Core Lithium (CXO) released a Definitive Feasibility (DFS) for its Finniss Lithium Project in the Northern Territory, Australia. The Study outlined a relatively short mine life of 3.3 years, but high margins based on low operating costs (US$300/t spodumene concentrate). Pre-production capex increased significantly on the 2018 Pre-Feasibility Study (PFS), rising from $54m to $73m. While we believe this will make financing challenging with the current reserves mine life, the project has tangible exploration upside which should increase the mining inventory. CXO derives a A$114m NPV10 (nominal) and an 80% IRR. Argonaut maintains a SPEC BUY recommendation, but we downgrade our target price from 10¢/sh to 6.2¢/sh.
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