Core Lithium shares tumbled after production and cost guidance...

Core Lithium shares tumbled after production and cost guidance from the company’s Finniss project in the Northern Territory missed expectations, and recovery rates disappointed.

The stock was down over 12 per cent, or 11¢, trading at 76¢ just before 10am following the company’s production report for the June quarter, which showed spodumene concentrate output jumped from 3589 tonnes to 14,685t over the three months.

Core announced its maiden 5500t spodumene concentrate shipment from Finniss in April and will have a second 13,100t shipment in early July.

The company, which recently relocated its headquarters from Adelaide to Perth, produced 18,274t over the 2023 financial year. Quarterly unit costs came in at $902/t and $1230/t over the full-year.

Lithia recovery rates disappointed, with Core averaging about 49 per cent over the quarter — significantly lower than the 71.7 per cent rate it was eyeing in its 2021 definitive feasibility study.

Core also released guidance for fiscal 2024 for spodumene sales of 90,000-100,000t and production of 80,000-90,000t, which it acknowledged was lower than study estimates “due mainly to lower recoveries, mine plan adjustments and mining rates”.

It expected unit costs of $1165-$1250/t.

“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,” the company said in a statement to the ASX.

“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 (run of mine) pad stockpile building at the conclusion of FY25.”

Core chief executive Gareth Manderson said the company had undertaken a “thorough budgeting and forecasting process” based on 14 weeks of plant operations.

“Production forecasts are lower than what was anticipated in the July 2021 Definitive Feasibility Study and cost expectations are higher,” he said.

“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.”