Core Lithium Ltd (ASX: CXO) has taken a significant step forward in redefining its strategic direction by settling a long-standing offtake agreement with Yahua International Investment and Development Co., a Chinese lithium converter. The announcement, made on 12 May 2025, has triggered a mild boost in investor sentiment, with shares rising by 2.86% to A$0.072 by 12:16 pm AEST on the same day.
This development is seen as a pivotal move that may pave the way for greater operational flexibility and potential new funding sources for the company’s Finniss Lithium Operation, located 88km southwest of Darwin Port in the Northern Territory.
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A Clean Break from Legacy Agreements
Core Lithium Ltd (ASX: CXO) is an Australian company focused on lithium and other critical minerals, with full ownership of the Finniss Lithium Operation and exploration assets across the Northern Territory and South Australia. [Core Lithium]
The terminated offtake deal, originally signed in 2019 and revised in 2022, had governed the sale of spodumene concentrate from the Finniss Lithium Operation to Yahua. The agreement has now been formally concluded through a comprehensive deed of release between the two companies. As part of the settlement terms, Core Lithium will pay US$2 million in cash—a cost the company confirmed can be fully covered from its current reserves.
Paul Brown, CEO of Core Lithium, emphasised the collaborative spirit in which the deal was resolved, noting that the outcome reflects the long-standing relationship between Core and Yahua.
“We appreciate the constructive approach of Yahua in reaching this agreement, which reflects the long relationship between our two companies,” said Brown. “The settlement of this legacy offtake agreement provides greater scope and opportunity for securing strategic funding sources to support a future restart of the Finniss Lithium Operation.”
Market Reacts Positively
The ASX responded with a mild uplift in Core Lithium’s share price, with a gain of A$0.002 to A$0.072—up 2.86% as of midday trading on Monday. The increase builds on recent upward momentum for the company, which has posted a 1.41% gain over the past week and 7.46% over the past month.
Core Lithium now holds a market capitalisation of approximately A$154.3 million, with a total of 2,143,015,544 shares on issue.
Analysts suggest that the termination of the offtake agreement removes a layer of contractual rigidity, allowing Core to consider new partnerships or financing models in an evolving market. The company now finds itself in a more agile position to respond to market demand, price trends, and potential changes in project economics.
A Restart in the Making
The move comes as Core continues to progress its Finniss Restart Study, which remains on schedule for completion by the end of Q2 2025. The study will provide key insights into the economic and operational viability of recommencing lithium production at the site. While a formal restart decision is still subject to Board approval, the settlement with Yahua positions Core favourably for future investor engagement and capital raising efforts.
The Finniss Operation is one of the few projects in Australia that is fully permitted and has established infrastructure, including proximity to Darwin Port. Its strategic location and potential for near-term production have made it an attractive prospect within Australia’s broader critical minerals framework.
Outlook
While the full impact of the settlement on Core’s long-term prospects remains to be seen, the immediate market response suggests investor approval. The next major catalyst for the company is likely the outcome of the Finniss Restart Study. If results are favourable and Board approval is secured, Core could be back on track to become a key supplier in the global supply chain.
As the market continues to evolve, Core’s decision to streamline its contractual obligations could provide the agility needed to capture new opportunities and deliver value to shareholders in the years ahead.
