Advanced Northern Territory lithium developer Core Lithium Ltd (ASX: CXO) is pleased to announce that it has executed a binding offtake agreement (Offtake) with a subsidiary of Jiangxi Ganfeng Lithium Co., Ltd (Ganfeng), one of the world’s largest lithium producers by production capacity, for 75,000 tonnes per annum over 4 years. In addition, Ganfeng has agreed to a A$34 million equity investment into Core at a 10% premium to the 10-day VWAP, equating to an issue price of 33.8 cents per share (Equity Investment).
- Binding agreements executed with Ganfeng Lithium for:
- Offtake of 75ktpa of spodumene concentrate from Finniss Lithium Project over 4 years.
- A$34 million equity investment at a price of 33.8 cents per share, a 10% premium to Core’s 10-day VWAP.
- The offtake agreement is referenced to the market price for 6% Li2O spodumene concentrate, adjusted for actual Li2O content, with a price floor.
- The offtake adds to Core’s existing offtake with Yahua of 75ktpa over 4 years, resulting in approximately 80% of Finniss’ Stage 1 production being contracted over the first 4 years of the mine life.
- The equity investment is subject to Core shareholder approval and regulatory approvals in China.
- The offtake is subject to receipt of the equity investment from Ganfeng.
Following the recent release of the Company’s robust Stage 1 Definitive Feasibility Study and associated scoping studies (see announcements of 26 July 2021), the Offtake Agreement and Equity Investment are a proactive initiative that provides certainty of offtake and funding, to meet the previously stated timeline of construction commencement at the Finniss Lithium Project (Finniss or the Project) in 2H 2021.
Core’s Managing Director, Mr Stephen Biggins, commented:
“The Offtake and Equity Investment by Ganfeng represents a transformational moment for Core. Ganfeng has a proven track record of investing in high-quality lithium projects across the world and of being a strong and supportive offtake partner. We welcome Ganfeng’s participation with Core, and look forward to developing a long-lasting, mutually beneficial relationship with them.”