Minerals 260 (ASX:MI6) - Managing Director, David Richards
Managing Director, David Richards
Source: The Market Herald
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  • Liontown Resources (LTR) released its quarterly report for the March 2020 quarter, most of which was focused on the Kathleen Valley Lithium Project
  • Liontown spent the quarter conducting extensive drilling at Kathleen Valley to expand high grade mineralisation
  • The company not only achieved this – time and time again- but it also increased the project’s Mineral Resource Estimate by 86 per cent
  • Due to COVID-19, there will not be an upcoming definitive feasibility study but Liontown will release an upgraded pre-feasibility study better aligned with the updated resource
  • The company has also looked further into unlocking potential at the Moora Project, especially after Chalice Gold’s Julimar discovery
  • Julimar and Moora share similar geologic features which means Moora may contain a prospective nickel-copper-PGE system
  • Liontown took necessary actions to mitigate COVID-19’s impact but managed to end the quarter with over $5.8 million in cash
  • Shares in Liontown remain flat and are trading for 11 cents each

Liontown Resources (LTR) released its quarterly report for the March 2020 quarter, most of which was focused on the Kathleen Valley Lithium Project.

Kathleen Valley

The Kathleen Valley Project is located in Western Australia, approximately 680 kilometres north-east of Perth and 350 kilometres north-northwest of Kalgoorlie, within the Eastern Goldfields of the Archaean Yilgarn Craton.

The positive Pre-Feasibility Study (PFS) reported in the December quarter confirmed Kathleen Valley’s potential to become a robust, long-life mine. To do this, it outlined various opportunities to improve the financial metrics, including expanding high-grade mineralisation.

As a result, Liontown spent the March quarter conducting drilling programs designed to confirm the continuity of the high-grade mineralisation and test for extensions of the mineralised system.

Luckily throughout the quarter, results consistently confirmed the potential for a significant high-grade resource.

The company’s ongoing drilling program began in August 2019 and, since then, 52 new reverse circulation (RC) holes have been drilled, 11 previous RC holes have been extended and 48 new diamond core holes have been drilled for a total of 39,102 metres.

Liontown commenced work at Kathleen Valley in 2017 and in July 2019 it outlined a Mineral Resource Estimate (MRE) of 74.9 million tonnes at 1.3 per cent Li2O and 130 parts per million (ppm) Ta2O5.

In early February 2020, Liontown increased the MRE by a staggering 86 per cent. Kathleen Valley’s MRE now sits at 139 million tonnes at 1.3 per cent Li2O and 140 parts per million (ppm) Ta2O5.

Following the success of recent drilling programs, Liontown plans to spend this year focusing on plant operations and the ability to produce a premium-quality lithium product.

The company was gearing up for a Definitive Feasibility Study, however COVID-19 restrictions has led the company to postpone this. Instead, Liontown will produce an upgraded PFS that is closely aligned to the project’s updated MRE.

Moora Project

The Moora Project, which is located in the south-west of Western Australia approximately 150 kilometres north-east of Perth, has seen little historical exploration. Despite this, the minimal exploration defined significant nickel-copper-platinum group elements (PGE) and gold anomalism.

Liontown’s interest in the project stems from the belief that it hosts similar geological characteristics as Chalice Gold’s recently announced Julimar discovery. Julimar is situated 95 kilometres to the south of Moora and hosts a high-grade Ni-Cu-PGE deposit.

Liontown has completed a gravity survey and auger sampling at Moora and is waiting for results.

Once these are received, further work will be planned. Exploration will most likely comprise shallow air-core drilling to define anomalous nickel-copper zones, moving-loop electro-magnetic surveys to define possible massive sulphides and deeper RC and diamond core drilling.

Corporate

During the quarter, Liontown spent over $5.2 million on exploration and evaluation activities and $651,000 on administration costs. By the end of the quarter, Liontown’s cash balance was $5,832,000.

COVID-19

During the quarter, the company was forced to reassess its strategies and funding. To conserve cash, effective from the April 1, the non-executive directors of Liontown agreed to defer all fees they receive from the company.

In addition, Managing Director David Richards and Chief Operating Officer Adam Smits, have agreed to reduce the cash component of their remuneration by 45 and 40 per cent respectively for the foreseeable future.

This reduction came just after COO Adam Smits entered the newly-created role.

The Board is implementing equity compensation to be granted in lieu of reduced salaries and deferred fees. Liontown will also reduce short to medium term expenditure by postponing lower priority corporate and field-based activities until 2021.

Shares in Liontown remain flat and are trading for 11 cents each at 11:28 am AEST.

LTR by the numbers
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