Australian lithium miner Core Lithium (ASX: CXO) has provided its June quarter activities report and maiden guidance for the Finniss Lithium Operation near Darwin in the Northern Territory.
HIGHLIGHTS
- No significant safety incidents
- Quarterly spodumene production of 14,685t (FY23: 18,274t) at a C1 unit cost of $902/t (FY23: $1,230/t)
- Spodumene concentrate between 5.35% and 5.6% (on specification). Lithia recoveries ~49% with work underway on improvement initiatives
- Maiden 5,500t spodumene concentrate shipment in April and second 13,100t shipment in early July
- $45-$50 million approved for BP33 underground mine early works
- Revised BP33 feasibility study underway including incorporation of the increased resource
- Total Finniss Mineral Resource increased 62% to 30.6Mt @1.31% Li2O
- $25 million exploration program underway
- Cash balance as at 30 June 2023 of $152.7 million and no debt
- Andrea Hall appointed as Non-Executive Director and executive team complete following the appointments of Pierre Malan as EGM, Development and Exploration and Paul Benjamin as EGM, Commercial and Marketing (announced subsequent to the quarter)
Production and cost guidance
This report includes Core’s maiden production and cost guidance following 14 weeks of plant operations on a campaign basis. Core’s guidance for FY24 is for spodumene sales of 90,000 to 100,000 tonnes and spodumene production of 80,000 to 90,000 tonnes (this is lower than study estimates due mainly to lower recoveries, mine plan adjustments and mining rates), at a C1 cost of $1,165 to $1,250 per tonne.
With respect to the outlook for FY25, Core expects monthly mining and processing rates to be above FY24 levels whilst the Company continues mining in the Grants open pit. However, overall production in FY25 is expected to be below FY24 due to a currently anticipated three-month gap in ore supply from the mine and processing plant capacity constraints result in a ROM pad stockpile building at the conclusion of FY25.
Commenting on the quarter, Core Chief Executive Officer Gareth Manderson said:
“This quarter marks an important new phase in the life of our emerging operating and development company. We have now been through our first quarter with periods of integrated mining and processing operations and have successfully produced, transported, and sold our first cargoes of spodumene concentrate. Since joining Core in August 2022, the team has successfully brought the Finniss operation into production on time and within two years of commencing construction. In parallel, we have continued to explore and grow our mineral resources as we work to determine the true potential of the Finniss mineralised district.
“Our operation remains in its start-up phase. In aggregate the team has achieved a combined 14 weeks of plant operations on a campaign basis since first concentrate was produced and access to the pit, uninterrupted by rain events, was achieved in mid-April. Using this early operating experience, we have undertaken a thorough budgeting and forecasting process and provided production and cost guidance for FY2024 and an early view of the 2025 production outlook.
“Production forecasts are lower than what was anticipated in the July 2021 Definitive Feasibility Study and cost expectations are higher. Following this review, we are working through a suite of improvement projects to drive Finniss operating performance to deliver higher mining rates, improve lithia recoveries and commercialise the fines products.
“As is common during the project start-up phase, we are continuing to better understand the Finniss ore processing characteristics and mine performance with several key learnings being implemented. Grants remains the starter operation which is delivering near-term cash flow to fund our growth. BP33 is the next mine to be developed and the more significant operation which underpins the business.
“The revised feasibility study for BP33 is being advanced by the management team and this project remains on track for a Final Investment Decision in 1Q 2024 to capitalise on strong lithium markets, with early works approved to ensure the overall timeline can be maintained. Additionally, we have expanded our FY24 exploration budget to A$25 million given our track record of resource growth and due to the broad range of exciting greenfield and brownfield prospects identified in the mineralised district.
“We welcomed experienced company director Andrea Hall to the Board in May 2023 and completed recruitment of an experienced executive leadership team. With the team now in place, we are well positioned to deliver improved operational performance and sound commercial outcomes. Core’s lithium remains in strong demand as the world continues to decarbonise and we have the right team to deliver sustainable value for shareholders.”