Core Lithium (ASX:CXO) share price jumps as project construction begins

Work is under way at Australia’s newest lithium mine….

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A woman in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.

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The Core Lithium Ltd (ASX: CXO) share price is lifting today. This comes after the company announced the commencement of construction at its flagship Finniss lithium project in the Northern Territory.

At the time of writing, the Core Lithium share price is up 4.39% to 59.5 cents.

What did Core Lithium announce?

Core Lithium has entered the construction phase of its new lithium mine following its final investment decision on 30 September.

The company said road access works, site establishment, and construction of communications, fuel, and water supply infrastructure are now under way.

In addition, early works at Finniss’ Grants open-pit mine have begun in preparation for the start of mining activity later this year. The construction of a dense media separation (DMS) processing plant will follow in March 2022.

Commissioning of the DMS plant and the first production of lithium concentrate is scheduled for Q4 2022.

Core Lithium said the construction of a 1 million tonnes per annum DMS processing plant will enable it to produce high-quality concentrate over its mine life.

The project has gained all Northern Territory government and environmental approvals and is fully funded. This follows the successful raising of $150 million from institutional investors and shareholders.

Additionally, Core Lithium has secured approximately 80% of Finniss’ initial output under 4-year offtake agreements with China’s Ganfeng and Yahua.

Management commentary

Commenting on the news driving the Core Lithium share price today, managing director Stephen Biggins said:

At a time when Australia is firmly focused on both the generation of renewable resources and future job prospects for the regions, Core is incredibly proud of this milestone we’ve reached in the Northern Territory today.

This next phase of the company will be transformational, and we are excited to see construction milestones met at Finniss over the coming 12 months, ahead of first production before the end of 2022.

Core Lithium share price snapshot

The Core Lithium share price has ballooned around 300% year-to-date. This comes off the back of surging lithium prices and a heightened investor focus on renewables. It is also up more than 1,000% over the past 12 months.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. 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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