PERTH (miningweekly.com) – Lithium developer Liontown Resources will move ahead with a direct shipping ore (DSO) strategy at its Kathleen Valley project, in Western Australia, in order to generate early cashflow.

The company earlier this year flagged the potential sale of DSO from Kathleen Valley, with the company on Thursday saying that 70 000 t of DSO material had been stockpiled to the end of July, following the start of mining operations at Kathleens Corner and the Mt Mann openpits in January.

“Liontown’s mining team has continued to optimise our mining plan, which has created the opportunity for early revenue through the sale of DSO,” said MD and CEO Tony Ottaviano.

“It illustrates the depth of our team and our commitment to realising the full potential of Kathleen Valley.

“As a lithium producer in a Tier-1 jurisdiction we bring a distinct and reliable benefit to customers. Therefore, progressing with the production of DSO not only provides early revenue potential, but also enables us to de-risk the project by field testing our ore sorting and logistics solutions on a smaller scale ahead of first concentrate production mid-2024.”

Commercial discussions with potential customers are well advanced. Liontown expects to sell 250 000 t to 300 000 t of DSO material prior to first concentrate production. Sales of DSO product post first concentrate production are subject to a separate business decision and market conditions at the time, the company said on Thursday.

The miner has inked a crushing, screening and sorting contract for the DSO material which will start in the fourth quarter of this year.

The 2.5-million-tonne-a-year Kathleen Valley operation will produce 500 000 t/y of spodumene concentrate, and in year six of operations, Liontown will look to increase the project capacity to 4-million tonnes a year, delivering 700 000 t/y of spodumene concentrate, within six years.

Based on this production scenario, the Kathleen Valley operation is expected to have a mine life of 23 years, and will generate life-of-mine free cash flows of A$12.2-billion.