Already a subscriber?Liontown Resources has secured a $550 million loan from big Australian commercial banks and taxpayer-funded agencies in a crucial boost for the lithium developer’s hopes of delivering first production this year.
Only two of the big four banks – Commonwealth Bank and National Australia Bank – have participated in the syndicate behind Wednesday’s new, reduced loan agreement with Liontown. Liontown does not expect to need to draw down on the loan until around July, which is about the time it will produce first lithium from its Kathleen Valley mine in Western Australia.The start of production at Kathleen Valley is unlikely to arrest Liontown’s cash burn, given the slump in lithium prices. The type of lithium-rich spodumene concentrate that Kathleen Valley will produce was fetching $US950 a tonne last week.
That dynamic means Wednesday’s loan provides Liontown with certainty that it can sail through its early days of production. Liontown chief executive Tony Ottaviano said the loan positioned the company to deliver on its promise to start producing lithium “mid year”.The loan will be a blow to short-sellers who had targeted Liontown in the belief it may need to raise capital.