Liontown Resources (ASX:LTR) has made a final investment decision to proceed with a $389 million expansion of its Kathleen Valley Lithium Operation in Western Australia.
The expansion targets average annual production of approximately 780,000 dry metric tonnes (dmt) of spodumene concentrate grading 5.4% lithium oxide over the first five years from FY30, representing an increase of more than 50%. Production is expected to peak above 800,000dmt in FY34.
The concentrate is targeted to average 5.4% lithium oxide. Liontown expects the first additional production during FY28, with construction scheduled for completion by the end of the first half of FY29. Early works have begun, and long-lead equipment has been ordered.
The project involves accelerating development of the Kathleen’s Corner Underground mine alongside the existing Mt Mann Underground operation.
Annual processing capacity is expected to increase from approximately 2.8 million tonnes (Mt) to 4.2Mt through the installation of a ball mill and other plant and infrastructure upgrades.
Liontown intends to fund the expansion using existing cash and operating cash flow. The company says it retains the flexibility to slow, defer, or stop parts of the program if market conditions change.
Target operating costs after ramp-up are $840–920 per dry metric tonne sold, with the expansion expected to achieve payback approximately 2.5 years after construction ends.
Liontown says it has raised its FY27 capital expenditure guidance from $320 million–370 million to $435 million–495 million to include expansion spending. It also notes 21.5% of the production inventory underpinning the target comprises inferred mineral resources and notes there is no certainty the target will be achieved.
Liontown Resources is an Australian lithium producer operating the Kathleen Valley mine in WA.
Write to France Pinzon at Mining.com.au
Main image: Liontown Resources
