It's likely a question on the lips of many of those invested in S&P/ASX 200 Index (ASX: XJO) lithium shares. Thankfully for those holding Liontown Resources Ltd (ASX: LTR) shares, we have an answer as to when the company might pay its maiden dividend.
Liontown chair and major shareholder Tim Goyder sat down with Bell Direct market analyst Grady Wulff earlier this week to discuss what the coming years might bring the company.
And investors will be glad to know dividends are expected to be on the cards. Though, they're likely some time away yet.
Right now, the Liontown share price is up 0.71%, trading at $2.83%.
For comparison, the ASX 200 is gaining 0.46% at the time of writing.
So, without further ado, let's dive into when those invested in Liontown shares might expect to receive dividends from the company.
When can those holding Liontown shares expect dividends?
It's been a big year so far for the Liontown share price. It's gained a whopping 130% year to date, with the majority of those gains realised on the back of a takeover bid posed by industry giant Albemarle.
The New York-listed lithium producer offered to pay $2.50 per share for its ASX 200 counterpart in March. Commenting on the company's rejection of the bid at this week's Resources Rising Stars conference, Goyder said:
The best people to ascertain the value of a company are the operators of the company, or the board.
We, like Albemarle, believe that it's a great company. The only thing we differ on, of course, is the price.
And, you know, the longer-term shareholders, including myself, look forward to dividends.
Word of potential dividends likely pricked the ears of investors. Particularly, those already honed in on Liontown following its rebuffed takeover bid and amid major merger news from ASX 200 peer Allkem Ltd (ASX: AKE).
But passive income-focused ASX 200 lithium fans might not want to hold their breath waiting for the company's payouts.
Its flagship Kathleen Valley Project, located in Western Australia, is on schedule to see first production in mid-2024. From there, three major five-year offtake agreements will take effect.
Electric vehicle giants Tesla, Ford, and LG Energy Solutions have each signed on to purchase up to 150,000 dry metric tonnes (DMT) of the project's production annually.
When asked why investors should pour their hard-earned cash into Liontown shares, Goyder said:
It all comes back to the deposit. We've got a 25-year mine life, a production rate in the order of 600,000 tons a year of concentrate, we've got five years locked away with Tesla, Ford, and LG Energy Systems.
So, come year six and onwards, hopefully we'll be doing downstream, and during that period we are quite confident of paying dividends.
