The Core Lithium Ltd (ASX: CXO) share price is on the move on Wednesday morning.
At the time of writing, the lithium miner's shares are up 10% to 11 cents.
Image source: Getty Images
Why is the Core Lithium share price jumping?
The catalyst to this gain has been the release of an update on ore reserves at its wholly owned Finniss Lithium Project in the Northern Territory, which is located within the Bynoe Pegmatite Field and is ~88km by road from the Darwin Port.
Management notes that its update is the culmination of drilling and study work undertaken throughout 2023 and 2024. The estimates and related assumptions were developed by independent consultant OreWin with assistance from Core Lithium.
According to the release, the overall project ore reserve has decreased by 13.5% with a 11.1% decrease in contained metal. However, the BP33 ore reserve has increased by 223% from 3.9Mt to 8.7Mt as a result of the updated BP33 mineral resource. Management believes that this provides a strong foundation for the restart studies that are currently underway.
One slight disappointment could be that due to updated modifying factors, including cost and lithium market assumptions, there are no ore reserves reported for several smaller deposits, including Carlton and Hang Gong.
Nevertheless, management believes that its ore reserves underpin a simpler project with a notional operating life of 9.5 years at the rate of the existing 1Mtpa Finniss process infrastructure.
'The next step'
Core Lithium's CEO, Paul Brown, believes this update is the next step in the reset of its future operating strategy. He explains:
The updated Ore Reserve for our lithium assets around Finniss in the Northern Territory represents the next step in the reset of our future operating strategy. This estimate reflects the changes in lithium market conditions since our last Ore Reserves update and is consolidated around the high-grade BP33 deposit. The Ore Reserve for BP33 has more than doubled, underpinning a projected life of over nine years at the currently installed processing capacity.
The box cut and site establishment of BP33 were well underway before we paused operations earlier this year, with excavation of the final bench of the box cut almost complete. Our team is maintaining the site in good order so development can resume in the future, should it be supported by our restart studies and prevailing lithium market conditions.
But Core Lithium may not stop there. It's drilling activities are continuing. Brown adds:
The overall 9.3Mt Ore Reserve, which includes a small contribution from the Grants open pit, is based on our Measured and Indicated Mineral Resource of approximately 28 million tonnes. This represents a subset of the Group Mineral Resource of 48.2 million tonnes, containing more than 600,000 tonnes of Li2O metal.
Our current drilling activities are targeting further resource growth and the discovery of new deposits of a similar scale to BP33. This new Ore Reserve supports our strategy for a simpler, lower-cost, and more sustainable operating platform for Core Lithium. Restart studies are progressing to develop the execution plan.
The Core Lithium share price remains down 70% since this time last year.
