The Core Lithium Ltd (ASX: CXO) share price hit a new 52-week low today despite the S&P/ASX 200 Index (ASX: XJO) battery metals miner announcing the sale of its maiden production.
Chinese industrial group Sichuan Yahua has agreed to buy the lithium produced during the Finniss Project's dense media separation (DMS) commissioning, and some more on top.
Right now, the Core Lithium share price is 75.5 cents, 4.4% lower than its previous close.
That's a slight improvement on its intraday (and new 52-week) low of 75 cents – marking a 5% tumble.
Let's take a closer look at the milestone agreement announced by the newest ASX 200 lithium producer.
Image source: Getty Images
Core Lithium signs milestone sales agreement
The Core share price plummeted to a long-forgotten low this morning after the company revealed Yahua has loaded up on even more Finniss lithium.
The lithium miner announced its maiden spodumene concentrate production late last month. It expects to produce around 3,500 tonnes of the material during its DMS commissioning phase.
And now that lithium has found a home. Yahua will buy the parcel on a free on board (FOB) basis, with shipment tipped for the end of next month.
The Chinese company has also signed for the purchase of an extra 15,000 tonnes of the material – expected to be mined from the Finniss Project's Grants pit – under a pre-payment arrangement.
It will pay for 80% of the volume in April and the rest upon shipment. The price payable is linked to the commodity market with no floor or ceiling.
That's on top of the offtake agreement Yahua signed in 2019, set to see it snapping up 300,000 tonnes of Finniss lithium over four years.
Core Lithium CEO Gareth Manderson commented on the news seemingly weighing on the company's share price today, saying:
We are pleased to put these mutually beneficial agreements in place which sees us sell our high quality spodumene concentrate to a valued customer.
The prepayment provides additional working capital and assists Core to manage our cash flow as we continue to ramp up operations.
Core Lithium share price snapshot
Today's tumble has only added to the lithium stock's recent troubles.
It's currently down 25% year to date and 39% since this time last year.
For comparison, the ASX 200 is trading flat year to date and has fallen 6% over the last 12 months.
