Liontown Resources has sold its lithium project for $5 million.

Exploration minnow Liontown Resources is cashed up and ready to ramp up exploration of its Australian projects after selling its Byone lithium project in the Northern Territory for $5 million.

Lithium play Core Exploration (ASX:CXO) will acquire Bynoe tenure by paying $1.5 million in cash and issuing $2 million in Core shares.

In addition, Liontown (ASX:LTR) will receive $1.5 million in cash or shares once a 5 million tonne mineral resource within Bynoe tenure is defined.

Investors welcomed the news on Thursday with Liontown closing up 25 per cent at 1c and Core gaining 4 per cent to 4.8c.

The sale of Bynoe means Liontown is well-funded and able to aggressively advance its other Australian projects including the Kathleen Valley lithium project in Western Australia, the RJC vanadium project in Queensland.

The company also owns the Mohanga project and the Jubilee Reef project, both in Tanzania.

Liontown bought Bynoe in early 2016 due to the large number of documented rare metal pegmatites prospective for lithium.

“While widespread lithium mineralisation has been intersected within Liontown’s tenure, a commercial review indicates that rationalization of tenements and resources in the area would significantly enhance the economics of future mining operations,” the company said.

The project is also in close proximity to Darwin and related infrastructure, which is critical for the development of a commercial mining operation.

Liontown has a market cap of almost $9 million.