Core Lithium has inked a four-year binding offtake agreement with China’s Ganfeng, in a move that bolsters development of its Finniss lithium project in the Northern Territory.
Ganfeng will offtake 75,000 tonnes of spodumene concentrate per annum across the four years, while also committing to a $34 million investment in Core at 33.8 cents per share.
Core raised $91 million through a placement of 293 million shares, making the Finniss project fully funded.
It comes after Core released its definitive feasibility study alongside two scoping studies for the Finniss project in late July, research which further consolidated the venture.
The company is set to commence construction near Darwin before the end of 2021, with the aim to begin production in late 2022.
Core Lithium managing director Stephen Biggins said Ganfeng’s commitment is a transformational moment for the company.
“Ganfeng has a proven track record of investing in high-quality lithium projects across the world and of being a strong and supportive offtake partner,” Biggins said.
Ganfeng’s $34 million investment will contribute to the development costs of stage one of the Finniss project, assisting the launch of the project and Core’s first strides.
The spodumene concentrate commitment amounts to 300,000 tonnes in total, and complements Core’s existing supply contract with Sichuan Yahua, one also representing 75,000 tonnes per annum across four years.
The Ganfeng and Yahua agreements combined embody 80 per cent of the project’s production across the first four years of mine life.
Core Lithium has also commenced talks with other prospective backers as it looks to secure $91 million in an equity raising to support the Finniss project.
The funds will support Core’s upfront capital costs for the Finniss project; environmental bond payments to the Northern Territory Government; drilling to accelerate reserve and resource growth; and working capital.