Core Lithium has announced that it will be suspending mining operations at the Grants Open Pit, based on the findings of an ongoing strategic review of its business activities in response to the rapid drop in spodumene concentrate pricing.
The suspension comes after Core’s announcement in December 2023 that it will also be suspending construction activities on the BP33 project.
The price of spodumene concentrate has declined more than 85 per cent over the course of 2023, including by 50 per cent since the end of October 2023.
The strategic review is examining how the company is best able to reduce costs and schedule growth projects to preserve business value and optionality.
The review has identified a range of actions which will commence immediately. The company will continue to closely monitor market conditions to ensure mining can recommence should market conditions improve.
Finniss operations
Core has decided to continue processing of established ore stockpiles and temporarily suspend mining operations in the Grants Open Pit. This approach is expected to reduce the cash cost of Finniss operations, generate revenue from stockpiles and provide an opportunity to recommence mining as market conditions improve.
By suspending operations rather than preferentially mining ore over waste, the current mine plan is expected to be preserved, resulting in improved economics of future mining activities.
The Grants pit will be maintained to allow an orderly ramp up should market conditions improve.
At 31 December 2023, approximately 280,000t of ore stockpiles were available for processing allowing for sufficient stocks to feed the concentrator until mid-2024 without any further mining. The final concentrate cargo for 2023 sailed successfully in December.
Revised operating costs, exploration, studies and capital expenditure guidance for financial year 2023-24 are set to be provided in the December quarterly report when it is released in January 2024. Core has said that it is likely to record an impairment of the carrying value of the Finniss operation in the company’s 31 December 2023 half year results.
BP33 Project and other studies
As announced in December 2023, the BP33 early works construction project was suspended at the onset of the wet season to preserve cash and limit any additional costs associated with construction in the wet season.
Progress has been made on the BP33 project with the box cut excavation complete and the commencement of installation of the tunnel arch footings.
Cement stabilisation of the portal face at the end of the box cut had commenced and work on water management facilities has progressed as well.
The site will be placed in care and maintenance and all construction and infrastructure material delivered to site will be secured until a decision is made to recommence the early works at BP33.
Core has said that work continues on the BP33 updated feasibility study and the Carlton scoping study.
Exploration
Core’s 2023 exploration drilling season is complete. The program initially focussed on mineral resource delineation and definition drilling for the BP33 and Carlton ore bodies.
Exploration drilling then shifted to test targets identified through Ambient Noise Tomography (ANT), and geochemical and geophysical survey programs.
Results from the ANT survey work has led to a more targeted program for Finniss in the December quarter, with the revised RC drilling program completed in December. The resultant assay and analysis work will be completed and announced in the coming months.
Core Lithium CEO, Gareth Manderson, said that Core’s team has moved at pace to ensure its value is preserved in these tough market conditions.
“While suspending mining operations is a difficult decision, processing of ore stockpiles will continue to generate revenue and we will focus on managing our cash reserves prudently,” Mr Manderson said.
“We are working to put the business in the best position possible to recommence mining and proceed with BP33 when market conditions improve.
“The Northern Territory Government has been a supportive partner, and we remain committed to finding a path forward for the Finniss operation and the Territory community.
“We understand that this decision is difficult for employees, contractors and some local businesses.
“There is significant prospectivity in the Northern Territory, both in the Finniss district and in our broader regional tenement holding. We will continue to take a longer-term view and explore for new lithium resources.”
Featured image: Crushed stockpiles (foreground) and ROM stockpiles (background) at Finniss. Image credit: Core Lithium.
