Liontown reports strong revenue growth as Kathleen Valley ramps up production

About Liontown Limited

Liontown Limited (ASX: LTR) is an Australian battery minerals company focused on the production of lithium from its Tier-1 assets in Western Australia. The company’s flagship Kathleen Valley Lithium Project is one of the largest new hard-rock lithium developments globally and is strategically positioned to supply the rapidly expanding electric vehicle and battery energy storage sectors.

Liontown also controls the Buldania lithium project in Western Australia and continues to evaluate opportunities to expand downstream participation across the battery minerals value chain. The company’s strategy centres on delivering reliable supply of lithium chemicals essential for the global energy transition while maintaining strong sustainability and operational standards.

Production ramp-up at Kathleen Valley

Liontown’s operational performance during the half year reflected the continued ramp-up of production at Kathleen Valley, which has now transitioned to a 100% underground mining operation.

During the six-month period, the company produced 193,000 tonnes of spodumene concentrate, representing a 70% increase compared with the same period in the previous year. Sales volumes also increased substantially to 190,000 tonnes, more than doubling year-on-year as production capacity expanded. The ramp-up has allowed the operation to reach an underground mining run-rate of one million tonnes per annum, with management targeting a further increase to 1.5 million tonnes per annum by March 2026.

Revenue growth driven by higher sales volumes

Liontown reported revenue of $207.5 million for the half year, more than doubling from $100.4 million in the prior corresponding period. The growth was primarily driven by increased production and sales volumes as the Kathleen Valley operation moved into commercial production.

The company achieved an average realised price of US$888 per tonne for SC6 spodumene concentrate, reflecting prevailing lithium market conditions during the period. Liontown also conducted its first Metalshub spot auction in November 2025, with material clearing at US$1,254 per tonne, highlighting improving lithium market sentiment heading into 2026.

Despite the strong revenue growth, profitability remained impacted by ramp-up costs associated with bringing the operation to full production capacity.

Underlying EBITDA for the half year was negative $7.7 million, while the statutory net loss of $184 million included a significant non-cash derivative charge of $104.4 million linked to the company’s LG Energy Solution convertible notes.

Balance sheet strengthened

Liontown significantly strengthened its balance sheet during the reporting period, ending the half year with $390.5 million in cash.

Following the conversion of LG Energy Solution convertible notes into equity in early 2026, the company’s pro-forma gearing ratio declined from 48% to 22%, improving financial flexibility and positioning the company to fund further operational growth.

The company also renegotiated its Ford debt facility, deferring repayments by 12 months until September 2026, further supporting liquidity during the production ramp-up phase.

Management said the strengthened financial position provides a solid foundation to complete the ramp-up of operations while progressing future expansion plans.

Operational performance and plant efficiency

The Kathleen Valley processing plant delivered stable performance throughout the half year, processing approximately 1.22 million tonnes of ore during the period.

Average plant availability was 92%, reflecting reliable operational performance as the facility transitions to underground ore feed. Lithium recoveries averaged 61%, with further improvements expected as higher-grade underground ore becomes the dominant feed source.

The plant also produced 591 tonnes of tantalite by-product, providing an additional revenue stream for the operation.

Management indicated that recoveries and operational efficiency are expected to continue improving as optimisation of the processing circuit progresses.

Expansion plans and lithium market outlook

Liontown is currently undertaking a study to expand the Kathleen Valley operation to four million tonnes per annum, building on the existing infrastructure and mining development already in place.

The expansion would involve debottlenecking the processing plant and accessing additional ore from existing underground resources, allowing the company to increase production more rapidly than new greenfield projects.

Management believes this brownfield expansion option positions Liontown among a small group of global lithium producers capable of responding quickly to rising lithium demand.

Industry fundamentals continue to strengthen as electrification trends accelerate worldwide. Demand for lithium is being driven not only by electric vehicles but also by rapid growth in battery energy storage systems, which are emerging as a second major demand driver for the commodity.

At the same time, new lithium supply remains constrained by long development timelines for new projects, meaning existing producers with expansion capability are expected to benefit from improving market conditions.

Outlook

Liontown expects operational and financial performance to improve during the second half of FY2026 as production continues to scale and lithium prices strengthen.

Higher-grade underground ore, improving processing recoveries and increasing sales volumes are expected to support margin expansion as the Kathleen Valley operation moves further along the ramp-up curve.

With a strengthened balance sheet, expanding production capacity and a large resource base, Liontown believes it is well positioned to capitalise on the long-term growth in lithium demand driven by the global transition toward electrification and renewable energy storage.