Liontown sets for lithium split as former BHP exec slips into big chair

Plus, strong iron ore prices mean Fenix EBITDA set to exceed its market cap and Orion’s rising share price boosts its project funding prospects.

12th February 2021

Barry FitzGerald

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Geoscientists that double as CEOs rarely if ever get to take a world-class discovery they have made through to the off-take, financing, construction and production phase.

The reality is that 99% of them don’t want too either. It requires a different “skill set,” as they say. And besides, they would rather be out kicking rocks looking for their next career-defining discovery.

So it was this week with Liontown’s long-serving CEO David Richards.

Having converted Liontown from small-time explorer to the $740m company (LTR:42.5c) that is now a lead contender to become Australia’s next-generation lithium producer from the Kathleen Valley discovery in WA, Richards is moving across to a newly created technical (read exploration) director position.

It is hoped Richards continues on the speaking circuit because he has a way with words. Earlier this week, in a presentation to the RRS Summer Series webinar conference, Richards was again in fine form.

Addressing the ESG credentials of the company, like all good corporates do nowadays, Richards noted that he had added an “E” to make it ESGE.

“The E is for economics, because there is no point doing this stuff if we don’t make any money at the end of it,” he said

And when it came to talking to a slide on the bullish outlook for lithium, Richards said he needn’t bother.

“Given it was talked about on ABC Radio this morning, I don’t think we have to do that anymore.” So very true.

Richards’ immediate focus as technical director is to chase down the early encouragement from Liontown’s Moora gold-PGE-nickel-copper prospect.

It’s the one that is hoping for a repeat of the success Chalice – another company in Liontown chairman Tim Goyder’s stable – has had at Julimar, 90km to the south.

Julimar has turned Chalice from a $60m company to a $1.5bn company in under a year. Liontown has been busy with a wide-spaced reconnaissance-type program at Moora with early results including a 10m hit at a bottom of a hole grading 1.9% copper.

Early days, but very encouraging. A new batch of assays results can’t be far off now and could be worth looking out for given there is little if anything in Liontown’s market cap for what might come at Moora.

Should it come up trumps, the plan is to consider a separate IPO of the company’s non-lithium assets.

The task of advancing Kathleen Valley to producer status by circa mid-2024, mid-2025 now falls to Liontown’s new CEO, Tony Ottaviano, a mining engineer with long-time operational, commercial and corporate experience at BHP and Rio Tinto no less.

Prior to accepting the Liontown gig, Ottaviano was program director of the operating system that guides safety and productivity strategy across BHP’s major assets and before that, he was VP strategy, development and planning for the iron ore division.

So he comes well credentialed for the task of moving Kathleen Valley into production, with the attraction of becoming a CEO, rather than an underling in the BHP hierarchy, at a company with a potential Tier 1 project in a “future facing” industry to pin his hat on.