Australian lithium miner Core Lithium (ASX: CXO) today provided its quarterly activities report for the period ended 30 September 2022.
HIGHLIGHTS:
- Progressed construction activities at the Finniss Lithium Project
- Uncovered ore in the Grants pit
- Upgraded the Finniss Mineral Resource Estimation (MRE) by 28% and Finniss Lithium Project Ore Reserve by 43% to extend the Life of Mine to 12 years
- Received final assays for BP33 diamond drilling, which confirmed strong potential for further MRE growth
- Successfully completed a fully underwritten $100m capital raise in October
- Continued offtake negotiations with globally significant parties
- Welcomed new CEO Gareth Manderson
Finniss Lithium Project
Activities during the September quarter were dominated by significant corporate and project development to safely advance Finniss towards first DSO shipments in Q4 CY22 and maiden spodumene concentrate in H1 CY23.
Construction activities on track for H1 CY23 concentrate production
In mid-September, first spodumene ore was uncovered in the Grants Open Pit.
Work continued to ensure the crushing circuit remains on track for commissioning. A night shift was introduced to accelerate the ramp-up of the Dense Media Separation (DMS) plant construction for commissioning.
Core has received environmental approval for BP33 and submitted a Mine Management Plan to the Department of Industry Tourism and Trade (DITT). The mine management plan represents the final step to complete the approvals process.
Significant increase to Mineral Resources and Ore Reserve
On 12 July, Core reported a Mineral Resource and Ore Reserve Estimate update based on results from drilling undertaken in the 2021 drilling season (see ASX announcement “Significant Increase to Finniss Resources and Reserves” on 12 July 2022).
Most of the deposits at Finniss, including Hang Gong, Ah Hoy and Sandras remain open at depth and along strike. Importantly, the updated Mineral Resource and Ore Reserve Estimates support a 12-year mine plan for Finniss.
The Mineral Resource Estimate (MRE) for Finniss increased by 28% to 18.9Mt @ 1.32% Li2O.
The Measured and Indicated Resource categories have increased by 61% to 13.3Mt @ 1.40% Li2O. Approximately 70% of the MRE is now in the higher confidence Measured and Indicated categories, with excellent conversion of Inferred to Indicated.
Estimates for all existing Mineral Resources have been updated as well as the addition of a maiden Mineral Resource at Ah Hoy. Mineral Resources have been reported at a 0.5% Li2O cut-off, reflecting the current positive economics of the Project.
The Ore Reserve Estimate for Finniss has increased by 43% to 10.6Mt @ 1.3% Li2O.
The updated MREs for BP33, Carlton, Hang Gong and Lees include additional drilling and re-interpretation. The Sandras estimate represents a re-interpretation and classification of existing data while the estimates for Grants and Booths
represent a re-reporting of the existing models at the lower cut-off grade.
Exploration activities
BP33 diamond drilling
During the quarter, Core completed a 12-hole deep diamond drilling program at BP33 that commenced in May. The program was the largest undertaken by the Company to date.
On 1 August, Core reported first diamond drilling assays. Three holes intersected the main BP33 mineralisation at depths of up to 470 metres below surface, and a further five holes intersected variable thicknesses of mineralised pegmatite associated with the southern BP33 body at depths below any previous drilling, and up to 420 metres below surface (see ASX announcement “BP33 Drilling Delivers Outstanding Results” on 1 August 2022).
Significant intersections included:
- 66.88m @ 1.78% Li2O in NMRD030
o Incl. 16m @ 2.27% Li2O and 9m @ 2.24% Li2O
- 27m @ 1.50% Li2O in NMRD023
- Incl. 4m @ 2.02% Li2O
- 15.0m @ 1.22% Li2O in NMRD031
- Incl. 7.0m @ 1.70% Li2O
Core completed the program in late September 2022 and reported visual observations of deep diamond holes NMRD035, NMRD038 and NMRD039 – confirming that all three holes intersected variable thicknesses of spodumene mineralised pegmatite at depths below any previous drilling, and up to 830m below surface.
Importantly, New spodumene intersections were reported more than 400m outside of the current Mineral Resource, which is expected to deliver substantial ore body extensions.
The Company reported the final assays for the program which validated the visual observations (see ASX announcements “Business Update and Drill Results” on 29 September 2022 and “BP33 Diamond Drilling Results Revised” on 5 October 2022).
Significant intersections included:
- 72.74m @ 1.56% Li2O in NMRD038
- Incl. 14m @ 2.00% Li2O
- 22.0m @ 1.60% Li2O in NMRD039
- Incl. 6.0m @ 2.16% Li2O
The best result of 72.74m at 1.56% Li2O was intersected in hole NMRD038 and is interpreted to represent the down plunge extension of the main BP33 pegmatite body.
The intersections in NMRD035 and NMRD039 are interpreted to be associated with the southern BP33 pegmatite body.
These results, when combined with others from the program, reinforce the geological down plunge continuity of the pegmatite bodies hosting the mineralisation, with the grade of the main pegmatite body remaining consistently high. However, the grade of the southern body remains variable with the lower grade intersection in NMRD035 highlighting this variability.
Collectively, these intersections combine to define and double the depth extent of the mineralised pegmatite at BP33.
The true thicknesses of the intersections are approximately two thirds of those shown (i.e. downhole intersection of 72m equals true thickness of approximately 45m).
The continuity in grade and thickness displayed, together with the position of the intersections outside of the current Mineral Resource envelope, is expected to result in an increase in the Mineral Resource estimate for BP33.
Finniss Gold Project Update
Gold-focused activities at Finniss completed since the start of 2021 have included increasing the number of samples in the Finniss Project’s geochemical database by over 25,600 through the sampling of new sites together with assaying retained analytical pulps from historical lithium-focussed surface samples for gold.
Interpretation of the results suggest that the gold mineralisation at Finniss is of a style closely comparable with that seen at gold deposits in the Pine Creek Orogen (“PCO”) – a gold district with past production and current reserves totalling in excess of 18 million ounces.
Exploration has delineated more than 40 surficial gold geochemical anomalies on the Project tenements. Significant regions of the tenements remain to be geochemically sampled and the discovery of anomalies additional to those already delineated is a possibility (see ASX announcement “Exploration Activities Update” on 15 August 2022).
Corporate
Inaugural DSO sale
Core initiated preparations for sale of first DSO of spodumene ore in mid-September. Due to the high level of interest in Finniss ore, Core elected to use a digital exchange platform to conduct a tendering process for the sale.
The 15,000 dmt DSO cargo was tendered on a Cost Insurance and Freight (CIF) basis to several pre-screened participants active in the lithium-ion battery supply chain. The product offered for sale is the post-crushing DSO material to a P100 size of
6.3mm. The DSO sale will enable Core to commission all logistics processes and procedures in place between the Finniss mine site and Darwin Port.
Subsequent to the end of the quarter, Core announced that a cargo of 15,000 dmt spodumene DSO from Finniss, with an average grade of 1.4% Li2O, had been sold for US$951/dmt. The shipment is scheduled to leave Darwin in Q4 CY22.
Binding term sheet with Tesla
During the quarter, Core and electric vehicle manufacturer Tesla agreed to extend the termination date of their binding offtake term sheet to 26 October 2022. Subsequent to the quarter, the date for concluding a definitive product purchase agreement with Tesla passed on 26 October 2022 without that agreement being completed.
$100 million equity raising
On 30 September, Core announced a fully-underwritten institutional placement to raise $100 million. The purpose of the raising was to strengthen Core’s already robust balance sheet and provide flexibility to pursue growth options, accelerate resource growth, advance development of the BP33 underground mine and provide working capital as Core approaches completion of Finniss construction ramp-up.
The placement was completed on 3 October and was well supported by new and existing, high-quality domestic and global institutional investors. Core issued 97.1 million shares at $1.03 per share, representing a 6.8% discount to the 29 September closing price of $1.105 and a 13% discount to the five-day volume weighted average price of $1.184.
Appointment of CEO Gareth Manderson
On 5 August, Core announced the appointment of Gareth Manderson as Chief Executive Officer.
Mr Manderson is a well-credentialed mining executive with 28 years’ experience in the mining and minerals sector and joined Core after having served in various leadership and technical roles within mining giant Rio Tinto for more than 22 years. Mr Manderson commenced his role on 8 August.
