Core Lithium: Operational Collapse and Funding Crisis
Core Lithium's Finniss operation collapsed in early 2024 after catastrophic underperformance. The company achieved only **63% of contracted production targets** (95,020 vs 150,000 tonnes annually), while operating costs ballooned to $1,953 per tonne and recovery rates struggled at 65%. Combined with **lithium prices crashing 87%** from 2022 peaks, Core posted **$167.6 million losses** and was forced to shut down operations, slash 150 jobs, and drain cash reserves from $124 million to just $29.8 million.
Despite a restart study projecting improved economics with costs reduced to $690-785 per tonne, Core faces a **$145-170 million funding gap** against minimal cash reserves. The company's survival depends on securing capital through several challenging options: **dilutive equity raises** that would severely impact existing shareholders given the collapsed share price, **lithium price hedging** to lock in future revenue streams (though current $687/tonne spot prices remain well below the study's $1,330/tonne assumptions), or strategic partnerships with offtake agreements. However, with the lithium market oversupplied until 2026-2027 and Chinese producers maintaining cost advantages, Core must navigate both a hostile funding environment and ongoing care-and-maintenance expenses while competing for investor capital against more viable lithium projects.
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