Core Lithium (CXO) - Tesla Partner - "We Want All You Can Produce"

ASX-listed Core Lithium is well positioned to be Australia’s next Lithium producer, developing one of Australia’s most capital efficient and lowest cost spodumene Lithium projects located near Darwin Port in the Northern Territory, Australia.

We caught up with Stephen Biggins, MD of Core Lithium, to discuss their Finniss Lithium project and how the financing is going, the timings on the project and the latest developments with partners. We also talked about their 2 uranium projects and their Gold project too.

Company Overview

ASX-listed Core Lithium is Australia’s most advanced new Lithium producer, developing one of Australia’s most capital efficient and lowest cost spodumene Lithium projects located near Darwin Port in the Northern Territory, Australia which is near construction ready.

Core Lithium is aiming to complete project finance in the next few months and be in construction by Q3/21 which means production of high quality Lithium products is planned to commence at the Finniss Lithium project by the end of 2022.

Plans & Potential of the Uranium Projects

Uranium equities have seen an uptick and interest in Uranium is coming back from generalist investors. We've seen people like Sprott picking up the UPC project and we've seen Biden talking about clean energy. 

Core Lithium has significant Uranium assets within their portfolio and the company plans to find a corporate or separate pathway to advance these projects as interest in the Uranium sector is returning from generalist investors.

Spodumene Project: Update on Progress, 40% Off-take & FID 

The project DFS shows production of 175,000tpa of high-quality Lithium concentrate which is a large spodumene project. Core Lithium has 40% off-take agreements in place and is in the process of negotiating further agreements within the Lithium battery supply chain and electric vehicle industry. As spodumene prices continue to rise, Core Lithium and their customers are keen to get this project into construction as soon as possible.

Core Lithium is in an excellent position with the project construction ready and are getting strong and positive messages from their customers and potential new customers about providing a significant level of project finance to build the project alongside their off-take agreements. Over the coming months they will be able to complete the final off-takes along with a significant project finance piece that makes the project finance solution for the project obvious and enable them to achieve their FID goals sooner rather than later and get the project into construction this year.

Disconnect in the Market: What's Holding People Back?

Electric vehicle sales are continuing to increase and the amount of Lithium chemical needed to produce Lithium batteries is increasing, and there still hasn't been any significant increase in the Lithium supply side, because it takes years to get to that point. It has taken Core Lithium 5 years to get to the point where they are construction ready. They are in the right place at the right time as more Lithium is needed if Tesla and the rest of the EV industry wants to achieve its goals and the Lithium prices continue to increase until more supply hits the market.

Supply and demand suggests that there's a shortage now because the price hasn't been strong enough for people to get into production and haven't been able to fund their pilot plants, their demo plants, and full commercial plots. When the prices increase, it will encourage Lithium producers to get into production again.

Focus On Financing Means IRR & NPV Number Delays?

With the level of enthusiasm and support that is coming from customers and potential new customers, and the desire to support Core Lithium to get into production, the financing solution is likely to come from customer finance rather than from debt finance. Core Lithium aims to get into production as soon as they can, to expose the project and add product to those prices. Core Lithium plans to finance the project as soon as possible and start construction of the project this year to get into production next year as timing from FID to first production is in the order of about 12 to 15 months.

Timing for Deliverables

Core Lithium raised A$40M earlier this year which means the company is in a good position to ensure the project is ready to go once finance is agreed with key contracts, systems, orders and human resources already in place.

The Finniss Lithium Project has great infrastructure and a logistics chain to Asia and is within 25km of port, power station, gas, rail and 1 hour by sealed road to workforce accommodated in Darwin and importantly to Darwin Port - Australia’s nearest port to Asia.

Getting into Production: Process & Potential Hurdles

Core Lithium is confident in their conversations with customers, interest from equity markets all over the globe, and interest in finance which will enable them to reach construction this year and be in production next year. The world wants to support new Lithium supply and Core Lithium is Australia's next Lithium producer so has a lot of support going forward.

Update on the Gold Project

Core Lithium has just appointed a Gold exploration manager who is delving into the data and they expect to start drilling on the Gold project within the next few weeks.

We look forward to following the Core Lithium story and keen to understand timings this year as the project moves towards construction and production.

To find out more, got to the Core Lithium Website