Advanced Australian lithium developer Core Lithium (ASX: CXO) is pleased to announce an upgraded Definitive Feasibility Study (DFS), underpinned by a significant increase in Ore Reserves and Life of Mine (LOM), for the Company’s wholly owned Finniss Lithium Project in the NT (Finniss Project).
The DFS demonstrates the Project’s economics to be compelling, with low capital costs and competitive operating costs that result in strong operating margins and rapid payback.
HIGHLIGHTS
- Stage 1 Finniss Lithium Project updated Definitive Feasibility Study (DFS) confirms that Core Lithium is well positioned to be the next lithium producer in Australia.
- 30% increase in Ore Reserves to 7.4Mt @ 1.3% Li2O prepared using the JORC Code 2012, underpinning a 8-year Life of Mine (LOM), with additional Mineral Resource inventory to potentially further increase LOM.
- Stage 1 mine plan comprises open pit production from Grants and Hang Gong and underground at Grants, BP33 and Carlton prospects.
- High lithium grade and exceptional spodumene geo-metallurgy enable Core to produce high quality, coarse concentrate using simple DMS processing.
- Excellent DFS economics reflected in Reserves-backed pre-tax IRR of 53% and pre-tax NPV8 of A$221 million and life-of-mine EBITDA of A$561 million from revenue of A$1.3 billion.
- Low initial capital expenditure of A$89 million (including pre-production mining costs) enables a 2-year payback and confirms Finniss as one of Australia’s lowest capital intensity lithium projects.
- Life-of-mine average C1 Operating Cost (FOB) of US$364/t concentrate generate a robust average operating margin of more than US$370/t.
- Further potential for Stage 2 production expansion and increases in Mineral Resources and Ore Reserves underway, with a substantial drilling budget for 2021 and 2022.
- Completion of the DFS now paves the way for the Company to progress debt finance opportunities and finalise other customer and equity financing discussions.
- Targeting FID for the start of Stage 1 construction, which is scheduled to commence before the end of 2021.
The production target is underpinned by 98% proved and probable Ore Reserves and 2% inferred Mineral Resources. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.
With the completion of this DFS, Core has taken a major step forward towards becoming Australia’s next lithium producer and its goal of producing high quality lithium spodumene concentrate through the mining and processing of high grade spodumene-bearing pegmatites located within one hour’s drive of the Port of Darwin, Australia’s closest port to Asia.
High-grade Ore Reserves with an average grade of 1.31% Li2O, combined with exceptional spodumene metallurgy, will enable Core to produce high quality, coarse concentrate using gravity only Dense Media Separation (DMS) processing. The construction of a simple 1Mtpa DMS processing plant will enable Core to produce up to 197,000 tonnes of high-quality concentrate per annum over an 8-year LOM.
Core’s Managing Director, Mr Stephen Biggins stated:
“The Definitive Feasibility Study confirms Finniss Lithium Project as a simple, low risk and low capital intensity project with high cash generating potential, and puts Core on track to become Australia’s next lithium producer.
“The study highlights the Project’s attractive combination of high-grade Ore Reserves, simple DMS processing producing a high quality concentrate, and proximity to nearby existing infrastructure including the Port of Darwin.
“With the updated DFS now completed, we aim to finalise funding over the coming months, to allow Core to make a Final Investment Decision in 2021 and fast-track construction. We are also maintaining our exploration momentum, with the aim to more than double the mine life and Resources of the Project.
“On behalf of the Core Board, I would like to thank our management team and valued partners who have been involved in preparing the DFS. We look forward to an exciting future as we move toward commencing construction of Stage 1 of the Finniss Project.”
