Liontown Resources has launched a fully underwritten institutional placement to support the ramp-up and underground transition at the Kathleen Valley lithium mine in Western Australia.
Kathleen Valley officially opened its doors last month, with a formal ceremony taking place on July 10.
Kathleen Valley is WA’s first underground lithium mine. Liontown kicked off underground production at Kathleen Valley in April, with full underground mining expected to take place by September 2026.
To support this transition, Liontown has launched a fully underwritten placement of approximately 364.4 million shares to raise approximately $266 million at $0.73 per share.
The National Reconstruction Fund Corporation (NRFC) – which was established by the Federal Government and has $15 billion to invest in seven priority areas, including value-add in resources – will invest $50 million into Liontown’s placement.
“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,” NRFC chief executive officer (CEO) David Gall said.
“Our investment in Liontown will help to attract private capital and develop Australia’s resources sector. It is aligned with the government’s strategy of transforming Australia into a global leader in the critical minerals supply chain.”
Liontown managing director and CEO Tony Ottaviano welcomed NRFC’s investment, describing it as a “strong endorsement of Kathleen Valley’s strategic importance and long-term value”.
Aside from Kathleen Valley’s ramp-up, the placement’s funds are expected to fortify Liontown’s balance sheet to a pro forma cash balance of approximately $422 million, provide a prudent liquidity buffer during a period of lower lithium prices, and fund general corporate purposes and transaction costs.
“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 said.
“We have preserved optionality over our growth options including the potential expansion of Kathleen Valley to 4Mtpa (million tonnes per annum) which, currently, remains subject to improving market conditions.
“Our collaborative relationship with customers and partners provides a unique opportunity set of strategic and value-accretive growth opportunities which we continue to evaluate.”
Liontown will also allow existing eligible shareholders to participate in a non-underwritten share purchase plan (SPP) to raise up to an additional $20 million.
The SPP will see all members of Liontown’s board of directors participate, with the funds to further strengthen Liontown’s balance sheet and maintain resilience amid the lithium downturn.
Like the fully underwritten placement, Liontown’s SPP will be conducted at $0.73 per share.
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