Core eyes larger Finniss resource
CORE Exploration believes fresh high-grade drill results have demonstrated “significant potential” to grow resources at the near-term Finniss lithium project in the Northern Territory.
The emerging lithium developer has embarked on aggressive drilling this year to grow the Finniss resource base, ahead of a late-2018 Definitive Feasibility Study (DFS) and early 2019 Final Investment Decision.
The Pre-Feasibility Study (PFS) confirmed Stage 1 of the Finniss Project, mining the high-grade Grants deposit, would generate strong free cash flow; but with a mine life of just 26 months, further resources were required to underpin a potential long-life operation.
Latest results from the Carlton prospect, 1km from Grants, included 16 metres at 1.79 per cent lithium oxide (Li2O) from 84m, while results from Hang Gong prospect 1.5km from Grants “highlights potential for shallow-dipping, multiple stacked pegmatites” and included 11m at 1.34 per cent Li2O from 97m.
“These exploration results demonstrate the huge potential of the Finniss lithium project that we are yet to realise,” Core managing director Stephen Biggins said.
“The remainder of 2018 is shaping up to be a very busy one for Core as we continue to progress Grants towards development, while continuing drilling to grow the existing resource base at Grants and BP33, as well as maintaining an aggressive exploration program to continue to identify prospects such as Carlton and Hang Gong.”
The PFS estimated Stage 1 capex of just $53.5 million, of which more than $US20 million was already committed by major lithium offtake partner, Yahua Group.
This, combined with a non-binding $US35 million pre-payment facility with RiuFu, would fully fund Stage 1, the company said.
The PFS also flagged $346 million in pre-tax revenue to be generated over the 26 month period, at a strong operating margin of 57 per cent based on average life of mine sale price of $US649/t (FOB) (A$865/t at 75 cent exchange rate) concentrate; and even more if sales prices move closer to current spot prices.
The company said these strong operating margins provided for a rapid payback period of less than 12 months.
The strong free cash generation from Stage 1 was expected to help Core self-fund future development opportunities at Finniss, including any future development of the nearby BP33 deposit, which has potential to more than double the current mine life.
BP33 will be considered as part of the DFS later in 2018.
“These exploration results demonstrate the huge potential of the Finniss Lithium Project that we are yet to realise.”