Lithium play Core is flying after a $47m handshake with another Chinese major
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Junior lithium explorer Core Exploration has another Chinese lithium heavyweight on side in a $US35 million ($47.3 million) sales deal.
Core (ASX:CXO) today inked a five-year deal with Shandong RuiFu Lithium to supply up to 150,000 tonnes of lithium concentrate each year from its Finniss project.
RuiFu is one of China’s largest lithium producers and is a subsidiary of the $3 billion Shanghai-listed Meidu Energy Co.
Investors loved the news, sending shares up 11.5 per cent to 5.8c in early Monday trade.
The company already has the backing of Ya Hua International – a subsidiary of the $2.4 billion Sichuan Yahua Industrial Group.
Now Core will receive a $US35 million conditional pre-payment facility from RuiFu to add to the $US20 million pre-payment from Yahua.
RuiFu will also increase its stake in Core to 10 per cent by participating in a $3 million placement at 5c per share.
“This funding and concentrate supply term sheet with RuiFu, along with our existing prepayment agreement with Yahua, sum to $US55 million in pre-payments, and has the potential to provide the funding solution for the relatively low capex required to get the Finniss lithium project into production,” managing director Stephen Biggins told investors.
A pre-feasibility completed in June placed the total capital cost of developing the Grants deposit and building the processing plant at $53.5 million.
Core is currently undertaking a feasibility study and is targeting first deliveries in late 2019.