Quarterly Report Presentation
Released
Released
Announcement PDF
corelithium.com.au
Australia’s
newest
lithium
producer
Q1 FY24 quarterly update
Gareth Manderson (CEO)
27 October 2023
Q1 FY24 Quarterly Update
corelithium.com.au
Important and cautionary notes
•
This presentation has been prepared by Core Lithium Ltd (“Core”, “Company”) and provides a general overview of the Company and its strategy.
•
This presentation does not purport to be all-inclusive or to contain all the information that you or any other party may require to evaluate the prospects of the Company. None of the Company, any of its related bodies
corporate or any of their representatives assume any responsibility for, or makes any representation or warranty, express or implied, with respect to the accuracy, reliability or completeness of the information contained
in this presentation and none of those parties have or assume any obligation to provide any additional information or to update this presentation. The information in this presentation should be read in conjunction with
Core’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au.
•
To the fullest extent permitted by law, the Company, its respective affiliates and representatives, related bodies corporate, officers, employees, partners, agents and advisers make no representation or warranty
(express or implied) as to the currency, accuracy, reliability, reasonableness or completeness of the information in this presentation and expressly disclaims all responsibility and liability for any loss or damage arising in
respect of your reliance on the information contained in this presentation (including your reliance on the accuracy, completeness or reliability of that information), or any errors in or omissions from this presentation,
including any liability arising from negligence.
•
The Finniss Lithium Project as described in this presentation is at the production stage, and potential investors should understand that mineral exploration, development and mining are high-risk undertakings. There is
no guarantee that the Finniss Lithium Project can be economically exploited.
•
This document contains statements which may be in the nature of forward-looking statements. No representation or warranty is given, and nothing in this presentation or any other information made available by the
Company or any other party should be relied upon as a promise or representation, as to the future condition of the respective businesses and operations of the Company.
•
Competent Person Statements
•
Core confirms that it is not aware of any new information or data that materially affects the information included in previous announcements (as may be cross referenced in the body of this announcement) and that all
material assumptions and technical parameters underpinning the Mineral Resource estimates, Ore Reserve estimates, production targets and forecast financial information continue to apply and have not materially
changed. This release contains “forward-looking information” that is based on the Company’s expectations, estimates and projections as of the date on which the statements were made. This forward-looking information
includes, among other things, statements with respect to feasibility studies, the Company’s business strategy, plan, development, objectives, performance, outlook, growth, cash flow, projections, targets and
expectations, and Mineral Resources and Reserves.
•
Currency
•
Unless otherwise stated, all cashflows are in Australian dollars, are undiscounted and are in real terms (not subject to inflation/escalation factors), and all years are calendar years. C1 Operating Costs references in
USD throughout this presentation have been derived by converting AUD using an exchange rate of 0.70 AUD/USD.
•
Forward‐looking Statements
•
Generally, this forward-looking information can be identified by the use of forward-looking terminology such as ‘outlook’, ‘anticipate’, ‘project’, ‘target’, ‘likely’,’ believe’, ’estimate’, ‘expect’, ’intend’, ’may’, ’would’, ’could’,
’should’, ’scheduled’, ’will’, ’plan’, ’forecast’, ’evolve’ and similar expressions. Persons reading this release are cautioned that such statements are only predictions, and that the Company’s actual future results or
performance may be materially different. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance
or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other
factors set out herein, including but not limited to general business, economic, competitive, political and social uncertainties; the actual results of current exploration, development and construction activities; conclusions
of economic evaluations; changes in project parameters as plans continue to be refined; future prices of lithium; possible variations of ore grade or recovery rates; failure of plant, equipment or processes to operate as
anticipated; accident, labour disputes and other risks of the mining industry; and delays in obtaining governmental approvals or financing or in the completion of development or construction activities. This list is not
exhaustive of the factors that may affect forward-looking information. These and other factors should be considered carefully, and readers should not place undue reliance on such forward-looking information. The
Company disclaims any intent or obligations to or revise any forward-looking statements whether as a result of new information, estimates, or options, future events or results or otherwise, unless required to do so by
law. Statements regarding plans with respect to the Company’s mineral properties may contain forward-looking statements in relation to future matters that can be only made where the Company has a reasonable basis
for making those statements.
•
Past Performance
•
Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.
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Q1 FY24 Quarterly Update
corelithium.com.au
Core – Our Value Proposition
Achieved first production in under
five years from maiden Resource
discovery by pursuing a ‘Minimum
Viable Project’ strategy
Leveraged to EV thematic –
Australia’s newest producing lithium
mine which is located 88km from
Darwin Port
Currently operating the Grants open
pit which is our starter operation.
BP33 is the cornerstone asset for
Core which is targeting a Final
Investment Decision in Q1 CY24
Secured offtake with some of the
world’s largest battery companies,
including Ganfeng Lithium and
Yahua
$202.1 million of cash and nil debt
Refreshed senior management team
who have strong experience in
developing and operating resources
projects
Track record of exploration
success and attractive pipeline of
greenfield and brownfield
exploration opportunities in the
Finniss mineralised district
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Q1 FY24 Quarterly Update
corelithium.com.au
Q1 FY24 Highlights
Operations
Sales &
Marketing
Exploration &
Development
Corporate &
Financial
Safety &
Sustainability
BP33
Cash balance of
One reportable safety incident
(hand injury)3
Total Material Moved
8% Increase
(Compared to Q4FY23)
Spodumene concentrate
production of
20,692t
(Q4FY23: 14,685t)
Recovery of Lithium
50%
Second and final spodumene
concentrate shipment into
additional agreements
13,100t
shipment in early July
First shipment into Ganfeng
contract
10,000t
(Q4FY23: 49%)
Average realised price
Concentrate grade
5.0%
(Q4FY23: 5.4%)
C1 unit cost of
$904/t
Site works advancing in parallel
with updated feasibility study
10,155t
and no debt (as at 30 September
2023)
Critical Risk Management
(CRM) Program continues to be
rolled out across the business
BP33 Measured and Indicated
Resource upgraded to
$107.9m raised
89%
through Institutional placement
and SPP raises (net of costs)
Wet season preparation and
investment in water management
infrastructure well underway
Executive team complete
following the appointments of
Pierre Malan as EGM
Development & Exploration and
Paul Benjamin as EGM
Commercial & Marketing
2nd round of community
of total resource2
US$2,560/t
Second shipment into Ganfeng
contract early October1
$202.1m
$25m
exploration program continues
grants open to community
groups across greater Darwin
region
(Q4FY23: $902/t)
1. Subsequent to quarter end.
2. Refer “BP33 Mineral Resource upgraded to 89% Measured and Indicated” 16 October 2023.Core Lithium confirms that the Company i s not aware of any new information or data that materially affects the Mineral Resource Estimates cross referenced in this report and confirms that all material assumptions and technical parameters
underpinning the estimates continue to apply and have not materially changed.
3. A driller's offsider sustained a hand injury. See full Quarterly Activities report for details.
4
5
corelithium.com.au
Q1 FY24 Quarterly Update
Finniss operational update
Ramp up continuing. Improvements in both mining and
processing
Management commentary
Quarterly Operating Performance
• Concentrate production of 20,692t at an average 5.0% Li2O grade with all products meeting
customer specification
• Mining performance improved ending the quarter strongly:
o mining productivity improvement led to an 8% increase in TMM compared to previous
quarter;
o blasting and dig unit availability improvement led to record ore extraction in September;
o the plant saw a more consistent ore feed with improved operations in the pit.
Q3 FY23
Q4 FY23
Q1FY24
3,589
14,685
20,692
47
49
50
Production
Spodumene concentrate produced
tonnes
Recovery
%
Sales
• Grants pit wall stability monitoring continues with second radar installed
DSO Shipments
tonnes
14,774
–
–
• Wet season preparedness is well progressed and includes haul road upgrades and
investment in water storage facilities and new dewatering equipment
Spodumene Concentrate Shipments
tonnes
–
5,423
23,424
Concentrate grade shipped
%
n/a
5.4
5.2
Lithium fines shipped
tonnes
–
–
15,002
• As at 30 September there were 164,796t of ore on the ROM pad
• Recovery of 50% achieved for the quarter compared to 49% previous quarter with
adjustments to screen sizing, reagent set points and other process parameters
• Agreement finalised with one customer to allow acceptance of concentrate with a minimum
grade of 4.5%. A similar agreement is being finalised with our second for the FY24 period.
• Test work and trials to improve plant recoveries continued as a priority
Q1 FY24 Quarterly Update
6
corelithium.com.au
Finniss operational update…cont.
Costs broadly in line, cash impacted by shipment timing
and QP adjustment
Quarterly Operating Performance
•
C1 unit costs of $904/t were broadly in line with the previous quarter
•
The build up in ore on the ROM pad, resulted in $985/t being deferred to inventory
Cost of production
•
Before inventory movements, cash operating unit cost of $1,889/t were 11% higher than
the previous quarter, due to a lower strip ratio, resulting in a higher proportion of the
mining costs being expensed (rather than capitalised)
Cash operating unit cost
•
Closing cash of $202.1 million included $107.9 million in proceeds from the equity raise
and SPP in August
•
The operating cash outflow of $25.97 million reflects:
•
o
the timing of shipments, with 8,527t of concentrate at the Darwin port at 30
September, which was included in the early October shipment; and
o
the repayment of $27.7 million to Yahua, in respect of a QP adjustment. The QP
adjustment resulted from the significant fall in the lithium spodumene price between
the date of prepayment and the end of the quotational period.
Excluded from the cashflows in the quarter are the cash receipts relating to the 13,100t
shipment in July. These tonnes were part of the prepayment arrangement with Yahua with
the cash received in Q4FY23.
Q3 FY23
Q4 FY23
Q1FY24
A$/t
2,386
1,691
1,889
Inventory and other (non-cash)
A$/t
(198)
(789)
(985)
C1 unit cost
A$/t FOB
2,188
902
904
C1 unit cost plus royalties
A$/t FOB
2,323
1,416
1,067
Q1 FY24 Quarterly Update
Recovery improvement trials seeing uplift
Improvement projects
Trial sales of fines product (complete)
Process control optimisation (underway)
Crusher screen change out (complete)
Met test work (underway)
Mica classifier commissioned (complete)
Rolls crusher refurbishment (underway)
Product quality projects (underway)
Study feasibility of installing a filter or belt press (initiated)
Flotation study in progress (initiated)
Assess merits of selling DSO (not commenced)
corelithium.com.au
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Q1 FY24 Quarterly Update
Recovery improvement trials seeing uplift
Recoveries continue to improve, ~55% achieved in
October
Spodumene concentrate production
(tonnes) vs recovery (%), (RHS)
corelithium.com.au
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Q1 FY24 Quarterly Update
FY24 guidance on track
Higher tonnes at lower grade for same Lithium unit
production
• Operation on track to reach production, unit cost and capex guidance for FY24
• Current product strategy will see higher volumes of concentrate at a lower grade, with
the overall lithia units expected to be within the range implied by the original guidance
(80,000-90,000t at 5.5%)
• Net revenue outcome is expected to be within range implied by original guidance:
• Lower grade and discounts expected to be offset by higher tonnes.
• ROM stocks to build over Q2FY24 and be drawn down in Q3FY24
• Fines sales expected to be 85,000 to 95,000t of fines at a grade of ~ 1% Li2O at no
incremental mining or processing costs – subject to market conditions
• Finniss sustaining capital of $20-25 million for water management civil work, site
infrastructure, ROM extension and haul roads
• Studies and exploration expenditure to define, extend and discover new resources
$35-45 million
• BP33 remains on track for a Final Investment Decision in 1Q CY24
o Early works budget of $45-50 million
corelithium.com.au
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Q1 FY24 Quarterly Update
corelithium.com.au
BP33: Site works well underway
3D Design for BP33 Box Cut
Wide end of BP33 Box Cut (October 2023)
Box cut length 288m
Box cut depth 40m (design)
354,390t excavated
(393,348t total)
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Q1 FY24 Quarterly Update
BP33: Site works
Box Cut – Tunnel Liner foundations under construction (October 2023)
Concrete batch plant (with cooling) now on site. Footings for
tunnel liners now being installed.
corelithium.com.au
11
Q1 FY24 Quarterly Update
BP33: Site works
Lay down area (October 2023)
All 2,062 steel tunnel segments for the covered box cut
have been delivered to site.
800t of steel reinforcing for arch footings.
corelithium.com.au
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Q1 FY24 Quarterly Update
corelithium.com.au
Increase in Resource confidence at BP33
February 2023
October 2023
•
Measured & Indicated
Increased to 89% of 10.5Mt
@1.53% Li2O
•
Grade increased, from 10.1Mt
@ 1.48% Li2O to 10.5Mt @
1.53% Li2O
NOTES:
1. Refer ASX release 16 October 2023. Core
Lithium confirms that the Company is not aware of
any new information or data that materially affects
the Mineral Resource Estimates and Exploration
Results cross referenced in this report and confirms
that all material assumptions and technical
parameters underpinning the estimates continue to
apply and have not materially changed. The BP33
Mineral Resource announced on 6 March 2023 is
comprised of Measured Resource 2.85Mt @
1.46Li2O, Indicated Resource 4.09Mt @ 1.53Li2O
and Inferred Resource 3.17Mt @ 1.45Li2O. Total
BP33 Mineral Resource of 10.1Mt @ 1.48Li 2O.
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Q1 FY24 Quarterly Update
corelithium.com.au
Project pipeline and sustaining growth
Near-term priority
Project
Discovery
Resource Definition
Development
Grants
Resources: 2.91Mt @ 1.47% Li2O
Production until late CY25
Progress open pit expansion study
Progress study work and reserve
definition drilling
Grants Open pit extension / underground
Resource included in Grants
BP33
Resources: 10.5Mt @ 1.48% Li2O
Complete FS / Early works. Infill drilling planned to convert
inferred resources to measured and indicated.
Targeting FID Q1 CY24 and first production in CY26
Carlton
Resources: 6.2Mt @ 1.38% Li2O
Drilling ongoing at Carlton to support
additional resource definition. Study work
expected to be completed by end of CY24
Hang Gong
Resources: 3.5Mt @ 1.16% Li2O
Progress study work / further drilling
Lees-Booths
Resources: 2.7Mt @ 1.11% Li2O
Progress study work / further drilling
Sandras, Bilatos, Penfolds, Ah Hoy
Resources: 5.3Mt @ 1.01% Li2O
Finniss District, Shoobridge,
Anningie-Barrow Creek
Production / Extension
Drilling to expand resource
Exploration drilling
NOTES
1 ASX Release: "Significant increase to Finniss Mineral Resources" dated 18 April 2023. Total Mineral Resources of 30.6Mt @ 1.31% Li2O. Measured Mineral Resource 6.98Mt @ 1.45% Li2O / Indicated Mineral Resource 12.4Mt @1.33% Li2O. Inferred Mineral Resource 11.3Mt @ 1.21% Li2O.
Core Lithium confirms that the Company is not aware of any new information or data that materially affects the Mineral Resource Estimates cross referenced in this report and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply and have not
materially changed. For full details refer to Appendix A.
14
Q1 FY24 Quarterly Update
Our priorities for FY24
•
Safe Operations & Critical Risk Management program
•
FY24 spodumene production guidance - 80,000t to 90,000t
•
Finniss Operations improvement: Recovery and mining productivity
•
Deliver into offtake contracts
•
Execute exploration plan for FY24
•
Complete BP33 underground Feasibility Study (Q1 CY24)
•
FID for BP33 underground in (Q1 CY24)
•
Fine-tune strategy for regional exploration and growth
•
Continue local Community Grants Program
•
Identify further opportunities for local business and groups to mutual benefit
•
HSE systems and processes that are fit for purpose and reflect our risk profile
•
Learning from first operations activities to enhance Critical Risk Management
EMPLOYER OF
THE FUTURE
•
Contemporary approach to workforce management- role design & engagement
•
Ways of working that deliver on safe, sustainable, cost-effective production
outcomes
4
•
Aspire to create systems of work that foster diversity
•
Continue to build an experienced operational team
OPERATIONAL
DELIVERY
1
SUSTAINED
GROWTH
2
ENVIRONMENT,
SOCIAL,
GOVERNANCE
3
corelithium.com.au
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Q1 FY24 Quarterly Update
Appendix
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17
FINNISS MINERAL RESOURCES
Mineral Resource Estimate for the Finniss Lithium Operation (0.5% Li2O cut-off)
Measured
Indicated
Inferred
Total
Mineral Resource
Tonnes
(Mt)
Li2O
%
Tonnes
(Mt)
Li2O
%
Tonnes
(Mt)
Li2O
%
Tonnes
(Mt)
Li2O
%
Contained Metal (kt)
Grants*
1.93
1.50
0.61
1.49
0.37
1.27
2.91
1.47
42.7
BP33
2.85
1.44
6.51
1.55
1.14
1.59
10.50
1.53
160.1
Carlton
2.20
1.38
2.69
1.39
1.29
1.37
6.18
1.38
85.5
Hang Gong
-
-
1.51
1.18
1.95
1.14
3.46
1.16
40.0
Sandras
-
-
1.17
0.92
0.57
0.82
1.73
0.89
15.4
Lees#
-
-
0.88
1.24
0.35
1.05
1.23
1.19
14.6
Ah Hoy
-
-
0.67
1.16
0.38
1.17
1.05
1.16
12.2
Booths#
-
-
0.80
1.05
0.70
1.06
1.50
1.05
15.8
Bilatos
-
-
-
-
1.92
1.03
1.92
1.03
19.9
Penfolds
-
-
-
-
0.57
1.04
0.57
1.04
5.9
Total
6.98
1.44
14.8
1.37
9.20
1.18
31.10
1.33
412.1
Li2O
Note: Totals within this table are subject to rounding. * Net decrease due to mining depletion. # Re-classified with no additional data.’ The above Mineral resource is current at the time of release on 18 April 2023.
ASX Release: "Significant increase to Finniss Mineral Resources" dated 18 April 2023. Total Mineral Resources of 30.6Mt @ 1.31% Li2O. Measured Mineral Resource 6.98Mt @ 1.45% Li2O / Indicated Mineral Resource 12.4Mt @1.33% Li2O. Inferred Mineral Resource 11.3Mt @ 1.21% Li2O.
Core Lithium confirms that the Company is not aware of any new information or data that materially affects the Mineral Resource Estimates cross referenced in this report and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply and have
not materially changed.
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Q1 FY24 Quarterly Update
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