Core Lithium : Quarterly Activities and Cashflow Report 30 June 2022

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ASX: CXO Announcement

Quarterly Activities Report for Three Months Ended 30 June 2022

For personal use

27 July 2022

CORE LITHIUM LTD Level 5, 149 Flinders Street Adelaide SA 5000

[phone]

Contact:

Stephen Biggins | Managing Director

Jarek Kopias | Company Secretary

Email | [e-mail] | www.corelithium.com.au

Directors:

Greg English | Non-Executive

Chairman

Stephen Biggins | Managing

Director

Heath Hellewell | Non-Executive

Director

Malcolm McComas | Non-Executive

Director

Issued Capital:

• 1,733,215,716 Ordinary Shares
• 28,487,726 Unquoted Options
• 13,829,438 Unquoted Performance Rights

Highlights

The Board of Core Lithium Ltd ("Core" or "Company") is pleased to present its Quarterly Activities Report for the period ended 30 June 2022.

During the June quarter, Core was focused on a number of initiatives aimed at advancing the construction and development of its wholly owned Finniss Lithium Project, located near Darwin in the Northern Territory.

During the reporting period, Core:

• Advanced construction activities at the Finniss Project;
• Received the final 2021 lithium drilling assays;
• MRE and ORE updated (announced post-quarter), Finniss Life of Mine extended to 12 years;
• Awarded crushing contract for Finniss ore;
• Received environmental approval for BP33;
• Acquired new NT lithium project, Shoobridge Project;
• Adversely affected by ongoing COVID absenteeism, supply chain disruption and inflationary pressure; and
• Admitted to the S&P/ASX 200 Index.

ASX: CXO

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Finniss Lithium Project, NT

The Finniss Lithium Project ("Finniss", "Finniss Project") is Australia's most advanced new lithium project on the ASX and places Core at the front line of new global lithium production.

Finniss is one of the most capital efficient lithium projects and has arguably the best logistics chain to markets of any Australian lithium project.

The Project lies within 25km of power station, gas, rail and one hour by sealed road to workforce accommodated in Darwin and importantly to Darwin Port - Australia's nearest port to Asia.

Lithium is the core element in batteries used to power electric vehicles. Finniss boasts world-class,high-grade and high-quality lithium suitable for this use and other renewable energy sources.

Figure 1. Map of the Finniss Lithium Project area, showing the location of the Mineral Resources.

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June Quarter Activities

Finniss Project development

Construction and mining activities are progressing well at Finniss. Development remains on schedule and on track for first export of lithium by the end of the calendar year 2022.

Preparatory infrastructure works to support mining and plant construction efforts are now complete, including the Finniss site administration and IT complex, and the erection of communications towers.

Core has successfully employed all required staff at Finniss, with more than 80% of staff living in Darwin. Similar percentages of locally based personnel are being achieved by major on-site contractors.

Water management infrastructure works, and construction of drainage control infrastructure and erosion control infrastructure were also completed in the quarter, including additional sediment and erosion controls such as a rock filter dam to improve the quality of water discharged from the sediment basin. This work is part of the Company's sediment erosion control plan (SECP).

Materially higher rainfall and an extended wet season impacted early-stage mining activities at Grants Stage 1. However, with weather conditions improving, and the arrival of five new dump trucks and an additional excavator to site, mining activities have again accelerated.

Crusher civil works were completed in the period and, following the award of a Crushing Services Contract for the crushing of run of mine ore at Finniss to CSI Mining Services (CSI) in early-May, CSI has commenced mobilisation to the site as planned.

Run of mine ore will be stockpiled prior to feeding into the CSI crusher circuit. The crushed ore will then be stockpiled before being processed by the Dense Media Separation (DMS) plant to make spodumene concentrate for export.

The DMS process plant pad was completed in May, with handover to Primero Group completed in June. DMS plant structural steel was sourced from Shanghai and, due to COVID-19 restrictions in Shanghai, delays were experienced with the manufacture and delivery of the structural steel.

Primero has now successfully facilitated the export of the steel, and all DMS components are enroute to Finniss. Plant construction activities have commenced, and Primero is well advanced with the plant design and all long lead packages are ordered.

The quarter was adversely affected by factors including ongoing COVID absenteeism, supply chain disruption and inflationary pressure which resulted in some delays to mining and construction.

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Figure 2. Mining at Grants Pit Stage 1

BP33 receives environmental approval

In early-May, the Northern Territory Minister for Environment granted environmental approval for the proposed BP33 Underground Mine. BP33 is the second mine approved at the Finniss Project.

The grant of the environmental approval completes the Environmental Impact Assessment process for BP33. The Company is preparing to submit a Mining Management Plan (MMP) to the Department of Industry, Tourism & Trade (DITT) for assessment. Approval of the MMP is the last step in the approvals process for BP33.

Final 2021 lithium drilling assays received

In mid-May, Core reported the final results and assays from lithium exploration drilling undertaken at Finniss throughout the 2021 field season (see ASX announcement "Final 2021 Lithium Drilling Assays Received" on 10 May 2022).

Assay results were from drilling undertaken to test for a southern extension to the pegmatite hosting mineralisation at BP33, resource extensions to the north of Hang Gong and to the north of Lees as well as a number of regional targets.

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BP33 South

A total of seven RC holes and two diamond holes were drilled during the 2021 field season to test for southern extensions to the BP33 mineralised system.

Drilling confirmed that a spodumene bearing pegmatite extends to the south and remains open at depth and to the south. This is now supported by assay results with the best intersections including:

• 35m @ 0.84% Li2O in NMRD015

• 1. including 10m @ 1.44% Li2O
• 8m @ 1.01% Li2O in FRC272
• 12m @ 0.82% Li2O in FRC277

Figure 3. Plan of BP33 showing recent drilling (including results released ASX 18/02/2022) and pegmatite

distribution with extension of mineralised pegmatite to the south beyond limits of the current Mineral Resource.

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