The Liontown Resources Ltd (ASX: LTR) share price is currently in the red after the ASX lithium share’s quarterly update.
Liontown Resources is an ASX lithium share that’s working on the Kathleen Valley project to produce lithium.
Liontown Resources share price
Quarterly update
The highlight of the update was that the company was able to say that the Kathleen Valley project is now more than 50% complete with a “clear line of sight” to first production in mid-2024. This is key for the Liontown share price.
All major mining and construction contracts were awarded and approximately 90% of project capital costs committed, “de-risking the pathway to first production.”
The structural, mechanical, piping and electrical & instrumentation contract was awarded to tier 1 contractor Monadelphous Group Ltd (ASX: MND).
It also revealed that the hybrid power station was substantially advanced with the solar farm now 82% complete. The thermal power station and LNG facilities are 50% complete and the first wind turbine footing has been poured.
The ASX lithium share also spoke of an updated estimate of the Kathleen Valley project capital cost, including pre-production mining, to first production of A$951 million.
Liontown Resources also revealed that the average cost (C1) is expected to be A$651 per SC6 dry metric tonne (dmt) over the initial 10 years of production from 1 January 2025.
The company finished the September quarter with a cash balance of A$285 million. However, it also drew down A$128.6 million of its $300 million finance facility with Ford.
Takeover troubles
During the quarter, the company received a revised conditional and non-binding indicative offer from Albemarle on 4 September 2023 to buy 100% of Liontown for a Liontown share price of A$3 cash via a scheme of arrangement.
After the end of the quarter, Albemarle told Liontown it was withdrawing from the “complexities” associated with executing the transaction. Presumably, because Gina Rinehart‘s business bought shares.
Capital raising
After the end of the quarter, the company announced that Kathleen Valley was “fully funded to production and beyond” with debt funding of A$760 million secured and a capital raising of A$376 million.
Final thoughts on the Liontown share price
The Liontown share price has sunk around 45% in a month. Now that it’s a lot lower priced, I think it could be a long-term opportunity, assuming it’s able to capitalise on the lithium demand and the long-term lithium price is at an attractive level.
However, I’m sure there will be plenty of ups and downs over the next 12 months and beyond.
