[SMM News] locking in 75000 tons of lithium oxide concentrate Core Lithium re-signed off-take agreement with Yahua Group

SMM4, March 8: Core Lithium Ltd, an Australian lithium power developer, announced recently that it will expand its lithium resources cooperation agreement with Ya Hua Group, which refers to the Finniss lithium project, which is 100 per cent owned by the company near Darwin in the Northern Territory. The off-take agreement is aimed at Yahua International Investment Development Co., Ltd., one of China's largest producers of lithium hydroxide and carbonate, a wholly owned subsidiary with a market value of A $200 million, and Sichuan Yahua Industrial Group Co., Ltd., which is listed on the Shenzhen Stock Exchange. This time, Core and Yahua have agreed to increase the purchase of lithium concentrate by 50 per cent and the annual intake of 5.5 per cent lithium oxide concentrate to 75000 tons.

Details of the off-take agreement

The off-take agreement is for the supply of lithium oxide concentrate from the mineral lease and exploration license, which includes grants and delivery of BP33 lithium deposits (lithium deposits) and 300000 dry metric tons of lithium oxide concentrate prior to 30 November 2023. Mining leases were awarded in January 2019 to 100 per cent of the Finniss Lithium project owned by Core near Darwin.

The off-take agreement provides for attractive pricing of market-related 6.0%FOB spodumene concentrate and includes agreed price floor and upper limits for the previous two years to ensure that Core's operating margins are protected during the commissioning and capital recovery period. During the useful life of these mines, off-take agreements account for about 40 per cent of the output of Grants and BP33 lithium deposits, supporting their production conditions and providing Core with great confidence in the rapid development of the mines. The off-take agreement is of great value to the Company's early project income during the term of the off-take agreement.

As part of the off-take agreement, Core has granted Yahua the highest rejection of Li2O concentrate production from lithium deposits, up to 300000 tons of lithium oxide concentrate or up to 50 per cent of any projected production in any calendar year. The latter is the core of the off-take agreement, which has supplied 300000 metric tons of lithium oxide concentrate to Ava or on 30 November 2023 and can be extended by a joint agreement between Core and Ava.

Finniss lithium project

The Finniss lithium project, which includes more than 500 square kilometers of licensed mining rights, is located in the Bynoe Pegmatite oil field near Darwin in the Northern Territory. So far, exploration and mineral resource drilling have confirmed that ore-grade lithium mineralization is common in the Finniss project. Core drilling in 2018 and early 2019 has shown the possibility of significantly increasing the mineral base to support potential long-life lithium mining and production operations.

Core plans to become Australia's next lithium producer by mining and producing high-quality lithium concentrate from the Finniss project and plans to complete DFS, regulatory approvals, financing and internal approvals before construction begins later this year. The Finniss project has rich infrastructure advantages to support the development of the project; close to the power grid, natural gas and railways, through sealed roads to Darwin Port, Australia's nearest Asian port. Core plans to ship lithium concentrate from Darwin Port to its Asian customers to meet its growing global lithium demand, including Yahua as Core's preferred customer.

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