Today marked a historic moment for Core Lithium (ASX: CXO), with the Adelaide-based company taking the podium for the first time at Diggers & Dealers, as the soon-to-be first lithium producer outside of Western Australia.
It has been a long journey to the stage for Core. The last time the fledging miner had representation at the annual forum was in 2019, when the lithium market was facing global uncertainty and spodumene prices were lagging. Core shares could be snapped up for about 5 cents each at the time.
But after a stunning turnaround in early 2020 and a renewed global bullish outlook on the market , Core ramped up its activities and quickly found itself in the hot seat as an attractive near-term producer with a highly favourable logistics chain to its growing list of offshore customers.
Now with its Finniss Project under construction and on track to achieve its very first production of spodumene concentrate before the end of the year, Core Chief Financial Officer Simon Iacopetta says the Project is coming online at the perfect time.
“Current lithium pricing is multiples over the Finniss Project’s cost profile over the life of mine; under both spot or forecasts pricing scenarios, operating margins at Finniss should see the Company generating hundreds of millions of dollars of free cashflow as Core brings the project online,” he told delegates at the Diggers forum today.
“We have a strong track record of delivering project growth. This year alone, Core will be undertaking over 40,000m of exploration drilling and investing $13 million on Finniss alone. This is the single largest exploration investment in Core’s history.
“And if past is prologue, then one year of mine life is added for every $1.8 million invested in the ground, and a $13 million investment could deliver a mine life closer to 20 years.”
Today’s presentation came against the backdrop of a major find at its BP33 deposit at Finniss, with significant intersections from assays received including:
- 88m @ 1.78% Li2O in NMRD030
- 16m @ 2.27% Li2O and 9m @ 2.24% Li2O
- 27m @ 1.50% Li2O in NMRD023
- 4m @ 2.02% Li2O
- 0m @ 1.22% Li2O in NMRD031
- 7.0m @ 1.70% Li2O
“Investment in organic growth at Finniss is a key priority to continue to build on mine life growth,” Mr Iacopetta said.
“This includes extensional drilling on existing resources, namely BP33 and Carlton with a target to increasing mine life closer to 20 years in the next 12 to 18 months.”
Core shares closed 3 cents higher at $1.19.