Liontown to earn up to 100% interest in Centenario lithium project

Liontown Limited (ASX: LTR) signed a farm-in agreement with Next Lithium Corp. that could give the Australian miner full ownership of the Centenario lithium brine exploration project in Argentina. 

The deal gives Liontown a low-cost entry into lithium brines while adding geographical and resource diversification beyond its Kathleen Valley hardrock operation in Western Australia. It also provides NEXT Lithium with a pathway to further develop Centenario.  

“NEXT Lithium knows lithium, knows brine, and knows Argentina. That depth of expertise is exactly what we want alongside us as we build our own capability,” Tony Ottaviano, Liontown’s managing director and CEO, said in a statement. 

The project is strategically located close to the Pozuelos-Pastos Grandes project and Centenario-Ratones operations, both with production targets of lithium carbonate of up to 150,000 tonnes a year. 

Brine is one of the two principal sources of lithium and Argentina is one of its top global exporters.  

Staged investment 

The farm-in agreement is divided into four phases, slowly increasing Liontown’s interest in Vertex Holdings, NEXT Lithium’s Australian subsidiary, to reach 100% over that four-year period.  

Liontown will initially pay $5 million in cash and issue $10 million in shares for the farm-in right upon completion. “As NEXT Lithium becomes a Liontown shareholder, I look forward to seeing the Centenario Project explored and advanced, and to the value it can create for shareholders,” Kyle Stevenson, NEXT Lithium’s CEO, said.  

Liontown plans an initial $15 million work program within the first two years, which will include a drilling campaign to target anomalies previously identified by transient electromagnetic survey. With this funding, Liontown may earn an effective 49% in the project. 

Liontown is not obligated to proceed with phases 1, 2 or 3, but if it decides to reach phase 3, they must complete the phase 4 acquisition of 100% of Vertex. 

“Structuring the deal as a staged farm-in ties our capital to results, so we invest more only as the project proves itself. Kathleen Valley remains our priority, and we will keep pursuing value-accretive growth where it fits our strategy,” Ottaviano said.