Liontown Resources has announced its decision to monetise the additional material liberated from the revised mine plan of its Kathleen Valley Lithium Project.
The company will proceed with the delivery of Direct Shipping Ore (DSO) product, in order to provide an initial source of revenue before first concentrate production commences.
The decision comes after Liontown announced that mine plan optimisation work had identified the opportunity in January 2023, and commenced a study to determine the potential for early revenue from the sale of a DSO product.
Since mining operations commenced in Q1 2023, Liontown has stockpiled approximately 70,000t of DSO product while undertaking a financial evaluation, conducting ore sorting test work and engaging prospective offtake customers.
Ore sorting test work has achieved positive results and prospective customers have been provided bulk samples for their own test work.
Liontown said that commercial discussions with potential customers are well advanced. The company expects to sell 250,000t to 300,000t of less than one per cent grade DSO material prior to first concentrate production.
Liontown said that sales of DSO product post first concentrate production are subject to a separate business decision and market conditions at the time.
The company also said that the economics of the DSO opportunity are compelling, with a substantial portion of mining costs for the DSO material already sunk as development capital.
Accordingly, Liontown has executed a contract with Axis Mineral Services for the crushing, screening and sorting of the DSO material at Kathleen Valley, due to commence in Q4 2023.
The recent concentrate haulage contract with Qube Holdings included the flexibility to transport the DSO product, providing the opportunity to establish and refine transport logistics well in advance of the first spodumene concentrate shipments from mid-2024.
In addition, the DSO crushing and sorting program will provide crucial real technical data to assist in the design of a potential large-scale ore sorting circuit as part of the planned 4Mtpa circuit expansion.
Liontown continues to see robust demand for lithium from its customers, including automakers, battery producers, cathode suppliers and refiners and is aiming to take full advantage of the market demand for lithium DSO product, ahead of first production of spodumene concentrate from Kathleen Valley.
Liontown’s Managing Director and CEO, Tony Ottaviano, said that Liontown’s mining team has continued to optimise the project’s mining plan, which has created the opportunity for early revenue through the sale of DSO.
“It illustrates the depth of our team and our commitment to realising the full potential of Kathleen Valley,” Mr Ottaviano said.
“As a lithium producer in a Tier One jurisdiction we bring a distinct and reliable benefit to customers.
“Therefore, progressing with the production of DSO not only provides early revenue potential, but also enables us to de-risk the project by field testing our ore sorting and logistics solutions on a smaller scale ahead of first concentrate production mid-2024.”
