Lithium producer Core Exploration has signed a $US35 million ($47.3 million) prepayment and concentrate offtake agreement with Meidu Energy subsidiary, Shandong RuiFu Lithium.
The non-binding term sheet will see Shandong RuiFu receive up to 150,000t a year (150,000t/y) from Core’s Finniss lithium project south of Darwin Port, Northern Territory. The Chinese company will also invest $US3 million in 60 million Core shares (a price of 5 cents per share) for a 10 per cent stake in Core.
Feicheng-based Shandong RuiFu is one of China’s largest lithium hydroxide and carbonate producers.
Core recently confirmed the prospect of a project expansion at Finniss after finding significant lithium extensions outside of its established mineral resource area.
The extensions were found at the project’s Grants deposit, which was the subject of Core’s first prepayment and offtake agreement at the Finniss project last December — a $US20 million direct shipping ore (DSO) offtake agreement with Yahua, also from China.
Core managing director Stephen Biggins said the company was continuing to build relationships with potential offtakers in Korea, China and Japan as the Finniss project progressed.
“This funding and concentrate supply term sheet with RuiFu, along with our existing prepayment agreement with Yahua, sum to $US55m in pre-payments, and has the potential to provide the funding solution for the relatively low capex required to get the Finniss lithium project into production,” said Core managing director Stephen Biggins.
“We see the development of Grants as just the beginning for Core, as we anticipate Core’s bank of mineral resources [to] expand in the future, and our entry into production should be well-timed to coincide with what we see as rapidly increasing global long-term demand for lithium batteries.”
The Finniss project possesses a JORC 2012 mineral resource of 3.45Mt at 1.4 per cent lithium oxide. Within that, the Grants deposit contains an indicated and inferred estimate of 2.03Mt at 1.5 per cent lithium oxide and 30,000t of contained lithium oxide at a 0.75 per cent cut off.