Own Liontown shares? Here are 3 takeaways from the company’s investor presentation

What did today’s presentation reveal?

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Key points

  • Liontown shares are slightly in the green today 
  • The lithium explorer released a presentation to the market 
  • Highlights include multiple offtake agreements and a positive outlook on the lithium price 

The Liontown Resources Limited (ASX: LTR) share price is jumping today amid a new investor presentation to the market.

Liontown shares are rising 1.26% and are currently trading at $1.003. For perspective, the S&P/ASX 200 Index (ASX: XJO) is also up 0.49% today.

Liontown is developing the Kathleen Lithium Project in Western Australia. So what did today’s presentation reveal?

1. Lithium supply deficits predicted to continue

Liontown advised shareholders that the lithium market deficit will grow until 2030. The company said this is “driven by “tight supply”. Liontown said:

Analysts estimate that it can take up to 10 years for a lithium project to go online, leaving supply tight in the nearer future. There is currently no substitute for lithium in Li-ion cathodes.

The company noted spodumene producers are heading towards formula-based pricing for offtake contracts to capture “greater margin share” in the lithium supply chain. Liontown added at current spot prices, converters are retaining healthy margins centred on the “prevailing lithium hydroxide prices”.

2. Offtake agreements with Tesla, LG Energy Solution and Ford

Liontown spruiked its offtake agreements with major global companies including Tesla, LG Energy Solution and Ford.

These partnerships involve the production of 450,000 dry metric tonnes (dmt) per year of spodumene concentrate from the Kathleen Valley project.

Liontown noted Tesla is the biggest EV car company in the world, while Ford is also a leading automaker and LG is the second largest battery manufacturer in the world.

Liontown said:

Electric vehicles represent the vast majority of lithium demand and its forecast growth –

3. Mineral resource estimate ‘significant’

Liontown highlighted that Kathleen Valley is funded right through to production. This follows a $463 million equity raise and the $300 million Ford debt facility. This funding will help pay for the development costs of the project.

The company says the project is a “world class lithium deposit with a mineral resource estimate (MRE) of 156Mt at 1.4% lithium oxide.”

In late June, Liontown announced that the company’s board has endorsed the full development of this project.

The company is targeting net zero emissions by 2034.

Liontown share price snapshot

London shares have soared nearly 35% in the past year, while they have lost nearly 40% in the year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has jumped 9% in the past year.

Liontown has a market capitalisation of about $2.2 billion based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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