PERTH (miningweekly.com) – Lithium hopeful Core Exploration has inked a non-binding term sheet with a subsidiary of Shanghai-listed Meidu Energy for the offtake of up to 150 000 t/y of lithium concentrate from the Finniss project, in the Northern Territory.
Meidu subsidiary RuiFu Lthium, which is one of China’s largest lithium hydroxide and carbonate producers, will supply Core with a $35-million conditional prepayment facility that will be advanced in stages as key development milestones are achieved.
The prepayment agreement will be conditional on Core taking a decision to mine at the Finniss project, and having all the necessary approvals and permits in place.
In addition, RuiFu will increase its shareholding in Core to 10%, by subscribing for A$3-million in shares, priced at 5c each. The placement will be undertaken under the company’s placement capacity and will not require shareholder approval.
Core MD Stephen Biggins said on Monday that the funding and concentrate supply term sheet, along with Core’s existing $20-million prepayment agreement of Yahua, had the potential to provide a funding solution for the relatively low capital requirements to get the Finniss project into production.
“The execution of the nonbinding term sheet not only validates the high-quality of Core’s Finniss lithium project, but also the strong success Core is having in developing relationships with some of China’s largest lithium producers,” Biggins said.
“As we progress this project towards development, we are continuing to build relationships with potential offtake partners from China, Korea and Japan.”
A recent prefeasibility study into the Finniss project estimated a preproduction capital requirement of A$53.5-million to develop a one-million-tonne-a-year operation producing 225 000 t/y of lithium concentrate.
This initial development is expected to register earnings before interest, taxes, depreciation and amortisation of A$168-million over its 26-month life, a pre-tax net present value of $140-million and an internal rate of return of 142%, at a concentrate price of $649/t.