At the time of writing, the lithium developer’s shares are down 3.5% to $1.41.
Why is the Liontown share price falling on Monday?
Investors have been selling down the Liontown share price on Monday after broad market weakness offset the release of a positive update out of the lithium miner.
In respect to the latter, this morning the company confirmed that it has executed its first definitive full-form offtake agreement for the supply of lithium spodumene concentrate from the Kathleen Valley Lithium Project in Western Australia.
According to the release, LG Energy Solution (LGES) has signed a five-year deal and agreed to purchase 100,000 dry metric tonnes (dmt) of lithium spodumene in the first year. This will then increase to 150,000 dmt per year in subsequent years, which represents almost one-third of the project’s start-up SC6.0 production capacity of ~500,000 tonnes per annum.
LGES is a global leader in delivering advanced lithium-ion batteries for electric vehicles (EVs), mobility and IT applications, and energy storage systems.
In addition, the release reveals that pricing will be determined using a formula-based mechanism referencing market prices for battery-grade lithium hydroxide monohydrate.
Both volume and pricing are in line with what was agreed by the two parties in a term sheet announced by Liontown in January.
Liontown’s Managing Director and CEO, Tony Ottaviano, was pleased to see the talks progress to a full form agreement.
He commented: “We are delighted to have concluded negotiations with LG Energy Solution allowing us to execute our first full form Spodumene Concentrate Offtake Agreement for up to 30% of our production. This establishes the foundation for a long-term partnership and we are proud that we will be supplying lithium from the Kathleen Valley Project to LGES, a respected global leader in the lithium battery value chain.”
The post Liontown Resources share price tumbles despite lithium update appeared first on The Motley Fool Australia.
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