Core Lithium CEO steps down following strategic review

Core Lithium produced 49,529 tonnes (t) of spodumene concentrate during the first half of the 2023–24 financial year (H1 FY24), amid the global lithium downturn and the resignation of its chief executive officer (CEO).

H1 FY24 results

The company sold 54,142t of spodumene concentrate at an average realised SC6 price of $US2098/t and sold 46,298t of lithium fines at an average realised price of $US106/t, generating $134.8 million in revenue.

Core Lithium recorded $167.6 million in net loss after tax and a loss of $11.5 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA).

The EBITDA reflected a 75 per cent fall in the spodumene price over the period ending December 31 2023, a non-cash impairment of $119.6 million and provisions for onerous contracts of $27.6 million associated with the suspension of mining at the Grants open pit.

The lithium miner closed the period with $124.8 million in cash.

Following the significant fall in lithium prices, Core announced the suspension of mining at the Grants open pit operation in January.

The BP33 early works were also suspended last December, and a decision was made to defer the project’s final investment decision.

“Although mining has been suspended, the processing of existing ore stockpiles and the operation of the DMS (dense medium separation) plant to produce spodumene concentrate continues,” Core Lithium said.

“Primero has a contract to operate and maintain the DMS plant and Primero has been given notice post the end of the period that DMS plant operations will end once the processing of the remaining ROM (run of mine) stocks was completed.”

Leadership changes

Alongside the company’s H1 FY24 results, Core CEO Gareth Manderson has announced his resignation, which will take effect from March 18.

“This is the final time I am reporting on Core’s financial results as CEO,” Manderson said.

“I am pleased to be able to report that together with my team we have responded rapidly to the changing market conditions and taken the action required to put the business in the best position possible to weather the current market conditions.

“While this has meant suspending our mining activity, the processing of ore stockpiles provides an opportunity to generate revenue and puts the business in the best cash position possible to pursue the options available and realise value for our shareholders.

“I am pleased with the operating improvement we saw over the first half of FY24 as we matured as a lithium miner. We saw significant improvement in mining rates and our preparation for the wet season has meant we have been able to manage a wet season with rainfall well in excess of average.”

Manderson first joined Core Lithium in August 2022.

“Gareth joined Core at a difficult time: the Grants open pit mine was underperforming and the mine infrastructure was not complete,” Core Lithium chair Greg English said.

“He joined to provide the leadership and skills required as a developer and operator. He has delivered the Finniss project, established concentrate production, shipping and sales processes and developed the governance, practices and processes required of a listed mining company.

“While it is very unfortunate that Gareth is leaving, we are pleased with the rapid and decisive approach he and his team have taken in the light of the dramatic downturn in commodity prices to preserve cash, define the value of the business in this market and recommend this new strategy.”

Manderson said he is proud of what Core Lithium has achieved alongside contract partners, local communities and the Northern Territory Government during his tenure.

“The challenges we have faced, not least the market backdrop, have seen the need to move very quickly on a number of fronts,” Manderson said.

“I’m extremely impressed in the way the team has established the brand new operation and supply chain, managed very effectively through a wet season, and improved operational performance, our plant recoveries in particular.

“I now hand over the leadership of a company, which is moving to a different stage of development, to a team with the right skills to manage through a pause in operations and to pursue a different focus with energy.”

Core Lithium chief financial officer (CFO) Doug Warden will assume the role of interim CEO from March 18.

“Doug is a highly credentialed mining executive with a strong commercial background,” English said. “Before joining Core, Doug was CFO at several major mining companies and has extensive finance and management experience.

“We are fortunate to have Doug’s depth of experience in the leadership team as we work through this transition.”

Core Lithium has appointed James Virgo as interim CFO from March 18. Virgo is currently the company’s financial controller.