Proactive Investors - Run By Investors For Investors
Why invest in CXO?
Core Lithium Ltd: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Core Exploration targets lithium concentrate production at Finniss by late 2019

Preliminary feasibility study (PFS) completed, definitive feasibility study (DFS) scheduled for delivery by the end of 2018.
lithium rock
INVESTMENT OVERVIEW: CXO The Big Picture
Shares are trading 7.5% higher intra-day, at 4.3 cents

Core Exploration Ltd (ASX:CXO) is on the path to low-capex lithium concentrate production by late 2019 at its Finniss Lithium Project near Darwin in the Northern Territory.

The company’s pre-feasibility study (PFS) clearly demonstrates the Finniss project economics to be compelling, with globally competitive cash costs that result in high operating margins and rapid capital payback.

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

The Grants lithium deposit, a key component of its Finniss Lithium Project, 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 recent spot concentrate price of US$895 per tonne is realised.

The Finniss project comprises over 500 square kilometres of tenements across the Bynoe Pegmatite Field, with exploration results confirming that ore grade lithium mineralisation is widespread.

Core’s 2018 drilling is aimed at growing the mineral resource to underpin a potential long-life lithium mining and production operation.

Countdown to first lithium production

The company is focused on completing a definitive feasibility study (DFS) later this year for the development of mining and producing lithium concentrate.

Core aims to complete regulatory approvals, financing and internal approvals before commencing production at Grants by the end of 2019.

READ: Core Exploration receives lithium assays revealing BP33 potential

Core has another promising area within the project, the BP33 prospect, where recent drilling returned high-grade lithium results.

Highlight results include 63 metres at 1.50% lithium oxide from 76 metres, 43 metres at 1.78% lithium oxide from 157 metres and 59 metres at 1.59% lithium oxide from 198 metres.

The PFS focussed only on the Grants deposit, with BP33 drilling results to be included in the 2018 DFS.

Drilling programs underway

The follow-up resource extension drill program at Grants is progressing with results expected this month.

Exploration drilling is also underway at the spodumene pegmatite at Sandras, Booths, Lees, Carlton and Hang Gong targets.

READ: Core Exploration new test work shows improved lithium recoveries

Core recently received updated metallurgical test work results showing improved lithium recoveries for samples from the Finniss project.

High grade 5.5% lithium concentrate was produced at an elevated recovery of 79%.

The new results are expected to further enhance the already robust economics demonstrated in the June 2018 PFS.

Test work demonstrates the viability of a simple gravity separation plant using industry standard dense media separation (DMS).

Notably, the further test work demonstrates a DMS circuit can easily produce a 6.1% lithium concentrate at good commercial recoveries of 69%.

Near Darwin Port - Australia’s nearest port to China

It is worth noting that the Finniss Lithium Project has a capex of only $53.5 million, with US$20 million already committed by major lithium offtake partner Sichuan Yahua Industrial Group.

Sichuan Yahua is a $2.4 billion listed company on the Shenzhen Stock Exchange and one of China’s largest lithium hydroxide and carbonate producers.

Core’s project can be considered fully funded when Sichuan Yahua’s US$20 million is combined with the US$35 million pre-payment facility with Shandong RuiFu Lithium Co Ltd.

READ: Core Exploration enters lithium off-take term sheet with US$35 million prepayment, share rise

Core and RuiFu have signed a term sheet for a lithium concentrate off-take agreement for up to 150,000 tonnes per annum for up to five years.

The prepayment facility will see RuiFu prepay US$35 million in stages to Core for lithium concentrate to be purchased under the off-take agreement.

RuiFu also intends to increase its equity holding to 10% in Core through a share placement, which would raise an estimated $3 million at 5 cents per share.

ASX lithium sector: comparative market capitalisations

Significantly, core's enterprise value of about $20 million offers substantial leverage to development and exploration.

View full CXO profile View Profile

Core Lithium Ltd Timeline

Related Articles

1530095749_shutterstock_102742847.jpg
June 27 2018
Metalla's royalty portfolio looks set to grow and grow
coal
September 04 2018
Regency’s partner LHC (Legacy Hill Coal) is the operator of MET and has a 53% stake, with the UK business owning the rest
scandium
Thu
Post-tax net present value of $234 million and a fast payback period of 5.3 years based on average scandium oxide price of US$1,550 per kilogram.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use