Australian lithium miner Core Lithium (ASX:CXO) has released its Quarterly Activities Report for the quarter ending 30 June 2023, highlighting key achievements during the period.
Quarterly Highlights
- No significant safety incidents were recorded during the quarter.
- The company achieved a quarterly spodumene production of 14,685 tonnes (FY23: 18,274 tonnes) at a C1 unit cost of $902 per tonne (FY23: $1,230 per tonne).
- Spodumene concentrate purity ranged between 5.35% and 5.6% (on specification), with lithium recoveries at approximately 49%, and initiatives in place to improve these figures.
- Core Lithium successfully shipped a maiden 5,500-tonne spodumene concentrate in April, followed by a second 13,100-tonne shipment in early July.
- Approval of $45-$50 million for early works on the BP33 underground mine.
- A revised feasibility study for BP33 is underway, incorporating the increased resource.
- The total Finniss Mineral Resource increased by 62% to 30.6 million tonnes at 1.31% Li2O.
- An exploration program with a budget of $25 million is underway.
- As of 30th June 2023, Core Lithium reported a cash balance of $152.7 million with no debt.
- New appointments include Andrea Hall as Non-Executive Director, Pierre Malan as EGM, Development and Exploration, and Paul Benjamin as EGM, Commercial and Marketing, all strengthening the executive team.
Production and Cost Guidance
Core Lithium presented its maiden production and cost guidance based on 14 weeks of plant operations on a campaign basis. The company's guidance for FY24 projects spodumene sales between 90,000 and 100,000 tonnes, and spodumene production between 80,000 and 90,000 tonnes. Notably, these estimates are lower than the initial study projections due to factors such as lower recoveries, adjustments in the mine plan, and mining rates. The expected C1 cost for FY24 is anticipated to be in the range of $1,165 to $1,250 per tonne.
In regards to the outlook for FY25, Core Lithium anticipates higher monthly mining and processing rates compared to FY24 while continuing operations in the Grants open pit. However, overall production for FY25 is expected to be lower due to a projected three-month gap in ore supply and processing plant capacity constraints leading to a ROM pad stockpile buildup by the conclusion of FY25.
Core CEO Gareth Manderson's Comments
"This quarter marks an important new phase in the life of our emerging operating and development company. We have now been through our first quarter with periods of integrated mining and processing operations and have successfully produced, transported, and sold our first cargoes of spodumene concentrate," said Core's Chief Executive Officer, Gareth Manderson. "Since joining Core in August 2022, the team has successfully brought the Finniss operation into production on time and within two years of commencing construction. In parallel, we have continued to explore and grow our mineral resources as we work to determine the true potential of the Finniss mineralised district."
"Our operation remains in its start-up phase. In aggregate, the team has achieved a combined 14 weeks of plant operations on a campaign basis since first concentrate was produced, and access to the pit, uninterrupted by rain events, was achieved in mid-April. Using this early operating experience, we have undertaken a thorough budgeting and forecasting process and provided production and cost guidance for FY2024 and an early view of the 2025 production outlook. Production forecasts are lower than what was anticipated in the July 2021 Definitive Feasibility Study, and cost expectations are higher. 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."
"As is common during the project start-up phase, we are continuing to better understand the Finniss ore processing characteristics and mine performance with several key learnings being implemented. Grants remains the starter operation which is delivering near-term cash flow to fund our growth. BP33 is the next mine to be developed and the more significant operation which underpins the business."
"The revised feasibility study for BP33 is being advanced by the management team, and this project remains on track for a Final Investment Decision in 1Q 2024 to capitalise on strong lithium markets, with early works approved to ensure the overall timeline can be maintained. Additionally, we have expanded our FY24 exploration budget to A$25 million given our track record of resource growth and due to the broad range of exciting greenfield and brownfield prospects identified in the mineralised district."
"We welcomed experienced company director Andrea Hall to the Board in May 2023 and completed recruitment of an experienced executive leadership team. With the team now in place, we are well positioned to deliver improved operational performance and sound commercial outcomes. Core's lithium remains in strong demand as the world continues to decarbonise, and we have the right team to deliver sustainable value for shareholders," Manderson concluded.
