Liontown Resources Ltd (ASX: LTR) shares are on the move on Monday morning.
At the time of writing, the lithium developer's shares are up 2% to $2.80.
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Why are Liontown shares rising?
Investors have been snapping up Liontown shares this morning after the company released an update ahead of its appearance at a conference.
According to the update, the company's flagship Kathleen Valley Lithium Project is now less than 12 months from achieving its target of first production in mid-2024. Pleasingly, mining and construction is progressing to schedule and is materially in line with the capital expenditure estimates.
This is a big win given how inflationary pressures have been causing other miners to revise their cost estimates higher.
As announced recently, management reiterated that it is pushing ahead with the delivery of a direct shipped ore (DSO) product as an early source of revenue. Material for DSO has been liberated through mine plan optimisation and is in addition to ore reserves. Its first DSO shipment is targeted by end of calendar year 2023.
Liontown also provided an update on government funding support. It confirmed that it has total non-binding and conditional finance interest for up to $300 million to support the delivery of the Kathleen Valley Lithium Project. Management also notes that it has a strong foundation as it advances all funding options to conclusion.
Finally, the company revealed that it has progressed the "partner" pillar of its downstream strategy through an agreement with Japan's Sumitomo Corporation. It is a global participant in commodity processing and marketing.
The two parties will investigate the development of a lithium supply chain between Australia and Japan. This agreement will support a jointly funded study that explores the feasibility of using Liontown's spodumene, or a future lithium sulphate product produced in a Western Australia based plant, to produce lithium hydroxide in Japan. The study is non-binding and is expected to be undertaken over a period of two years.
'Powering to production'
Liontown's managing director and CEO, Tony Ottaviano, was pleased with the company's progress. He said:
Liontown Resources is powering to production and recent achievements reinforce the commitment to realising the full potential for Kathleen Valley and growing our Company. We are on track to award our most significant contract, the underground mining services contract on schedule in the September quarter along with the structural and mechanical piping contract.
Executing the DSO project enables us to realise the dual benefit of unlocking early revenue and de-risking the project by field testing our ore sorting and logistics solutions ahead of first concentrate production.
