Core Lithium (ASX:CXO): The share price has bottomed out, but will FY26 be the year it restarts Finniss

Core Lithium (ASX: CXO) was one of the hottest ASX stocks post-pandemic, not just lithium stocks but all stocks. The company began production at its Finniss Lithium Project in the Northern Territory during April 2023. 

However, Core Lithium timed its run pretty poorly. The past year was a volatile one for the company’s share price, and it has fallen from $1.67 per share in November 2022 to a low of $0.08 in early 2025. But now shares are now at $0.12, and there is hope that it is only onward and upwards from here.

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Who is Core Lithium?

Core Lithium’s flagship project is the Finniss Lithium Project covers 500 square kilometres within the NT’s Bynoe Pegamite Field lying 88km trucking distance from Darwin Port.

Lithium was first discovered at Finniss in 2016 and the project has grown ever since. The April 2022 Definitive Feasibility Study (DFS) reported a JORC compliant Mineral Resource of 15 million tonnes (Mt) at 1.3% lithium oxide. The study reported a Pre-Tax IRR of 80%, an NPV of $114m and free cash flows of $158m from $501m revenue. A 180,000tpa operation was anticipated. Keep in mind this was based on a spodumene concentrate price of $981/t, far below the all time high of $8,125/mt in November 2022.

Another thing that to like about Core Lithium was its leadership. Then CEO Gareth Manderson spent just over two decades working at Aussie mining giant Rio Tinto both on projects in Australia and Canada. He departed in 2024 and was replaced by ex-Hastings CEO Paul Brown.

Production at Finniss began in April 2023.

What’s the big deal with Core Lithium?

Being a lithium company, Core Lithium was a target for investors wanting exposure to the lithium thematic. There is no other commodity undergoing such a rapid expansion in demand over the next decade. But in just three years, the company had transitioned from explorer to producer, something that cannot be said in respect of many other lithium companies. In April 2022, Core Lithium announced the maiden 3,500 tonne shipment of lithium spodumene concentrate was delivered to the Darwin port, ready for shipping to Yahua.

Falling lithium prices hurt the company

However, it has not been all smooth sailing. Lithium prices came down from all time highs and still in the toilet now. And this was not just in spodumene – Lithium Carbonate, for instance, has seen its price drop from an average of US$32,694 per tonne in 2023 to ~US$13,000 per tonne. Similarly, Lithium Hydroxide has fallen from US$32,452 per tonne to less than US$10,000 per tonne.

Spodumene concentrate – lithium ore in layman’s terms – fared the worst of all in plunging 86% throughout 2023. Countless economies (and their consumers) put their quest for sustainable technology on hold as they battle high interest rates. EVs are continuing to be sold at premiums, making them less appealing to consumers whose income is going backwards amidst high inflation. There is also the reality of increased supply as the world’s lithium producers ramp up capacity.

Profitable to a point

Initially, Core Lithium pledged to remain profitable for a few years even amidst shrinking margins. By the end of 2023, however, it suspended production and told investors it would just focus on processing stockpiled ore.

We noted above that the DFS assumed a price of US$986/t, which delivered Pre-Tax IRR of 80%, an NPV of $114m and free cash flows of $158m from $501m revenue. It is natural investors would get overly excited when prices accelerate to more than 8x that…but now prices are even below that point and have been for some time. It has been more than 2 years since any ASX lithium stock reported shipments above US$1,000/t.

There have been hopes for a rebound with events such as the (brief) interruption in operations of the Jianxiawo mine in China, one of the world’s largest mine. Nonetheless, lithium spodumene prices are well below their peak.

Why Core Lithium shares gained yesterday

Nonetheless, it has not been all doom and gloom for CXO. Even though it stopped production while other miners continued (Liontown was so bold as to start its Kathleen Valley project altogether), it has not been idle as a company.

The company continued to sell spodumene concentrate it had stockpiled, and finished FY24 with just over 95,000dmt sold. The balance was sold in FY25.

It has been making plans for a restart when prices rebound that could see a higher margin project than before. In May 2025, it announced an increased Resource, which is now 48.5Mt @ 1.26% lithium and a further Exploration Target of 10.9-16.5Mt at 1.5-1.7% lithium.

Moreover, CXO unveiled a Restart Study. Compared to earlier studies, this one had cut mining costs by 40%, processing costs to 33% and increased concentrate production by optimising the plant and simplifying the flowsheet without major capital. Pre-production capex was reduced by 29% to $175-200m from $282m. It anticipated a 20-year mine life with an average concentrate production of 2,911kt.

As of September 30, 2025, it had $35.9m cash and expects a further $20.8m when Tranche 2 of an earlier placement is approved. As we mentioned earlier, it had a management refresh with Paul Brown taking the top job. And all the infrastructure established remains in place.

Is this a buying opportunity? The positive side

It all depends on where lithium prices go. Will they rebound? On the positive side, you could just say that those who don’t learn from history are doomed to repeat it. The last lithium boom in 2017 occurred as producers failed to anticipate the demand shock from China’s subsidy-driven roll-out of EVs.

The boom soon turned into a bust as the supply response, especially from hard-rock spodumene producers in Australia, overwhelmed the increased demand.  As a result, many lithium projects were deferred or even terminated, building the base for another lithium boom later on.  

You could argue history is repeating itself here. The demand for lithium once again soared in 2021 and caught producers off-guard. This time the demand surge was led by Western nations’ decision to take more serious steps in the combat against climate change through green energy transition and EVs. 

The negative side

However, the fact is that the lithium market is still in surplus and it might take a while to clear. Analysts are not optimistic that this will be soon and lithium prices will reflect the status of the market.

And as we noted above, EV sales are continuing to slow. Sure, they are growing year on year, but not as fast as before. Higher interest rates, expensive vehicles, a lack of charging infrastructure all equate to a negative environment for EV sales growth, and thus for lithium and companies in it like Core Lithium.

Some upside to come even if margins shrink

We don’t think lithium prices will return to the crazy highs of 2022. But if Core Lithium can survive the current bear market and prices avoid plunging further, the company can emerge stronger than ever.

Investors should also remember that it is continuing exploration activities at the Finniss project that could have further lithium. We also think that it is realistic prospect that it could become a takeover target given it has such a high-quality asset.

So overall, we think even if Core Lithium’s share price sell off could be justified by the fall in lithium prices and the company’s transition from producer to a company with a mothballed project, things could turn around if it re-enters production. However, it will all hinge on where lithium prices go.