May 3, 2022

Sentiment: Bullish

Type of Trade: Aggressive

Industry: Lithium

Sector: Materials

Core Lithium Ltd is a lithium exploration company, engaged in the exploration of Lithium, copper deposits in North Territory and South Australia. Its Projects include Finniss Lithium Project , and copper, Zinc.

Core Lithium has successfully developed its Finisiss Lithium Project and will be producing by the end of 2022.

The key compelling fact of this company is that the Core Lithium is ready to be the next Australian Lithium Producer, with all approvals and funding in place to start Stage 1 on its flagship Finniss Project.

If can see in the illustration below, the potential leap on the company position within the next 12 months.

Finniss Project

The company has recently raised capital to fund Finniss Project throughout fully underwritten A$91m institutional placement and non-underwritten A$15m Share Plan at a price of A$0.31 per share. The money aims to fully fund Stage 1 development of Core’s flagship Finniss Lithium Project and bring Core into production (which is already happening. The stock price has gone a lot higher as the advancement of Finniss project progress.

Company also has secured a binding offtake agreement with Ganfeng for 75,000 tpa over 4 years and additional A$34 million equity investment at A$0.338 per share.

Ganfeng Lithium is China’s Largest Lithium Compounds Producer, the firm covers a wide swath of the lithium battery supply chain, from lithium resources development, refining and processing to battery manufacturing to battery recycling.

Ganfeng Lithium commits to 20% of its lithium hydroxide production capacity to Tesla from 2018 to 2020, putting Core Lithium directly into the Tesla supply chain.

The key Highlights are :

✅ CXO is fully funded to start construction of its 8 year mine life Lithium project that will produce 173Ktpa of battery grade lithium dioxide.

✅ Target Construction to start 2H 2021, production start 2H 2022.

✅ Project has competitive operating Cost.

✅ Project Value of A$384m Stage 1 if the Lithium spot price is at US$ 850/t, at moment it is sitting at US$1,250, forecasted to increase even more within the next 12 months due the high demand and low supply.

✅ Binding Offtake agreement with Ganfeng, one of the world largest lithium metals producers.

✅ Company also aim to start Stage 2 once stage 1 is completed, aiming the expansion the capability and the longevity of the project. That include further drilling to continue to explore the area.

✅ Further Offtake agreement is very likely to be announced in the meantime.

11 April 2022 – Core Lithium acquires new NT lithium (Shoobridge) near Finniss, located 80km SSE, this acquisition is consistent with the strategy of the company to keep increasing lithium resources.

2 May 2022 – Finniss Lithium Project continue to advance with recently announced that the crushing contract has been awarded with the signing of biding Crushing Services Agreement.

3 May 2022 – The company receives BP33 Underground Mine Environmental Approval.

First Ore on ship is still in schedule for the end of 2022.

The Corporate Presentation

Other Projects

Anningie and Barrow Creek Lithium Projects

Core Lithium has also acquired 100% interest in Barrow Creek Pegmatite Field in NT. Barrow Creek is an early-stage look-alike to Core’s high-grade discoveries at the Finniss Lithium Project with a long history of tin and tantalum production around Barrow Creek, similar to Core’s Finniss Lithium Project (and Greenbushes).

Core believes there is an excellent fit between the lithium potential of Barrow Creek Pegmatite Field, direct rail link to Darwin Port and Core’s objectives to make Darwin and Core’s Finniss Lithium Project near Darwin a central processing and global transport hub for NT lithium and spodumene production as forecast lithium demand keeps growing.

Copper, Zinc & Lead Projects

Includes Jervois Domain, Yerelina Zinc Project and Blueys and Inkheart Lead/Silver project and Mt Freeling Base Metals Project.

Uranium Project

Includes Napperby Advanced Uranium Project, Fitton Uranium Project.

Note that we haven’t exploit in depth all these other project, however, it worth looking at the other projects and how advanced the exploration phase are.

Technical Analysis

The share price has grown 388% in the last 52 weeks and it is currently trading 25% below its all times high (ATH).

During February run we saw SP breakout $1, taking the stock all the way to $1.6 on the back of strong momentum in the whole sector.

We have been trading CXO all the way with great gains and we believe that $1.25 is CXO technically fair price.

With the company being closer of start its production and well funded to finalise the project, these fundamental facts makes Core Lithium a less speculative stock and reduces the risk of the long term investor as per the bright next 12 months. We are still very positive for 2022 as we have seen CXO going as high as $1 as predicted in our last analysis. We believe that Core Lithium can still increase its value however investors and traders need to be buying away from the FOMO area when the stock is under correction.

Long term stock opportunity for investing and not only for trading, however entries are preferable at technically discounted prices (under SMA 40).

✅ The highest volumes are on the upside rather then on downside showing clear uptrend so far.

🚩 Red Candle on the Heiken Ashi.

🚩 Higher volume on the downside in this correction suggest the stock could take further correction.

🚩 Since the company still does not produces, CXO is still a speculative stock.

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