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Core Exploration enters maiden offtake, prepayment agreements

1st December 2017

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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JOHANNESBURG (miningweekly.com) – ASX-listed Core Exploration has entered into a binding lithium offtake agreement and a conditional $20-million prepayment agreement with China-based lithium hydroxide and carbonate producer Ya Hua International Investment and Development for the Finniss lithium project, near Darwin, in the Northern Territory.

Marking a milestone step in Core’s journey to become a low-cost lithium producer, the offtake agreement provides for the supply of one-million dry metric tonnes of direct shipping lithium ore (DSO) from Core’s 100%-owned Finniss.

“The signing of the first offtake and prepayment agreements for the Finniss lithium project is a significant milestone for Core, and we are delighted to have extended our strategic relationship with Yahua, as one of our largest shareholders as a result of the recent $2-million equity investment into Core,” said MD Stephen Biggins.

Ya Hua International is a wholly-owned subsidiary of Shenzhen Stock Exchange listed Sichuan Yahua Industrial Group.

The three-tranche prepayment facility, subject to various conditions precedent, will be used for the development of the Grants lithium deposit, which is currently the target of a prefeasibility study (PFS) with a first-delivery guidance of mid-2019.

The prepayment will be offset by Core through the delivery of either DSO or lithium oxide concentrate production from the Finniss lithium project or cash payment.

The company expects to report an updated mineral resource and results of its PFS in the first quarter of 2018.

“These agreements are a strong endorsement of the Finniss lithium project and give substantial clarity on project funding as we embark on our plan to rapidly transition into lithium DSO production, with a view to generating early cash flow that can fund our ultimate goal of becoming a long-term supplier of spodumene concentrate to the growing lithium battery market,” said Biggins.

It is expected that the offtake agreement will account for more than 50% of the Grants lithium deposit production over the life-of-mine.

Edited by Creamer Media Reporter

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