Australian lithium developer Core Lithium has announced a conditional loan offer from the Northern Territory government’s local jobs fund (LJF) worth $5 million.

The loan will contribute to lower start-up capital costs and overall costs for Core which aims to begin construction on its mine production facilities at its Finniss Lithium Project later this year.

The offer of a non-binding finance facility term sheet by the NT government follows an assessment by the LJF investment committee and is in recognition of the significant employment opportunities – more than 250 jobs – and the accompanying socio-economic benefits and enterprise opportunities the project will bring to the region.

The 36-month facility is subject to agreement of final terms and customary conditions, which include binding offtake agreements for at least 50% of production, evidence of the balance of financial funding being secured and the announcement of Core’s final investment decision.

Northern Territory chief minister Michael Gunner says the proposed financial commitment will bring new industry and jobs to the Territory: “To ensure the Territory rebounds strongly from COVID-19 the Northern Territory government is investing in projects that will help our economy grow and create jobs for Territorians.

“The Territory Government has provided Core Lithium a non-binding term sheet for a $5 million Business Investment Concessional Loan through the Local Jobs Fund, subject to due diligence.

“We are making the Territory Australia’s comeback capital, and this job-creating project can be a key part of that.”

Core Lithium managing director Stephen Biggins says the support of the NT government demonstrates further confidence in the robust long-term financial returns to be generated by the Finniss project: “We are delighted to have the support of the Northern Territory Government in the offer of a concessional finance facility, which contributes to the transition from developer to miner.

“The Northern Territory Government’s proposed financial commitment is recognition of the value of the near development-ready Finniss Lithium Project and its contribution to reducing global emissions and rebound in economic growth in the Territory.”

Core is continuing to engage with debt and equity capital markets in finalising the balance of the Finniss Lithium Project’s capital funding requirements.

As it moves forward, Core will work with the LJF to finalise documentation and satisfy customary conditions precedent alongside a commercial project financier. Any formal offer of finance remains subject to the final recommendation of the LJF investment committee and the approval processes of the Northern Territory government and Core Lithium board.