Here’s why the Core Lithium (ASX:CXO) share price rocketed 45% higher today

The Core Lithium Ltd (ASX: CXO) share price has been an exceptionally strong performer again on Monday.

At one stage today, the lithium-focused mineral exploration company’s shares were up 45% to a record high of 21 cents.

When Core Lithium’s shares hit that level, it meant they were up 150% since Christmas Eve.

Why is the Core Lithium share price rocketing higher?

Core Lithium’s shares have been on fire over the last few trading days despite there being no news out of the company.

However, this strong rise has caught the eye of the Australian share market, leading to a please explain enquiry today.

Core Lithium responded by advising that it is “not aware of any information concerning CXO that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities.”

However, it did provide the market operator with an idea for why its shares may be in demand with investors right now.

What did Core Lithium say?

The company noted that its largest shareholder, Yahua International Investment and Development Co, has signed a five-year deal to supply lithium to Tesla.

This could prove to be a positive for Core Lithium as it has signed a binding offtake agreement with Yahua for 75,000 tonnes per annum of lithium spodumene concentrate.

It also pointed out that lithium prices have been rising and that it is the “most advanced new Australian lithium developer on the ASX and there are very few advanced Australian lithium projects for investors to build exposure to increasing lithium prices.”

Finally, the company notes that it has previously advised that it is receiving interest from new lithium parties for additional binding offtake and customer project finance agreements for its Finniss Lithium Project.

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Source: The Motley Fool