Liontown buys back Royalty.
Liontown has agreed to pay Ramelius Resources Limited (“Ramelius”) A$30.25M to terminate the Kathleen Valley Royalty held by Ramelius.
• The Kathleen Valley Royalty, which comprises 1% of gross sales and A$0.50/t of ore mined and milled, was granted to Ramelius when Liontown acquired the Kathleen Valley Project in 2016.
• Based on the October 2020 Preliminary Feasibility Study (PFS)1, the acquisition of the Kathleen Valley Royalty will be value-accretive to Liontown and is expected to result in a reduction in operating costs of approximately US$10/t (USD:AUD 0.72) for 6% Li2O concentrate over the Life-of-Mine (LOM).
• The benefits of terminating the Kathleen Valley Royalty will be further enhanced via future expansion of the production rate at Kathleen Valley and/or increases in the spodumene concentrate price.
• Liontown is well funded to be able to terminate the Kathleen Valley Royalty and continue to accelerate the Kathleen Valley Project. The benefits stemming from the termination of the Kathleen Valley Royalty are consistent with the Company’s objectives of reducing project operating costs and enhancing the economic profile of the, world class, Kathleen Valley Project.