Liontown Resources (ASX:LTR) is raising around $266 million to support the ramp up and underground transition of the Kathleen Valley Lithium Operation in Western Australia through a placement.
The company will issue 364.4 million shares at $0.73 per share under a fully underwritten placement, which will result in a pro forma cash balance of roughly $422 million.
Law firm Allens is the acting legal advisor with Mizuho affiliate Greenhill appointed as the financial advisor.
This offer price represents a 13.6% discount to the last closing price of $0.85 on 6 August, as well as a 10.4% discount to the five-day volume weighted average price of $0.81 per share.
Cornerstone investor National Reconstruction Fund Corporation (NRFC) has also committed $50 million via this placement.
CEO Tony Ottaviano says NRFC’s investment aligns with its strategy to boost the critical minerals sector in Australia as a leader in the global transition to net zero.
“Liontown is well placed to remain resilient in this low-price environment whilst retaining flexibility to pursue low-cost, high return opportunities to maximise value,” Ottaviano says.
“We have preserved optionality over our growth options including the potential expansion of Kathleen Valley to 4 million tonnes per annum which, currently, remains subject to improving market conditions.”
Funds raised via this capital raise intends to bolster the company in the varying lithium market, which is currently priced at ¥71,100 ($15,172) per tonne, reflective of a 13.04% increase this month yet a 9.43% decrease this year on 8 August as recorded by Trading Economics.
NRFC CEO David Gall says its investment in Liontown intends to attract private capital while also developing the resources sector.
“Australia is well-positioned to be a competitive, long-term supplier of lithium to the rest of the world and local lithium production is important to the nation’s economic security and resilience,” Gall says.
In conjunction with this placement, eligible shareholders will be offered the opportunity to subscribe for a share purchase plan that intends to raise an additional $20 million.
Holders will be able to bid for a maximum of $30,000 in shares, under the same offer price as the placement.
Liontown Resources is focused on creating a “reliable” supply of battery minerals through its two lithium deposits in Western Australia.
Write to Maddison Elliott at Mining.com.au
Images: Liontown Resources



