Core Lithium Ltd (ASX:CXO) is officially in building mode after kickstarting construction on Australia’s newest lithium project with shares as much as 6.15% higher intraday.
Work to erect the Finniss Lithium Project in the Northern Territory is now underway after the CXO team reached a final investment decision last month.
Core is currently the only Australian company ready to kick off lithium production in the new year, with the construction phase bringing it one step closer to becoming a global lithium producer.
The ASX-lister hopes to commission its dense media separation (DMS) plant and generate its first lithium supply in the final quarter of 2022.
Next stage “transformational”
Speaking to the construction momentum, Core Lithium managing director Stephen Biggins said: “At a time when Australia is firmly focused on both the generation of renewable resources and future job prospects for the regions, Core is incredibly proud of this milestone we’ve reached in the Northern Territory today.
Core Lithium managing director Stephen Biggins.
“It has been a long journey for Core and its various partners, stakeholders and shareholders, and I would like to take this opportunity to thank everyone who has been a part of the Core journey to date.
“This next phase of the company will be transformational, and we are excited to see construction milestones met at Finniss over the coming 12 months, ahead of first production before the end of 2022.
“We also look forward to engaging the local workforce in the NT, with more than 84% of available jobs at Finniss already appointed to locals.
“We’re excited to see the Northern Territory play an important role in meeting the ever-rising demand of renewable energy sources.”
Core's market cap is now approximately A$900 million and today shares have been as much as 6.15% higher to A$0.605 on volume of more than 47 million.
Wheels up on construction phase
Core’s move into construction and production is set to create 250 jobs in a region described as "Australia’s comeback capital".
Work has kicked off with site construction and establishment activities after Core completed its necessary heritage and vegetation management undertakings.
There’s also preparation for mining activity underway, with construction giant Primero to kick off work on the 1-million-tonne-per-annum DMS plant in March 2022.
The project has gained all NT Government and environmental approvals and is fully funded thanks to a A$150 million institutional raise.
That includes a A$34 million placement to Ganfeng — one of the world’s largest lithium producers by capacity and a key supplier to Tesla — alongside a four-year offtake agreement.
Around 80% of Finniss’ initial output is covered under this contract, meaning much of the project’s maiden production is already accounted for.
“Another exciting milestone”
Commenting on CXO’s move to construction, Northern Territory Chief Minister Michael Gunner said: “The Territory is entering a wave of new mining and this is another exciting milestone for Australia’s comeback capital.
“Construction has officially begun on the Finniss Lithium Project, and we will see mining activity begin by the end of the year, with exports to start from 2022.
“This project will provide hundreds of world-class mining jobs for residents in Darwin, Palmerston and the rural area, which will also support local business and create new opportunities for Territorians.”
Studies outline Finniss’ potential
Earlier this year, the CXO team released a definitive feasibility study (DFS) and two scoping studies, outlining Finniss’ economic and production potential.
The DFS positions the project to turn out 7.4 million tonnes of resource at 1.3% lithium oxide over an eight-year mine life, with a 173,000-tonne-per-annum production rate, grading 5.8% lithium oxide.
The lithium play’s start-up capital costs are estimated at A$89 million, while operating costs are calculated to land around US$364 per tonne.
Key metrics from Core’s Stage 1 DFS.