Liontown Limited has reported a 70% surge in lithium concentrate production and doubled revenue to $207.5 million in the half-year ending December 2025, completing its transition to 100% underground mining and resetting its balance sheet.
- 70% increase in production to 192,514 dmt at 5.0% Li₂O
- Revenue doubles to $207.5 million with 106% sales volume growth
- Transition to 100% underground mining achieves 1 Mtpa run-rate on schedule
- Statutory loss of $184 million includes $104 million non-cash LGES derivative charge
- Balance sheet strengthened with pro forma gearing cut from 48% to 22% post equity conversion
Production Scale-Up and Operational Milestone
Lithium producer Liontown Limited (ASX:LTR) has marked a significant operational milestone by completing its transition to 100% underground mining at its Kathleen Valley project. The company delivered a one million tonne per annum underground run-rate on schedule during the half-year to December 2025, producing 192,514 dry metric tonnes (dmt) of spodumene concentrate at a robust 5.0% lithium oxide grade, representing a 70% increase over the prior corresponding period.
This operational ramp-up underpinned a doubling of revenue to $207.5 million, driven by a 106% increase in sales volumes to 189,596 dmt and an average realised price of US$888 per tonne. Notably, Liontown’s inaugural Metalshub spot auction cleared at US$1,254 per tonne for shipments in early 2026, signalling strengthening market conditions.
Financial Performance and Balance Sheet Reset
Despite the strong top-line growth, Liontown reported an underlying EBITDA loss of $7.7 million, reflecting the typical costs associated with ramping up underground operations and unit cost pressures early in the transition. The statutory net loss was $184 million, heavily impacted by a non-cash $104.4 million derivative charge related to the LG Energy Solution (LGES) convertible note, a charge that will not recur following its conversion to equity in February 2026.
The equity conversion has materially strengthened Liontown’s balance sheet, reducing pro forma gearing (excluding leases) from 48% to 22% and boosting cash reserves to $390.5 million. This financial reset provides the company with a solid foundation to complete the ramp-up and pursue growth initiatives.
Growth Strategy and Market Outlook
Looking ahead, Liontown is progressing a 4 Mtpa expansion study aimed at leveraging brownfield growth opportunities at Kathleen Valley. The company is targeting a 1.5 Mtpa underground run-rate by the end of March 2026 and 2.8 Mtpa by mid-2027, with expectations that higher-grade ore, improved recoveries, and rising spodumene prices will drive margin expansion through the second half of FY2026 and into FY2027.
CEO Tony Ottaviano highlighted Liontown’s unique position as one of the few producers globally able to rapidly increase lithium supply through brownfield expansions, a critical advantage given the extended permitting timelines constraining greenfield projects. The company is also benefiting from emerging demand drivers such as battery energy storage systems alongside electric vehicles.
Operational and Sustainability Highlights
Operationally, the Kathleen Valley processing plant maintained stable performance with 92% availability and processed 1.22 million tonnes of ore at an average grade of 1.3% lithium oxide. Lithia recoveries improved to 61%, with ongoing optimisation expected to further enhance recoveries as underground ore dominates feed mix.
On sustainability, Liontown continues to prioritise safety and renewable energy, operating a 95 MW hybrid power station with 82% renewable power usage, alongside strong community engagement and investment in local Indigenous businesses.
Bottom Line?
With its underground transition complete and balance sheet reset, Liontown is poised to capitalise on rising lithium demand and deliver growth through its brownfield expansion strategy.
Questions in the middle?
- How will the 4 Mtpa expansion study impact Liontown’s production costs and timelines?
- What are the risks to ramp-up targets given operational and market uncertainties?
- How will evolving spodumene prices and demand from battery storage influence Liontown’s margins?