Core Lithium Ltd (ASX: CXO) shares are falling on Wednesday.
In morning trade, the lithium miner's shares are down over 4% to 21.5 cents.
Why are Core Lithium shares falling?
Investors have been selling the company's shares this morning following the release of an announcement.
According to the release, Core Lithium has come to an agreement with its mining contractor, Lucas Total Contract Solutions, to terminate the Finniss mining services agreement.
This follows management's recent decision to suspend mining in the Grants open pit and the BP33 early works project.
Under the agreement, Core Lithium will make a cash payment to Lucas of $10 million. This comprises demobilisation costs, a settlement of claims, consumables, and contractual charges incurred during suspension.
This appears to indicate that its suspension won't be a quick one. Though, management has advised that it will now look to identify alternative mining solutions for the open pit "should it restart in the future."
In the meantime, it continues to process ore stockpiles to produce spodumene concentrate for sale to customers.
Core Lithium's CEO, Gareth Manderson, said:
We have reached an amicable agreement with our mining partner Lucas to terminate the mining agreement. In these difficult market conditions, this gives Lucas and its employees more certainty. Core will now look at alternatives for potential mining recommencement.
We sincerely thank Managing Director Ben Lucas and his workforce for their hard work as part of the team at Core. We have worked together to bring on the Northern Territory's first lithium mining operation in a short period of time. I wish Lucas well for its future projects.
Core Lithium shares have lost over 75% of their value since this time last year.
