Core Lithium Jumps 80%: Buy, Sell or Hold After the Finniss Restart?

Core Lithium (ASX: CXO) has rocketed 80% in a month to 52-week highs of 22 cents, outpacing the broader lithium sector. The surge has captured investor attention, but beneath the momentum lies an uncomfortable reality: Finniss remains idle, the board hasn't committed to restarting, and significant funding is still required. With lithium sentiment shifting from despair to cautious optimism, investors face a critical decision: is this a leveraged bet on recovery, or has the market priced in success that may never arrive?

The Lithium Market Reversal

After bottoming near US$8,300 per tonne in mid-2024, lithium carbonate has surged to US$12,000 per tonne in November 2025. The recovery stems from converging forces: China's EV sales up 25% year-on-year with NEVs exceeding 50% of new car sales, while energy storage deployments are hitting 330GWh in 2025, double previous forecasts.

Supply constraints are tightening simultaneously. High-cost Australian mines entered care and maintenance, while Chinese lepidolite production was curtailed by new royalty frameworks, adding US$20-30 per tonne to costs. New project funding delays are creating a tighter supply through 2026-2027. Bell Potter forecasts the market swinging into deficit by 2026, with Macquarie projecting shortages by 2027-2028. The sector-wide rally reflects this: Pilbara Minerals up 30%, IGO gaining 35%, Liontown surging 44%. Macquarie rates IGO as "outperform," citing stronger balance sheets versus restart candidates.

For investors tracking these shifts, ASR's HALO platform provides real-time sector analysis and technical indicators across ASX lithium producers.

Core Lithium's Restart Economics

Core Lithium suspended Finniss in early 2024 but completed a May 2025 restart study showing mining costs down 40% and processing costs slashed 33%. The company raised $60 million in August, benefits from proximity to Darwin Port (88km), and has $250 million in existing infrastructure. With no debt and 25% of market cap in cash, the balance sheet provides a cushion.

However, significant hurdles remain. No final investment decision has been made; the board awaits "suitably attractive funding." Restart requires an additional $175-200 million. At US$12,000 per tonne lithium prices, margins remain tight. Analyst consensus sits at $0.11, only 50% above current levels despite the 80% rally. Unlike producing peers like IGO (0.8-1.0x NAV), Core Lithium trades at 1.2x NAV, pricing in restart success that hasn't materialised. Several restart candidates compete for the same funding pool.

Buy, Sell or Hold? The Framework

For speculators (Buy): If you believe lithium will hold above US$12,000/t through 2026 and CXO secures funding within six months, the leveraged upside could be significant. An early 2026 production restart would capture the anticipated supply deficit.

For existing holders (Hold): The 80% rally warrants taking profits, but improving lithium fundamentals and the cost-optimised restart study provide rationale to maintain some exposure while awaiting the funding announcement.

For conservative investors (Sell): Execution risk remains high. Established producers like Pilbara and IGO offer lithium exposure with current cash flows, lower funding risk, and better liquidity. Income-focused portfolios should avoid unprofitable restart plays entirely.

 

Key Takeaways:

• Lithium prices recovered 45% from lows to US$12,000/t, sector fundamentals improving
• Core Lithium's 80% rally outpaced producing peers, pricing in an optimistic restart scenario
• Restart contingent on $175-200m funding and sustained price recovery above US$12,000/t
• Speculative buy for lithium bulls; avoid for income or low-risk portfolios

 

The lithium market is shifting from oversupply to potential deficit, creating equal parts opportunity and risk. Core Lithium's rally reflects optimism, but the real test lies ahead: can management secure funding and execute before sentiment shifts? For now, it's a bet on timing.

‍