Why the Core Lithium (ASX:CXO) share price is jumping 6% today

The Core Lithium Ltd (ASX:CXO) share price is jumping on Thursday following the release of an announcement…

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The Core Lithium Ltd (ASX: CXO) share price has been pushing higher on Thursday.

In morning trade, the lithium explorer’s shares jumped 6.5% to 24.5 cents.

Why is the Core Lithium share price jumping?

Investors have been buying Core Lithium’s shares on Thursday after the release of a positive announcement relating to the Finniss Lithium Project near Darwin in the Northern Territory.

According to the release, the company has defined an additional exploration target (ET) of 9.8 to 16.2 million tonnes at a grade of between 0.8 to 1.4% Li2O across seven different prospects. Management notes that the ET is supported by historical drilling, trenching, and exploration results.

However, it has warned that the potential quantity and grade of the ET is conceptual in nature. There has been insufficient exploration to estimate a mineral resource and it is uncertain if further exploration will result in the estimation of a mineral resource.

Nevertheless, Core is aiming to convert a high proportion of the ET at Finniss to mineral resources in 2021. Positively, it has received drilling approval from the state government for this area.

As a result, the company is preparing to start resource expansion drilling before the end of May. This will kick-off the most extensive exploration and resource drilling campaign in the company’s history.

Core’s Managing Director, Stephen Biggins, said: “Core has a clear pathway to achieve our goal of more than doubling resources and mine life at Finniss. Our recent acquisition deal is already bearing fruit, with wide and shallow pegmatites defined by historic drilling likely to add significant lithium tonnes to the Project in the near term.”

“Core’s exploration and resource drilling should provide a regular flow of news as we build the expansion potential and financeability of Finniss, and move into construction of Australia’s next lithium project later this year. It’s pretty simple maths to add the ET to our existing Mineral Resources to see where Core is headed, and our other well-funded exploration work ramping up at Finniss should add more tonnes on top of that,” he added.

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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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