With lithium stocks enjoying some much-needed relief this week following China’s decision to not reduce subsidies on its electric vehicle sector in 2020, it was timely for aspiring miner Core Lithium (ASX: CXO) to reveal a world-class find at its flagship Finniss lithium project in the Northern Territory.
As part of a recent reverse circulation and diamond drilling program at the BP33 prospect, located within the greater Finniss project area, Adelaide-based Core drilled a continuous intersection of more than 100 metres of high-grade spodumene pegmatite (107m at 1.7 per cent Li2O).
The outstanding hit indicates that the primary pegmatite body at BP33 extends with an estimated 40m true width for at least a further 100m (vertically) from previous drilling on this section.
This, along with other promising spodumene intersections from holes completed during the recent drilling campaign, are outside of the existing BP33 Mineral Resource and the company expects will substantially expand that estimate.
“Core’s announcement today of over 100m of high-grade lithium mineralisation located 25km from Australia’s closest port to Asia highlights the natural advantages the Finniss project has in regard to quality and cost,” Core managing director Stephen Biggins said.
“We are confident in having the Finniss project construction-ready in early 2020, so that wea re well-positioned to be Australia’s next sustainable lithium producer as market conditions continue to improve.”
Core shares rallied at the time of the news, climbing as much as 14 per cent during trade on Thursday following the announcement, and came just a day after reports emerged that the Chinese government was not planning to reduce subsidies on EVs this year, in contrast to speculation in late 2019 that the sector was due to face another cut.
Subsidies on EVs were introduced in China in 2009 to stimulate growth in the sector, but has been gradually reducing the size of those handouts over the past few years in attempt to push carmakers to compete and hold back fears of an industry bubble.
However, those subsidy cuts over the past year had dramatic impacts on the Chinese carmaking industry, with flow-on effects felt in Australia as shares in many ASX-listed lithium producers took big hits.
China’s indication it wouldn’t lower subsidies further in 2020 was a welcome relief for lithium plays, as indicated in the Weblink lithium index which was up about 8 per cent for the month to 118pts as of the close of trade on Friday.