Core Lithium has announced that it has mutually agreed with mining contractor Lucas Total Contract Solutions to terminate the Finniss mining services agreement.
Despite the termination, Core Lithium has said that it will not adversely affect current Finniss operations. Processing of existing stockpiles is planned to continue until mid-CY2024.
This announcement comes after Core Lithium’s decision in January to suspend mining operations at the Grants open pit and suspend the BP33 early works project, due to weak lithium market conditions.
The settlement deed provides for a cash payment from Core to Lucas of $10 million. This consists of demobilisation costs, a settlement of claims, consumables and contractual charges incurred during suspension.
The deed releases each party from further claims. The mining services contract was executed in September 2021, and the settlement amount will be paid in the days following contract termination.
Core said that it will now look to identify alternative mining solutions for the open pit should it restart in the future. Core continues to process ore stockpiles to produce spodumene concentrate for sale to customers. While the BP33 early works have been suspended, the feasibility study is ongoing, including work to optimise the mine design and reduce costs.
As announced in the Core’s recent quarterly report, Final Investment Decision (FID) for BP33 has been deferred until market conditions improve.
Core’s CEO, Gareth Manderson, said that the company has reached an amicable agreement with its mining partner Lucas to terminate the mining agreement.
“In these difficult market conditions, this gives Lucas and its employees more certainty. Core will now look at alternatives for potential mining recommencement,” Mr Manderson said.
“We sincerely thank Managing Director, Ben Lucas, and his workforce for their hard work as part of the team at Core. We have worked together to bring on the Northern Territory’s first lithium mining operation in a short period of time. I wish Lucas well for its future projects.”
