Liontown kicks off construction at the Kathleen Valley Lithium Project

Mon 03 Oct 22, 10:54am (AEST)
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Key Points

  • Liontown has received all approvals required to commence major site works
  • The Kathleen Valley project remains on track to enter production status in the second quarter of 2024
  • Management expect to deliver "steadily increasing news-flow in the weeks and months ahead"

Liontown Resources (ASX: LTR) is calling all hands on deck after receiving the final primary approvals required to commence major site works at its Kathleen Valley Lithium Project in WA.

The WA Department of Mines, Industry, Regulation and Safety approved the company's mining proposal and mine closure plan for a 4m tonnes per annum lithium and tantalum mining operation at Kathleen Valley.

In parallel, the WA Department of Water and Environmental Regulation approved a Works Approval which gives the green light for construction activities.

"With all key enabling permits now in place, our development team can move ahead at full pace to begin major site construction activities," commented CEO Tony Ottaviano.

"... shareholders can look forward to steadily increasing news-flow in the weeks and months ahead as we move into the full-scale commercial development phase," he added.

The timeline

The commencement of major site activities is in-line the company's project schedule.

Liontown forecasts the construction of Kathleen Valley to be complete in the fourth quarter of 2023 and hit production status in the second quarter of 2024.

The Project is expected to produce 500,000 tonnes per annum of spodumene concentrate to global markets, with a planned expansion to boost production up to 700,000 tpa within six years.

The initial production represents approximately 5% of global spodumene, with the expansion to bump that figure to circa 6%.

Liontown has in place three offtake agreements with heavyweights LG Energy Solution, Tesla and Ford for a combined 350,000 to 450,000 tonnes per annum of spodumene.

Lithium prices forecast to cool, margins remain healthy

Kathleen Valley will come online at an interesting time, where the lithium market is expected to remain in a deficit but prices are expected to cool as more supply comes online.

A spodumene consensus price forecast from Core Lithium (ASX: CXO) expects prices to cool to around US$2,500 in FY24 and US$1,250 by FY27.

Core Lithium price forecast
Source: Core Lithium

Still, Liontown's November 2021 definitive feasibility study expects all-in sustaining costs to come in at US$452 a tonne.

There's still plenty of margin left for lithium miners even if prices come down from current sky high levels.

Liontown Resources Ltd (ASX LTR) Share Price - Market Index
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Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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