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Highlights

  • Restart study reveals potential 20-year mine life and significant cost reductions.

  • Projected 40% cut in mining costs and 33% cut in processing costs to enhance competitiveness.

  • Pre-production capex lowered to $175–$200M; FID and funding still pending.

Shares in Core Lithium Ltd (ASX:CXO) soared on Wednesday morning, climbing 19% to 8.7 cents, after the company released an encouraging restart study for its Finniss Lithium Project in the Northern Territory. The report signals a possible return to production.

The restart study outlines a reconfigured operation built around underground mining, unlocking a projected 20-year mine life. This plan includes a high-confidence production schedule, with 94% of the first 10 years underpinned by confirmed ore reserves. The proposed shift to underground mining takes advantage of high-grade, steeply dipping ore bodies, which remain open at depth.

Key to the study's appeal is a significant improvement in cost efficiency. Mining costs are expected to fall by 40%, from $120 per tonne to a range of $63 to $72 per tonne. Similarly, processing costs are forecast to drop by 33%, down from $69 to $40 to $46 per tonne. These reductions could bring unit operating costs (FOB, SC6 equivalent ex-royalties) down to between $690 and $785 per tonne, placing Finniss among the most cost-competitive spodumene producers globally.

In addition to cost savings, the restart plan projects a 7% increase in concentrate output, lifting production to approximately 205,000 tonnes per annum. Despite the improvements, the plan remains sensitive to market conditions. The study's economic modelling assumes a spodumene 6% (SC6) price of US$1,300 per tonne, well above the current spot price of US$735 per tonne.

A further positive is the 29% reduction in pre-production capital expenditure, now estimated at $175 million to $200 million. With forecast free cash flow of $1.2 billion under base case assumptions, Core Lithium believes the revised plan highlights the economic strength and scalability of the operation.

However, the project is not yet a certainty. A final investment decision (FID) is still pending and will require approval from the board. Additionally, the company must secure appropriate funding, as it reported a cash balance of $30 million as of the end of March.