The Core Lithium Ltd (ASX: CXO) share price is having another day to forget on Tuesday.
In early trade, the lithium miner's shares have crashed 14.5% to a 52-week low of 61.5 cents.
What's going on with the Core Lithium share price?
Investors have been rushing to the exits again this morning in response to yesterday's quarterly update.
That update revealed production guidance for FY 2024 and FY 2025 that was significantly short of the market's expectations.
Core Lithium's spodumene production is now expected to be:
- FY 2024: 80,000 to 90,000 tonnes
- FY 2025: Lower than FY 2024
As a comparison, prior to this update, Goldman Sachs was expecting:
- FY 2024: 134,000 tonnes
- FY 2025: 190,000 tonnes
In addition, Goldman was forecasting costs of A$916 per tonne in FY 2024 and then A$576 per tonne in FY 2025. And while we don't know what Core Lithium's costs will be in the latter, it is guiding to A$1,165 to A$1,250 per tonne in FY 2024.
All in all, that's ~37% less production than expected and costs around 32% higher than forecast in FY 2024. The perfect combination for a Core Lithium share price crash.
Management explained the underperformance. It said:
The main drivers of the lower production compared to the 2021 DFS estimates are lower lithia recoveries, a revised mine plan which has seen the layback of the pit walls and more conservative mining assumptions, following the Company's experience in the recent wet season.
Anything else?
Another thing that is not helping matters is that the team at Citi has reiterated its sell rating with a 50 cents price target this morning. This suggests that there's still plenty of room for the company's shares to fall from here.
Short sellers will no doubt be licking their lips at this one. At the last count, Core Lithium was the second most shorted ASX share.
