Core Exploration (ASX: CXO) could potentially extend its Grants lithium resource, after assays from ongoing drilling identified more lithium along strike and at depth.
Part of Core’s flagship Finniss lithium project in the Northern Territory, the assays confirm “significant” extensions to Grants, with lithium intersected along strike to the south and at depth.
Notable intersections included 67m at 1.57% lithium from 191m, including 16m at 2.17% lithium and 12m at 12.08% lithium.
Other highlight results were 45m at 1.72% lithium from 188m, comprising a 22m interval with 2.09% lithium; and 45m at 1.72% lithium from 142m, containing 16m at 2.03% lithium.
“These new extensions to the mineral resource area, as well as the addition of BP33 mineral resources, are expected to have a material impact on the economics for the Finniss project,” Core managing director Stephen Biggins said.
In addition to indicating an extension to the Grants resource, the average grades of the latest drill results are above the current resource grade for Grants, which sits at 1.5% lithium.
The extensions also comprise thick intervals up to 22m with grades exceeding 2% lithium.
“These high-grade results highlight the significant upside potential for the Finniss project,” Mr Biggins noted.
Finniss prefeasibility results
A prefeasibility study was released for Finniss in June, which revealed the potential for Core to develop a low capital cost spodumene concentrate operation out of Finniss with payback anticipated in less than 12 months.
The study indicated a capital expenditure of A$53.3 million to generate A$168 million in free cash flow.
Finniss comprises around 500 square kilometres in tenements and is within trucking distance of Darwin’s port.
The prefeasibility study focussed on the Grants deposit, which indicates an initial 26-month operation producing 400,083 tonnes of 5% spodumene concentrate.
Underpinning the initial start up mine is the Grants lithium resource which current sits at 2 million tonnes grading 1.5% lithium.
A resource of 1.4Mt at 1.40% lithium for the BP33 deposit at the project was not included in the study.
However, the resource along with ongoing drill results will be incorporated in the definitive feasibility study, which is due for completion before the end of the year.
Core is targeting first deliveries of spodumene concentrate in 2019.
“The prefeasibility study for Grants highlighted exceptional returns and these results, which have the potential to extend the mine life of the project at minimal to no additional capex are extremely exciting,” Mr Biggins said.
Core’s share price opened 7% higher at A$0.047.