Liontown Dial Back KV to Save Cash

Mali's military government has detained 3 Resolute employees, including CEO Terry Holohan

November 11, 2024

The Pre-Start

  • Liontown is now high-grading at Kathleen Valley under a revised mine plan which will reach 2.8Mtpa by end of FY27 and expecting to produce 170-185kdmt SC6 in H2FY25 at unit costs to be A$775–855/dmt FOB (LTR)

    • Separately, a court ruling suggests the private royalty remains at 2% (LTR)

  • Resolute confirmed its CEO & two employees have been detained in Mali by Gov’t officials while in discussions regarding Bamako (RSG) Stock down 25%

  • Arcadium Lithium’s reported Q3 net income of US$16m on $203m in revenue, while realising an average price of US$16.2k/mt of lithium hydroxide (LTM)

  • NexGen’s Q3 quarterly saw C$35m spent on exploration, evaluation & operating costs while on Nov 9 it received ministerial environmental assessment approval to proceed from Saskatchewan with Rook 1 (NXG)

  • Global Lithium has applied to the WA Supreme Court to delay its AGM until 20/3/25 over potential breaches of Foreign Takeover rules (GL1)

  • Lindian announced a 10-year lease & royalty agreement over the Woula bauxite project in Guinea (LIN)

  • Black Cat reported that 110kt of ore has been processed with 4.1koz mined (BC8)

  • Ausgold appointed Paul Weedon as a NED, Mark Mitchell as COO while Matt Greentree resigned as MD (AUC)

  • Medallion advanced its required regulatory approvals for Ravensthorpe, with further clarity expected before year end (MM8)

High Grade It

  • Terry Holohan, the boss of Resolute Ming, as well as 2 employees, have been detained in Mali by the military-controlled gov’t (West)

  • Industry sources believe the Mali military gov’t wants an extra $250m from Resolute (Australian)

  • MinRes is under pressure from Wodgina partner Albermale to cut output, after the lithium major lost US$1.1bn in the Sep ‘24 quarter (West)

  • Meet Chris Ellison’s personal accountant (AFR) Further investigative work by Neil Chenoweth into Yenna Ong, the first exec casualty since scandals surfaced

  • China has announced a Rmb10tn (US$1.4tn) fiscal package to bail out local governments and help shore up its faltering economy (FT)

  • Liontown Resources is scaling back Kathleen Valley mine production in a bid for survival (LTR)

  • The Board games are on to rescue MinRes as Superfund HESTA airs its concerns about Chris Ellison’s long goodbye (West)

  • Huayou, one of the world’s largest nickel producers, is reportedly sounding out banks for ~$2.7bn financing for its Ford-backed Indonesian project (Bloomberg)

  • German opposition MPs propose checking the feasibility of restarting recently decommissioned nuclear power plants (CEW)

  • Lynas’ Kal plant was hit by a power outage during its official opening (LYC)

  • Barrick has fallen behind peers following the gold surge, in a move that CEO Bristow has put down to a rebuilding phase (Bloomberg)

  • The Australian Workers Union wants to leverage Labor’s revived industrial relations agenda to re-unionise mine workers in WA’s Pilbara (AFR)

  • Vedanta reported a US$516m net-profit for the quarter, boosted by higher revenue and a write-back of earlier charges (Bloomberg)

  • Andrew Forrest’s Wyloo is in a debt dispute with rare earths hopeful Hastings, with the stoush threatening the future of the taxpayer-backed ASX junior (AFR)

  • Global oil prices "would have hit the roof" if big importer India had not bought oil from Russia following the Ukraine war, India's oil minister said (Reuters)

Model Answer

Wheelin’ n Dealin’

  • Port of Newcastle is negotiating with major international investors for financing to fund a container terminal to diversify from coal (AFR)

  • Helix Resources released a target statement in response to Acta’s takeover attempt, with the board recommending to reject the offer (HLX)

Rattlin’ the Tin

  • Rox Resources has launched a $10m equity raise (RXL, AFR)

  • Syrah received US$53m in the first disbursement from the US DFC loan (SYR)

Word on the Decline

  • Word on the Decline is the Stanmore x M Resources x Widjaja consortium is poised to scoop up Anglo’s remaining Queensland coal assets… Final bids are expected to have been submitted by now so absent some late-game shenanigans, this is our mail

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In the Weeds

  • The MinRes CFO is the $10m man (AFR’s Rear Window) Brings up a $117m interest-free loan from MINs to RDG (headed by Chris Ellison’s brother)

  • Understanding China's recent stimulus measures (Livewire)

  • Inside the Audacious Plan to Reopen Three Mile Island’s Nuclear Plant (WSJ)

  • Election Takeaways for the Energy Sector (Super-spiked)

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Devil’s in the Detail

We think a lot of people will be looking at Liontown’s recoveries. The trajectory is in the right direction but still quite a way from the assumption (pg 13) of 70% by Q3FY26 and trending to 78%.

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