Core Lithium share price tumbles to multi-year low following quarterly update

This lithium miner has released its first update since suspending mining activities.

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The Core Lithium Ltd (ASX: CXO) share price is starting the week in the red.

In morning trade, the lithium miner's shares are down 3.5% to a multi-year low of 14 cents.

Why is the Core Lithium share price hitting new lows?

Investors have been selling the company's shares this morning in response to the release of its quarterly update. As a reminder, this is the first quarterly the company has released since suspending its mining activities in January.

Core Lithium continued processing ore stockpiles during the quarter. This led to the company reporting quarterly spodumene concentrate production of 24,927 tonnes, which is down 14% from 28,837 tonnes in the second quarter.

Despite this, the company only shipped 10,199 tonnes of spodumene concentrate during the three months. This is down from 30,718 tonnes in the previous quarter. It ended the period with 19,756 tonnes of spodumene concentrate and 20,000 tonnes of lithium fines available for sale. It notes that these currently have a market value of ~A$25 million.

Core Lithium also still had ~139,000 tonnes of ore stockpiles at the end of the third quarter. Management believes this allows it to continue processing until mid-2024.

At the end of March, Core Lithium had a cash balance of $80.4 million. This is down from $124.8 million from the end of December. Though, it notes that this reflects shipment timings, QP payments, and the settlement of the Grants mining contract.

Management commentary

Core Lithium's interim CEO, Doug Warden, acknowledged that the quarter was challenging. He also revealed that there are plans underway to restart the Finniss operation if lithium prices rebound. Warden said:

Following the decision to cease mining in January 2024, it has been a challenging quarter for Core employees, contractors and shareholders. I'm very appreciative of the professionalism demonstrated by all involved during a difficult period. It was pleasing to see the continued improvement in recoveries as processing of ore stockpiles continued during the quarter. Whilst processing of the remaining ore stockpiles is expected to be completed by June 2024, the Company has developed plans to restart of the Finniss operation, should the lithium price increase sufficiently to generate positive cash flow.

The interim CEO also spoke about its cash balance and exploration activities. He adds:

Although the cash balance reduced to $80.4 million during the quarter, importantly due to the solid production and shipment timings, there was 19,756t of concentrate stocks and 20,000t of lithium fines stocks at the end of the quarter. At current prices this inventory has a market value of ~A$25m and will be sold in Q4 FY24. We are excited by the exploration results released during the quarter and the 58% increase in the Mineral Resource announced after quarter end. Our 2024 exploration program will target both larger standalone deposits, as well as clusters of smaller deposits that have the potential to be mined with shared infrastructure.

The Core Lithium share price is down 85% since this time last year.

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 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 Scott Phillips.

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