Core Lithium owns 100% of the Finniss Lithium Project, located just south of Darwin port in the Northern Territory, which has JORC 2012 compliant Mineral Resources of 3.45 million tonnes (Mt) at 1.4% lithium oxide (Li20).
The flagship Finniss Project lies within one of the most prospective areas for lithium in the NT, the Bynoe pegmatite field, and covers over 500 square kilometres of granted tenements.
The Company is proposing to develop one of Australia’s highest-grade lithium resources at the Grants Deposit and is also actively exploring the highly prospective BP33 Deposit, both of which are integral components of the Finniss Project.
The Finniss Project has substantial infrastructure advantages; being close to grid power, gas and rail and within easy trucking distance by sealed road to Darwin Port – Australia’s nearest port to Asia.
Grants Pre-Feasibility Study
In June 2018, Core released a Pre-Feasibility Study for the Grants Deposit, marking a major step forward in its goal become a major Australian lithium producer.
Core’s development of the Finniss Lithium Project is initially centred on production from the high-grade Grants deposit as an open pit mining operation, and construction of a simple 1Mtpa Dense Media Separation (DMS) process plant that will produce a high quality 5% spodumene concentrate for export.
The high grade of Grants, when coupled with proximity to infrastructure, low capital and operating costs, results in a development capable of delivering A$168 million (pre-tax) in free cash generation over a period of only 26 months.
This strong cash surplus will ensure Core is well placed with a first-mover advantage in this exciting new lithium province and lays solid foundations for the building of a long-term lithium production hub.
Existing road infrastructure will provide access for daily road train movements of concentrate product to the Darwin Port for shipment which is located 88km from the Project area.
The Project also has other substantial infrastructure advantages, including being close to grid-power, gas and rail infrastructure and being less than a 1-hour drive from the skills, trades, workshops and services in suburban Darwin.
The PFS confirms Grants as a financially viable operation, with A$346 million in revenue (pre-tax) to be generated over the 26-month life-of-mine, at a strong operating margin of 57% based on average life of mine sale price of US$649/t (FOB) (A$865/t at 75 cent exchange rate) concentrate, and up to 67% operating margin in the event sales prices closer to the current spot price of US$895/t (FOB) concentrate can be achieved. These strong operating margins provide for a rapid payback period of less than 12 months.
The strong free cash generation from Stage 1 of the Finniss Project development, mining only the Grants deposit initially, is expected to enable Core to be self-funding on future development opportunities within the Finniss Project, including any future development of the nearby BP33 deposit, which has potential to more than double the mine life of the Finniss Project.
In addition to the BP33 Mineral Resource, there are a number of additional advanced pegmatite targets within the Finniss Project containing known high-grade lithium intercepts that require follow up drilling. The results from this follow up drilling will provide additional line of sight to organic growth opportunities.
A maiden Mineral Resource estimate for the BP33 Deposit was released in May 2018 and comprised an Inferred Resource of 1.4Mt at 1.40% Li20, which grew the overall Finniss Mineral Resources by 70%.
The potential to expand the maiden BP33 Mineral Resource is considered high as the Mineral Resource is currently extended only 20m south of the most recent drill intersection of 75m @ 1.68% Li2O at the southern end of BP33. Resource extension and exploration drilling recommenced in May 2018 at BP33 to test directly south of this outstanding high-grade lithium drill intersection.
The BP33 Mineral Resource is open to the south and south-west in a 300m long target area between pegmatites identified at surface at BP32 Prospect and BP32W Prospect. Drilling at BP33 is planned to immediately define south and south west extensions to the BP33 Resource and undertake exploration drilling in the target area between the BP33 Resource and BP32 and BP32W prospects.
The Company also commenced aggressive exploration and resource expansion drilling campaigns in June 2018 over the larger Finniss Project area, with the aim of substantially growing the Mineral Resource base for the Finniss Project to underpin a potential long-life lithium mining and production business.
ANNINGIE AND BARROW CREEK
During the June 2018 quarter, Core acquired a 100% interest and conducted reconnaissance evaluation of granted Exploration Licence 31058 comprising 574km2 in the Barrow Creek Pegmatite Field in the NT.
Barrow Creek is an early-stage look-alike to Core’s high-grade discoveries at the Finniss Lithium Project with a long history of tin and tantalum production around Barrow Creek, similar to Core’s Finniss Lithium Project (and Greenbushes).
Core believes there is an excellent fit between the lithium potential of Barrow Creek Pegmatite Field, direct rail link to Darwin Port and Core’s objectives to make Darwin and Core’s Finniss Lithium Project near Darwin a central processing and global transport hub forNT lithium and spodumene production as forecast lithium demand keeps growing
Core’s Anningie and Barrow Creek Lithium Projects now encompass five exploration licences covering approximately over 2,500 square kilometres in and around the Anningie and Barrow Creek Tin Tantalum Pegmatite fields in the north Arunta Region of the NT, which are considered highly prospective for lithium.
Reconnaissance mapping and soil geochemical surveys on EL31058 during the reporting period included 2,150 regional-spaced soils samples and mapping by Core’s geologists.
Historical pegmatite prospects and mine areas subject to field reconnaissance and soil sampling included Ringing Rocks, Jump Up, Ballace’s Claim1 & 2, Tabby Cat, Hugo Jack’s, Boyce’s Corner, Johannson’s, Jody’s, Slippery and Krakatoa. Many other pegmatite occurrences were also opportunistically investigated during the course of reconnoitring and navigating. The soils program aimed to test historically mined or prospected pegmatite fields and geological settings considered prospective for Lithium-Caesium-Tantalum (L-C-T) Type pegmatite.
Soil sample grids generally utilised 200X400m or 400X400m spacing to establish regional coverage without sacrificing resolution. Two historical prospects (Tabby Cat and Jump Up) with lithium associations established by previous workers were subject to more detailed 50X100m spaced grids.