Core Lithium Faces Funding and Operational Risks as It Raises A$60M for Finniss

Equity Raising to Accelerate Finniss Restart

Core Lithium Ltd (ASX – CXO) has announced a significant capital raising initiative designed to underpin the advancement of its Finniss Lithium Project in the Northern Territory. The company is seeking to raise approximately A$60 million through a non-underwritten two-tranche placement to institutional and sophisticated investors, alongside a share purchase plan (SPP) open to eligible shareholders in Australia and New Zealand.

The placement comprises an initial unconditional tranche of about A$29.2 million, with a second tranche of approximately A$20.8 million subject to shareholder approval expected in early October. The SPP aims to raise up to A$10 million, offering existing shareholders an opportunity to participate at the same discounted price of A$0.105 per share, representing a 12.5% discount to the last traded price.

Strategic Use of Funds

The proceeds from the capital raising will be directed towards critical long-lead items, including the BP33 underground box cut and decline development, as well as operational readiness activities. These include technical services, approvals, and accelerated testwork to improve cost confidence and contingency estimates. Additionally, funds will support general working capital and the costs associated with the equity offer.

Core Lithium’s management emphasizes that this funding will de-risk and accelerate the Finniss Project’s progression to a positive Final Investment Decision (FID), a pivotal milestone for the company’s growth trajectory.

Finniss Project – A Low-Cost, Long-Life Asset

The Finniss Lithium Project is positioned as a low-cost, long-life spodumene concentrate operation with a 20-year mine life and an average annual production target of 205,000 tonnes of SC6 equivalent. The project benefits from existing infrastructure, including a modern dense media separation (DMS) plant with planned throughput expansion to 1.2 million tonnes per annum.

Recent studies have updated the ore reserve to 10.7 million tonnes at 1.29% lithium oxide, supported by a mineral resource base of 48.5 million tonnes. The operation’s cost profile is competitive, with forecast unit operating costs between A$690 and A$785 per tonne FOB, excluding royalties.

Strategically located just 88km from the Port of Darwin, the project enjoys access to established export infrastructure and proximity to key Asian and Middle Eastern markets, enhancing its commercial appeal.

Management and Market Position

Core Lithium is led by an experienced management team with deep expertise in lithium mining and capital markets. The company remains debt-free with a market capitalization of approximately A$257 million and a cash balance of A$23.5 million as of June 2025.

The equity raising is supported by joint lead managers Argonaut Securities and Canaccord Genuity, with Morgan Stanley appointed as financial advisor for the broader strategic funding process. Core is actively engaging with potential strategic and financial partners to secure funding pathways that minimize shareholder dilution.

Risks and Considerations

While the Finniss Project presents a compelling opportunity, Core Lithium highlights several risks inherent to mining operations and capital markets. These include uncertainties around the restart timeline, commodity price volatility, funding execution risk given the non-underwritten nature of the raise, and operational challenges such as achieving production targets and cost estimates.

Additionally, the company is involved in ongoing discussions with offtake counterparties and faces legal risks, including a noted dispute with Tesla, Inc. Investors are cautioned to consider these factors alongside the company’s growth prospects.