Liontown in talks on funding shortfall as Albemarle, Rinehart circle
Liontown Resources says it has managed to keep a lid on cost blowouts associated with building its flagship Kathleen Valley lithium project but needs to lock in more than $450 million in additional finance within the next three months to keep going.
The Tony Ottaviano-led Liontown said capital costs associated with Kathleen Valley had increased to $951 million, up 6 per cent on the $895 million estimate from January.
Liontown chief executive Tony Ottaviano at the part-built Kathleen Valley mine in August. Evan Collis
Mine operating costs per tonne have also risen but by less than most analysts were predicting, and Kathleen Valley remains on schedule, in a rebuff to Gina Rinehart’s claims about risks hanging over the project.
However, Liontown has shelved plans to generate early cash flow through the sale of unprocessed lithium-bearing ore because of soft prices.
The company delivered its update on Friday as $6.6 billion takeover suitor Albemarle remains close to completing due diligence.
The takeover bid has been complicated by Mrs Rinehart’s Hancock Prospecting taking a big stake in Liontown – potentially about 13 per cent after $100 million-plus share raids on Monday and Tuesday.
Hancock has cast doubt on Liontown’s ability to deliver and operate the Kathleen Valley mine and is pressing its case for a role in both tasks.
Liontown said it was in talks with a syndicate of commercial banks and government credit agencies to meet a funding shortfall of at least $450 million as it looks to have Kathleen Valley in production by mid-2024.
The company expects to have the funding needed to meet capital and other costs in place by the end of the calendar year.
Liontown flagged that it could seek to increase the size of the debt
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