Liontown Resources eyes Kathleen Valley lithium resource upgrade this month

Liontown Resources (ASX: LTR) has set its sights on a resource upgrade this month for its Kathleen Valley lithium-tantalum project in Western Australia’s eastern goldfields after ongoing drilling returned further thick and high-grade intersections.

Drilling at the wholly-owned project has confirmed the continuity of the Kathleen Valley mineralised system, which has been defined over 1.7km and remains open along strike and at depth.

The ongoing drilling program at the project has generated numerous mineralised intercepts.

Highlight results comprise 13.1m, at 3.1% lithium from 299m, including 10.4m at 3.8% lithium from 299.9m; 58m at 1.3% lithium from 318m, including 12m at 2.2% lithium from 355m; and 11.8m at 2% lithium from 113.7m, including 9m at 2.3% lithium from 114m.

The resource upgrade due later this month is expected to build on the current estimate of 74.9 million tonnes at 1.3% lithium and 130 parts per million tantalum, which was released in July last year.

Liontown has firmed up a resource extension exploration target of 25-50Mt at 1.2-1.5% lithium, with current drilling testing this target.

Under the ongoing drilling program, 26-holes for 7,500m remain to be drilled.

Kathleen Valley pre-feasibility study

Liontown completed a pre-feasibility study at Kathleen Valley in December last year including debuting a maiden reserve of 50.4Mt at 1.2% lithium.

The reserve is anticipated to underpin a 26-year mine life, with drilling expected to grow the mine’s lifespan.

Under the pre-feasibility study, production is estimated at 295,000 tonnes per annum of 6% spodumene concentrate.

The study projects this will generate life of mine after tax free cashflow of $1.94 billion – averaging $84 million annually during production.

To get the project up and running, capital expenditure of $240.5 million has been calculated, with project pay back anticipated within four years after production begins.

Liontown’s strategy is to be producing to meet the forecast rise in lithium demand as the decade advances and uptake of renewable energies and electric vehicles increases.

Shares in Liontown were steady at $0.079 in early morning trade.