Core Lithium has kicked off open pit mining at Grants and underground development at BP33, backed by strong cash reserves and strategic asset divestment plans.
- Open pit mining commenced at Grants with first spodumene shipment targeted for December
- Underground decline development underway at BP33 with $274 million contract awarded
- Two lithium fines sales to Glencore generate A$16.2 million cash flow
- Strong funding secured via equity raising and convertible notes, cash at A$181.8 million
- Gold assets slated for spin-out to Axiant Resources, board chair retires
Mining Operations Take Off at Grants and BP33
Core Lithium Ltd (ASX:CXO) has marked a significant operational milestone with the rapid commencement of open pit mining at its Grants deposit within the Finniss Lithium Operation. Following the award of a surface mining contract to NRW Pty Ltd, drill and blast activities began in the June quarter, setting the stage for ore processing in the September quarter and targeting the first shipment of newly produced spodumene concentrate by December. Grants is expected to deliver approximately 134,000 tonnes of SC5 product, underpinning an accelerated production timeline with lower upfront capital expenditure.
Simultaneously, underground development has kicked off at the BP33 deposit, with the portal cut completed and underground decline development underway after awarding a three-year, A$274 million contract to Develop Global Ltd. This development phase signals Core's shift from initial open pit operations to establishing a long-life underground mine, with first development ore anticipated by mid-2027 and steady state production targeted for mid-2028. The mobilisation of underground mining equipment and infrastructure installation progressed on schedule, reflecting disciplined project execution.
Sales Agreements and Logistics Chain Boost Near-Term Cash Flow
Core has executed two binding sales agreements with Glencore International AG for a combined ~45,000 tonnes of lithium fines from existing stockpiles, generating A$16.2 million in cash during the quarter. These transactions highlight the value of Core’s established logistics chain, now fully operational with shipments of lithium fines and spodumene concentrate successfully exported via Darwin Port. The company continues to explore options to monetise the remaining ~30,000 tonnes of fines, leveraging a flexible marketing framework that includes a five-year agreement with Glencore alongside a newly initiated offtake process to evaluate strategic alternatives.
Exploration and Tenement Consolidation at Finniss
Core has launched a substantial exploration program at the Blackbeard prospect, aiming for a maiden Mineral Resource Estimate supported by a planned 12,150-metre diamond drilling campaign. The Exploration Target ranges from 7 to 10 million tonnes at 1.5% to 1.7% lithium oxide, based on encouraging historical drill intersections. The program forms part of Core’s broader strategy to extend mine life and resource growth at Finniss.
Further consolidating its footprint, Core agreed to acquire the Bynoe Lithium tenement from Charger Metals NL for an initial A$3.75 million, enhancing its tenement package surrounding the Blackbeard prospect. This acquisition, subject to regulatory approvals, includes deferred payments linked to resource milestones and a capped royalty, positioning Core to optimise its exploration pipeline.
Robust Financial Position and Strategic Divestment
Financially, Core closed the quarter with a strong cash balance of A$181.8 million, more than doubling from A$91.6 million at the end of March. This boost followed the completion of the second tranche of a A$120 million equity raising, securing approximately A$67 million, alongside the receipt of US$26 million (~A$37 million) from the first tranche of convertible notes issued to InfraVia Capital Partners. The overall funding package also includes a US$70 million convertible note facility and a US$50 million senior secured debt facility, the latter pending Foreign Investment Review Board approval.
In a strategic move to sharpen its focus on lithium, Core announced plans to spin out its gold and non-lithium exploration assets into a new entity, Axiant Resources Limited. Core will retain a significant stake in Axiant following an anticipated IPO, allowing it to concentrate capital and management efforts on advancing Finniss. The spin-out coincides with the retirement of long-serving Chair Greg English, who will chair Axiant, and the appointment of Malcolm McComas as Core’s new Chair.
Operational Momentum Sets Stage for 2028 Production
Core Managing Director Paul Brown highlighted the quarter as a defining period, with multiple operational fronts advancing in tandem, from mining and underground development to exploration and logistics commissioning. The company’s disciplined execution and strong liquidity provide a solid foundation to progress Finniss toward steady state production by 2028. With key milestones delivered on time and within budget, the focus now turns to processing Grants ore in the September quarter and shipping the first spodumene concentrate by December, while underground development at BP33 gains pace.
Bottom Line?
Core Lithium’s robust cash position and operational progress at Grants and BP33 position it well for a critical production ramp-up phase, though regulatory approvals and exploration outcomes remain key variables.
Questions in the middle?
- Will Core’s exploration at Blackbeard convert the conceptual target into a defined Mineral Resource Estimate?
- How will the completion of FIRB approvals for convertible notes and senior debt impact Core’s funding flexibility?
- What strategic options will emerge from the ongoing offtake process given Core’s unencumbered position?