The Core Lithium Ltd (ASX: CXO) share price has fallen 24% this week and it’s down over 8% today after the ASX lithium share’s quarterly update.
Quarterly highlights
It told investors yesterday that its June quarterly spodumene (raw lithium) production was 14,685 tonnes, while the FY23 spodumene production was 18,274 tonnes.
The quarterly C1 unit costs (the production costs) were $902 per tonne, while the FY23 C1 unit costs were $1,230 per tonne.
It said that the spodumene concentrate was between 5.35% to 5.6%, with lithia recoveries at around 49%, with work underway on improvement initiatives.
The company told investors about its maiden 5,500 tonne spodumene concentrate shipment in April and the second 13,100 tonne shipment in early July.
It also told said that in the quarter, between $45 million and $50 million was approved for BP33 underground mine early works. A revised BP33 feasibility study is underway, including incorporation of the increased resource.
The total Finniss mineral resource increased 62% to 30.6mt, which means the lithium deposit is bigger than initially expected and there’s more lithium for Core Lithium to extract over time.
It finished June 2023 with a cash balance of $152.7 million and no debt.
FY24 and FY25 guidance
The ASX lithium share said that its FY24 guidance for spodumene sales is between 90,000 tonnes to 100,000 tonnes, and spodumene production of between 80,000 tonnes to 90,000 tonnes.
The company explained that the production is lower than study estimates “mainly due to lower recoveries, mine plan adjustments and mining rates” at a C1 cost of between $1,165 and $1,250 per tonne. That’s despite the June quarter C1 cost being $902 per tonne.
In FY25, Core Lithium expects monthly mining and processing rates to be “above FY24 levels” as the company continues mining in the Grants open pit. However, overall production in FY25 is expected to “be below FY24 due to a currently anticipated three-month gap in ore supply from the mine and processing plant capacity constraints result in a ROM pad stockpile building at the conclusion of FY25.”
Final thoughts on the Core Lithium share price
The company’s news has clearly disappointed the market. I’m not an expert on the ASX lithium share, so I can’t definitively say whether it’s now a good price or not, but the commentary about the next couple of years wasn’t exactly optimistic.
In the lithium sector, I much prefer Pilbara Minerals because it’s already producing lithium, it’s planning to upscale its production and it has a huge pile on cash.
