- Liontown Resources (LTR) has spiked this morning after revealing an updated pre-feasibility study (PFS) for its Kathleen Valley project in WA
- The study outlined a $1.12 billion net present value for the lithium mine, with a 37 per cent internal rate of return
- The Kathleen Valley project is now expected to have a life-of-mine of 40 years
- Today’s results substantially upgrade the project from the initial pre-feasibility study released by Liontown last December
- Managing Director David Richards said today’s announcement sets a strong foundation a definitive feasibility study (DFS) in the final quarter of 2020
- Shares in Liontown are trading over 11 per cent higher today, currently at an all-time high 24 cents each
Junior explorer Liontown Resources (LTR) has spiked this morning after revealing an updated pre-feasibility study (PFS) for its Kathleen Valley project in WA.
Following on from the updated Mineral Resource for the lithium mine, announced in May, today’s PFS highlights Kathleen Valley as a billion-dollar mine.
Specifically, the project now has a post-tax net present value (NPV) of $1.12 billion with an internal rate of return (IRR) of 37 per cent over a 40-year mine life. This is an increase of 121 per cent for the project’s NPV compared to the $507 million outlined in last December’s PFS. It’s also a 49 per cent increase to the project’s IRR.
The company expects the project to produce 350 kilo-tonnes per annum (ktpa) of spodumene concentrate at an average grade of six per cent lithium oxide, as well as 430 ktpa of 30 per cent grade tanalum concentrate.
Moreover, with expected operating costs of US$283 (roughly A$394) per dry metric tonne, Liontown said the mine will have a three-year payback period.
Liontown Managing Director David Richards said the updated PFS marks a major step forward for the company’s plans to become a substantial Australian lithium producer.
“Our larger resource and higher grades – combined with promising metallurgical testwork and re-worked, more selective mining methods – have provided the foundation for the project to be significantly enhanced,” David said.
He said some of the key points of difference from today’s study compared to the December PFS are a whole-of-ore flotation process flowsheet, a tantalum recovery circuit, and the incorporation of higher-grade underground ore.
“The combined impact of these innovations is clearly reflected in the exceptional financial returns outlined in the 2020 PFS, which has delivered major increases in Ore Reserves, mine life, project NPV, IRR, and payback while, importantly, lowering project unit costs,” he said.
Looking ahead, he said today’s announcement sets a strong foundation for the company to begin a definitive feasibility study (DFS) in the final quarter of 2020.
“This provides a clear blueprint for Liontown to build quickly on the achievements of the past three years and unlock the enormous value of the Tier-1 Kathleen Valley asset for our shareholders over the next few years,” he said.
The Kathleen Valley project is in the Eastern Goldfields region of Western Australia, around 680 kilometres northeast of Perth and 400 kilometres north of Kalgoorlie.
Lithium has once more been thrust into the spotlight thanks to the recent Tesla Battery Day event, and Liontown has been among several ASX-listed miners to enjoy the extra attention.
The company’s shares have increased in value by 75 per cent since the start of September. Today, Liontown shares are up 11.36 per cent at an all0time high of 24 cents each at 11:45 am AEDT.