The Core Lithium (ASX:CXO) share price is up 21% in just one week

Here’s why the Core Lithium Ltd (ASX:CXO) share price has been flying high this week and is up 21% in the space of just five days…

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The Core Lithium Ltd (ASX: CXO) share price has been a very strong performer in recent trading sessions.

In fact, since this time last week, the lithium company’s shares have rallied an impressive 21%.

This means the Core Lithium share price is now up a remarkable 1,000% over the last 12 months.

Why is the Core Lithium share price racing higher this week?

Investors have been scrambling to buy Core Lithium shares this week following a rise in lithium prices to two-year highs and the release of a positive announcement.

In respect to the latter, on Monday the company revealed that its Finniss Lithium Project near Darwin has been awarded Major Project Status (MPS) by the Hon Karen Andrews MP.

According to the release, MPS is the Federal Government’s recognition of the strategic significance of a project to Australia. It provides companies with extra support from the Major Projects Facilitation Agency. This includes a single-entry point for Australian Government approvals, project support, and coordination with state and territory approvals.

Management believes the award of MPS, which carries a three-year period, represents yet another major milestone in its path towards bringing this world-class lithium project into production.

What’s next?

There are a number of potential catalysts on the horizon that could make or break the Core Lithium share price.

The main one is of course the updated Definitive Feasibility Study (DFS) on the Lithium Project, which is due in the first half of 2021. Once that is complete, the company will make its final investment decision on the project.

If all goes to plan, Core Lithium is on track to commence construction at the Finniss Project before the end of the year.

Core Lithium’s Managing Director, Stephen Biggins, commented: “The award of Major Project Status for our flagship Finniss Lithium Project is another major milestone for both the company and the Federal Government, as we strive to enter the construction phase in 2021, subject to a Final Investment Decision.”

“When in production, the Finniss Lithium Project will be the first Australian lithium-producing mine outside of Western Australia, with our proximity to Darwin Port – the country’s nearest port to Asia – serving as a direct route for our lithium to be processed and delivered to end users worldwide.”

“This opens up a pathway for a critical minerals hub to be established in Northern Australia, along with the potential for significant associated local modern manufacturing opportunities.”

Given the potential of the project, it isn’t at all surprising to see the Core Lithium share price flying high this week. Shareholders will no doubt be hoping for more of the same in the coming months as things progress.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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