Lithium producer Core Lithium (ASX:CXO) is temporarily suspending operations at its Grants open pit mine in the Northern Territory to slash costs in light of slumping spodumene concentrate prices.
The company will also place its BP33 Project, at which Core suspended early construction work in December 2023, on care and maintenance.
These decisions come on the back of a strategic review launched by Core management in late 2023 to preserve the business and ensure the company can give shareholders the best bang for their buck out of its operations.
Core says lithium spodumene prices have plummeted more than 85% over the last 12 months, including by 50% since the start of October 2023.
As such, the company is now taking steps to scale down its operations until spodumene prices improve.
However, while Core is pausing Grants mining, it will continue to process its existing ore piles. The company says that as of 5 January 2024, it has around 280,000 tonnes of ore stockpiles available for processing — enough to continue to feed its concentrator until mid-2024 without any further mining.
This means the company can continue generating revenue over the coming months even as it reduces costs at its Finniss Lithium Operation, which is home to the Grants mine, and it can then recommence mining once the spodumene market improves.
Meanwhile, at BP33, while early works have been put on hold, Core says work continues on the project’s updated feasibility study and the Carlton scoping study.
Core CEO Gareth Manderson says the company’s team has moved ‘at pace’ to preserve value in tough market conditions.
“While suspending mining operations is a difficult decision, processing of ore stockpiles will continue to generate revenue, and we will focus on managing our cash reserves prudently. We are working to put the business in the best position possible to recommence mining and proceed with BP33 when market conditions improve.
The Northern Territory government has been a supportive partner, and we remain committed to finding a path forward for the Finniss operation and the Territory community.
We understand that this decision is difficult for employees, contractors and some local businesses.”
“We are working to put the business in the best position possible to recommence mining and proceed with BP33 when market conditions improve”
As far as exploration goes, Core has wrapped up its 2023 drilling season, which was focused on mineral resource delineation and definition drilling for the BP33 and Carlton orebodies.
Core is expecting to receive assay results in the coming months.
Shares in Core Lithium slipped 8.85% to $0.24 as of 11:00am AEDT on 5 January.
Write to Joshua Smith at Mining.com.au
Images: Core Lithium
