viewCore Lithium Ltd

Core Lithium on track for final investment decision on Finniss Project by mid-2021


The company is positioned to be Australia’s next lithium producer through the development of its flagship Finniss Lithium Project and has already established binding and non-binding offtake agreements within the lithium battery supply chain and EV industry.

Core Lithium Ltd - Core Lithium on track for final investment decision or Finnis Project by mid-2021

Quick facts: Core Lithium Ltd

Price: 0.205 AUD

Market: ASX
Market Cap: $205.5 m

Core Lithium Ltd (ASX:CXO) focused on enhancing the value and potential of its fully-owned Finniss Lithium Project in the Northern Territory over the September quarter as it drives the project toward a final investment decision by mid-2021.

A 4,000-5,000 metre resource expansion drilling program has commenced at Finniss and is expected to be completed this month.

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

Notably, the last holes drilled at BP33 showcased an intersection of 107 metres at 1.70% lithium oxide that is open along strike in both directions and at depth.

The ore body at Grants is open below the intersection of 48 metres at 1.59% lithium oxide from 224 metres and the mining engineering team is working to optimise the depth of the Grants open pit to complement an extended underground mining operation to exploit the deeper extents of the Grants ore body.

Environmental Impact Assessments

Core received approval from the Northern Territory Environmental Protection Authority (EPA) to extend the operation of the Grants open pit mine and the proposed 1 million tonne DMS process plant to seven years, which enables subsequent processing of spodumene pegmatite from the nearby BP33 and Carlton deposits at the proposed processing facility at Grants.

The NT EPA is also progressing an environmental impact assessment of the company’s proposed BP33 underground mine under the Environment Protection Act 2019.

The Supplementary Environmental Report (SER) will take into account prior submissions Core made and received for the Grants deposit, and the company anticipates its proposed BP33 Underground mine will meet the strict environmental requirements and guidelines set out by the NT EPA.

Core plans to prepare and submit the SER in the near term.

Lithium resources within Core’s 100%-owned Finniss Lithium Project

Adelaide River Gold Project

In July, Core announced results from a detailed review of historic data for the Adelaide River Gold Project, located 25 kilometres southeast of the Finniss Lithium Project.

Rock chip gold grades of up to 170 g/t gold were identified at the Possum prospect and gold grades of 16.4 g/t, 10.5 g/t, 6.4 g/t and 5 g/t at the Happy Valley prospect.

Similarly, widespread elevated gold, with values including 11.3 g/t, 8.3 g/t, 7 g/t, 5.3 g/t, 3.7 g/t, 2.9 g/t, 2.6 g/t, 1.9 g/t and 1.7 g/t were identified at the Croc Pate prospect.

Adelaide River Mine prospect also contains significant gold assays in rock chips and drill core of 56.2 g/t, 3.1 g/t, 2.7 g/t, 1.9 g/t and 1.2 g/t.

The Adelaide River prospects have received limited exploration to date and Core sees an opportunity to take a more consolidated and systematic approach to exploration going forwards.

Bynoe Gold Project

In September, Core revealed assays from the gold re-assay program on the Bynoe Gold Project had resulted in new targets and prospects emerging and existing gold targets being affirmed.

A result of 828 parts per billion gold in a conventional soil sample originally collected for lithium was received from a new prospect named Pickled Parrot where visible gold was also found at surface.

Results were re-assayed, generating several new targets, and regional mapping and reconnaissance rock chip sampling have also led to the discovery of a number of exciting gold prospects, including Covidicus West - where one rock chip assayed over 100 g/t gold and numerous others are above 10 g/t.

The company recently announced the Bynoe Project resources of 15 million tonnes at 1.3% lithium oxide and ore reserves supporting a seven-year LOM and has subsequentially paid Liontown Resources Limited (ASX:LTR) $1.5 million as part of the acquisition terms.

Location of Adelaide River Project (EL31886) in relation to mineral occurrences in the Pine Creek Orogen.

FID targeted in mid-2021

The company is now targeting a final investment decision (FID) for Finniss in mid-2021 to enable a production start date in H2 2022 - timed to take advantage of forecast higher lithium demand and prices.

The revised timing of the optimised feasibility study update in quarter one 2021 has been carefully considered, with the aim of maximising the best possible outcome for the Finniss Project without delaying Core’s capability to achieve target FID by mid-2021.

Notably, the Local Jobs Fund (LJF) commitment by the NT Government is a strong endorsement of the Finniss Project and expected to contribute to the lower start-up capex needs.

The concessional interest rate is expected to reduce the overall cost of finance and the planned upside opportunities being delivered later this year are expected to provide even more value to Finniss when the updated feasibility study is released in early 2021.

Offtake agreements

During the September quarter, Core announced that discussions and negotiations with a potential new offtake partner, Xinfeng, had culminated in the signing of a non-binding memorandum of understanding (MOU) for the supply of 20,000-30,000 tonnes per annum of spodumene concentrate for three years from Finniss.

This new offtake agreement supplements Core’s existing binding offtake agreement with Yahua for 75,000 tonnes per annum and the company’s non-binding MOU with Transamine Trading for 50,000 tonnes per annum.

These offtake agreements now represent approximately 85% of Core’s current production capacity of 175,000 tonnes per annum.

The term sheet with Xinfeng paves the way for a binding offtake agreement and also holds the potential for project finance, subject to due diligence by Xinfeng and FID for Finniss by Core.

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on 5/5/20

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