Monsters of Rock: Liontown foreshadows Kathleen Valley lithium development

Liontown Resources (ASX:LTR) is yet to make a final investment decision on its Kathleen Valley lithium mine in the northern Goldfields, but momentum is building towards the announcement after the company placed an order for a $10 million SAG mill to foreshadow the mine’s development.

The Tim Goyder chaired lithium developer is aiming to have its initial ~500,000tpa spodumene operation online in 2024, with an FID on the $473 million mine due in the June quarter.

But it says engineering studies are already far enough advanced to book an order in for the Metso-Outotec mill, a key cog of its planned 2.5Mtpa concentrator, which will expand to 4Mtpa in the sixth year of the mine plan.

LTR says the mill is one of several critical long-lead items and the largest piece of equipment for the project, which LTR raised $450 million in equity to fund last year.

The early order comes amid significant supply chain and labour challenges facing WA mine builders, who remain locked behind WA’s border wall until at least February 5, impacting the flow of skilled labour into the State.

Liontown MD Tony Ottaviano said the early award of long-lead items will help the company maintain its development schedule.

“Placing this significant order with a world-class partner in Metso-Outotec is a great way to start the year and reflects our commitment to advance the Kathleen Valley Project rapidly towards first production,” he said.

“Detailed engineering and design work continues to advance, with the Company’s recent $450 million share placement ensuring that Liontown is well capitalised to progress the Stage 1, 2.5Mtpa development at Kathleen Valley, including the early award of the SAG Mill and other key long-lead items.

“This will enable us to lock-in production slots, maintain our development schedule and meet our target of achieving first lithium concentrate production in 2024.”

Liontown Resources share price today:

Adriatic Metals ties up funding package for Vares silver mine

$500 million capped Adriatic Metals (ASX:ADT) has completed its debt funding package with Orion Mining Finance to back the development of its US$168 million Vares silver mine in Bosnia and Herzegovina.

Orion has arranged a US$120 million senior secured debt and US$22.5 million copper stream which, combined with a US$102 million equity raise, will fully fund the miner to production by the second half of 2023.

Adriatic Metals MD Paul Cronin said the deal would put the company on the road to becoming a local supplier of strategic metals into Europe.

“We are delighted to have Orion on board and believe it’s a strong validation of the potential of the Vares Silver Project,” he said.

The deal will include a US$100,000 annual contribution from Orion to ADT’s charity arm the Adriatic Foundation during the debt repayment period.

“Critical to achieving production at Vares is our social license to operate, which we have secured by taking a responsible approach to developing and working towards the creation of a positive longterm legacy,” Cronin said.

“Orion’s contribution to the Adriatic Foundation emphasises its alignment with our commitment to the community.“

A DFS last year placed a US$168m pricetag on the decade long Vares development, with a post-tax NPV if US$1.062 billion, IRR of 134% and payback period of just 0.7 years.

The polymetallic project contains silver grading 202g/t as well as economic grades of zinc, lead, gold and copper.

Elsewhere, energy and mining stocks led the ASX 200 today with South32 (ASX:S32), MinRes (ASX:MIN), BHP (ASX:BHP) and Rio Tinto (ASX:RIO) all standouts.