Core Lithium Ltd (ASX: CXO) shares have recorded another unwanted milestone on Monday.
This morning, the lithium miner's shares edged lower to hit a new 52-week low of 38 cents.
This means that its shares have now dropped a whopping 80% from their 52-week high.
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Why are Core Lithium shares hitting new lows?
There have been a few catalysts for the weakness in the Core Lithium share price this year.
The first is a collapse in lithium prices since January. As I mentioned here last week, the spot lithium spodumene 6% price has dropped from US$5,990 a tonne in the middle of January to approximately US$3,000 a tonne last week.
Another reason why Core Lithium shares have been under pressure is the miner's surprise capital raising in August. It raised $100 million from institutional investors at 40 cents per new share and is now seeking to raise a further $20 million from retail shareholders.
Management advised that the proceeds will help the company deliver on its near-term growth projects during the Finniss Lithium Project's ramp-up, whilst preserving balance sheet flexibility.
Anything else?
While the above has certainly not helped matters, probably the biggest factor in Core Lithium's fall from grace has been management's production guidance.
In July, management advised that it expects spodumene production of 80,000 to 90,000 tonnes in FY 2024. This was notably lower than study estimates and consensus estimates.
This surprisingly weak production was driven largely by lower recoveries, mine plan adjustments, and mining rates.
And as you might expect given these issues, Core Lithium revealed that it expects its C1 costs to be higher than planned at A$1,165 to A$1,250 per tonne.
But the disappointment didn't stop there. Core Lithium revealed that it expects its production to fall year on year in FY 2025. As a comparison, Goldman Sachs was forecasting production of 190,000 tonnes of spodumene concentrate.
Is this a buying opportunity?
The team at Macquarie appear to see this as a buying opportunity. Late last month, the broker put an outperform rating and 77 cents price target on its shares.
This implies approximately 100% upside from current levels.
