Core Lithium Ltd (ASX:CXO) has agreed to the sale of its first spodumene concentrate from the Finniss operations in Australia's Northern Territory with long-term customer Sichuan Yahua (Yahua).
The agreement comes just weeks after the company hit its first spodumene concentrate production milestone at the Finniss Lithium Operation within close proximity to the port of Darwin.
Yahua will receive a parcel of around 3,500 tonnes produced during Finniss DMS (Dense Media Separation) commissioning.
It will be sold on a FOB basis and is expected to be ready for shipment by the end of April 2023.
Yahua will also purchase an additional 15,000 tonnes of concentrate under a pre-payment arrangement that will be produced from ore to be mined from Core’s Grants pit.
Building the first concentrate shipment stockpile from the Finniss Lithium Operation.
Long term agreement
Core and Yahua have a long-standing agreement that first came to pass in 2019.
The agreements for the current tonnes are in addition to the existing binding agreement to sell Yahua 300,000 tonnes over four years, signed in 2019.
Yahua will pay 80% of the volume by April 2023 with the balance due upon shipment.
Pricing for both cargos is linked to the Fastmarkets (spodumene 6% CIF China) price with no floor or ceiling.
“It is pleasing to be able to announce the contract for sale of our first concentrate products to Yahua who have been a long-term partner for Core and a strong supporter of the Finniss Project,” Core Lithium CEO Gareth Manderson said.
“We are pleased to put these mutually beneficial agreements in place which sees us sell our high-quality spodumene concentrate to a valued customer. The prepayment provides additional working capital and assists Core to manage our cash flow as we continue to ramp up operations.
“Commencement of concentrate production early this year and the agreement for the first sale of concentrate from the Finniss mine demonstrates that Core continues to deliver against its milestones.”