The ASX-listed Core Lithium Limited (AU:CXO) share price started this week on a rough note and traded down by 17.2% on Monday. Following the release of the company’s fourth-quarter update today, investors have been actively selling their shares.
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Over the past five days, the stock has experienced a decline of over 24%, adding to its overall poor performance over the last year. Analysts are also not so happy with the stock and have rated it a Moderate Sell.
Core Lithium is among the latest additions to Australia’s mining industry. The company concentrates its efforts on lithium, copper, zinc, and lead projects with the objective of establishing a diverse metals project portfolio.
Q4 2023 Update
Today, the company announced its production numbers for the fourth quarter of fiscal year 2023, which ended on June 30, 2023. It reported a huge growth in its spodumene production of 14,685 tonnes, up from 3,589 tonnes in the last quarter, at a C1 cost of AU$9.0 per tonne. This was mainly driven by its Finniss lithium project, where the mineral resource has increased by 62%. However, the mining performance during the quarter fell short of the anticipated levels, partly due to additional adverse weather conditions experienced in April.
In terms of financial strength, the company posted a cash balance of AU$152.7 million with no outstanding debt.
Production Outlook
With this update, the company also provided its first guidance numbers. For the fiscal year 2024, the company is anticipating production of spodumene concentrate to be between 80,000 and 90,000 tonnes at a C1 cost of AU$1,165 to AU$1,250 per tonne.
On the contrary, the outlook for FY 2025 is not as optimistic as investors had anticipated. Despite the company’s expectation of higher monthly mining and processing rates, the overall production for FY 2025 is projected to be lower than that of what is expected in FY 2024.
Is Core Lithium a Good Buy?
According to TipRanks, CXO stock has a Moderate Sell rating at an average target price of AU$0.92. The target price still provides a decent upside for investors and is 26% higher than the current level.
Ending Notes
Over the last year, the share price of Core Lithium has fallen from a record high. Currently, the company is in the production phase and is actively expanding. If the lithium market continues to rebound, there could be a possibility of the stock price recovering in the long term.
