Rinehart’s Hancock Prospecting has upped its stake in Liontown to 10.69 per cent, forking out over $132 million on Monday.
It comes just weeks after Liontown’s board recommended its shareholders accept a $6.6 billion takeover offer from US lithium behemoth Albemarle, valued at $3.00 per share.
Hancock’s latest acquisition was made below the $3.00 per share margin.
“This strategic stake has been acquired for no more than $3.00 per share, and at average price per share well below that level,” Hancock said.
“Whilst lithium price have continued to fall since Hancock first became a Liontown shareholders (and with spodumene concentrate prices falling by approximately 60 per cent over the past nine months), Hancock maintains a long term approach to its investments and commodity markets.
Hancock also cited what it believes to be a number of risks associated with Liontown’s flagship Kathleen Valley lithium project, citing – among other things – inflationary market pressures.
“Liontown’s indicated production rate of three million tonnes per annum at its Kathleen Valley project is significant for an underground operation and carries commensurate production and operating cost risks, with its target recovery rate (78 per cent) also exceeding the recoveries achieved by most existing and planned lithium producers in WA,” Hancock said.
“Hancock has a demonstrated project development and operations ramp-up capability…”
Hancock has previously indicated its intention to work alongside other Liontown shareholders, like Albemarle, in steering the company’s future. Including potentially seeking a position on Liontown’s board.
Hancock also expressed an interest in exploring potential investment opportunities with shareholders for downstream lithium processing in WA.
With Albemarle roughly two weeks into a four week stretch of exclusive due diligence with Liontown, whether Hancock’s new 10.69 per cent stake will affect the deal remains to be seen.