarter of 2021.

The company recently undertook a placement exercise, which was well supported by global institutional investors, to raise A$40 million.

With the availability of funds to boost growth, the company is also open to the idea of acquiring additional assets adjacent to its base in an effort to increase resources and earnings.

Quick facts: Core Lithium Ltd

Price: 0.2225 AUD

Market: ASX
Market Cap: $259.82 m

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