Liontown Resources has taken another step towards developing its Kathleen Valley lithium project in Western Australia after completing a fundraising campaign for the project.
The company undertook a fully underwritten institutional placement to raise $450 million through the issue of 272.7 million shares at a price of $1.65 per share. This represented a 14.1 per cent discount to Liontown’s closing price of $1.92 on November 30.
Liontown has also launched a non-underwritten share purchase plan, inviting existing shareholders to contribute to its goal of raising a further $40 million at the same price as the placement. This will open on or around Friday December 10.
At the placement’s completion, Liontown will have cash reserves of approximately $474 million (excluding proceeds from the share purchase plan).
This will enable the company to place orders for long-lead items, award the necessary engineering and mining services contracts and assemble its team to ensure it’s on track to achieve its 2024 production goal.
The fundraise supports the capital cost of stage one of Kathleen Valley’s initial 2.5-million-tonne-per-annum (Mtpa) development, as outlined in the project’s definitive feasibility study (DFS).
Liontown is also exploring options to raise additional funds of between $81 million and $121 million to round out the financing for Kathleen Valley’s stage one works. The company hopes to secure these funds by the second quarter of 2022.
Liontown managing director and chief executive officer Tony Ottaviano said the equity raising marked a capstone achievement for Kathleen Valley.
“The strong demand from both domestic and offshore institutions for this landmark equity raising is testament to the world-class nature of the Kathleen Valley project and represents a strong endorsement of our development pathway,” he said.
“The placement was well supported by existing Liontown shareholders and will also see new investors join the register. The introduction of these high-quality institutions together with the support shown by current shareholders has ensured that we emerge well capitalised with certainty of funding for the stage one capital cost of the initial 2.5Mtpa development at Kathleen Valley.”
Settlement of the placement is expected to occur on Monday December 6, with new shares to be allotted the following day.
Liontown announced the findings from the Kathleen Valley DFS in November, suggesting the project has the capacity to produce approximately 500,000 tonnes per annum (tpa) of spodumene concentrate.
Kathleen Valley has the potential to expand its production base from 2.5Mtpa to 4Mtpa in year six, to deliver approximately 700,000tpa of spodumene concentrate.