Name of the Project                                    
Kathleen Valley lithium/tantalum project.

Location
North-east Goldfields of Western Australia.

Project Owner/s
Lithium developer Liontown Resources.

Project Description
A definitive feasibility study (DFS) has confirmed the potential to develop a state-of-the-art, second-generation lithium/tantalum mining and processing operation.

The DFS optimises the mine schedule, process plant design and forecast sales pricing to enhance the technical and financial viability of a standalone, long-life, four-million-tonne-a-year operation.

The project has an ore reserve of 68.5-million tonnes grading 1.34% lithium oxide and 120 parts per million tantalum pentoxide, underpinning an initial estimated 23-year mine life, based on the updated mining schedule.

Building on the October 2020 prefeasibility study (PFS), the DFS base production has been increased from two-million tonnes a year to 2.5-million tonnes a year, producing about 500 000 t/y of spodumene concentrate, with a four-million-tonne-a-year expansion planned in Year 6 to deliver about 700 000 t/y spodumene concentrate.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a real 8% discount rate, of A$4.2-billion and an internal rate of return of 57%, with a payback of 2.3 years.

Capital Expenditure
Liontown flagged a cost increase in the project January 2023, reporting a new capital cost estimate of A$895-million. The new price tag, which includes a A$40-million contingency, compares with the June 2022 forecast of A$545-million and the 2021 DFS estimate of A$473-million.

Liontown explained that the engineering design and project delivery had been significantly refined and optimised since the completion of the DFS in November 2021 and the final investment decision in June 2022. Several optimisation and scope changes have been made, including a 20% increase in initial throughput capacity to three-million tonnes a year to take advantage of the strong price forecast.

In addition, the project has not been immune to the substantial inflation seen across the industry, with some tenders experiencing price increases of more than 30%.

Liontown further stated that tendered package prices had been impacted on by a reduction in productivity rates and the number of contractors willing to bid.

Planned Start/End Date
First production is expected to start in the first half of 2024.

Latest Developments
To date, Liontown has spent A$73-million on the project, with A$685-million of remaining funds, comprising A$385-million in cash reserves and A$300-million in debt through a facility available for future deployment.

Liontown has said that it does not anticipate having to access additional funds until the end of 2023. The firm is advancing a potential direct shipping ore opportunity, which could generate early revenue.

Key Contracts, Suppliers and Consultants
ZOOID (environmental, social and governance); Optiro (geology and mineral resources estimate); Snowden Mining Industry Consultants (mine optimisation, planning, design and scheduling); ALS Metallurgy (process testwork); Lycopodium Minerals (process and infrastructure design, capital and operating expenditure); Knight Piésold (tailings and hydrogeology); MBS Environmental (environmental studies); Peter O’Bryan and Associates (geomechanical engineering); Metso-Ouotec (design, fabrication and delivery of a semiautogenous grinding mill); Lycopodium Minerals (engineering, procurement and construction management); and Zenith Energy (hybrid power station – design, build, own, operate and maintain).

Contact Details for Project Information
Liontown Resources, tel +6 8 6186 4600 or email info@ltresources.com.au.