The Core Lithium Ltd (ASX: CXO) share price is up after the company announced approval of early BP33 underground project works.
This ASX lithium share describes itself as a hard-rock lithium mining company, which owns and operates the Finniss lithium operation near Darwin in the Northern Territory.
BP33 underground mine works approval
The board of Core Lithium have approved expenditure for early works for the BP33 underground project. The company also reminded investors that the BP33 project has received all mine authorisation approvals from the Northern Territory Government.
Core Lithium noted that it’s aimingto develop the Finniss lithium project through several satellite deposits within trucking distance of the dense media seperation (DMS) plant located at the Grants mine operation. Due to the scale, recent grant by the NT government and the study work conducted to date, BP33 has been selected as the next potential mine to be developed.
The early works that have been approved include the “covered box cut, improved access and some associated surface works for water management.” The capital cost for these works is between $45 million to $50 million, and is expected to be completed by the end of the first quarter of the 2024 calendar year.
Final capital expenditure, development and production timing for the BP33 underground mine cannot be realiably determined before the ASX litihum share completes further studies that include the new BP33 resources, further metallurgical test work, additional geotechnical studies, mine sequencing options and cost estimated associated with a potentially extended mine area.
Management commentary
The Core Lithium CEO Gareth Manderson said:
Core would like to acknowledge the support of the Government of the Northern Territory. We have been able to bring on the Finniss operations at a time in the market when it can deliver benefits for the NT and all its stakeholders due to the professional and efficient processes for approvals. The BP33 approval is another example of this.
I am pleased the civil works contract has been awarded to a successful locally based business, Northern Australian Civil. NAC currently provides civil construction activities at Grants Operations and is a fantastic local contracting partner which employs local Darwin and NT residents and invests back into the Territory.
We will continue focus on the safe ramp up of the Grants open pit and concentrate production through the DMS plant.
Final thoughts on the Core Lithium share price
It’s understandable that investors have pushed the ASX lithium share higher after this update, as it gets the business closer to producing a lot of lithium.
I’m not sure if it’s good value today, as it depends on how the lithium price performs and how effective Core Lithium is at getting the mine up and running. I’d prefer to invest in Pilbara Minerals Ltd (ASX: PLS) shares because it’s already making a lot of cash and has a big cash pile on its balance sheet.