Name of the Project                                    
Kathleen Valley lithium/tantalum project.

Location
North-east Goldfields of Western Australia.

Project Owner/s
Lithium developer Liontown Resources and Hancock Prospecting.

Project Description
A definitive feasibility study (DFS) has confirmed the potential to develop a state-of-the-art, second-generation lithium/tantalum mining and processing operation.

The DFS optimises the mine schedule, process plant design and forecast sales pricing to enhance the technical and financial viability of a standalone, long-life, four-million-tonne-a-year operation.

The project has an ore reserve of 68.5-million tonnes grading 1.34% lithium oxide and 120 parts per million tantalum pentoxide, underpinning an initial estimated 23-year mine life, based on the updated mining schedule.

Building on the October 2020 prefeasibility study (PFS), the DFS base production has been increased from two-million tonnes a year to 2.5-million tonnes a year, producing about 500 000 t/y of spodumene concentrate, with a four-million-tonne-a-year expansion planned in Year 6 to deliver about 700 000 t/y spodumene concentrate.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a real 8% discount rate, of A$4.2-billion and an internal rate of return of 57%, with a payback of 2.3 years.

Capital Expenditure
Capital costs for the project are now estimated at A$951-million, up from the previous estimate of A$895-million.

Planned Start/End Date
First production is expected to start in the first half of 2024.

Latest Developments
Liontown Resources announced an expanded strategic partnership with foundation customer and major lithium-ion battery manufacturer LG Energy Solutions on July 2.

The companies have executed agreements for a five-year, $250-million convertible note, a ten-year offtake extension, and a downstream collaboration agreement to investigate the feasibility of establishing an Inflation Reduction Act-compliant conversion plant to process offtake material and potential additional tonnes from any future four-million-tonne-a-year expansion.

The funding would be instrumental in supporting the production ramp-up to 2.5-million tonnes a year and the early works necessary to preserve the potential expansion case for Kathleen Valley.

The project remains on budget to first production, with about A$120-million budgeted and planned to be spent for capital costs to complete construction and commissioning. The balance of A$381-million of additional liquidity provides balance sheet strength to fund the ramp-up to three-million-tonnes a year steady-stage production.

Liontown is progressing early enabling works in the underground mine to preserve the expansion option on a 2027 timeframe. Optimisation studies are also continuing for the mine and processing plant as part of its review of the four-million-tonne-a-year expansion case.

A board decision on whether to proceed is expected before the end of the year.

Regarding the offtake agreement, the extension provides for a spodumene concentrate volume increase with a target of 6% lithium oxide grade (SC6) from the initial 100 000 t/y in Year 1 to 150 000 t/y in years 2 to 5, rising to 160 000 t/y in years 6 to 10 and, subsequently, decreasing to 140 000 t/y in years 11 to 15.

The extension also includes a commitment to make up to an additional 250 000 t/y SC6 available to LG Energy Solution over the first ten years of the 15-year offtake term.

Further, the feasibility study with LG Energy Solutions regarding a refinery to process Kathleen Valley spodumene into battery-grade lithium chemicals will continue in parallel to the existing downstream prefeasibility study with Sumitomo.

“These developments pave the way for Liontown to pursue our long-term strategy to be a globally significant provider of battery minerals as the world transitions to a low-carbon future,” Liontown MD and CEO Tony Ottaviano has indicated.

Key Contracts, Suppliers and Consultants
ZOOID (environmental, social and governance); Optiro (geology and mineral resources estimate); Snowden Mining Industry Consultants (mine optimisation, planning, design and scheduling); ALS Metallurgy (process testwork); Lycopodium Minerals (process and infrastructure design, capital and operating expenditure); Knight Piésold (tailings and hydrogeology); MBS Environmental (environmental studies); Peter O’Bryan and Associates (geomechanical engineering); Metso-Outotec (design, fabrication and delivery of a semiautogenous grinding mill); Lycopodium Minerals (engineering, procurement and construction management); Zenith Energy (hybrid power station – design, build, own, operate and maintain); and GR Engineering Services (EPC).

Contact Details for Project Information
Liontown Resources, tel +6 8 6186 4600 or email info@ltresources.com.au.