Core Lithium Ltd (ASX:CXO) has pressed the Final Investment Decision (FID) button that will see the Finniss Project near Darwin become the Northern Territory’s first lithium mine and Australia’s next producer of the key battery metal.
The Board of Directors’ FID green light will see project execution kickoff immediately and puts the company on track to commission the DMS plant and deliver first lithium concentrate in the fourth quarter of 2022.
Mobilisation and site activities will begin during October with 250 jobs to be created during construction and operations.
“A significant milestone”
This key decision places Core as the only new Australian company forecast to start lithium production in 2022 and comes during a time of strong and improving lithium market fundamentals with resulting high prices.
Core Lithium’s non-executive chairman Greg English said: “This is a significant milestone, not just for Core, but also for the Northern Territory.
"We are delighted to be developing the Territory’s first lithium project, investing in the local economy and creating hundreds of new jobs on a project that will deliver lasting value for all Core stakeholders.
“It is a credit to Core’s management team, led by managing director Stephen Biggins, and the strong and positive support our company has received from the NT Government that we can today announce the go-ahead for Finniss.”
Shares higher
Shares are 5.13% higher to A$0.41 while the company's market cap pre-open was approximately A$603.7 million.
Core is committed to delivering one of the most capital efficient and cost-competitive lithium projects in Australia with the FID following hot on the heels of awarding of the mining services contract to Lucas Total Contract Solutions and process plant EPC contract to Primero Group.
Work to start next month
A range of site establishment works will start in October. Lucas will support site establishment activities in preparation for the start of mining followed by Dense Media Separation (DMS) process plant construction by Primero beginning in March 2022.
Core Lithium managing director Stephen Biggins said: “The board’s support for Finniss’ development is the culmination of over five years of hard work to put together a low-risk, capital-efficient and high-margin lithium project that will deliver benefits for our shareholders, our employees, our partners and all our stakeholders.
“FID places Core firmly at the front of the line of new global lithium production just at the right time as lithium demand and prices are increasing rapidly.
“The project and FID are underpinned by high-grade lithium deposits that have the potential to support long-term lithium supply from northern Australia, quality lithium offtake partners and a highly engaged and supportive NT Government, Finniss will become Australia’s next lithium producer.
“On behalf of the Core management team, I thank our board for their support. I also extend thanks to the NT Government for delivering on its promise that the Territory is a Tier 1 mining jurisdiction.”
Strong infrastructure
The construction-ready Finniss Project lies within 25 kilometres of port, power station, gas, rail and one hour by sealed road to workforce accommodated in Darwin and, importantly, to Darwin Port - Australia’s nearest port to Asia.
Finniss has gained all NT Government approvals and is fully funded following the raising of A$116 million from institutional investors and shareholders. In addition, Ganfeng has signed a 4-year offtake agreement with Core and agreed to provide A$34 million in new equity, subject to Chinese Government approvals.
Offtake agreements
Around 80% of Finniss’ initial output is covered under four-year offtake agreements with Ganfeng, one of the world’s largest lithium producers by production capacity, and Yahua, a key lithium supplier to Tesla.
A modest project capex and strong cash flows as outlined in the recent project DFS enable rapid payback from the sale of the first concentrate and confirms Finniss as Australia’s lowest capital intensity lithium project.
High-grade lithium reserves and resources at Finniss combined with positive spodumene metallurgy, will enable Core to produce high quality, coarse concentrate using gravity only DMS processing.
The construction of a simple 1 million tonnes per annum DMS processing plant will enable Core to produce high-quality concentrate over its life.
Core is also investing in plans to further extend and expand production from the project.
Biggins added: “The Core team looks forward to getting feet on the ground immediately and commencing construction, in line with our schedule to produce first lithium concentrate before the end of next year as Australia’s next lithium producer.”
“Good news for the Territory”
Northern Territory Minister for Mining and Industry Nicole Manison said: “Today’s milestone achieved by the Finniss Lithium Project is very good news for the Territory and Territorians.
“The Northern Territory Labor Government is delivering on its promise to make the Territory a world-class hub for resources and critical minerals, which is cementing our position as Australia’s comeback capital.”