Announcement PDF Australia’s newest lithium producer Annual Report 2023 Core Lithium | 2023 Annual Report About this Report Core Lithium is the 100% owner and operator of the Finniss Lithium Operation – the Northern Territory’s first lithium mine, and Australia’s only lithium mine outside of Western Australia. Finniss is located just 88km by sealed road to the Port of Darwin and supported by one of the best logistics chains of any Australian lithium project. Contents The Year in Review 2 Finniss Milestone Timeline 4 Future Focused 6 Chair’s Letter 8 Chief Executive Officer’s Report 10 Operating and Financial Review 12 Sustainability 30 Corporate Governance Statement 40 Tenement Schedule 49 Mineral Resource and Ore Reserves Statement 50 Directors’ Report 55 Auditor’s Independence Declaration 72 Financial Report 73 ASX Additional Information 114 Corporate Information 116 Important Information Acknowledgement of country This Annual Report covers Core Lithium Ltd (“Core”, the “Parent” or the “Company”) and its subsidiaries, collectively referred to as “the Group”. Core Lithium acknowledges First Nations people, the traditional custodians of the land on which we work throughout Australia. We pay our respects to the people and cultures, and to their elders past, present and emerging. We recognise their connection to land, water and community, and their rich contribution to society. The financial report is presented in the Australian dollars. Core is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Core Lithium Ltd Level 9, 2 Mill Street Perth 6000 Western Australia 1 Construction of the Finniss Operations was completed in early 2023 and the first concentrates produced in February 2023. 2 Core Lithium | 2023 Annual Report The Year in Review Value drivers Delivery Growth Commercial ESG Operational and financial performance Exploration and business development Product, market strategy and sales Reputable supplier of ethically sourced minerals Operations Sales and marketing Mining of ore commenced in October 2022 14,774t Read more 16–17 Read more 18 Direct Shipping Ore sold through digital exchange platform Projects and exploration Read more 19–23 Finniss Global Mineral Resource estimate 62% to 30.6Mt @1.31% Li2O1 Finniss mine officially opened Construction completed DMS plant completed Crushing plant commissioned Logistics to port commissioned First concentrate produced 18,274t concentrate produced 1. Commissioned all logistics to the Darwin Port First spodumene concentrate shipment made in April Pre-payment agreements reached with customers 5,423t in spodumene concentrate sales Maiden guidance 80,000–90,000t of spodumene concentrate production for FY24 BP33 Finniss Mineral Resource estimate 131% to 10.1Mt @1.48% Li2O2 BP33 early works and feasibility study update commenced $15.0m Spent on exploration in FY23 $35– 40m Guided for FY24 exploration and studies Refer “Significant Increase to Finniss Mineral Resources released on 18 April 2023. 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. 3 Financial (as at 30 June) Read more 14–15 $152.8m Cash NIL Debt 1,859m Gearing up for growth ESG Appointment of Andrea Hall as Non-Executive Director CRM implemented Read more 24–29 Read more 30–39 12 Community Grants awarded Appointment of Gareth Manderson as Chief Executive Officer $11m capital allocated to water management Shares on issue $50.6m Leadership team in place revenue $90.8m Operating cash flow Relocation of registered office to Perth New charter for Risk and Sustainability Committee Total rewards framework for employees NPAT of $10.8m 2. Refer “BP33 Mineral Resource more than Doubled” on 6 March 2023. 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. Measured Mineral Resource 2.85Mt @ 1.46% Li2O/Indicated Mineral Resource 4.09Mt @ 1.53% Li2O. 4 Core Lithium | 2023 Annual Report Finniss Milestone Timeline Discovery to Production Finniss landholding grows 250% 2019 2018 • AAPA Certificate granted 2017 • BP33 MRE grows 50% 2016 • BP33 emerges as high-priority target • Finniss discovery • Core transitions to pure-play lithium company • Bynoe region project acquisition • Bynoe landholding increased • Maiden MRE at Grants • Grants mining lease lodged • Maiden MRE at BP33 • Grants MMP submitted • Scoping study • Grants Mining Lease granted • Finniss DFS • EPA assessment completed • Grants MMP submitted • Yahua offtake agreement 5 Finniss Mineral Resource Estimate grows BP33 grows Finniss MRE grows 10.1Mt 18.9Mt 30.6Mt @1.4% Li2O1&2 @1.31% Li2O @1.32% Li2O Finniss Ore Reserve grows 10.6Mt 2023 @1.3% Li2O 2022 2021 • BP33 mine authorisation and Mine Management Plan • Finniss officially opened • $50M early works approved • Updated DFS • Crushing plant commissioned • Ganfeng offtake $125M raising • Maiden DSO sale • $100M institutional placement and Share Purchase Plan • Final Investment Decision • Construction complete • Construction commences • First concentrate produced • Finniss awarded Major Project status • Core joins ASX200 • Additional offtakes • BP33 Mining Lease granted • Finniss ORE grows to 10.6Mt @1.3% Li2O • $100M institutional placement 2020 • BP33 approvals commence • Grants MMP approved • Darwin Port agreement • BP33 Early works commence • First delivery into long-term offtakes • Mining commences 1. Refer “Significant Increase to Finniss Mineral Resources released on 18 April 2023. 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. 2. Refer “BP33 Mineral Resource more than Doubled” on 6 March 2023. 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. Measured Mineral Resource 2.85Mt @ 1.46% Li2O/Indicated Mineral Resource 4.09Mt @ 1.53% Li2O. 6 Core Lithium | 2023 Annual Report Future Focused Our focus for FY24 Core aims to be a reputable supplier of sustainably and ethically sourced Australian minerals. Core strives to be a responsible and sustainable participant of Australia’s mining sector. We aim to be a company that contributes positively to responding to climate change both through our products and our practices. As we mature, we aim to implement sustainable practices through all stages of our operations, from extraction through to processing and distribution. Our objective is to conduct our operations minimising environmental and social impacts and delivering positive outcomes for our stakeholders and the local communities where we operate. Lithium has a fundamental role in shaping the global energy future, with battery storage key to the decarbonisation pathways the world will pursue. We are excited to be part of that journey through mining and processing spodumene concentrate to produce the lithium hydroxide that is essential to battery production. We are embracing our role in the energy transition and acknowledge our responsibility to sustainably manage our operations to contribute to a lower carbon future. Delivery Growth Sustainability Achieve FY24 spodumene production guidance of 80,000 to 90,000 tonnes Execute exploration plan for 2024 Develop the sustainability strategy aligned with future growth opportunities Complete BP33 underground revised Feasibility Study due in Q1 2024 Identify further opportunities through the community investment program for local businesses, associations and groups to mutually benefit Execute Finniss performance improvement initiatives, including improving lithia recoveries and mining productivity Deliver into offtake contracts Reach FID for BP33 underground in Q1 2024 Fine-tune strategy for regional exploration and growth options Build HSEC systems and processes that are fit for purpose and reflect our risk profile Continue to evolve the integration of Critical Risk Management into operational practices 7 8 Core Lithium | 2023 Annual Report Chair’s Letter Dear Shareholder Last year, we safely and significantly advanced the Finniss Lithium Project and completed our first financial year as an Australian lithium producer. During 2023, Core became Australia’s newest lithium producer, with the first sale of lithium (direct shipping ore) occurring just five years after our first announcement of a Mineral Resource at Finniss. Construction and development were the central focus of activities at Finniss during the year, as our team worked to a rigorous timeline of key milestones and objectives. Significant progress was achieved with the Dense Media Separation (DMS) plant construction completed and the first commissioning ore produced in February 2023. The commissioning of modern DMS plants is never without its minor hiccups, and during the year, we managed and fine-tuned a number of elements of the processing circuit. Building and operating a mine and processing plant in a tropical climate can be challenging, with open pit mining during the wet season proving difficult. Despite the difficulties, we were able to continue open pit mining operations to extract the Direct Shipping Ore (DSO) lying above the main Grants deposit, as well as mining significant volumes of open pit spodumene ore and overburden. It is a tribute to the continued focus, hard work and dedication of our outstanding team of people, both at the Finniss Project and in our Perth head office, that we have achieved so many outstanding milestones during the year. Safety As our business continues to grow, safety remains our priority at Core and is an integral part of everything we do. During the year, the Core team successfully implemented programs to strengthen our approach to safe work and further embedding it in our operations. The safety of our people will continue to be a key focus for Finniss through our safety leadership, our systems of work, and our workplace attitudes, where all employees and contractors take action to ensure effective controls that address hazards are in place. Our strategic focus While ramping up production at Finniss remains our key immediate priority, we are also building a pipeline of high-quality assets to sustain growth over the long term. Some of the key pillars of our growth strategy are already beginning to take shape, and they form the backdrop to what we see as a multi-pronged growth strategy. The key elements of this strategy include: • Build our ESG credentials – strengthen our culture and safely advance growth and operational delivery at our operations. • Production – ensuring we continue to hit all of our goals and milestones at Finniss, successfully ramping lithium production to meet forecasts and maintaining operating costs within target levels. • Near-mine exploration – maintaining a comprehensive and aggressive exploration program targeting additional lithium deposits around our existing mining operations and within our broader 500 km2 tenement holding at Finniss. We are currently spending over $25 million per year on exploration to unlock the next generation of lithium deposits, utilising some of the world’s most sophisticated exploration technologies. The BP33 underground mining studies started earlier this year and are focussed on optimising the BP33 mine design, with a final investment decision to be considered in early 2024. • Australian regional exploration – undertaking focused exploration programs within a growing portfolio of exploration projects. Opportunities include Anningie and Barrow Creek near Alice Springs and Shoobridge, approximately 130km southeast of Finniss. • Business development – targeting assets that can add genuine value through acquisition or corporate opportunities. 9 The result of our team’s outstanding commitment and dedication was clearly displayed at the official opening of the Finniss Lithium Mine, which was officially opened by the Northern Territory Deputy Chief Minister, the Honourable Nicole Manison MLA, on 10 October 2022. This was a very proud day for the Core team. At the opening ceremony, I said it was an opportunity to thank the many people who have contributed to the Core success story and to celebrate the spirit of resilience and optimism that forms the backbone of the Australian mining and exploration industry. The official opening took place at the Finniss Grants Lithium Mine on 10 October 2022 by the Honourable Nicole Manison MLA, the Northern Territory’s Minister for Mining, and Industry. Core Chief Executive Officer Gareth Manderson, Core Non-Executive Chair Greg English and members of the Core Board were also in attendance. Board and Management Throughout FY23, Core’s organisational structure has evolved for growth. We have significantly grown our in-house expertise, refined our strategy, strengthened our management team and reorganised the team to support our future growth agenda. Our devolved organisational structure has enabled a continued focus on sustained, reliable performance at the Grants open pit mine, construction and commission of the Grants DMS plant, commencement of studies for our next generation of mines and the consolidation and embedding of our culture and governance processes. Since beginning life with an appropriately structured smaller Board, Core now has four Directors. Notably, three of these are independent, including our latest appointment, Andrea Hall. Andrea is an experienced company director and highly respected industry leader with a distinguished career as a company director and consultant. Consideration will be given to appointing additional independent Directors in the next 12 months. Any such appointment will be considered in the light of continuing to add to a diverse mix of skill sets on the Board. Core’s firm belief that our people are the key to realising our ambitions led to the appointment of Gareth Manderson as Chief Executive Officer. Gareth brings a wealth of skills and experience to this crucial position. Gareth hit the ground running and quickly built an experienced and highly credentialed senior management team, ensuring he is ideally placed to help us meet our performance and growth targets at Finniss now that the commissioning process is complete. Outlook Core’s progress is also being reflected at the corporate level, with the composition of the Board continuing to evolve in response to the Company’s growing status. Core’s founding Managing Director, Stephen Biggins, resigned in October 2022. Mr Biggins oversaw the initial ASX listing of Core and was instrumental in discovering and developing the Finniss Lithium Project. The outlook for lithium remains optimistic, with demand for traditional and new lithium-ion battery technologies contributing to projected growth in demand. A global mine supply shortfall is projected in the coming years due to increasing lithium demand and a lack of new mine development. This, combined with emerging battery technologies that depend on lithium, suggests it will remain a sought-after commodity. The Company’s achievements have laid a solid foundation for us to resume the strong growth path as global economic conditions improve and demand for lithium – which remains a core metal for the transition to electric vehicles – recovers in North America and the Euro Zone and continues to be underpinned by the strong growth of the Chinese economy. With the ramp-up of production at Finniss now essentially complete, we look forward to another successful year ahead as we continue to take measured steps towards realising our vision of building a sustainable lithium mining company in partnership with our strategic commodity partners worldwide. Much of the thanks for this remarkable journey must go to our team, both staff and contractors, who have ensured that we have made the journey quickly, safely and prudently. In particular, I would like to recognise our senior management team’s continuing hard work and efforts. Our management team worked tirelessly during the year to ensure that Core’s transition to an ASX-200 mining company has been seamless. I also acknowledge the support of our offtake partners with whom we have developed a healthy relationship. Finally, I thank our shareholders for your continued support, trust, and confidence. We are now at a point where our efforts in FY24 will be focused on consolidating and strengthening our current position. This will support the delivery of our future growth ambitions in the coming years. We will do this by strengthening our approach to safe work in all our operations, delivering reliable and consistent mine operation performance, ramping up towards DMS plant full production, optimising our future growth pipeline through our province approach, mining studies at BP33 and Carlton and continued near mine and regional exploration. Greg English Chair Core Lithium Ltd 10 Core Lithium | 2023 Annual Report Chief Executive Officer’s Report Dear Shareholder In the 2023 financial year, your company became Australia’s newest lithium producer. This achievement is a testament to the vision of your Board and the hard work of the Core Lithium team over a number of years. The minimum viable project approach taken at Finniss (the smallest viable resource and lowest capital investment necessary to commence production) has generated revenue in less than two years from the Grants Final Investment Decision. In parallel, successful exploration has led to a 62% increase in Finniss’ Global Resource to 30.6Mt at 1.3% Li2O, and within that an increase to the BP33 resource by over 130% leading to the potential for the BP33 mining option to cornerstone the Core business1. In the 12 months since joining Core we have rapidly completed construction, commenced operations and worked to define the next steps of growth for the business. The Core team has worked very well together to achieve many important milestones at the Finniss Lithium Operation and they have also responded very well to the challenges often faced by a young business maturing from developer to miner and operator. Operations The Finniss Lithium Operation was officially opened in October 2022, shortly after the commencement of ore mining at the Grants pit. This was followed by rapid commissioning of the crushing plant, which saw our first revenue generated from the sale of our first lithium product, a 15,000t DSO Direct Shipping Ore (DSO) cargo using a digital exchange platform in November. We also managed through our first wet season as a producing mine. This challenged our new site, with water inundating the pit in December. Our operations team moved quickly and worked together admirably to resolve the situation. During this time, construction of the Dense Media Separation (DMS) processing plant was completed and commissioning commenced. In late‑February, we subsequently reported production of our first spodumene concentrate. 1. Operational outlook By the end of the financial year sufficient operational experience and data was gathered from integrated but campaigned pit to plant operations, to complete a detailed budgeting and forecasting process. Our first production guidance of 90,000 to 100,000t of concentrate sales, was provided to market as a result of this work. While this forecast for FY24 was below expectations from study work, it is important to note that the reasons for this are understood. Metal recoveries from the DMS plant are lower than expected, a revised mine plan required the pit walls to be laid back to improve wall geotechnical stability and the wet season impact is better understood. Importantly, Core now has a baseline of operational performance at Finniss to build on, and a clearer picture of the journey ahead as we ramp up operations. Our priority now is to undertake plant trials and engineering studies to identify near, medium and long-term initiatives to lift recovery rates and improve mining operations. While this improvement work is underway, the sale of a lithium fines product generates revenue from a new product which would otherwise have been unsold. Our people Focus has also been brought to bear on the establishment of the organisations’ capacity and capability. During the year a leadership team has been brought together, with the capabilities and experience to lead Core through its transition from developer to operator and drive a growth strategy. The company’s corporate office has been relocated to Perth, Australia’s lithium capital which is providing ready access to the resources and capability required to support our business. For full details refer to 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. The BP33 Mineral Resource Estimate (MRE) was first reported on 6 March 2023 and is comprised of; Measured MRE of 2.85Mt @ 1.46% Li2O, Indicated MRE of 4.09Mt @ 1.53% Li2O and Inferred MRE of 3.17Mt @ 1.45% Li2O. Core Lithium confirms that the Company is not aware of any new information or data that materially affects these Mineral Resource Estimates and confirms that all material assumptions and technical parameters underpinning the estimate continue to apply and have not materially changed. 11 Financial performance Strategy and priorities This financial year your company generated its first income from lithium sales. The Company recorded revenue of $50.6 million from a shipment of Direct Shipping Ore (DSO) and a portion of the revenue from its first cargo of spodumene concentrate. We generated an earnings before interest, taxes, depreciation and amortisation (EBITDA) of $14.0 million, with a reported net profit after tax of $10.8 million. Moving forward Core is focused on three priorities. Firstly, to establish the mining business around the Grants operation as outlined above. Secondly, progress the BP33 project, our near-term growth option, including the early works and the underground mine feasibility, and thirdly pursue an organic growth strategy that includes exploration across our leases to identify potential mine options. Prudent cashflow management, and balance sheet strength and flexibility have been a key focus of the management team to support the Finniss ramp up period, maintain resource expansion and progress development opportunities. We have done this through securing pre‑payments for commissioning and first production volumes and two capital raises. One in September 2022 and a second in August 2023. Maiden revenue generated from our first production, along with the capital raised in September 2022 saw us end the financial year with a closing cash balance of $153 million. The BP33 underground project has been selected as the next potential mining operation, and subject to a successful updated feasibility study, could become the cornerstone asset for Finniss. In March, we reported that Mineral Resources at BP33 more than doubled. The BP33 Mine Authorisation and Mine Management Plan was received from the Northern Territory Government in May, and up to $50 million was allocated to an early works program to be conducted in parallel with the mining feasibility study. The early works includes surface infrastructure and a covered box cut to reduce the water catchment area and better accommodate the wet season. Our long-term offtake partners remain valued supporters of our business. As mentioned above, Sichuan Yahua, signed sales agreements to purchase the commissioning and first production concentrate cargos under pre-payment terms, and, as we now begin to deliver into the long-term offtake agreements, both Ganfeng and Yahua have provided flexibility in terms of shipment timing as we work through the recovery improvement plan and ramp up period of operations. As part of our organic growth program, our $13 million 2022 drilling program was the biggest in the Company’s history and as mentioned above, in April, we reported the Finniss’ Global Resource had increased by 62%. In 2023 the Company increased exploration spend again, allocating $25 million, as well as establishing a project studies team. The immediate focus of this work is to find and prove up mining options from those deposits in the Northern Finniss area within trucking distance to the crusher and DMS plant. “Importantly, Core now has a baseline of operational performance at Finniss to build on, and a clearer picture of the journey ahead as we ramp up operations. Core is producing lithium, a commodity with very attractive long‑term fundamentals. As the global decarbonisation transition gains momentum, we will work to use our assets to their highest potential to match demand for our lithium products. Working together inside and outside the business the Core Lithium team will continue to build an inclusive culture that supports strong safety, operational and financial performance. We will also work closely and in partnership with our contractors, suppliers and stakeholders.  ur priority now is to O undertake plant trials and engineering studies to identify near, medium and long-term initiatives to lift recovery rates and improve mining operations.” In this way we will build our ESG credentials, contribute to the global transition to a low carbon future and in doing so build a great long-term business for our shareholders and the communities where we operate. The financial year ahead is shaping up to be another period of significant growth for Core. The ramp up to commercial operations at Finniss is advanced, and the parallel early works program and updated feasibility study at BP33 are progressing well and we are on track for a Final Investment Decision in the March quarter of 2024. Core continues to receive strong inbound interest from existing battery chemical manufacturers as well as companies with plans to build facilities in many parts of the world. This demand coupled with continued constrained supply leads to favourable market conditions for our products and provides the business case to continue to pursue our growth options. I would like to take this opportunity to thank the Core team and our contracting partners for the work they have done to deliver the Finniss Lithium Project and turn it into Finniss Operations over the past year. Thanks also goes to our customers, suppliers, and the Federal and Northern Territory Governments for their support during this pivotal year for Core Lithium. And finally, I thank our shareholders. It has been a year of significant change. We are grateful for your ongoing support as we work through our transition to a mature mining operator and continue to develop our growth options. Gareth Manderson Chief Executive Officer Core Lithium Ltd 12 Core Lithium | 2023 Annual Report Our Financial Performance Operating and Financial Review Core Lithium’s transition from explorer and developer to producer has seen the Group report its maiden profit. The Company generated revenue of $50.6 million from its first sales; a shipment of Direct Shipping Ore (DSO) and a cargo of spodumene concentrate. The Group generated an EBITDA of $14.0 million, with a reported net profit after tax of $10.8 million. $50.6m Revenue $14.0m EBITDA $10.8m NPAT 13 Our operations are reviewed on pages 12 to 18, and the Group key risks are addressed on pages 26 to 29. These sections and the information below form part of the Operating and Financial Review. Summary of FY23 A summary of Core Lithium’s production, sales and financials are provided below. For the full statutory accounts see page 73. Table 1 – Summary FY23 physicals, sales and financials Operations Spodumene concentrate production Tonnes 18,274 Spodumene concentrate sales Tonnes 5,423 US$/t 4,163 DSO production Tonnes 14,774 DSO sales Tonnes 14,774 DSO realised Price US$/t 951 C1 Costs A$/t 1,155 Revenue $m 50.6 EBITDA $m 14.0 NPAT $m 10.8 Operating cash flow $m 90.8 Finniss Capex $m 150.6 Exploration expenditure $m 15.0 Cash balance at 30 June $m 152.8 Spodumene concentrate realised price Profit and Loss1 Cash flow 1. The Group reports the figures below to help explain its underlying performance and profitability. The detailed reconciliations of these non-IFRS measures are provided below. 14 Core Lithium | 2023 Annual Report Our Financial Performance Operating and Financial Review Income Statement The company’s maiden full-year revenue of $50.6 million was underpinned by the sale of first lithium products in H2 FY23 – a shipment of Direct Shipping Ore (DSO) and a shipment of spodumene concentrate. In January 2023, Core received $20.1 million payment for a 15,000-tonne DSO cargo for US$951/tonne, representing the Company’s first revenue event. This was followed by shipment of Core’s 5,423 maiden cargo of spodumene concentrate in May,