Core Lithium Ltd (ASX:CXO) can begin construction at its flagship fully-financed Finniss Lithium Project near Darwin within months after it signed a mining services contract with Lucas Total Contract Solutions.
Lucas has signed a three-year deal to conduct open pit mining and associated services at the Grants pit, the first mine that will be developed at Finniss ahead of expected lithium production in 2022.
The scope of work covers the construction and mining of the Grants open pit mine including clear and grub, topsoil management, pads, roads, dumps, dams, bunds and water controls and open pit mining (load and haul and drill and blast).
Taking advantage of spodumene prices
Core managing director Stephen Biggins said the deal represented a major step forward for the company as it moved towards first construction at Finniss this year.
It is also another key step toward a final investment decision for the project in coming weeks.
“Advanced discussions with a high-calibre and respected team such as Lucas with proven lithium mining experience has facilitated this step and we are looking forward to partnering with this key services provider to deliver Australia’s next significant new lithium mine,” Biggins said.
“With recent spodumene spot sales above US$2,000 per tonne, Core is the only Australia-focused, ASX-listed company forecast to join the ranks of new spodumene producers between now and the end of 2022 in a position to take advantage of these high prices.”
Shares have been as much as 11.2% higher to A$0.45 while Core’s market cap before today’s trade was approximately A$626.9 million.
Finniss mine development
Core describes Finniss as Australia’s most advanced new lithium project on the ASX, placing it at the front of the line of new global lithium production.
The project lies within 25 kilometres of a port, power station, gas, rail and one hour by sealed road to a workforce accommodated in Darwin, giving it prime access to the Asian market, which is driving lithium demand.
Core is exceptionally well-funded, having recently raised $25 million in its strongly supported share purchase plan, considerably higher than the initial target of A$15 million.
The share purchase plan complemented the company’s recent placement to sophisticated and institutional investors to raise a whopping $91 million and the recent Ganfeng equity investment of $34 million, taking total proceeds to $150 million.
This significant interest means stage one of project development of Finniss is fully funded, with the company on track for first production in late 2022.
A key appraisal of the project has also revealed the asset boasts the lowest spodumene concentrate transport emissions of any other Australian lithium play.
The results form part of a greenhouse gas assessment, which sustainability consultant ERM Group has just completed at the lithium play, evaluating its mining, power, haulage and downstream processing operations.
- Daniel Paproth