Core Lithium Ltd (CXO) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Core Lithium June 2026 quarterly webcast. [Operator Instructions] I would now like to hand the conference over to Mr. Paul Brown, CEO and Managing Director. Please go ahead.

Thanks, and good morning, everyone. Thanks for joining us. I'm also joined today with James Virgo, Chief Financial Officer; Chelsea Bates, our General Manager of Investor Relations. For the June quarter marked an important milestone for us following FID decision and securing funding in March, our focus has certainly shifted from planning to execution. I'm pleased to say that we have delivered significant progress across the business. Today, I'll take you through our key achievements for the quarter and how we're tracking against our restart plan and what investors can expect over the coming months. At the conclusion of the presentation, James, Chelsea and I will be happy to take any questions. So our June quarter highlights. Firstly, we have transitioned from planning into execution across the Finniss restart. Secondly, we've awarded all of our major mining and development contracts required for the restart. Thirdly, we have commenced mining at Grants, started underground development at BP33 and continue progressing our plant upgrades. Finally, we've maintained a strong -- a very strong funding position while successfully commissioning our logistics chain while shipping our stockpiled material left over from when we were previously operating. Importantly, every major milestone we committed to following FID has either been delivered or remains firmly on track. So I think this slide really highlights why we chose to restart the operation. We're restarting an existing operation with established infrastructure, existing permits, and a processing plan already in place. Obviously, this significantly reduces both capital intensity and our execution risk. The project is fully funded through the steady-state production as a competitive long-term operating cost profile and provides a long life supported by BP33 and Carlton. Importantly, Finniss also provides multiple future growth opportunities without requiring significant new infrastructure, which I'll talk about later in the deck. And this isn't a greenfields development. We're restarting and improving the existing operation. So you'll see this slide really highlights where we've -- where our focus has been. But really, we're really laser-focused on the restart. But just to take us back a step. Back in March, we outlined a clear road map for the restart. Today, we're demonstrating that we've delivered the early milestones we committed to, which was funding, the secured major mining contracts were awarded. Mining has commenced at Grants, and the underground development has commenced at BP33. Our focus now shifts towards plant recommissioning in the September quarter, followed by a concentrate production and our first shipment of the newly produced ore during the December quarter. So the business is now firmly in execution mode. We'll see the Grants open pit. So this provides initial production platform for the restart. And the pace of the progress has been significant. As you'll see in a very short time period, the team has successfully bought the open pit back to operation and position the asset to return to production. So I think importantly, our Grants role is to generate early production and cash flows for BP33 underground development progresses. Mining commenced in the quarter, and we're continuing to expose the ore in line with the mine plan. One of the major advantages of Grants is that it leverages our existing processing infrastructure, allowing us to move into production relatively quickly while maintaining flexibility around processing and shipment timing depending on market conditions. Overall, Grants is doing exactly what we expected it to do as part of the restart strategy. Just moving to our processing plant upgrades. It's been another major focus during the quarter and has -- and preparing the processing plant for recommissioning has been a key focus. The work being undertaken isn't simply about restarting the plant. It's about restarting a better plant. We are completing the targeted brownfield upgrades designed to increase our throughput, improve recovery and enhanced operational performance while leveraging the plant that has already demonstrated successful operating performance. I look forward to recommissioning the plant in the December quarter, and we'll note that the team up there is doing an outstanding job getting the plant knocked into shape. So moving to BP33. I think the pictures really speak for themselves. And again, I think the advantage that we do have with the infrastructure that was previously in place is quite undersold. But hopefully, you'll see the photos and the progress that we've made really draws out the previous strength and certainly the speed of which we've been able to remobilize. But look, BP33 remains the cornerstone of our long-term Finniss operation. During the quarter, we successfully progressed dewatering remediation works and portal development before commencing the underground development with Develop Global An important milestone was the contract award to Develop. The contract obviously validates both our restart capital estimates and certainly the long-term mining cost assumptions. BP33 will become the long-life, low-cost production base that underpins Finniss for many years to come. So we're particularly excited about the progress we've made and certainly looks forward to to reporting in the months to come. So just moving to talk about funding. So I think it's important just to spend a minute or 2 on a couple of questions that we've sort of had over the period. But look, we're in a really strong position. At the end of June, we ended up with $182 million in cash together with committed funding and additional available facilities, providing approximately $320 million of available funding. This supports our restart capital requirements through to steady-state production while maintaining a healthy liquidity buffer. Importantly, these funding sources exclude any future cash flows generated from grants production, which provides additional upside to our liquidity. I think that's an important point I really wanted to make. When you look at the funding deck that we put out post FID, you look at the sources and uses and one of the things that I've spoken about many times is about we wanted to be fully funded, but certainly, in today's prices Grants provides significant early cash flow and an even greater stronger liquidity buffer. The funding is no longer our primary focus. Our attention is now on safely and efficiently executing the restart. So the next couple of slides, we'll just talk about exploration growth. I think, again, we're really excited about the Blackbeard prospect. It's something that we're going to get underway and pleasingly to report that we have drilled spinning. There is a decent program that's planned and now underway. And just to remind everyone that this prospect, it could be quite significant. We've obviously reported an exploration target. And now we're happy to be drilling. We look forward to reporting those results in the coming months. But obviously, while our immediate priority remains executing the restart, we're also continuing to invest in the future growth opportunities. The Blackbeard drilling program, again, has been started successfully. We have a team that's been with us for a long time that manages these programs. And I think combined with Carlton and our broader tenement package, Finniss provides multiple opportunities to expand production over time using our -- obviously, already 100% owned infrastructure. Obviously, growth remains important, but we'll continue to be disciplined and capital-efficient. Look, I'll finish on here, just like to leave with 5 key messages. Firstly, we've successfully transitioned from planning to execution. All major mining and development contracts are now in place. Mining and underground development are underway. The project remains fully funded through to steady-state production. And finally, we continue to see significant opportunities for future resource and production growth beyond our current restart plan. So the June quarter represents an important milestone for us. As I said, 3 months ago, our focus was on funding and mobilization. Today, we're mining. We're developing BP 33, our plant upgrades are advancing as per our plan, and we've demonstrated our logistics capability. There's obviously still plenty of work ahead, but we're pleased with the progress we've made and certainly maintain our focus on our disciplined execution, certainly, as we move towards our first concentrate production later this year. So thanks for that. That's the presentation. We're now happy to take any questions.

[Operator Instructions] Your first question today comes from Hayden Bairstow from Argonaut.

Just a question on the mining rate of the pit. And obviously, you've got to manage whenever the wet season turns up, then maybe it won't as bad this year. But just interested to know what sort of volume you think you'll have on the ROM pad by, say, I don't know, early December to get you through those couple of months of the wet season. And then first ore for BP33, now looking like it's about probably midyear or something next year. So you'll be well ahead of still processing the pit by the time you get into it. Is that a fair way to think about it?

Yes. So the intent of the NRW contracts, so was to mine as fast as we can. And you rightly pointed out, I mean, it's something we don't need to do is mine through the wet season. So if you remember, when we had our site visit post our May Restart study, you remember, there's significant ROM capacity. So the intent there, obviously, we're in that sort of initial development phase. We've got about a 5:1 strip ratio. So we're mining as fast as we can. And the intent is to mine up until the wet season. There's no point mining through because we're going to have significant stocks on the ROM leading into the wet season. And then certainly, the intent will be for NRW to return and mine out the remainder, including a potential good buy cut. So that's the plan. We've got plenty of stockpiles space. As I said, once you think about the next couple of weeks, we're through the majority of -- sorry, the next couple of months, we're through the majority of the waste and we're only ever north. So we're comfortable with the plan. And certainly, the workforce has been rightsized for commissioning and for the mine material that will come out to Grants. So we are planning on having significant stockpiles available to us, which will obviously give us the ability to either flex up or flex down. But the intent is not to have an ore gap. As you said, BP33, it's on track. It will deliver first or mid-calendar year '27. So that's the -- obviously, the plan at the moment, we don't see any reason for that not to be executed on.

Okay, beautiful. And just timing on drilling results at Blackbeard?

Yes. Look, as soon as we can is a short answer. So we've drilled several hundred meters of the 12,000, 13,000 meter program. So we are planning on doing all of that this side of the wet season. So look, as soon as they're available, the intent is to get them out. We'll give you a bit more color in the coming weeks on what that -- what all that sort of looks like. But drilling is going well. We haven't seen any issues, obviously, we got in there and mobilized really well. And as I said, the program is already seeing some meters into -- in the ground and some results will be in the lab shortly.

[Operator Instructions] Your next question comes from Andrew Harrington from Petra Capital.

Paul, well done, getting everything in line and running to your schedule. The question is around offtake and the kind of volumes you're talking about and the parties that you might be talking about or what kind of time line you're looking at to complete those?