Core Lithium leads the way in growing while building shareholder value
Core Lithium, the ASX’s newest $1 billion mining stock, made clear yesterday that it was not prepared to rest on its laurels.
Well advanced with construction of its $89 million Finniss lithium project on the outskirts of Darwin, Core (ASX: CXO) is continuing to explore its tenement position with the ambition of adding more resources and extending the mine life.
Yesterday’s news of strong hits at the BP33 deposit were well received by investors – Core’s stock rose 6% to 84c for a $1.3 billion market capitalisation.
Importantly, it was another signal by Core that it does not intend to go into news hibernation while Finniss is being built.
This multi-pronged newsflow is also being mirrored by St George Mining (ASX: SGQ), another battery minerals play with a priority focus on its Mt Alexander project in WA’s Goldfields.
Announcing the cracking hits at BP33 yesterday, Core’s managing director Stephen Biggins reaffirmed that the company regarded further exploration at Finniss a key strategic initiative that would not distract from building the foundation lithium project.The BP33 update was based on assays from drilling throughout the 2021 field season. The drilling has continued to deliver broad and high-grade lithium intersections. with the best including:
57.35m @ 1.83% LiO2 in NMRD016
51.0m @ 1.63% LiO2 in FRCD023
Additional reverse circulation and diamond drilling also identified a significant southern extension to the spodumene-bearing pegmatite at BP33. Intersections outside of the current mineral resource at BP33 are expected to deliver substantial extensions.
Further drilling is planned at BP33 for the coming field season while the expanded exploration and resource drilling will recommence and ramp up early next quarter across the entire Finniss project.
“Our prime directive is to deliver first production of high-quality lithium concentrate from the Finniss Project this year in the midst of a very high lithium price and high operating margin environment,” Mr Biggins said.
“These new world-class lithium drilling results reflect the confidence Core has in delivering significant resource growth from the Finniss project that will add to our life of mine and our capacity to materially increase lithium production from northern Australia in the future to keep up with rapidly growing global demand.”
St George is in a different situation though, like Core, it is combining exploration newsflow with progress advancing already discovered nickel-copper sulphide resources at Mt Alexander.
There was understandable investor disappointment this week when St George said S1, one of several deep seismic targets being tested for the first time with drilling, had failed to unearth the motherlode.
Mt Alexander is a complex geological beast, which is why St George has been diligent and systematic with its exploration strategy as it looks to add to five high-grade discoveries.
One of those discoveries, Stricklands, is being lined up for a starter mine development.
To progress the starter mine, a program is underway to develop a flowsheet for the separate production of copper and nickel concentrates. Metallurgical test work is complete, with a final report pending, and discussions are underway for a pilot plant campaign.
St George’s executive chairman John Prineas said he had already received preliminary approaches to secure offtake from any potential mining operations.
In the meantime, the S2 target is being drilled to maintain the drill bit newsflow.
“Overall, we are strongly encouraged by these results and are assessing the completion of additional seismic lines over key exploration areas, including the Stricklands deposit where the seismic will assist to identify any continuation at depth of the high-grade shallow deposit,” Mr Prineas said about his confidence in the Mt Alexander exploration push.
“The unique geology at Mt Alexander means that there is no precedent for exploration here. But the five high-grade discoveries we have already made – including at Stricklands – drive our determination to press on to discover more nickel, copper and platinum group metals across what is a highly prospective and still underexplored project area.”
Growth is important but not at all cost, with Northern Star Resources (ASX: NST) this week demonstrating its fiscal discipline when it comes to looking for extra ounces.
Granted, Northern Star – Australia’s second-largest listed gold producer and owner of the Super Pit in Kalgoorlie-Boulder – has enough in its organic growth pipeline to keep shareholders happy for a long time and be the envy of most of the gold sector.
But it has not stopped Northern Star’s leadership from assessing other options, including Osisko Mining’s Windfall advanced exploration project in Quebec, Canada.
However, having struck a C$154 million ($169 million) convertible debenture deal with Osisko three months ago, Northern Star this week concluded its due diligence and decided to not progress talks about a Windfall joint venture.
“Northern Star is disciplined in its review of acquisition opportunities with superior shareholder returns being its first priority,” managing director Stuart Tonkin said.
As they say in the classics, the best deals are often the ones you walk away from.