PERTH (miningweekly.com) – A final investment decision (FID) on the Kathleen Valley lithium project, in Western Australia, is due by June this year, ASX-listed Liontown Resources said.
Speaking at the Paydirt Battery Minerals conference, in Perth, Liontown MD and CEO Tony Ottaviano said that first production from Kathleen Valley is scheduled for the end of the second quarter of 2024.
“We've done our Native Title Agreement, the remaining permits are now being submitted to government and going through the processing that government departments have to do in order to sign off on these permits. And we're confident that we will get them the ones that we need to start construction before FID,” he said.
A definitive feasibility study (DFS) on Kathleen Valley estimated that the project would require an initial capital investment of A$473-million to support a 2.5-million-tonne-a-year operation, producing 500 000 t/y of spodumene concentrate.
During year six of the operation, a further A$66-million investment would be made to increase the project capacity to 4-million tonnes a year, delivering 700 000 t/y of spodumene concentrate.
Based on this production scenario, the Kathleen Valley operations are expected to have a mine life of 23 years, and would generate life-of-mine free cash flows of A$12.2-billion. The DFS estimated a post-tax net present value (NPV) of A$4.2-billion and an internal rate of return (IRR) of 57%, with a payback period of 2.3 years.
Ottaviano said on Thursday that Liontown was working to finalise another offtake agreement for the Kathleen Valley operation, to supplement the ones already signed with Tesla and LG Energy Solutions to support funding for the FID.
“We've got one more offtake to do and we're working through that as we speak, and we will leave 15% of our production for the spot market,” he added.
Meanwhile, Ottaviano told delegates that Liontown was also progressing with a prefeasibility study on the downstream activities at Kathleen Valley.
A previously completed updated downstream scoping study at the Kathleen Valley project had confirmed the value of a staged-built, integrated mining, processing and refining operation based on the production of batttery grade lithium hydroxide monohydrate (LHM) using spodumene feedstock from Kathleen Valley.
The scoping study had estimated a capital cost of A$2-billion for the spodumene plant and a three-train 90 000 t/y refinery, producing 29 000 t/y of LHM per train.
The downstream operation is estimated to have a post-tax NPV of A$9.6-billion and an IRR of 56%, and would generate free cash flows of A$32.4-billion over its 23-year operating life.