Core Lithium moving into next growth phase on path to being Australia's next lithium producer at Finniss Project

It also plans to continue to step up exploration activities targeting additional discoveries that could further enhance its lithium resource inventory.

Core Lithium Ltd (ASX:CXO) is set to move into its next phase of growth in FY22 as the new financial year looks to be even busier than the previous one.

The company is targeting to kick off the construction of the Finniss Lithium Project near the Darwin Port in the Northern Territory.

It also plans to continue to step up exploration activities targeting additional discoveries that could further enhance its lithium resource inventory.

Further exploration success will enable it to extend the Finniss Project’s life or potentially increase production by upgrading its treatment facilities.

FY21 a defining year

Core Lithium chairman Greg English said: “The past year has been one of the busiest in our history. I do not doubt that the year ahead will be even busier …. “

“While delivering a quality mine development at Finniss remains our key focus in the short term, we have not lost sight of the next horizon of the company’s growth.

“Our solid asset base and substantial cash, which we expect to generate, means we will be uniquely placed to capitalise on near term exploration success and downstream processing opportunities.”

“FY2022 will see Core move into our next phase of growth. We are proud of the achievements of our team in FY2021, and we have exciting opportunities ahead of us.”

Start FY22 fully funded

“We start FY2022 with the Finniss Project fully funded, and binding offtake agreements for spodumene concentrate from Finniss.

“We have completed the detailed engineering design of the Finniss Project mine and processing plant.

“We are also in the process of finalising key construction and mining contracts and plan to commence early site construction activities this financial year.

“Management capacity and systems are being developed to accommodate full construction and mining activities.

“Interest in Core and our product continues to grow, and the completion of project financing has created a clear roadmap to product delivery.

“In FY 2023, when we expect to achieve steady-state production, Finniss is forecast to produce about 175,000 tonnes per annum of spodumene concentrate for world markets.”

Achievements in the year

Core has achieved – and continues to achieve – key milestones on a regular basis.

Over the past financial year, in particular, Core has achieved milestones at the Finniss Project, which included:

➢ Finalisation of the definitive feasibility study (DFS) highlighted the project’s low technical risk, low capital intensity and attractive financial returns;

➢ Declaration of a JORC 2012-compliant proved and probable ore reserve of 7.4 million tonnes at an average grade of 1.3% lithium oxide, sufficient for current design production of eight years;

➢ Key regulatory approvals for Grants mine and processing facility have now been granted; and

➢ After year-end, it completed a $91 million private placement to institutional and professional investors and a $25 million share purchase plan to existing shareholders.

This has paved the way for Core to secure finance for the construction of the Finniss Project ahead of the Final Investment Decision (FID) and commencement of construction, which is on track for the end of this year.

Demand for lithium

Accelerated growth of electric vehicle (EV) sales combined with rapidly increasing lithium prices reflect that the global lithium sector is forecast to be in perpetual deficit.

Underinvestment in supply has now left the world short of low-risk, development-ready lithium projects like the Finniss Lithium Project.

Core is uniquely placed as the only ASX-listed, Australia-based company forecasting the commencement of new production of lithium spodumene concentrate in 2022.

Commentators and lithium industry forecasters are predicting strong growth in the lithium markets and commodity prices in the near to medium term.

These forecasts suggest that Finniss Project will commence production at “the right time in the commodity price cycle”.

Further, the recent substantial increases in lithium prices and the robust outlook for lithium, provide a powerful backdrop to Core’s growth plans as Australia’s next lithium producer.

It also places the company ahead of other higher-risk and less-advanced lithium projects around the globe.

COVID-19 – no material disruption

A significant focus during the 2021 financial year has been managing the COVID-19 pandemic risks, while at the same time maintaining business continuity.

Core Lithium adapted to remote working and a volatile environment quickly by reducing people movements through working from home arrangements.

While the company did not experience any material disruption, COVID-19 restrictions hindered its short-term ability to explore the Finniss Lithium Project and its other Northern Territory tenements.

Next stage of growth

The company believes that the best place to look for the next stage of the company’s growth is “right on the doorstep of Finniss”.

It has executed an option agreement to potentially acquire the nearby lithium and tin tenements and believe they present an opportunity to expand resources and the Finniss Project mine life.

Resource growth will also underpin the potential of any future downstream processing opportunities.

From Proactive Investors today.