Core Lithium share price dives another 14% to fresh 52-week low

It has been a very difficult week for shareholders of this lithium stock.

| More on:
A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Core Lithium Ltd (ASX: CXO) share price is having another day to forget on Tuesday.

In early trade, the lithium miner's shares have crashed 14.5% to a 52-week low of 61.5 cents.

What's going on with the Core Lithium share price?

Investors have been rushing to the exits again this morning in response to yesterday's quarterly update.

That update revealed production guidance for FY 2024 and FY 2025 that was significantly short of the market's expectations.

Core Lithium's spodumene production is now expected to be:

  • FY 2024: 80,000 to 90,000 tonnes
  • FY 2025: Lower than FY 2024

As a comparison, prior to this update, Goldman Sachs was expecting:

  • FY 2024: 134,000 tonnes
  • FY 2025: 190,000 tonnes

In addition, Goldman was forecasting costs of A$916 per tonne in FY 2024 and then A$576 per tonne in FY 2025. And while we don't know what Core Lithium's costs will be in the latter, it is guiding to A$1,165 to A$1,250 per tonne in FY 2024.

All in all, that's ~37% less production than expected and costs around 32% higher than forecast in FY 2024. The perfect combination for a Core Lithium share price crash.

Management explained the underperformance. It said:

The main drivers of the lower production compared to the 2021 DFS estimates are lower lithia recoveries, a revised mine plan which has seen the layback of the pit walls and more conservative mining assumptions, following the Company's experience in the recent wet season.

Anything else?

Another thing that is not helping matters is that the team at Citi has reiterated its sell rating with a 50 cents price target this morning. This suggests that there's still plenty of room for the company's shares to fall from here.

Short sellers will no doubt be licking their lips at this one. At the last count, Core Lithium was the second most shorted ASX share.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

More on Materials Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Materials Shares

Own Rio Tinto shares? Here's your quarterly update preview

What is the market expecting from this mining giant?

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Materials Shares

Why is this ASX lithium stock rocketing 32% today?

Investors are cheering on a big announcement.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Materials Shares

These ASX lithium stocks could crash 20% to 40%

Analysts are feeling bearish about these lithium stocks.

Read more »

A man looking at his laptop and thinking.
Materials Shares

What could $1,000 invested in Pilbara Minerals shares become in 1 year?

Is it worth investing in this lithium miner's shares?

Read more »

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Broker Notes

Up 15% in 13 days, is it too late to buy South32 shares?

South32 shares have risen 1%-plus per day for the past 13 trading days. Have investors missed the boat?

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Own BHP shares? Here's your quarterly update preview

The Big Australian is releasing its quarterly update next week.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Materials Shares

Guess which small-cap ASX mining stock is rocketing 16% on 'outstanding' discovery

This lithium stock is catching the eye today. But what's going on?

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Materials Shares

Why is this ASX lithium stock racing 15% higher today?

Investors have been impressed with an announcement this morning.

Read more »