PERTH (miningwekely.com) – Lithium developer Liontown Resources has awarded a A$1-billion underground mining services contract to contractor Byrnecut for work at its Kathleen Valley project, in Western Australia.

The contract is the largest to be awarded by Liontown and provides the full suite of mining services for the underground operations, to support initial plant throughput capacity of three-million tonnes a year. The contract will run for a period of four years.

“Today marks a significant milestone for Kathleen Valley as we have issued a letter of award for the Underground Mining Services contract to Byrnecut,” said Liontown MD and CEO Tony Ottaviano.

“Our collaboration with Byrnecut has already delivered value in the form of the updated ‘one mine, two orebodies’ mine plan, which was optimised as an outcome of the tender evaluation process.

“Byrnecut will invest more than A$125-million in new equipment, highlighting their commitment to the successful delivery of underground mining services at Kathleen Valley.

“At around A$1-billion this is the largest contract to be awarded by Liontown and is reflective of operational requirements, external factors and the four-year duration. We remain on track for first production from Kathleen Valley by mid-2024 and I look forward to partnering with Byrnecut for the next stage of our project development,” Ottaviano said.

Byrnecut will mobilise to site throughout the September quarter, and first development meters is expected to star in the December quarter.

The award of the underground mining services contract is subject to finalising the binding full-form contract.

The 2.5-million-tonne-a-year Kathleen Valley operation will produce 500 000 t/y of spodumene concentrate, and in year six of operations, Liontown would look to increase he project capacity to 4-million tonnes a year, delivering 700 000 t/y of spodumene concentrate, within six years.

Based on this production scenario, the Kathleen Valley operation is expected to have a mine life of 23 years, and will generate life-of-mine free cash flows of A$12.2-billion.