Liontown Resources flags monster $490m raising

Liontown Resources has announced a monster $490 million equity raising to fund the bulk of its Kathleen Valley lithium project near Leinster.    The raising comes just weeks after the Tim Goyder-chaired company released a definitive feasibility study for its flagship $473m project which is expected to produce 500,000 tonnes a year of spodumene concentrate in its first five years of operation, rising to 700,000tpa from year six of a 23-year minelife.

The company has also recently signed a landmark indigenous land use agreement with the local Tjiwarl Native Title holders that clears a path for further permitting to go ahead.  Liontown said the raising would enable it to finalise discussions with offtake partners and commercial lenders, order long-lead items, finalise permitting and accelerate development towards first production in 2024.

Liontown has described Kathleen Valley as a tier-one global lithium project with outstanding economics and sector-leading sustainability credentials.  The recent study gives it a post-tax net present value of $4.2 billion based on an 8 per cent discount and an internal rate of return of 57 per cent.

The expansion would give the project’s production profile a similar scale to Pilbara Minerals’ planned 800,000tpa-850,000tpa operation at its Pilgangoora mine in the Pilbara and make the company a top-five global producer.

Liontown roars towards earlier Kathleen Valley production

Liontown Resources is rapidly progressing its Kathleen Valley lithium project near Leinster in Western Australia with first production forecast to begin a year ahead of schedule.  A pre-feasibility study in October 2020 had first production scheduled for 2025, however a definitive feasibility study (DFS) has brought that estimate forward to the first half of 2024.

According to a statement from Liontown, the DFS confirms the potential to develop a state-of-the-art, second-generation lithium-tantalum mining and processing operation at Kathleen Valley.  Liontown chief executive officer and managing director Tony Ottaviano said the completion of the DFS marked a major step towards the company becoming a substantial global lithium producer and lays very strong foundations for its aspirations to become a world-class battery materials company.

“This is a major new Australian resource project, in a future-facing commodity, that we believe will deliver exceptional long-term returns for our shareholders, all of our other key stakeholders and the state of Western Australia.”

The Kathleen Valley lithium project is located on four granted mining licences and one mining licence application, approximately 680 kilometres north-east of Perth and 400 kilometres north of Kalgoorlie in the north-eastern Goldfields of Western Australia.

The project is readily accessible by sealed highways which connect with mineral exporting ports at both Geraldton and Esperance.