Core Lithium share price on watch amid $167m half-year loss and CEO exit

The Core Lithium Ltd (ASX: CXO) share price will be one to watch closely on Wednesday.

That’s because the lithium miner has released its half-year results after the market close.

Core Lithium share price on watch

• Revenue of $134.8 million
• EBITDA loss of $11.5 million
• Loss after tax of $167.6 million
• CEO to exit

What happened during the half?

For the six months ended 31 December, Core Lithium reported revenue of $134.8 million. This reflects spodumene concentrate production of 49.5kt with sales of 54.1kt and lithium fines sales of 46.3kt.

Core Lithium reported a 75% decline in its spodumene concentrate realised price to US$2,098 per tonne and cash operating costs of A$1,926 per tonne.

Unfortunately, this meant that the company posted a loss for the six months. It reported an EBITDA loss of $11.5 million and a loss after tax of $167.6 million. This includes a non-cash impairment of $119.6 million and provisions for onerous contracts of $27.6 million.

CEO exit

In response to operational changes put in place as a result of its strategic review and the revised near-term path forward for the company, its CEO, Gareth Manderson, will step down.

Commenting on his exit, Core chair, Greg English, said:

Gareth joined Core at a difficult time: the Grants open pit mine was underperforming and the mine infrastructure was not complete. 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. [..] Gareth has made an outstanding contribution to the Company, and we wish him well in his other ventures.

Looking beyond lithium

With the lithium price tipped to stay lower for longer, Core Lithium has suggested that it may look beyond the white metal. It commented:

The Core exploration team is reviewing the local and regional prospectivity of the Company’s lithium tenements and the potential of the Company’s 100% owned gold, uranium and base metal projects. The Company has received multiple inbound enquiries about the Napperby and Fitton Uranium Projects. Updates will be provided as the review continues and the exploration plan is finalised.

Outlook

The company has yet to make a decision on the restart of the Finniss Lithium Project. However, it will continue to process existing ore stockpiles to produce spodumene in the meantime.

As a result, it has reaffirmed its revised FY 2024 production guidance of 90,000 tonnes to 95,000 tonnes of 4.77% spodumene concentrate production and sales of 80,000 tonnes to 90,000 tonnes.

Though, that may not be enough spodumene to fulfil its obligations, which could have consequences for Core Lithium and its share price. Its report highlights the following:

The Group has offtake agreements with Ganfeng Lithium and Sichuan Yahua for the supply of lithium spodumene concentrate. Within these agreements, there are annual shipment quantities that Core Lithium is contractually obligated to meet. Due to the suspension of mining at the Finniss operations, there is a possibility that Core Lithium may not meet this obligation. In respect of one of these agreements, if this obligation is not met, Core Lithium is obligated to pay the customer the difference between the price and the price the customer actually paid in procuring a replacement supply of spodumene concentrate.

The post Core Lithium share price on watch amid $167m half-year loss and CEO exit appeared first on The Motley Fool Australia.

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More reading

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• Could the big short of ASX lithium stocks be nearing its end?

Motley Fool contributor James Mickleboro 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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