Liontown Expands Lithium Portfolio with Argentine Brine Farm-In Deal

Liontown Ventures into Lithium Brine with Strategic Argentine Project

Liontown Limited (ASX:LTR) is broadening its lithium portfolio beyond Western Australia’s Kathleen Valley hard-rock mine by entering a farm-in agreement with NEXT Lithium Corp. to earn up to 100% ownership of the Centenario lithium brine project in Salta Province, Argentina. This marks a significant step into the brine lithium sector, which accounts for a substantial share of global lithium supply but represents a new technical frontier for Liontown.

The deal sets a clear, staged pathway for Liontown to progressively increase its stake by funding up to US$40 million (~A$56 million) in project expenditure over four years, supplemented by milestone payments potentially reaching US$140 million (~A$195 million). These payments can be made in cash, Liontown shares, or a combination, with NEXT Lithium holding the election rights. The initial upfront consideration includes US$5 million in cash and US$10 million in Liontown shares, payable once customary conditions precedent are met.

Exploration Focus and Project Positioning

The Centenario project sits in a lithium-brine-rich region, geographically close to established operations like the Pozuelos-Pastos Grandes project and Eramet’s Centenario-Ratones mine. Liontown plans an initial US$15 million work program over the next 12 to 24 months, including a drilling campaign targeting anomalies pinpointed by a transient electromagnetic survey already completed on site. Achieving this expenditure would earn Liontown a 49% effective interest in the project.

Subsequent phases allow Liontown to increase its ownership to 51% by paying US$15 million in cash or shares, then to 75% by funding an additional US$25 million in project costs. The final phase enables acquisition of the remaining 25% interest for up to US$125 million, contingent on resource estimates and capped accordingly. This phased approach allows capital deployment to scale with project milestones and results.

Strategic Partnership and Growth Ambitions

Liontown’s Managing Director Tony Ottaviano emphasised the strategic value of the deal, highlighting the low-cost entry into brine lithium and the opportunity to build technical expertise alongside NEXT Lithium’s experienced team. NEXT Lithium’s founder previously helped develop Millennial Lithium, which was acquired by Lithium Americas, underscoring the partner’s local knowledge and operational track record.

While Kathleen Valley remains Liontown’s core asset, this transaction aligns with the company’s broader strategy to diversify its lithium portfolio and capture growth opportunities in emerging lithium sources. The staged farm-in structure reflects a disciplined capital approach, allowing Liontown to increase exposure only as the project advances.

Financial and Market Considerations

The potential milestone payments and share issuances introduce dilution risks for existing shareholders, with the number of shares issued tied to Liontown’s 20-day volume weighted average price at relevant times. NEXT Lithium’s ability to elect share consideration is limited by Liontown’s available placement capacity under ASX Listing Rule 7.1.

Completion remains subject to customary conditions precedent, including the release of security interests over the project’s Argentinian tenements and local subsidiaries. The project is at an early exploration stage, carrying inherent geological and technical uncertainties typical of lithium brine ventures.

Despite these risks, Liontown enters the brine sector with a financially robust position, having recently reported strong cash flows and profits supported by its underground ramp-up at Kathleen Valley and a healthy cash reserve, which should underpin funding for the Centenario work program and subsequent phases.