The Core Lithium Ltd (ASX: CXO) share price had yet another difficult month in April.
Over the course of the month, the lithium miner's shares lost a further 12% of their value.
This unfortunately means that they are now down 85% since this time last year.
What happened to the Core Lithium share price?
Investors continued to sell the lithium miner's shares last month due to a couple of reasons.
One was broad market volatility, which saw the ASX 200 index tumble 3% over the period.
Given how lithium stocks are higher-risk options for investors, they tend to be punished more by investors when the market becomes volatile.
In addition, the Core Lithium share price was under pressure after the release of the company's quarterly update. This was the first since it announced the suspension of mining activities at the Finniss Lithium Project.
Due to the processing of ore stockpiles, Core Lithium was still producing lithium and reported quarterly spodumene concentrate production of 24,927 tonnes. This is down 14% from 28,837 tonnes in the second quarter.
However, this lithium wasn't in demand with end users. Core Lithium only shipped 10,199 tonnes of spodumene concentrate during the three months. This is down from 30,718 tonnes in the previous quarter.
At the end of the period, the company had a cash balance of $80.4 million. This is down from $124.8 million from the end of December.
Should you buy the dip?
Analysts at Goldman Sachs continue to believe that the Core Lithium share price remains overvalued despite its significant decline.
In response to the company's quarterly update, the broker reiterated its sell rating and cut its price target to 11 cents. This implies a further downside of almost 25% from current levels.
Goldman believes that the company's shares are expensive compared to peers and suspects that the restart of the Finniss Lithium Project is unlikely in 2024. It said:
We rate CXO a Sell on: (1) Valuation, trading at a premium on ~1.1x NAV and an implied LT spodumene price of ~US$1,200/t (peer average ~1.05x & ~US$1,250/t (lithium pure-plays ~US$1,140/t)), with the lowest average operating FCF/t LCE on a more moderated/deferred production restart/ramp up, (2) Ongoing risk to restart timing in the current pricing environment, with a mine restart highly unlikely ahead of the next wet season and, given the Grants open pit has ~12 months of life, likely tied to a development decision on BP33 (with its own funding risks) to support a new processing contract, increasing the risk of a longer gap in production; (3) Potential resource growth/ development now likely longer dated.
