Liontown’s Capital Raise Hinges on Approvals Amid Lithium Market Uncertainty

Capital Raising Overview

Liontown Resources Limited (ASX, LTR) has successfully completed a significant capital raising effort, securing approximately A$316 million through a combination of placements and a share purchase plan. The cornerstone of this raise was a fully underwritten institutional placement that brought in around A$266 million by issuing roughly 364.4 million new shares at A$0.73 each. This was complemented by a conditional placement to Canmax Technologies and other institutional investors, aiming to raise an additional A$50 million subject to shareholder and regulatory approvals. Furthermore, the company is offering existing eligible shareholders the opportunity to participate in a non-underwritten Share Purchase Plan (SPP) targeting up to A$20 million.

Strategic Backing and Market Confidence

The institutional placement attracted strong demand from both domestic and international investors, including a notable A$50 million investment from the National Reconstruction Fund Corporation. Canmax’s involvement, a major global lithium chemicals producer, signals robust confidence in the long-term prospects of Liontown’s Kathleen Valley lithium project. This strategic partnership not only underscores the project's value but also highlights the growing global demand for lithium, a critical mineral for battery technologies and the clean energy transition.

Financial Strength and Operational Flexibility

With the capital raising, Liontown’s pro forma cash balance is expected to reach approximately A$472 million, providing a fortified balance sheet to navigate volatile lithium markets. The funds will support the company’s transition to 100% underground mining operations at Kathleen Valley, a move aimed at reducing costs and improving sustainability. This financial resilience also positions Liontown to capitalize on anticipated lithium price recoveries and pursue low-cost, high-return growth opportunities within the sector.

Next Steps and Shareholder Engagement

The conditional placement requires shareholder approval at a general meeting scheduled for mid to late September 2025, alongside regulatory clearance from Chinese authorities for Canmax’s participation. Meanwhile, the SPP offer booklet is expected to be released shortly, inviting eligible shareholders to increase their holdings at the placement price without brokerage fees. The company’s board members have expressed their intention to participate in the SPP, signaling strong internal confidence in the capital raising and future prospects.

Outlook

Liontown’s managing director, Tony Ottaviano, emphasized the strategic importance of the capital raising in underpinning the company’s growth trajectory and its role in the Australian economy. As the lithium market evolves, this strengthened financial position and strategic partnerships could prove pivotal in unlocking further value for shareholders and stakeholders alike.