Australia’s Liontown Resources said on Monday it had started a review of the planned ramp-up and expansion of its flagship Kathleen Valley lithium project, following the recent decline in spodumene prices, that sent shares tumbling.
The project review to lower near-term funding needs includes potentially delaying its 4 million tonne per annum (mtpa) underground development, other mine plan adjustments, and further cost cuts, Liontown said in a statement.
It remains focused on delivering first production in the middle of the calendar year and to budget. There is no change to the 3 mtpa plant that is under construction, it said.
Shares of the company fell as much as 25.9% to their lowest level since June-2022 by 2352 GMT.
The company noted that the recent drop in spodumene prices had triggered significant reductions in short and medium-term lithium price forecasts, and had impacted finalisation of a debt package for the Kathleen Valley project.
Kathleen Valley is regarded as one of the world’s top five lithium projects, and Liontown has already signed deals to supply Ford Motor, Tesla and electric vehicle battery maker LG Energy.
Liontown had secured A$760 million ($501.5 million) of debt funding in October last year, just after U.S.-based miner Albemarle abandoned a A$6.6 billion buyout bid for the company.
It said it had commenced discussions on a revised, smaller debt facility to reflect the project review, and remained on track for first production from Kathleen Valley in the middle of 2024.
($1 = 1.5156 Australian dollars)