Why is the Core Lithium (CXO) share price dropping today?

Posted: 25 March 2022 12:20 pm

Shares in the lithium explorer are up 5-fold over the last 12 months.

Explorer Core Lithium (ASX: CXO) is among the most traded shares on the ASX boards on Friday, but among the list of worst performers. Shares in the company were down 3.4% to $1.19 at the time of writing. By comparison, rival Pilbara Minerals (ASX: PLS) was up nearly 3% at $3.20.

Why has the CXO stock price slipped?

The drop in the Core Lithium shares comes after the company on Friday announced the shock resignation of its founding managing director Stephen Biggins.

In a statement to the ASX, the company said Mr Biggins was resigning for personal reasons and will step down from the role by the end of the year.

"Core is in the perfect position to reach its next stage of growth as a lithium producer, and I feel it is the right time to step down as managing director and pass the torch on to the right person to lead Core in this next stage," Mr Biggins said in the statement.

"Our transformation from explorer to producer is progressing to plan, the financial performance is strong, and at the Finniss Lithium Project, we have built a platform for sustainable growth for many years to come."

The Core Board has appointed Korn Ferry to conduct a competitive executive search for a new CEO.


The news comes just 3 weeks after Core Lithium signed a landmark deal with electric vehicle giant Tesla Inc. (NASDAQ: TSLA) for the supply of up to 110,000 dry metric tonnes of spodumene concentrate, the substance used to produce the lithium chemical used in electric vehicle batteries, over a 4 year period.

The deal marked the culmination of Core Lithium's transformation from another junior explorer to reliable supply partner for global firms.

The agreement came just months after CXO's board took a Final Investment Decision to start the development of the wholly-owned Finniss Project near Darwin in the Northern Territory, with first production scheduled for delivery by the end of 2022.

Finniss has been awarded Major Project Status by the federal government, and is considered one of the most capital-efficient projects that will provide high-grade lithium suitable for batteries used to power electric vehicles and renewable energy storage.

That transformation was led by Mr Biggins, who has been Core Lithium's MD for 12 years and will be hard to replace. That sentiment is shared both by the company's board, as well as the market.

"Stephen was a foundation director of Core and has put the company on a pathway for a stronger future. With the development of the Finniss Lithium Project, he has led the biggest transformation in the company's history and has set Core up for strong earnings growth," Chairman Greg English said.

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