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Core fails to strike a deal with Tesla

27th October 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – The share price of lithium developer Core Lithium dropped more than 6c a share on Thursday after the company failed to secure an offtake deal with electric vehicle (EV) major Tesla.

Core earlier this year inked a term sheet with Tesla for the supply of up to 110 000 t of spodumene concentrate from its Finniss lithium project over a term of four years, with pricing referenced to the market price for spodumene concentrate.

In August, the two companies extended the termination date for the term sheet until October 26, allowing the two companies to complete negotiations for a definitive full form binding offtake agreement.

Core on Thursday told shareholders that this deadline had now passed without the companies concluding an agreement.

“I want to thank Tesla for the time taken to negotiate with Core and look forward to maintaining an open and ongoing dialogue,” said Core CEO Gareth Manderson.

He pointed out that with the recent official opening of the Finniss lithium mine and the underwritten share placement to fund accelerated resource definition, Core was well positioned to take advantage of strong global demand and constrained lithium supply.

Furthermore, the sale of 15 000 t of direct shipping ore (DSO) shows strong international demand for Finniss lithium.

“The recent DSO sale, predicted commencement of lithium concentrate sales in the first half of 2023 and an increasing lithium price environment indicate that Core Lithium is well positioned to capitalise on the high demand and current shortage of available battery grade lithium spodumene concentrate,” said Manderson.

Agreements in place with offtake partners Ganfeng, and Yahua bring total concentrate sales under offtake contracts to about 80% of the Finniss lithium project production over the first four years of operations.

Core shares were trading at A$1.39 on Thursday.

Edited by Creamer Media Reporter

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