Lithium developer Core Lithium [ASX:CXO] announced its first Spodumene Direct Shipping Ore (DSO) tender via a digital exchange platform.
Core sold 15,000 dmt (dry metric tonnes) of DSO at an average grade of 1.4% for US$951/dmt.
CXO also completed a $100 million placement, issuing 97.1 million new shares at a 6.8% discount to the last close price of $1.105 on 29 September.
The fresh funds will fast-track the development of its Finniss Lithium Project.
CXO shares were down more than 4% in late Monday trade. The CXO stock is up 65% year to date.
Source: Trading View
Core announces first ever DSO for Finniss
On Monday, Core Lithium broadcast its inaugural sale of a spodumene DSO product at 1.4% Li2O grade, sourced from its Darwin-based Finniss Project.
Core reported 15,000 dmt was tendered on a CIF (Cost, Insurance, and Freight) basis, fetching US$951 per dmt after being exposed to several pre-screened participants within the lithium-ion battery supply chain.
CXO takes the interest from these participants, and the concluding purchase price, as evidence of strong demand for DSO spodumene.
Proceeds from the sale will allow Core to continue commissioning its ongoing logistics processes at Finniss and fund activities at Darwin Port, preluding spodumene concentrate production due in H1 2023.
The shipment is scheduled to leave the Darwin Port around late Q4 2022.
Core’s CEO Gareth Manderson provided a brief statement:
‘The completion of the spodumene DSO tender is an excellent result for Core and indicates the strong demand for lithium.’
To support further growth and production at its Finniss mine, Core also recently carried out a AU$100 million fully underwritten placement, which is now complete.
The placement consists of 97.1 million shares at the price of AU$1.03 each (a 6.8% discount to the last close price on 29 September 2022 of AU$1.105 and a 13.0% discount to the five-day volume weighted average price of AU$1.184), raising the total AU$100 million before the deduction of any costs relating to the transaction.
Core reported the placement was well received, with support of both new and existing ‘high-quality domestic and global institutional investors’ interested in growth opportunities for its Finniss Lithium Project, which Core takes as a strong endorsement to its efforts.
These funds will enhance the company’s balance sheet, allowing the company to fast-track its exploration programs, capital development initiatives, and further growth opportunities for Finniss.
Some of those program and growth opportunities include extension exploration drilling, development of the prosed BP33 underground mine, starting night shifts to push timeline targets, improve development, and general construction ramp-ups.
Core encouraged to fast-track growth based on lithium demand
While the resources sector has been one of the worst hit as recession fears shake markets, Core has been pushing hard with its Finniss Project plans, boosting growth with its AU$100 million capital raising and already glimpsing the benefits with its first DSO tender.
Despite Tesla’s offtake negotiations sidelined to the end of October, Core sees an abundance of opportunities provided by a market in which demand continues to outweigh supply.
This is even despite some corrections experienced in the lithium sector this year.
As Core moves towards expanding an underground mine and ramping up construction at Finniss, the high price offered for its first spodumene DSO has encouraged the miner.
Lithium and the EV revolution
In 2021, lithium stocks dominated the ASX — eight of the 10 best-performing stocks on the All Ordinaries in 2021 were lithium stocks.
But lithium stocks haven’t fared as well in 2022, with many of last year’s high-flyers trading well below their 52-week highs.
Is it too late to tap into the lithium sector, then?
As we were just assessing in regard to Core’s outlook, not quite.
In fact, our Money Morning editors recently published a research report on three overlooked ASX lithium stocks.
Get the exclusive intel here.
Regards,
Kiryll Prakapenka,
For Money Morning
