The company really has been backed into a corner due to the current market conditions (and some questionable decisions by management) when you look back through the earlier announcements and promotional videos they were clearly wrong on there costing and predictions with the grades being much lower than predicted and cost of product being twice what they had stated.
The main problem I see at the moment is with all future works being suspended even if they do begin mining again which projects will they have ready to move on to once the current ore body is depleted?
I think some very good points have been made on the increased profits available to the company due to much improved stripping ratios on the current pit.I also think if the information is correct that mining equipment is still being stored on site this body's well for the company to recommend mining. Anybody working within the industry will know that companies quite often off hire and then re-engage equipment and it is not uncommon for it to be left onsite if this is the clear direction.
the reason I say it has been backed into a corner is because of the possibility of compensating the companies that currently have contracts. If CXO is pushed into care and maintenance it will be an ongoing expensive exercise for them.
Commitments and contingencies (cont.) The Group has offtake agreements with Ganfeng Lithium and Sichuan Yahua for the supply of lithium spodumene concentrate. Within these agreements, there are annual shipment quantities that Core Lithium is contractually obligated to meet. Due to the suspension of mining at the Finniss operations, there is a possibility that Core Lithium may not meet this obligation. In respect of one of these agreements, if this obligation is not met, Core Lithium is obligated to pay the customer the difference between the price and the price the customer actually paid in procuring a replacement supply of spodumene concentrate. The Group is working with its offtake partners to ensure their contractual obligations are met.
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