...looks like a full discounted CR could be averted, but the question is if Posco is willing to finance for the full sum of $550mil?
...that is perhaps the negotiation and CR optionality to consider over the 2 days.
...my guess is it will be a mix or combination - $550m is too big for a CR and too big for a loan by a single entity; even with a $100-200mil Govt support loan, $300-400mil is too big for a single entity IMO. Liontown in offtake deal to replace banks; eyes on POSCO Sarah Thompson, Kanika Sood and Emma Rapaport
Jul 2, 2024 – 12.06pm
Lithium hopeful Liontown Resources is poised to announce a major offtake/funding deal to get its Kathleen Valley project off the ground.
In March, the $2.2 billion mining group said it put in place what was effectively a short-term $550 million debt facility with a syndicate of lenders including Commonwealth Bank, National Australia Bank, Societe Generale and the Clean Energy Finance Corporation to get the mine away.
Sources said the company was close to announcing a major offtake and funding deal to replace those banks – with South Korean steel manufacturer POSCO said to be involved.
Liontown entered a trading halt earlier this morning.
The debt deal in March came after the collapse of a similar, but larger agreement in October. That one was worth $760 million and stretched for at least seven years, and was put in place following the end of a $6.6 billion takeover proposed by Albemarle.
The start of mining at Kathleen Valley is unlikely to arrest Liontown’s cash burn, given the slump in lithium prices. The lithium-rich spodumene concentrate that Kathleen Valley will produce is fetching $US970. Goldman Sachs estimates that the first year of production is expected to see unit costs closer to $US1278 a tonne.
