7 reasons why Core Lithium says you should buy its shares

A smiling woman holds an arm in the air in triumph while also holding a graphic of a fully-charged battery in her other hand representing the Pilbara Minerals share priceA smiling woman holds an arm in the air in triumph while also holding a graphic of a fully-charged battery in her other hand representing the Pilbara Minerals share price

Core Lithium Ltd (ASX: CXO) shares have been front of mind for many investors in recent years.

The stock rocketed 320% in 2021 and another 70% in 2022. This year, however, hasn’t been so fruitful for the company’s share price – it’s fallen 5% year to date to trade at 95.25 cents today.

Still, Core Lithium has surpassed some notable milestones in 2023, and the S&P/ASX 200 Index (ASX: XJO) lithium producer still thinks its shares could make a worthwhile investment.

Here are seven reasons why the company outlined in a presentation on Tuesday.

7 reasons Core Lithium thinks you should buy its shares

It’s a producer of battery-quality lithium

Core Lithium is the baby of Australian lithium producers, having realised its maiden production of high-quality spodumene concentrate in February.

That was when Finniss Operation’s dense media separation plant was in its commissioning phase.

The company quickly sold the approximately 3,500 tonnes of material produced during the commissioning to its long-term customer Sichuan Yahua.

It’s bringing in cash

Speaking of sales, Core Lithium is officially generating cash flow.

The company recorded its first revenue event earlier this year when its maiden lithium shipment set sail.

It has since begun to bring in cash from regular shipments of ore.

It boasts offtake agreements with industry leaders

But who has been snapping up that ore? Well, that would be the company’s industry-leading offtake partners, Yahua and Ganfeng Lithium.

As previously mentioned, Yahau bought the company’s maiden production.

Both it and Ganfeng have also each signed on to buy 300,000 tonnes of spodumene concentrate over four years, with the material priced in line with the market.

It offers exposure to electric vehicles

Electric vehicles (EVs) are becoming more and more mainstream. Indeed, EVs made up more than 3% of all car sales in Australia in 2022 – a figure that grew over the course of the year, according to the Federal Chamber of Automotive Industries.

Building the batteries that power EVs demands large amounts of lithium. Thus, buying shares in Core Lithium can provide some exposure to the EV movement.

Location, location, location

Core Lithium’s flagship Finniss Operation boasts an attractive location compared to many other lithium mines.

It’s found in a tier 1 mining jurisdiction, just 88 kilometres by road to the Darwin Port where its production can be shipped to customers around the globe.

Its leaders have plenty of experience

Core Lithium believes investors would be wise to pay attention to its experienced board and management.

Looking to the top, the ASX 200 company is chaired by co-founder Greg English, who has been with the company since its inception.

CEO Gareth Manderson, meanwhile, has spent nearly three decades in the mining industry.

It has expansion potential

The final reason Core Lithium thinks ASX investors should snap up its shares is its potential for growth.

The company recently announced a 62% increase in Finniss’ mineral resource estimate on the back of last year’s exploration program.

And that could be just the beginning. Commenting last month, Manderson said:

Our exploration team returns to Finniss in 2023 with a pipeline of new and existing deposits.

The success of the 2022 exploration program is a strong endorsement of our near-doubled 2023 exploration budget [$25 million] as we target growth at the Finniss Lithium Operation.

The post 7 reasons why Core Lithium says you should buy its shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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