Core Lithium has terminated a legacy offtake agreement it held with Yahua International via a legally binding deed of release, with Core paying $US2 million in cash as part of the settlement.
The offtake concerned the supply of spodumene concentrate from Core’s Finniss lithium operation in the Northern Territory, located 88km southwest of Darwin Port. The original agreement was first signed in 2019 and updated in 2022.
Core confirmed the cash settlement would be funded from existing reserves and will clear the path for “strategic options and flexibility” as the company advances the potential restart at Finniss.
“We appreciate the constructive approach of Yahua in reaching this agreement, which reflects the long relationship between our two companies,” Core chief executive officer Paul Brown said.
“The settlement of this legacy offtake agreement provides greater scope and opportunity for securing strategic funding sources to support a future restart of the Finniss lithium operation, which remains subject to board approval.”
In late 2023, Core suspended early works at the BP33 project – an underground mine at Finniss – citing difficulties with mining and construction during the wet season and a renewed focus on reducing expenditure.
Following this, the company also suspended mining operations at the Grants open pit – the starter operation at Finniss – in January 2024 to “preserve business value in light of weak (lithium) market conditions” primarily caused mainly by a supply surplus and an increase in lithium supplies from countries such as China.
Since then, Core has worked to restart Finniss as soon as possible. The company said the Finniss restart study is progressing well and remains on track for completion in the June 2025 quarter.
“The Finniss operation has been well built and maintained, with over $250 million invested capital across Grants and BP33,” Core said in March.
“The restart study is focused on optimising current infrastructure and minimising complexities during future mining and processing to increase productivity. Work completed to date has reinforced the future opportunity, which exists at Finniss.”