Liontown Resources Limited
ABN 39 118 153 825
For the year ended 30 June 2023
FY23
ANNUAL
REPORT
Liontown Resources | FY23 Annual Report | C11
FY23 Annual Report
Liontown Resources is an ASX100 company with a vision to
be a globally significant provider of battery minerals as the
world transitions to a low-carbon future.
Welcome to our summary of operations, activities,
performance and financial reporting for the year ended
30 June 2023. To gain a broader contextual appreciation of
our business, this report can be viewed together with our
ESG Report and Corporate Governance Statement at
ltresources.com.au.
About this report
Acknowledgement of Country
We acknowledge the Traditional Owners of the land
on which we work and recognise the intricate and
deep connection to country that they share. We pay
our respects to their Elders past and present.
This Annual Report is a summary of Liontown’s
operations and financial results for the financial
year ended 30 June 2023. All references to
‘Liontown Resources’, ‘Liontown’, ‘the Company’,
‘we’, ‘us’, ‘our’ refer to Liontown Resources Limited
(ABN 39 118 153 825) and the entities it controlled
in the reporting period, unless otherwise stated.
References in this report
References in this report to a ‘year’ are to the
financial year ended 30 June 2023, unless
otherwise stated. All dollar figures are expressed
in Australian dollars (AUD) unless otherwise stated.
All references to ‘Indigenous’ people are intended
to include Australian Aboriginal and/or Torres Strait
Islander people.
Our ESG team at Kathleen Valley on country with members of Tijwarl
Contents
About this report
About us
From the Chair
From the Managing Director
Liontown at a glance
Operational review
Environmental, Social and
Governance (ESG)
Corporate update
Directors’ report
Auditor’s Independence Declaration
Financial report
- Notes to the financial statements
- Directors’ declaration
- Independent auditors report
Mineral Resources and ore reserves
Additional information
- Tenement schedule
- Shareholder information
- Glossary of terms and abbreviations
- Corporate directory
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12
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118
Liontown
is an
emerging
Tier-1
battery
minerals
producer
We are an ASX100 company with a focus on
battery minerals. We aim to be an ESG leader
in the Australian resources sector and a
significant provider of battery minerals for the
rapidly growing world clean energy market.
Liontown Resources | FY23 Annual Report | 1
About us – our vision and strategy
Our Vision
To be a globally significant provider of battery minerals as the world transitions to a low-carbon future.
Our Strategy
To find and develop lithium and other mineral deposits required to support the transition to a low-carbon
future.
Kathleen Valley
Full Potential
Downstream
Expansion
Liontown
Full Potential
Our goal is to develop Kathleen
Valley to its full potential and
become a globally significant
supplier of spodumene
concentrate and lithium
hydroxide.
Developing integrated operations
will allow us to capture higher
margins and create new supply
chains.
As we grow, we will expand
our portfolio through organic
growth, value accretive M&A, and
exposure to the circular economy.
2 | Liontown Resources | FY23 Annual Report
Our ESG Pillars
ESG is in our DNA – we have designed our company and operations with ESG at the centre.
Respecting and protecting
Creating social and economic value
■
We aim to deliver real value from the lands
on which we will operate.
■ Together, we will set a new benchmark
for the mining industry in Western
Australia in recognising and protecting
Heritage and Country.
Operating with integrity
■
Individually and collectively, we
demonstrate leadership through the
governance mechanisms we have in place.
■ We do what we say we will do, for the right
reasons and with respect.
■ We promise to respect and protect
everyone who is part of us.
■ Our sense of team ensures we are all safe
and included.
Partnering with others
■ We are proud to partner with customers
and suppliers who can demonstrate their
ESG credentials.
■ We work hard to ensure that the raw
materials we produce are extracted
efficiently and responsibly.
Developing natural resources responsibly
■ The materials we produce are a critical
input to global decarbonisation.
■
It is our responsibility to produce them
with the lowest possible carbon footprint
and manage the environmental impact at
every stage.
Liontown Resources | FY23 Annual Report | 3
About us – our values
Our Values
Safety
■
Every one of us will do everything we can to create a safe work
environment.
We will ensure everyone who visits our workplaces is supported
and goes home safe every day.
■
Sustainability
■
Together, with our customers and suppliers we work towards a
circular economy.
■
We develop resources responsibly, and the raw materials we
produce are used efficiently and responsibly.
Sense of Team
■
We are a group of people who get together to do important work.
■
We are inclusive.
■
We celebrate the diversity present in our team.
■
We have fun.
Respect
■
We understand and celebrate that our work involves diverse
relationships and many stakeholders with individual objectives.
■
We ensure all voices are respectfully heard and develop solutions
that balance the interests of all stakeholders.
Ambition
■
We don’t just want to do well, we want to keep getting better.
■
The challenge of constant improvement is what motivates us.
■
We set objectives and work to discover how these can be achieved.
Integrity
■
We have many stakeholders who expect great things from us.
■
We have the courage to do the right thing, even when it is the
harder thing.
■
We don’t take ‘shortcuts’.
4 | Liontown Resources | FY23 Annual Report
Liontown Resources | FY23 Annual Report | 5
From the Chair
Tim Goyder
Chairman
On behalf of the Board, it
gives me great pleasure to
present the Annual Report
for the 22/23 Financial Year
It has been another extraordinary year for
Liontown. Your Company is well advanced with the
development of its flagship asset, the Kathleen
Valley Lithium Project in Western Australia.
The pace at which this project is progressing
is impressive and it has been exciting for me to
witness, as I’m sure it has been for many of you.
In the 12 months to the end of June, our share price
experienced a rise of nearly 170 percent, which
made us the top performing stock in the benchmark
S&P/ASX 200 Index for the 12-month period. A key
catalyst behind the share price performance was
the outside interest in the exceptional quality of
our Tier-1 asset at Kathleen Valley, including from
global lithium sector leader Albemarle Corporation.
The interest from such a well-regarded,
international company is a testament to what the
Liontown team has achieved to date.
As you will be aware, your Board rejected
Albemarle’s initial indicative proposals, determining
that they undervalued Liontown and, therefore,
were not in the best interest of shareholders. In
September 2023 however, Albemarle tabled
another proposal. After carefully considering the
revised non-binding and conditional proposal,
the Board determined to grant Albemarle an
opportunity to conduct a limited period of exclusive
due diligence, subject to customary fiduciary
exceptions, to enable it to put forward a binding
proposal, subject to the parties agreeing to a
mutually acceptable non-disclosure and exclusivity
agreement.
6 | Liontown Resources | FY23 Annual Report
Should Albemarle make a binding proposal at
$3.00 per Liontown share, subject to agreement
of a mutually acceptable binding scheme
implementation agreement, it is the Board’s
intention to unanimously recommend shareholders
vote in favour of the proposal in the absence of a
superior proposal and subject to an independent
expert concluding (and continuing to conclude) that
the proposed transaction is in the best interests of
shareholders.
Kathleen Valley stands out
as a strategic asset in the
global lithium market
As has become more apparent during the past
12 months, our Kathleen Valley Project carries
immense strategic value as a genuine Tier-1, hard-
rock lithium deposit. Already in development and
nearing production in an established, mining-
friendly jurisdiction, there are precious few lithium
assets like it around the world.
The global interest in our flagship Project, and the
lithium thematic more broadly, were reinforced
to me firsthand on a visit to the United States in
February this year. We were fortunate to visit the
electric vehicle factories of our major customers,
Tesla and Ford, and to meet with highly engaged
investors and US government policy makers – all
working collectively to drive forward the massive
expansion of global battery supply chains.
Toward the end of financial year, lithium prices
stabilised from record highs in the 2022 calendar
year and the lows experienced early in 2023. The
fluctuation in pricing we’ve seen throughout the
year was largely driven by China as they curbed
electric vehicle subsidies, applied heavy discounts
to internal combustion engine vehicles and the
Chinese lithium chemicals industry went through a
period of de-stocking.
During the financial year, the average price for
spodumene concentrate, the product that Kathleen
Valley will produce, was US$6,482 per tonne,
however it finished the year at a 12-month low
of US$3,750 per tonne. Despite this short-term
softness, the consensus is that we are entering
an extended period of elevated pricing for lithium
products as demand from the clean energy sector
continues to grow and supply deficits widen.
Ensuring diversity in our workplace is high on our
agenda and in 2022 we set ourselves a target of
achieving 30 percent female composition on our
Board by June 2024. I am pleased to report that,
as at the end of this financial year, our Board
composition had increased to 29 percent female
representation with the appointment of Adrienne
Parker as an independent Non-Executive Director
in October 2022. We believe we are doing well for
the maturity of our company but know that there is
room for improvement. We have initiatives in place
to ensure that, as we grow, we increase our diversity
at all levels of our company.
We were delighted that Craig Williams continued
as a Non-Executive Director after initially
contemplating retirement last year. Craig is a
founding Director of Liontown and we are grateful
for his wise counsel and contribution, particularly
as we entered the construction phase of Kathleen
Valley.
Environmental, Social and Governance (ESG) is a
vital part of our Company and, as we entered the
next phase of our growth this financial year, we
established a Sustainability and Risk Committee
at Board level to oversee our risk management
framework and sustainability practices. This
committee, chaired by Independent Non-
Executive Director, Adrienne Parker, serves as a
cornerstone for proactive decision-making, as it
not only bolsters our commitment to ethical and
environmental responsibility but also mitigates
potential risks that could impact our long-term
viability. Elevating these critical matters to the
board level will ensure that sustainability and risk
considerations are seamlessly integrated into our
core strategies and business management.
During the year, much of the focus has been the
construction of Kathleen Valley, which continues
to progress to schedule. Led by Managing Director,
Tony Ottaviano and the broader management
team, our employees and contractors have done a
magnificent job delivering the project safely and
to an exacting standard. A significant amount of
effort has also been invested in developing systems
and processes to bolster our data security, ensure
transparency of our financial data throughout the
company, and establish the necessary policies and
procedures for effective governance.
Being part of the growth of our company this year
has been very exciting but also humbling. I would
like to thank my fellow Directors for their support
and expert guidance during the past 12 months,
the executive team and all of our employees,
contractors, consultants and advisers for their
incredible effort in keeping up the momentum as
Kathleen Valley heads towards first production in
mid-2024.
I reserve a special debt of gratitude to Liontown
shareholders, both new and longstanding. Nothing
gives me more pleasure than seeing you participate
in our success and reap the rewards.
Our business is built on
the premise of helping the world
transition to a low-carbon future
Chair
Tim Goyder
Liontown Resources | FY23 Annual Report | 7
From the Managing Director
Tony Ottaviano
Managing Director / CEO
Paving the way for a
greener future
This year has been a fundamentally transformative
year for Liontown. We are firmly on track to become
a world-class battery materials business and a
meaningful contributor to the global push towards
a lower-carbon future from the middle of next year,
which is when our Kathleen Valley Lithium Project is
scheduled to produce its first batch of spodumene
concentrate.
During the past 12 months, we have made great
strides towards meeting that first production
date target and we remain in an excellent position
to start supplying product to our three Tier-1
foundation customers as anticipated. We note
that the proposal put forward by Albemarle in
September 2023 and how that progresses will
have a bearing on whether Liontown remains an
independent company but our number one goal
remains – to deliver our Kathleen Valley Project
safely and on schedule.
At the same time, we have been building a high-
performing team committed to working together
safely, continuously improving how we work and
building a culture where everyone feels respected
and protected. Given the important role contractors
play in delivering the Kathleen Valley Project, this
year we incorporated contractor safety training into
our work programme.
Pleasingly, we have not recorded any lost time
injuries during the year. Such is the increase
in the level of activity onsite as we ramped up
construction, not long after the end of the financial
year, we exceeded one million man-hours onsite.
I commend the team for putting the safety of
themselves and their colleagues first to achieve this
milestone safely.
8 | Liontown Resources | FY23 Annual Report
As we bring the Kathleen Valley Project into
production mid next year, our focus shifts to
being “ready” for production. Our operations and
business readiness programmes are underway
with key workstreams such as recruiting, which is
ramping up as we move into operations, onboarding
is now well entrenched, our website and social
media channels are well established to share our
news and career opportunities, our enterprise
system deployment commenced, and we have
evolved our operational processes so we can
be efficient and effective as we transition into
operations. When this good planning meets good
execution, we will deliver our commitments to our
customers and stakeholders in a timely manner. It
will also set the tone for our culture, where every
day our teams bring new ideas and new ways of
improving everything we do, with our leadership
setting the standard.
The many project-level highlights we achieved
during the reporting period are detailed in this
report, but a few standouts are:
• Receiving approval for the Kathleen Valley
Mining Proposal and Works Approval from the
Western Australian Department of Mines,
Industry Regulation and Safety (DMIRS) in
September 2022, which paved the way for site
works to begin in October 2022. It is symbolic
and meaningful that on receipt of these approvals
a business co-founded by the Chair of Tjiwarl
Aboriginal Corporation, Bundarra Contracting,
cleared the first land;
• Mining activity commencing with the first blast
at Mt Mann pit on 31 January. By the end of June,
2.37 million Bulk Cubic Metres (BCM) of ore and
waste rock had been moved, supporting the
development of production stockpiles and the
construction of the Run-of-Mine (ROM) pad and
Tailings Storage Facility (TSF);
• Changes to the mine plan presented the
opportunity of liberating additional material
outside the Ore Reserve as potential Direct
Shipping Ore (DSO) material;
• Substantive progress on process plant
construction and, by the end of the financial year,
more than 50 per cent of concrete had been
poured and structural steel erection was well
underway on the dry plant, secondary screening
and grinding areas;
• Completion of the concentrate storage facility
ahead of when required, which is being used to
store critical long-lead items that were delivered
to site ahead of schedule; and
• Development of Kathleen Valley’s Hybrid Power
Station commenced, with the majority of the
31,000 solar panels delivered to site, along with
construction of the wind turbine access road and
the gas generation facility underground conduits
nearing completion. A successful trial assembly
of the 1000-tonne crane required to erect the
wind turbine was also undertaken in Perth.
By the end of FY23, $556 million, approximately
62 percent of forecast project expenditure, had
been committed.
Remaining funding at 30 June 2023 was $485.8
million, comprising approximately $304.5 million in
existing cash reserves and $181.3 million remaining
undrawn under the Ford debt facility. By the end
of the financial year, we were well advanced on
a range of further funding options to deliver the
project into production.
Subsequent to the end of the financial year, we
awarded our spodumene and DSO material haulage
contract to Qube Holdings, a Letter of Award for the
underground mining services contract to Byrnecut
Australia and the Structural, Mechanical Piping
(SMP) and Electrical and Instrumentation (E&I)
contract to Monadelphous Group Limited.
The underground mining contract is the single
largest contract for the Kathleen Valley Project,
with a value of approximately $1 billion over four
years. It was critical that we appoint a Tier-1 group
in Byrnecut with extensive underground experience
and the requisite balance sheet strength and
workforce.
With the finalisation of the underground contract,
we will have a better understanding of operating
cost estimates and working capital requirements.
This will allow us to proceed with finalising the
funding arrangements that will see us through
to commercial production. We have several
highly attractive options for further capital and,
subsequent to the end of the financial year,
announced indicative support for up to $300 million
finance by Export Finance Australia, US EXIM Bank
and South Korea’s K-Sure and significant interest
from commercial banks. While non-binding and
conditional, the joint support from these export
credit agencies provides Liontown with a strong
foundation as it advances all funding options to
conclusion.
Our business is built on
the global transition to a
low-carbon future
Liontown Resources | FY23 Annual Report | 9
From the Managing Director (Continued)
At the same time as we announced the support
of the export credit agencies, we announced a
downstream processing partnership with Japan’s
Sumitomo, a world-leading industrial conglomerate.
This partnership will include studying the feasibility
of building a lithium sulphate plant in Western
Australia that would supply a lithium hydroxide
finishing plant in Japan.
Our aim is to be at the forefront in the transition
to a low-carbon future while being mindful of
environmental and social concerns, and to take
proactive measures. We are dedicated to fostering
positive social interactions, especially with the
Traditional Owners of the land on which we work.
Additionally, we are committed to implementing
policies that prioritise the health, safety and overall
welfare of all who are connected to our operations.
The relationship we have developed with the Tjiwarl,
which is built on open dialogue and meaningful
ongoing consultation, is a significant point of pride
for our company and me personally. In my opinion, it
is also a positive example for the broader industry.
During this financial year, we defined our ESG
governance framework, focusing on areas that
are material to Liontown and our stakeholders.
We established this framework at this early stage
of our company’s development, not because it is
increasingly expected, but because it reflects our
values and our strong overall commitment to doing
the right thing for the right reasons from the outset.
Our employees are at the
heart of our success and
building a vibrant people and
culture is key
The physical signs of progress are there for all to
see at Kathleen Valley. Not so obvious has been the
progress in building a culture our stakeholders can
be proud of.
When I took on the role of Managing Director
for Liontown, much of the appeal was that I was
inheriting a clean slate. Liontown was a junior
explorer with a handful of employees, a couple
of quality lithium assets and a bright future. The
opportunity was not just to build a mine, but to build
a modern, progressive mining company, drawing on
all I’ve learnt from a long career in the industry.
10 | Liontown Resources | FY23 Annual Report
During the past year, we have laid the foundation
to create an inclusive, diverse and innovative
workplace. While there remains significant work
ahead in advancing our company, the strides we’ve
taken in enhancing business readiness, refining
systems and processes, embracing cutting-edge
technology, and nurturing our workforce and
organisational culture have established a robust
platform from which to grow.
By putting the fundamentals in place, we are
attracting a diverse workforce across our company.
By the end of the financial year, our workforce
comprised 31 percent female, though we know
there is more work to be done. During this past
financial year, we developed a gender diversity
roadmap, which includes a strategy to target female
leaders. Our current state is not our final state and,
as we move towards operational readiness, we will
seek to increase our diversity across teams at all
levels of our company.
Although we have seen some volatility at a macro
level in global financial and commodity markets,
the underlying fundamentals and long-term outlook
for lithium remain sound. Liontown is in an enviable
position, with a Tier-1 hard rock lithium asset under
development and close to production in one of the
best mining jurisdictions in the world. We have a
clear strategy with growth options in Buldania, a
forward exploration programme and a downstream
strategy underway to explore the potential of
unlocking further value to develop both Kathleen
Valley and Liontown to their full potential.
I thank the Board for their guidance and support
during the year and our incredible team who work
tirelessly every day to keep us on track.
To our investors, thank you wholeheartedly for
your support. It’s an exciting time to be at Liontown
and we remain focused on delivering our flagship
project mid next year and creating value for all our
stakeholders.
Tony Ottaviano
Managing Director / CEO
Liontown Resources | FY23 Annual Report | 11
Liontown Resources | FY23 Annual Report | 11
Liontown at a glance – year in review
LTIFR:
0.00
Lost time injury
frequency rate
Employee
growth:
273%
July
2022
EPCM contract
awarded
September
2022
Hybrid Power
Station contract
awarded
October
2022
Mining Proposal &
Works Approval
received
Early earth works
commenced
December
2022
Accommodation
village welcomes
first residents
Process plant
construction
commenced
12 | Liontown Resources | FY23 Annual Report
Share Price
Growth:
170%
Compound annual
growth rate (CAGR)
Capital
Expenditure:
$311m
January
2023
Plant capacity
20% increase
announced
First blast at
Mt Mann
June
2023
Process plant
structural steel
erection commenced
Concentrate storage
shed completed
450+ people onsite
April
2023
90m communications
mast erected
December
2022
Accommodation
village welcomes
first residents
Process plant
construction
commenced
February
2023
Open pit mining
commences
May
2023
Direct Shipping Ore (DSO)
material samples sent to
potential customers
SAG Mill, longest lead item
arrives on site ahead of
schedule
Liontown Resources | FY23 Annual Report | 13
Liontown at a glance – where we operate
The products we will produce
are vital in the transition to a
low-carbon future.
Liontown is headquartered in Perth, Western Australia, and controls two major hard rock lithium deposits in
the state’s Goldfields region.
■ Our project at Kathleen Valley in the northern Goldfields is a Tier-1 battery metals asset, which will be one of
the world’s largest lithium mines when it comes into production in mid-2024.
■ Buldania is a highly prospective lithium project located south of Kalgoorlie in the eastern Goldfields. Our
active drilling program has confirmed a mineral resource estimate of 15 million tonnes of 1.0% Lithium oxide
(Li2O).
Key market sectors where our products will play an important role include the automotive industry, renewable
energy and battery manufacture. Liontown’s offtake strategy for Kathleen Valley was to target Tier-1
customers diversified by geography and position on the battery value chain.
Ford
Tesla
LG Energy Solutions
14 | Liontown Resources | FY23 Annual Report
Toolebuc
Mt Isa
Townsville
100% ownership in two major hard
rock lithium deposits in Western
Australia and ambition to grow
our portfolio through exploration
acquisitions and downstream
processing.
I
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A
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S
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A
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WESTERN AUSTRALIA
World-class scale
and economics
156Mt @ 1.4% Li2O
& 130ppm Ta2O5
high-grade
Kathleen
Valley
Geraldton
Olympio farm-in
Kalgoorlie
Perth
Buldania
15Mt @ 1.0% Li2O
Esperance
Liontown Resources | FY23 Annual Report | 15
16 | Liontown Resources | FY23 Annual Report
Operational Review
Liontown Resources | FY23 Annual Report | 17
The year
of the
fast
charge
On 30 June 2022 the Final Investment Decision
(FID) for the development of Liontown’s Kathleen
Valley lithium mine was announced – an appropriate
way to close out the 21/22 Financial Year. With the
commencement of FY23, the Liontown team hit
the ground running with the Mining Proposal and
Works Approval received within three months of
FID approval and construction works commenced
immediately.
During the past 12 months, we have achieved an
impressive array of firsts in our transition from
explorer to mining company:
■ Construction of our greenfields mining
facility in Kathleen Valley progressed at pace:
- Open pit mining operations commenced in
January 2023, with over 2.3 million BCM of
Total Material Movement (TMM) in the first six
months of operation. Ore is being stockpiled as
both future mill feedstock and DSO material,
with waste rock being used to build both the
Run of Mine (ROM) pad and the Tailings Storage
Facility (TSF)
- More than 50 percent of concrete poured as
part of the process plant construction
- More than 600 rooms of the accommodation
village completed and available for our
onsite construction and operations teams
- Construction commenced on one of Australia’s
largest off-grid wind-solar-battery hybrid
power stations
18 | Liontown Resources | FY23 Annual Report
■ The underground mining contract and the
Wet/ Dry plant Structural Mechanical Piping
(SMP) packages put out to tender
■ Concentrate transport package put out to
tender
■ DSO samples sent to potential customers
■ At Buldania, further drilling was and a
metallurgical test work programme was initiated,
initial environmental studies and surface water
management review commenced.
Importantly, we are also building a company.
During the financial year, our employee numbers
grew by 273 percent, increasing to more than 130
employees. This is in addition to the more than 450
contractors and subcontractors on site at Kathleen
Valley. Through the construction period and steady
state operations, Kathleen Valley will deliver
approximately 1,000 full time equivalent jobs to the
Western Australian economy.
In addition, Liontown’s commitment to ESG
leadership is already being proven:
■ Construction of the 95MW renewable hybrid
power station is progressing to schedule and
is on track to achieve the company’s goal of
deriving a minimum of 60 percent power from
renewable sources
■ Multiple contracts have been awarded to
companies operated by Traditional Owners of
the land Kathleen Valley occupies, the Tjiwarl,
and we are assisting those contractors in
developing sustainable businesses.
Becoming a major
lithium supplier
is Liontown’s goal
and long-term
forecasts for
the demand for
lithium support
that aspiration
During 2022, the share of electric cars in total car
sales was 14 percent, an increase from nine percent
in 2021 and less than five percent in 2020. National
policies and incentives will help bolster sales,
while a return to the exceptionally high oil prices
seen in 2022 could further motivate prospective
buyers. The increase in electric car sales varies
across regions but remains dominated by China.
China accounted for nearly 60 percent of all new
electric car registrations globally and, for the first
time in 2022, also accounted for 50 percent of all
electric cars on the world’s roads. While there is
an anticipation of robust year-over-year growth
in electric vehicle demand in China, projected to
be around 30 percent, concerns about the overall
health of the domestic economy persist.3
Liontown Resources | FY23 Annual Report | 19
The level of achievement across every area of the
business has been immense. The speed with which
our transition from explorer to mining operator has
been advancing is a testament to the tenacity and
teamwork of a large and growing group of people.
The fact that we have been able to meet our ESG
commitments at every stage demonstrates that
Liontown is at the forefront of an epochal change in
the Australian mining industry.
The Lithium Market
The lithium market is evolving at an incredible pace
which has rarely been seen before. Product quality
requirements, production line qualification and
continued development of vertical partnerships are
all part of the landscape. The increasing demand
will require several supply chains to develop
in perfect unison, which will not be without its
challenges, but does create opportunities. High
prices and product shortages have made DSO
a viable proposition for emerging spodumene
producers as a way of creating early cash flow
ahead of spodumene concentrate production.1
Electrification leading the way
Lithium demand continues to be driven
predominantly by demand from electric vehicles.
Despite supply chain disruptions, macro-economic
and geopolitical uncertainty, and high commodity
and energy prices, electric car sales saw another
record year in 2022. This growth took place in the
context of globally contracting car markets, which
dropped 3 percent compared to 2021. 2
1 Wood Mackenzie, Global lithium investment horizon outlook to 2032
(update), December 2022
2 International Energy Agency Global EV Outlook 2023
3 International Energy Agency Global EV Outlook 2023
Operational Review (Continued)
During 2022, the stationary storage sector has
notably exceeded expectations in terms of demand
growth, with a predicted doubling of growth year-
on-year, and an average annual growth rate of
around 23 percent, until 2030.4
Overall, the global trend toward electrification
remains strong, with electric vehicle and stationary
storage markets exhibiting consistent year-on-
year growth. This shift toward electrification
fundamentally drives substantial demand for
lithium, with market expectations pointing toward a
fivefold increase in demand from 2021 to 2030.5
A year of ebbs and flows for pricing
Toward the end of FY23, lithium prices stabilised
from record highs in the 2022 calendar year and
the lows experienced early in 2023. During the year
to June 2023, the average price for battery-grade
lithium carbonate was approximately US$64.8 per
kilogram.6 The average price for battery-grade
lithium hydroxide was approximately US$70.2 per
kilogram.7
Spodumene concentrate, the product Liontown
will sell, averaged approximately US$6,482 per
tonne for the financial year, although finished the
year at a 12-month low of US$3,750 per tonne
after reaching an historic high in November 2022,
exceeding US$8,287 per tonne.8
The future looks bright
Looking ahead, the prospects for Liontown lithium
remain promising. There is a consistent anticipation
of supply shortages extending until the end of the
decade. The company continues to experience
robust demand from various sectors, including
automakers, battery manufacturers, cathode
suppliers and refiners. Geopolitical pressures and
risks are further enhancing the appeal of Australian
lithium.
The processing plant at Liontown’s Kathleen
Valley will produce spodumene concentrate from
mid-2024 and we are actively investigating the
potential for an integrated refinery to upgrade our
spodumene from the Kathleen Valley mine to higher
value lithium products that will meet the needs of
our customers.
We are very well positioned to become a significant
source of lithium supply and our Kathleen Valley
project development timeline means we are poised
to take advantage of the continued long-term
buoyancy in the lithium market.
20 | Liontown Resources | FY23 Annual Report
4 BloombergNEF 1H 2023 Energy Storage Market Outlook 2023
5 BloombergNEF Transition Metals Outlook, January 2023
6 Fastmarkets: Lithium carbonate 99.5% Li2CO3 min, battery grade,
spotprices cif China, Japan & Korea, $/kg
7 Fastmarkets : Lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH
min, battery grade, spot price cif China, Japan & Korea, $/kg
8 Fastmarkets : spodumene min 6% Li2O, spot price, cif China, $/tonne
Operational Review (Continued)
A year ago,
we hadn’t
yet broken
ground.
12 months
on and
construction
is progressing
at pace
Kathleen Valley Lithium Project
Every day we are closer to completing one of the
most significant new long-life lithium projects
being constructed anywhere in the world. Kathleen
Valley is on track to achieve first production in mid-
2024.
Kathleen Valley, approximately 60 kilometres north
of Leinster and 680 kilometres north-east of Perth,
is readily accessible by sealed highways which
connect with mineral exporting ports at Geraldton.
The location is well served by local infrastructure,
including national highways and sealed airstrips
capable of taking 100-seat jets.
From our customers’ perspective, the development
of Kathleen Valley as one of the top five lithium
mines in the world in Australia implies a secure,
reliable and high-quality source. As a Tier-1
jurisdiction, Australia is perhaps the world’s
most appealing mining centre. Our nation offers
high levels of political stability and government
policy, while our abundant mineral reserves and
commercial operability make Kathleen Valley an
exceptional investment and supplier opportunity.
Mining Operations
Following extensive preliminary works, which were
completed by the end of 2022, open pit mining at
Mt Mann and Kathleen’s Corner pits commenced in
January 2023, with ore being mined from surface.
Ore is being stockpiled for processing through
the processing plant when it comes online in
2024 delivering upgraded six percent spodumene
concentrate to our three foundation Tier-1
customers as contracted.
9ASX 20 January 2023, Kathleen Valley Project Update
Mine Optimisation
One of the most significant tasks undertaken
this financial year has been the development of
an optimised mine plan, as announced in January
2023.9 As part of the mine optimisation work,
the original mine designs were further enhanced
reducing the operational complexity of the initial
Definitive Feasibility Study (DFS) mine plan
from both an open pit and underground mining
perspective. Kathleen’s Corner pit has been
expanded to produce more ore than previously
assumed in the DFS, while the Mt Mann pit has
been redesigned and will become the main entry
and exit point/s through dedicated portal/s to
underground operations.
The focus for mine planning has been to develop
a mine plan which de-risks the start up by early
ore stockpiling from the open pits, reducing
operational complexity and designing-out reliance
on large project critical activities, such as raise-
boring. Optimisation of the underground mine
plan has focussed on initial stope production from
the steep to moderately dipping, high tonnes per
vertical metre Mt Mann orebody, supplemented by
production from the North-West Flats (NWF).
The Kathleen’s Corner pit will provide initial ore
supply at the process plant while the underground
mining operations are being established. The
larger Kathleen’s Corner open pit will result in more
material being moved over the initial project period.
Ore from both the Mt Mann and Kathleen’s Corner
pits is being stockpiled for processing. Additionally,
mineralised material that previously carried too
much dilution to be included in the mine plan, has
been stockpiled separately as a potential DSO
material opportunity through ore sorting, which
could provide a source of early revenue.
Open pit mining is planned for the first three years
of production. Following an extensive tender
process during the first half of FY23, a Letter
of Award for the underground mining services
contract was issued to Byrnecut Australia in August
2023.
The underground mining contract is the single
largest contract for the Kathleen Valley Project,
with a value of approximately $1 billion over four
years. Byrnecut’s wealth of underground expertise,
strong balance sheet and skilled workforce was
critical in our decision.
Liontown Resources | FY23 Annual Report | 21
Operational Review (Continued)
Project Development
Following the FID in June 2022,10 the Liontown team
immediately went to work on transitioning the
company from an exploration company to a mine
operator.
In July 2022,11 leading engineering firm Lycopodium
Minerals Pty Ltd (Lycopodium) was appointed
to conduct the engineering, procurement,
construction management (EPCM) and
commissioning services for the processing facilities
and associated non-process infrastructure at the
Kathleen Valley Lithium Project. Lycopodium has
been involved with the Project since 2018, and their
substantial global mineral processing and project
delivery experience will ensure timely and effective
delivery of the project.
Liontown received the Native Vegetation Clearing
Approval (NVCP) in August 2022, ahead of the
Mining Proposal and Works Approval by the
Western Australian Department of Mines, Industry
Regulation and Safety (DMIRS) for a 4Mtpa
operation which was received in September
2022.12 Both were key milestones for the Project
which enabled major site works to commence
immediately.
The critical siteworks began in the first week of
October 2022 following key approvals and, since
that time, there has been rapid progress across all
aspects of the Project:
■ Iron Mine Contracting was awarded the
contract to provide open pit services and
commenced mining at Mt Mann and
Kathleen’s Corner and is delivering ore to
the stockpile/s and providing material for the
construction of ROM pad and TSF outer
walls
■ The full complement of Liontown’s open pit
mining team is on site
■ The first cell of the TSF construction is well
underway
■ Progress continues to be made on all
elements of the process plant:
- ROM pad
- Primary and secondary crushing circuits
- Fine ore bin
- SAG mill
- Flotation & magnetic separation
- Thickening
- Concentrate storage shed
- Buried services
22 | Liontown Resources | FY23 Annual Report
■ ADD Group kept pace with the increasing
numbers of people on site and, by the end of
the financial year, 600 (out of 660) rooms had
been commissioned for use. The permanent
dining facility is complete and the permanent
gym, café and bar areas are in progress
■ A 90-metre communications mast was erected by
local Tjiwarl business, Dilji Corporation, in April
2023
■ The solar farm area was prepared and, by the end
of FY23, 21,000 solar panels, out of a total of
30,936, had been delivered to site
■ Site preparation work commenced on access
roads and laydown areas for the wind turbines
and gas power stations in preparation for
construction commencing in the first half of
FY24
■ The spodumene concentrate haulage tender
process was substantially progressed and,
subsequent to the end of the financial year, in
July 2023, was awarded to integrated logistics
solutions provider Qube Holdings Limited.
The contract includes loading spodumene
concentrate at Kathleen Valley, haulage of the
concentrate, and potentially DSO material, to the
Port of Geraldton; storage and stockpile
management and the loading of vessels for
shipment to Liontown customers
■ An extensive tender process for both the
underground mining contract and the SMP and
E&I contract was undertaken. Subsequent to the
end of the financial year, a Letter of Award was
issued to Byrnecut Australia for the underground
contract and the SMP and E&I contract was
awarded to Monadelphous Group
■ Recruitment of Liontown’s underground mining
team ramped up ahead of underground mining
activity scheduled for FY24
■ Recruitment of Liontown’s processing team
commenced as part of operational readiness
activities.
We remain on schedule to deliver first production
from the process plant to market by the middle of
2024. With a portfolio of three committed Tier-1
foundation customers, Kathleen Valley is ideally
positioned to capitalise on strong forecast demand
for lithium raw materials over the next decade
and beyond.
10 ASX 29 June 2022 Liontown Board approves development
of Kathleen Valley
11 ASX 21 July 2022 Liontown awards EPCM Contract to Lycopodium
12 ASX 3 October 2022 Mining Proposal and Works Approval Paves Way
for Start of Construction and Mining at Kathleen Valley
Liontown Resources | Annual Report 2023 | 23
Operational Review (Continued)
Capacity Expansion
Liontown’s November 2021 DFS13 anticipated initial
plant throughput of 2.5Mtpa, increasing to 4Mtpa in
year six of operations.
Since the DFS, we have sought to reduce
bottlenecks and optimise engineering design to
maximise near term production. We were pleased
to announce in January 202314 that our plant
optimisation process will deliver a 20 percent
increase in the initial plant throughput rate to
3Mtpa.
Schedule and Cost
As inflation surged across the globe over the 22/23
financial years, costs have escalated across most
sectors of the economy. As a result, our Kathleen
Valley Lithium Project has been subject to cost
increases across all site-based labour-intensive
contracts, with some tenders growing by more
than 30 percent throughout the year. In addition
to market-wide price escalation, a reduction in
the number of contractors willing to bid for some
contracts and an associated decline in productivity
has impacted tendered package prices. Liontown
is not the only company to have experienced
cost increases and several companies within
the resources sector have also announced cost
increases during the past 12 months.
Project optimisations and scope adjustments
undertaken by Liontown, coupled with the
continued macro-level and industry-wide cost
escalation, necessitated a revised capital estimate
of $895 million to first production (including $40
million in contingency), which was announced in
January 2023.15
Time to market and safe delivery of the Project
remains our priority and several scope adjustments
were undertaken to de-risk the project which
contributed to the increase in capital cost. These
included:
■ Plant capacity design optimised to deliver
a 20 percent increase in the initial plant
throughput rate to 3Mtpa (up from 2.5Mtpa)
■ Enhancing the on-site accommodation
capacity by 60 percent to support increased
labour resources and de-risk the schedule.
This has been necessitated by external
accommodation capacity constraints in the
region
24 | Liontown Resources | FY23 Annual Report
■ A range of critical infrastructure
development programs were brought
in-house, including mine workshops,
changerooms and administration facilities
■
Increasing water exploration and piping
works for plant water to meet the higher
3Mtpa plant production rate.
These capital requirements will continue to be
refined as remaining contracts are awarded and as
part of the ongoing optimisation program.
Funding
By the end of FY23, $556 million, approximately
62 percent of forecast project expenditure, had
been committed. Remaining funding at 30 June
2023 was $485.8 million, comprising approximately
$304.5 million in existing cash reserves and $181.3
million remaining undrawn under the Ford debt
facility.
At the end of FY23, negotiations were well
advanced on a range of further funding options
to deliver the Kathleen Valley Lithium Project
into production. Securing additional funding is
anticipated well ahead of the requirement for
funding.
13 ASX 11 November 2021, Kathleen Valley DFS confirms Tier-1 global
lithium project with outstanding economics and sector-leading
sustainability credentials
14 ASX 20 January 2023, Kathleen Valley Project Update
15 ASX 20 January 2023, Kathleen Valley Project Update
Liontown Resources | FY23 Annual Report | 25
Direct Shipping Ore
Non-process Infrastructure
The success of the optimisation project presents
an opportunity to monetise additional contact
ore (mineralised material that previously carried
too much dilution). This material was not part of
the original Ore Reserves and would otherwise be
stockpiled as waste for potential treatment late in
the mine life.
By the end of FY23, Liontown completed test work,
which confirmed the potential to crush, screen and
process this material through ore sorters to remove
dilution. This ore sorted material would be suitable
either for sale as DSO or can be added to the ore
stockpile for processing through our own plant
when operational.
26 | Liontown Resources | FY23 Annual Report
Power
Our high-level commitment to ESG has seen the
Liontown team search for ways to meet our energy
needs effectively while minimising our impact on
the environment.
Working with Zenith Energy on a Build, Own and
Operate (BOO) basis, we are developing a ground-
breaking off-grid wind-solar-battery storage hybrid
power station – one of the largest off-grid hybrid
power stations for a mining project in Australia.
The design of the system allows us to operate
at a minimum of 60 percent renewable energy
during periods of high wind and solar resource and
maximise the use of renewable power at all times.
Our objective is to derive a minimum of 60 percent
of our energy from renewable sources at start-up
and the design of our power supply is more than
capable of achieving that goal. The 95MW system
comprises:
■ A solar array with approximately 31,000
photovoltaic (PV) panels generating up to 16MW
of power
■ Five 6MW wind turbines (total 30MW)
■ A 17MW/19MWh Battery Energy Storage
System (BESS) that stores excess renewable
energy generated by solar and wind
■ A 27MW gas generator station and five 1MW
diesel standby generators.
The Purchase Power Agreement (PPA) executed
with Zenith Energy in the December quarter of
FY2316 is designed to supply electricity to our
Kathleen Valley Lithium Project for 15 years.
Importantly for Liontown, Zenith Energy has
committed to working with the Tjiwarl people
and in May 2022 announced a collaboration with
Tjiwarl Contracting Services (TCS), a wholly owned
subsidiary of Tjiwarl Aboriginal Corporation. This
collaboration will see Zenith Energy and TCS work
together to deliver low-carbon emission power
solutions for miners and communities on Tjiwarl
native title determined lands. This collaboration
has already resulted in the establishment of a joint
venture, Tjiwarl Katu Power Pty Ltd, between Tjiwarl
Contracting Services (TCS) and Zenith Energy with
the intent that Zenith will train and develop and
contract qualified Tjiwarl members.
Mobilisation and early works on the Kathleen
Valley hybrid power station commenced in the
March quarter of FY23. The first solar panels were
delivered to site in May 2023 and clearing for the
wind turbines commenced in June 2023.
16 ASX: 20 December 2022, Liontown executes binding Power Purchase
Agreement
Accommodation Village
Our Kathleen Valley ‘Dragonfly’ accommodation
village is emblematic of our respect for the culture
of the Traditional Owners of the land our Project
occupies, the Tjiwarl people. According to the
Tjiwarl, a snake lives on the land – an enormous
serpent that stretches all the way to Alice Springs.
Dragonfly hunters chased the snake into the nearby
Jones creek to protect the people. We worked with
our camp contractor to incorporate the dragonfly
shape into the overall layout design and the result is
our inspired Dragonfly accommodation village.
By the end of FY23, over 600 rooms of the
accommodation village onsite had been
commissioned along with new kitchen and dining
facilities. The camp is on schedule to be completed
by the end of the calendar year at which time it will
comprise 660 permanent rooms with a further 100
rooms added for peak manning during construction.
The accommodation village has been designed to
create a ‘home away from home’ for our people,
with larger bathrooms, increased storage space,
communal gathering areas, recreation and health
facilities and, in addition to the dining and bar
facilities, a modern café. We endeavour to ensure
that while on site all our workers’ and contractors’
needs are met and their comfort is assured.
Liontown Resources | FY23 Annual Report | 27
Operational Review (Continued)
Exploration
Anna Deposit
Throughout FY23, our drilling programme
continued, focusing on the down dip extremity
of the Mt Mann feeder dyke system. The western
margin of the pegmatite swarm has been drill
tested over a strike length of 1.5 kilometres, up to
600 metres down dip from the base of currently
defined Mineral Resource.
Of eight deep holes drilled in FY23, seven were
unmineralised and one was weakly mineralised.
A single shallower diamond hole (KVDD0083)
returned moderate lithium mineralisation
(approximately 250 metres down dip for the
Mineral Resource) indicating potential for future,
incremental resource expansion in the periphery of
the current resource model.
Liontown was successfully granted government
co-funding for two holes in the exploration program
under the Exploration Incentive Scheme, which
were completed in the second quarter of FY23.
Given the depth of this mineralisation and the
current large Mineral Resource base at Kathleen
Valley, it may be more efficient to continue the
exploration work during underground mining.
Buldania
While much of the focus this year has been on the
massive strides made in developing Kathleen Valley,
its sister project at Buldania is proving its value as a
source of future spodumene supply.
Situated in the eastern Goldfields region of
Western Australia, approximately 600 kilometres
east of Perth, the Buldania site shares similar
geology with the nearby Mt Marion (71 million
tonnes) and Bald Hill (26 million tonnes) lithium
deposits.
The Buldania Project is close to major road and rail
infrastructure, with direct access to the Port of
Esperance 200 kilometres to the south.
During FY23, further exploration on the Anna
deposit at Buldania was carried out and we
now have a much clearer picture of the size and
definition of the ore deposit. The exploration and
in-fill drilling were completed by the end of the
financial year and all assays had been received.
Re-modelling of the geological data was also
completed by external consultants and was under
internal review at the end of FY23. The Anna
Deposit has a Mineral Resource Estimate of
15 million tonnes at one percent Li2O.
North West (NW) Prospect
Further exploration and drilling of the north-west
area was undertaken during FY23. By the end of
the financial year, the process of analysing the
results from the drilling program at the NW
Prospect was underway, with about 67 percent of
the assay results still pending.
So far, the mineralisation we’ve encountered is
relatively thin and of relatively low grade, with
limited continuity at depth. Interestingly, the
diamond holes did not show any obvious
spodumene mineralisation. It appears that the NW
Prospect may be situated at the lower boundary of
the spodumene zone, with limited potential below
the known outcrop.
Buldania Scoping Study Works
Outside of exploration drilling, a metallurgical drill
program was also undertaken. Core collected is
being used as part of a metallurgical test work
program that has now commenced at Nagrom.
In addition, initial environmental studies and
surface water management reviews were also
initiated.
28 | Liontown Resources | FY23 Annual Report
Downstream Expansion
As part of our overall strategy to create value for
shareholders, during FY23, work progressed on
investigating the potential for an integrated refinery
to upgrade the spodumene from the Kathleen Valley
mine to higher value lithium products that will meet
the needs of customers. Refining spodumene into
downstream lithium products presents an attractive
opportunity for Liontown to increase value for
shareholders.
Further work is being undertaken at a strategic
level to address three key areas:
■ Updating costings to reflect capital
escalation that has affected the industry
globally
■ Progressing a trade-off study comparing
the construction of a plant to process our
spodumene into different product streams -
including intermediate lithium products
and/or battery-grade lithium hydroxide
■ Identifying potential industrial sites and
technical partners for developing a refinery in
Western Australia and other jurisdictions.
By staging the potential investment and
development of refining capacity, as originally
contemplated in the 2021 DFS, Liontown could
have flexibility on product, final sizing and specific
timing of development while also reducing
implementation risk.
Business Development
Completion of Toolebuc Vanadium
Project Sale
During FY23, Liontown completed the sale of the
Toolebuc Vanadium Project, located in north-west
Queensland, to Currie Rose Resources Inc (Currie
Rose) (TSXV: CUI) in consideration for 12,500,000
common shares in the capital of Currie Rose,
4,000,000 common share purchase warrants of
Currie Rose and a 2 percent net/gross revenue
royalty payable on minerals extracted from the
property.
The common share purchase warrants expire
24 months from the issue date, each of which is
exercisable prior to the expiry date to subscribe for
one common share in the capital of Currie Rose for
a subscription price of CAD$0.10.
Liontown and Olympio Metals
Farm-in Agreement
In April 2023, Liontown and Olympio Metals (ASX:
OLY) announced a farm-in agreement for Olympio’s
Mulline and Mulwarrie Lithium Projects in the
eastern Goldfields of Western Australia.
Under the terms of the agreement, Liontown will
complete 1,100 soil samples across both projects
and make an initial assessment before progressing
to a possible Stage 1 earn-in. Liontown may elect
to progress further investments within set time
frames to increase its exposure to both projects.
Exploration work on the projects commenced in the
June quarter of FY23.
Liontown Resources | FY23 Annual Report | 29
30 | Liontown Resources | FY23 Annual Report
Environmental,
Social and Governance
(ESG) Approach
Liontown Resources | FY23 Annual Report | 31
Environmental, Social and Governance
Fostering
an aligned
corporate
culture for
sustaining a
social license
to operate
Our business is built on the premise of helping
the world to transition to a low-carbon future. Our
ESG goal is to minimise environmental harm and
create positive social impacts through considered
governance and safe, healthy policies and
strategies.
As part of our ESG commitment, the Board of
Directors, the management team and the people
that work for, and with, Liontown all share a
common aim of leading by example. For this reason,
ESG leadership is a vital part of our purpose and our
practice.
We strive to lead the way in clean energy
production and sensitivity to environmental
concerns and actions, positive social engagement –
particularly with the Tjiwarl people, the Traditional
Owners of land where Kathleen Valley is situated
and the Ngadju Native Title Aboriginal Corporation
(NNTAC), the Traditional Owners of the land where
our Buldania deposit is located – and policies that
promote the health, safety and wellbeing of all our
stakeholders.
ESG Framework
Our objective in formulating ESG strategies is to
effectively manage the significant short-, medium-
and long-term economic, environmental and
social impacts of our Kathleen Valley Lithium and
Buldania Projects, our Perth offices and all of our
transport and exploration activities.
Our goal is to balance any impacts we create to
achieve positive and measurable outcomes for
our host communities, the regions we work in and
traverse, Western Australia and, more broadly,
Australia. We aspire to establish a world-class
ESG framework at this early stage of Liontown’s
development, not because incorporating ESG
principles is an approach global investors and
the market increasingly request, rather because
it reflects our values and our strong overall
commitment to doing the right thing for the right
reasons from the outset to the benefit of all
stakeholders.
The foundation of our approach to ESG as our
company evolves from exploration to development
to significant mine and processing operator, is
the Kathleen Valley Lithium Project DFS. The
DFS sets the standards and the character of our
methodology, because we understand that the right
approach from the outset means the work we do
now positions us well for the future.
During FY23, we defined five interconnected pillars
of our ESG framework, focusing on areas that are
material to Liontown and our stakeholders:
■ Respecting and Protecting
■ Partnering with Others
■ Developing Natural Resources Responsibly
■ Creating Social and Economic Value
■ Operating with Integrity.
32 | Liontown Resources | FY23 Annual Report
See Liontown FY23 ESG Report p. 52 for definition of Tier-1 spend
FY23 ESG
Key Achievements
LTIFR:
0.00
Lost time
injury frequency
rate
Employee
growth:
273%
Gender diversity:
31%female
representation
Tier-1 spend17
78%
with Australian
companies
17 See Liontown FY23 ESG Report p. 52 for definition of Tier-1 spend
Throughout FY23, we continued to work towards
achieving our ESG commitments:
■ We established a Sustainability and Risk
Committee at Board level to oversee
Liontown’s risk management framework and
sustainability practices
■ We commenced development of our
decarbonisation pathway strategy which
will help us create a clear set of objectives
and strategies to reduce carbon emissions
through our activities and to help the world
achieve a low-carbon future
■ A climate risk workshop was held during
the year on the Task Force on Climate
Related Financial Disclosures (TCFD)
■ We undertook a self-assessment to gain
an understanding of our compliance with
the Initiative for Responsible Mining
Assurance (IRMA) Ready Standard pilot
program. The next step is to attain third
party assessment against the IRMA
Standard for Responsible Mining in the
coming years
■ We prepared our first climate change response
to the CDP
■ We continued ongoing consultation with
the Tjiwarl Traditional Owners through
the delivery of the Kathleen Valley Project
and implementation of the Cultural Heritage
Management Plan (CHMP) and applicable
agreements
We use best-in-class reporting standards to
measure our ESG performance, including:
■ Global Reporting Initiative (GRI) Standards 2021
■ Sustainability Accounting Standards
Board (SASB) Metals and Mining Sustainability
Accounting Standard
■ The Task Force on Climate-related Financial
Disclosures (TCFD) recommendations
■ Sustainable Development Goals Framework
(SDGs)
To keep our stakeholders fully informed of our
progress, we release an ESG Report every year.
To learn more about the work we undertook this
financial year and the progress we made, you can
access the 2023 ESG Report at ltresources.com.au.
Liontown Resources | FY23 Annual Report | 33
34 | Liontown Resources | FY23 Annual Report
Liontown Resources | FY23 Annual Report | 35
36 | Liontown Resources | FY23 Annual Report
Corporate Update
Liontown Resources | FY23 Annual Report | 37
Laying the
foundation
for a
future
ready
company
Although much of the attention for the year has
been spent on our projects, we have also been
heavily focused on building a company that sets us
up for the long-term.
Business readiness and
transformation
Since receiving final investment approval for our
Kathleen Valley Lithium Project in June 2022, we
have dedicated significant effort and resources
to building a team that will enhance our business
readiness to navigate our evolving landscape.
During FY23, we strategically aligned our initiatives
to support our rapid growth and our commitment
to business readiness is a driving force behind
our transformation from junior explorer to mining
operator and producer.
Systems to set us up
for success
During FY23, we invested in a diverse range of
systems that will significantly shape our company
and the way we operate. With unwavering
commitment to innovation and efficiency, we
strategically implemented several cutting-edge
systems across our company. These systems will
not only streamline our internal processes but will
enhance our ability to operate with transparency,
accountability and integrity as we grow our
company.
We embarked on the transformative journey of
implementing an Enterprise Resource Planning
38 | Liontown Resources | FY23 Annual Report
(ERP) system, commencing with the integration of
our financial and human resources (HR) modules.
This strategic initiative marked a significant
milestone in streamlining our organisational
processes and fostering greater operational
efficiency. The integration of these modules
has enabled us to seamlessly manage financial
transactions, optimise resource allocation and
facilitate HR functions, all within a unified digital
ecosystem. As a result, we have witnessed
improvements in data accuracy, real-time reporting
and cross-functional collaboration. In the year
ahead, we will further bolster our ERP system by
incorporating the maintenance and procurement
modules.
We commenced the process of consolidating
the separate document storage methods that
had evolved since the Company’s inception
into a business-wide, leading-edge Document
Management System (DMS). Creating the
architecture of this system involved every area of
the business and, when fully implemented, it will be
key in how we manage, access, and share critical
information across the organisation. By digitising
our document management and workflows, we will
not only set ourselves up for improved efficiency
in the way we work but will also enhance our data
security and compliance.
In the pursuit of enhanced financial stewardship
and operational efficiency, we implemented a
comprehensive cost management system (CMS)
for tracking the budget and costs of our projects,
coupled with a powerful business analytics tool.
Corporate Update
Combined, these systems provide us with the
ability to monitor and manage project expenditures
with precision and agility. Through meticulous
data collection and real-time integration, our team
can import and facilitate advanced data analysis
and create dynamic reports and dashboards to
provide clear, real-time updates of expenditure
across every aspect of the project. The synergy
between our cost management system and our
business analytics tool not only ensures seamless
visualisation of financial data but also enables
live updates, fostering proactive decision-making
and a culture of transparency from the team on
the ground executing the project through to the
executive team and the board.
Fostering a vibrant people and
culture ecosystem
Our employees are at the heart of our success and
building a vibrant people and culture will be key
to our success. During the past year, we have laid
the foundation to create an inclusive, diverse and
innovative workplace. We are in the unique position
in which we get to frame our culture as we build our
company.
With the pace of our employee growth, we outgrew
our original office and our Perth based teams
were working across multiple locations. To ensure
we create an environment where our employees
grow together and thrive, we relocated to a single
location, investing in a workplace with the latest
technology, a variety of collaborative spaces and
strong ESG credentials. This will help us remain
competitive in a tight labour market and a rapidly
changing business landscape.
Although there is still much to be done to build our
company, the progress we have made with business
readiness, systems and process, the adoption
of advanced technology, and the shaping of our
people and culture during FY23 have laid a solid
foundation from which to build on in FY24 and
beyond.
Albemarle Indicative
Non-Binding Proposal
In March 2023, Liontown announced that it had
received an unsolicited, conditional and non-binding
indicative proposal from global lithium company
Albemarle Corporation, at a price of $2.50 per share
via a scheme of arrangement. The Board carefully
considered the indicative proposal, as it had for two
prior proposals, and unanimously determined that it
substantially undervalues Liontown and, therefore,
was not in the best interests of shareholders and
rejected the offer.
Subsequent to the end of the financial year, in
September 2023, Liontown received a revised
proposal from Albemarle. After carefully
considering the revised non-binding and conditional
proposal, the Board determined to grant Albemarle
an opportunity to conduct a period of exclusive due
diligence of approximately four weeks, subject to
customary fiduciary exceptions, to enable it to put
forward a binding proposal, subject to the parties
agreeing to a mutually acceptable non-disclosure
and exclusivity agreement.
Should Albemarle make a binding proposal at
$3.00 per Liontown share, subject to agreement
of a mutually acceptable binding scheme
implementation agreement, it is the Board’s
intention to unanimously recommend shareholders
vote in favour of the proposal in the absence of a
superior proposal and subject to an independent
expert concluding (and continuing to conclude) that
the proposed transaction is in the best interests of
shareholders.
Liontown Resources | FY23 Annual Report | 39
Competent Person Statement
Competent Person Statement
The Information in this Report that relates to Mineral Resources for the Kathleen Valley Project is extracted from the ASX
announcement “Strong progress with Kathleen Valley Definitive Feasibility Study as ongoing work identifies further key
project enhancements” released on 8 April 2021 which is available on ltresources.com.au. The Company confirms that it is
not aware of any other new information or data that materially affects the information included in the original market
announcement and that all material assumptions and technical parameters underpinning the estimates in the relevant
market announcement continue to apply and have not materially changed. The Company confirms that the form and
context in which the Competent Person’s findings are presented have not been materially modified from the original market
announcements.
Kathleen Valley Project – Mineral Resource Estimate as at April 2021
Resource category
Tonnes (Million)
Li2O (%)
Ta2O5 (ppm)
Measured
Indicated
Inferred
Total
20
109
27
156
1.3
1.4
1.3
1.4
145
130
113
130
Notes: • Reported above a Li2O cut-off grade of 0.55%.
• Tonnages and grades have been rounded to reflect the relative uncertainty of the estimate.
The Information in this Report that relates to Mineral Resources for the Buldania Project is extracted from
the ASX announcement “Liontown announces maiden Mineral Resource Estimate for its 100%-owned Buldania
Lithium Project, WA” released on 8 November 2019 which is available on ltresources.com.au. The Company
confirms that it is not aware of any other new information or data that materially affects the information included
in the original market announcement and that all material assumptions and technical parameters underpinning
the estimates in the relevant market announcement continue to apply and have not materially changed. The
Company confirms that the form and context in which the Competent Person’s findings are presented have not
been materially modified from the original market announcements.
Anna Deposit, Buldania Project – Mineral Resource as at October 2019
Resource category
Tonnes (Million)
Li2O (%)
Indicated
Inferred
Total
9.1
5.9
15.0
1.0
1.0
1.0
Notes: • Reported above a Li2O cut-off grade of 0.5%
• Tonnages and grades have been rounded to reflect the relative uncertainty of the estimate
Forward Looking Statement
This report contains forward-looking statements which involve a number of risks and uncertainties. These forward-
looking statements are expressed in good faith and believed to have a reasonable basis. These statements reflect current
expectations, intentions or strategies regarding the future and assumptions based on currently available information.
Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual
results may vary from the expectations, intentions and strategies described in this announcement. No obligation is
assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other
future developments.
40 | Liontown Resources | FY23 Annual Report
40 | Liontown Resources | FY23 Annual Report
Liontown Resources | FY23 Annual Report | 41
42 | Liontown Resources | FY23 Annual Report
Directors’ Report
Liontown Resources | FY23 Annual Report | 43
Directors’ Report
Directors’ Report
The Directors present their report together with the Consolidated Financial Statements of the Group consisting of
Liontown Resources Limited (Liontown or the Company) and its controlled entities for the financial year ended 30 June
2023 and the independent auditor’s report thereon.
Directors
The names and details of the Company’s directors in office during the financial year and until the date of this report are
as follows. Directors were in office for the entire period unless otherwise stated.
Timothy Goyder
Non-Executive Chair
Experience:
Mr Goyder is an experienced mining executive with over 40 years’
experience in the resources industry. He has been involved in the formation
and management of a number of publicly listed companies and is currently
Non-Executive Chairman of DevEx Resources Limited. Mr Goyder was
appointed as Non-Executive Chairman on 2 February 2006.
Interest in shares and options at the date
of this report:
329,678,766 ordinary shares
Special responsibilities:
Member of the Remuneration Committee.
Directorships held in other listed entities
in the last three years:
Mr Goyder is currently Non-Executive Chairman of DevEx Resources
Limited, Non-Executive Director of Minerals 260 Limited, Non-Executive
Director of entX Limited and was previously Non-Executive Chairman of
Chalice Mining Limited (resigned 24 November 2021).
Antonino Ottaviano BEng (Mechanical), MBA
Managing Director and Chief Executive Officer
Experience:
Interest in shares and options at the date
of this report:
Mr Ottaviano is a global mining executive, with over 30 years’ experience
leading operations across Australia, the Americas, Asia, Europe and Africa.
Prior to joining Liontown, he held senior executive roles with two of the
world’s largest mining companies, BHP and Rio Tinto, establishing a
successful track record in Operations, M&A, project delivery and business
transformation programs, most recently as Group Performance and
Improvement Officer with BHP Limited.
4,922,754 ordinary shares
2,500,000 unlisted options
1,250,000 unlisted sign-on performance rights
249,079 unlisted short-term incentive (STI) performance rights
2,605,454 unlisted long-term incentive (LTI) performance rights
Special responsibilities:
Directorships held in other listed entities
in the last three years:
None
None
3 | D I R E C T O R S ’ R E P O R T
44 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
Anthony Cipriano B.Bus, CA, GAICD
Independent Non-Executive Director
Experience:
Mr Cipriano is a Chartered Accountant with over 30 years accounting,
corporate and finance experience. Mr Cipriano was formerly a senior partner
at Deloitte and at the time of his retirement he was the Deloitte National Tax
Leader for Energy and Resources and leader of its Western Australian Tax
Practice. Mr Cipriano has significant experience working in the resource
sector, and in particular dealing with corporate, legal and financial matters.
Mr Cipriano was appointed as a Non-Executive Director on 1 July 2014.
Interest in shares and options at the date
of this report:
16,100,000 ordinary shares
Special responsibilities:
Chair of the Audit Committee, Member of the Remuneration Committee, Lead
Independent Director (effective 1 January 2022) and previously Chair of the
Remuneration Committee until 24 November 2021.
Directorships held in other listed entities
in the last three years:
Mr Cipriano is Non-Executive Chairman of Minerals 260 Limited.
Craig Williams BSC (Hons)
Independent Non-Executive Director
Experience:
Mr Williams is a Geologist with over 40 years’ experience in mineral
exploration and development. Mr Williams co-founded Equinox Minerals
Limited in 1993 and was President, Chief Executive Officer and Director prior
to Barrick Gold’s takeover of Equinox. He has been directly involved in several
significant discoveries, including the Ernest Henry Deposit in Queensland and
a series of gold deposits in Western Australia. In addition to his technical
capabilities, Mr Williams also has extensive corporate management and
financing experience. Mr Williams was appointed as a Non-Executive Director
on 14 November 2006.
Interest in shares and options at the date
of this report:
29,767,515 ordinary shares
1,000,000 unlisted options
Special responsibilities:
Member of the Audit Committee until 30 June 2022 and Member of the
Remuneration Committee until 30 April 2022.
Directorships held in other listed entities
in the last three years:
Mr Williams was previously Non-Executive Chairman of OreCorp Limited
(resigned 16 November 2022), Non-Executive Chairman of Solstice Minerals
Limited (resigned 16 November 2022) and Non-Executive Director of Minerals
260 Limited (resigned 22 November 2022).
Jennifer Morris B.Arts, AICD, INSEAD
Independent Non-Executive Director
Experience:
Ms Morris is an accomplished corporate executive and Non-Executive
director, with key experience in advising corporations and government entities
on strategy development, governance controls, complex large-scale business
transformation, human capital related work, the embedding of environment,
social and governance related policies and the understanding of high-
performance environments learned during her varied career including elite
sport. Ms Morris is a former partner of global professional services firm
Deloitte where her career spanned more than 10 years working across the
mining, government and transport sectors. Ms Morris was also previously a
Senior Marketing Analyst for Rio Tinto Iron Ore.
Interest in shares and options at the date
of this report:
66,210 ordinary shares
500,000 unlisted options
Special responsibilities:
Chair of the Remuneration Committee from 24 November 2021, member of the
Audit Committee to 30 September 2022 and member of the Sustainability &
Risk Committee from 23 March 2023.
4 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 45
Directors’ Report (Continued)
Jennifer Morris B.Arts, AICD, INSEAD
Independent Non-Executive Director
Directorships held in other listed entities
in the last three years:
Ms Morris is a Non-Executive Director of Sandfire Resources Ltd and was
previously a Non-Executive Director of Fortescue Metals Group Ltd (resigned
30 June 2023).
Shane McLeay B Eng Mining (Hons) FAusIMM AWASM
Independent Non-Executive Director
Experience:
Mr McLeay is a mining engineer and senior manager in the resource sector
with over 25 years’ experience. He has a strong track record in starting up and
operating mines of varying scale, with a skillset that includes project
management, building highly capable teams and overseeing operational
ramp-up to steady-state production. He has extensive experience in senior
operational site management, predominantly in gold and base metal hard rock
mines, prior to founding Entech in 2010.
Interest in shares and options at the date
of this report:
160,000 ordinary shares
Special responsibilities:
Member of the Audit Committee from 1 July 2022 and member of the
Sustainability & Risk Committee from 23 March 2023.
Directorships held in other listed entities
in the last three years:
None
Adrienne Parker LLB MAICD
Independent Non-Executive Director
Experience:
Ms Parker is a highly esteemed lawyer with over 25 years’experience in the
infrastructure and resources sector. She has extensive legal, commercial, and
business expertise specialising in delivery of large construction, engineering,
energy and mining projects across a number of jurisdictions, worldwide. Ms
Parker is a partner with global law firm, Pinsent Masons, and Head of their
Perth office.
Interest in shares and options at the date
of this report:
None
Special responsibilities:
Member of the Audit Committee from 7 March 2023 and Chair of the
Sustainability & Risk Committee from 23 March 2023.
Directorships held in other listed entities
in the last three years:
Ms Parker is currently a Non-executive Director of Fleetwood Limited.
Steven Chadwick BAppSc, AusIMM
Independent Non-Executive Director (resigned 4 July 2022)
Experience:
in the mining
industry,
Mr Chadwick has over 40 years’ experience
incorporating technical, operating and management roles, as well as a strong
metallurgical background. He was a founding Director of BC Iron Limited and
a former Managing Director of Coventry Resources, PacMin Mining Limited
and Northern Gold Limited, prior to their corporate acquisitions. Mr Chadwick
was also a Director of and consulted to major Canadian miner Teck Resources’
Australian subsidiary for ten years. Mr Chadwick was appointed as a Non-
Executive Director on 10 January 2019.
Interest in shares and options at the date
of retirement:
10,047,636 ordinary shares
Special responsibilities:
None
Directorships held in other listed entities
in the last three years at date of
resignation:
Mr Chadwick is a Non-Executive Director of Lycopodium Limited and was
previously an Executive Director of Quantum Graphite Limited (resigned 30
November 2020).
5 | D I R E C T O R S ’ R E P O R T
46 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
Company Secretary
The name and details of the Company Secretary in office during the financial year and until the date of this report are
as follows:
Mr Clint McGhie B.Com, CA, AGIA
Experience:
Mr McGhie is an experienced Chartered Accountant and Company Secretary
who commenced his career at a large international accounting firm and has
since been involved with several ASX and AIM listed exploration and
including
development companies operating
Minerals 260 Limited, Salt Lake Potash Limited, Berkeley Energia Limited
and Sovereign Metals Limited. Mr McGhie is a Fellow of the Governance
Institute of Australia (Chartered Secretary), and a Fellow of the Financial
Services Institute of Australasia. He was appointed Company Secretary on 5
May 2021.
in the resources sector,
Directors’ Meetings
The number of board and committee meetings attended by each Director during the year are as follows:
Board
Meeting
Audit Committee
Remuneration
Committee
Sustainability & Risk
Committee
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
T Goyder
T Ottaviano
A Cipriano
C Williams
J Morris
S McLeay
A Parker
18
18
18
18
15
18
14
18
18
18
18
18
18
14
-
-
3
1
3
2
-
-
3
-
1
3
2
3
-
2
-
3
-
-
3
-
3
-
3
-
-
-
-
-
-
2
2
2
-
-
-
-
2
2
2
Principal Activities
The principal activities of the Company during the course of the financial year were mineral exploration, evaluation and
development.
Review of Operations
The Directors present the operating and financial review of the Company for the year ended 30 June 2023.
Operating performance
The information provided in the review is set out in pages 17 to 29 of this Annual Report and forms part of the Directors’
Report and provides information to assist users in assessing the operations and activities of the Company.
Financial performance
The Group reported a net loss after tax of $22.2 million for the year compared to the net profit after tax of $40.9 million
in 2022. The net profit in 2022 was largely driven by the $91.0 gain on the demerger of Minerals 260 Limited. Exploration
and evaluation expenditure was $11.7 million being an increase of $3.3 million from 2022, excluding $30.3 million from
2022 relating to the termination of the Kathleen Valley royalty previously held by Ramelius Resources Ltd. Corporate
and administrative costs increased by $7.7 million in 2023 due to an increase in corporate activity and resources
associated with development of the Kathleen Valley Lithium Project. Corporate and exploration expenditure was offset
by $11.6 million of interest income derived from the management of the Group’s cash reserves.
The Group continued the capitalisation of costs related to the development of the Kathleen Valley Lithium Project with
$284.6 million of costs capitalised during the year.
Financial position
At balance date the Group had net assets of $449.7 million (2022: $466.8 million), and an excess of current assets over
current liabilities of $248.4 million (2022: $434.6 million).
The Group cash on hand was $305.4 million as at 30 June 2023 (2022: $453.1 million).
The carrying value of property plant and equipment increased by $302.4 million to $329.4 million at 30 June 2023.
Capitalised Kathleen Valley development costs was the main contributor to the year-on-year movement with a total of
$284.6 million of costs capitalised during 2023. The Group has recognised a $9.5 million rehabilitation asset (2022:
6 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 47
Directors’ Report (Continued)
$0.2 million) and a corresponding rehabilitation provision in line with the increased disturbance associated with the
Kathleen Valley development.
Trade and other payables increased by $54.0 million to $73.5 million at 30 June 2023 (2022: $19.5 million). Accrued
expenses accounted for $69.2 million of the balance and primarily related to Kathleen Valley development and mining
costs.
Non-current interest bearing liabilities and borrowings of $115.1 million at 30 June 2023 is related to the first drawdown
of the $300 million Ford term loan facility which occurred during April 2023. Refer to note 16 for further details.
Statement of cashflows
Net cash outflow from operating activities was $16.4 million (2022: $47.0 million) which included cash inflows of $10.8m
related to interest income from term deposits. The 2022 net cash outflow included the $30.3 million purchase of the
Kathleen Valley royalty from Ramelius Resources Ltd.
Net cash outflows from investing activities increased by $230.1 million to $244.1 million (2022: $14.0 million). The
increase in cash outflows was primarily driven by the increased development activities at Kathleen Valley.
Net cash inflows from financing activities of $112.8 million (2022: $501.5 million) was primarily comprised of the $118.8
million drawdown of the $300 million Ford financing facility offset by costs incurred to secure the facility. Inflows for
2022 included $501.6 million net proceeds from the issue of shares.
Corporate
Board Changes
Highly experienced lawyer Ms Adrienne Parker was appointed as Independent Non-Executive Director effective 1
October 2022. Ms Parker is a highly respected lawyer specialising in the infrastructure and resources sectors. She is a
partner with global law firm, Pinsent Masons, and Head of their Perth office. Ms Parker has over 25 years’ experience
in the delivery of large construction, engineering, energy and mining projects across a number of jurisdictions, including
as a partner of major Australian and global law firms. She has advised on procurement strategies and contract models,
risk assessment and management, the negotiation and preparation of mining services agreements, EPC and EPCM
contracts, as well as providing ongoing life-of-project advice, including claims and disputes.
Ms Parker’s experience and her specialisation in the infrastructure and resources sector will bring strong legal,
commercial and corporate experience to the Board.
Mr Steven Chadwick retired as a Non-Executive Director of the Company effective 4 July 2022. Mr Chadwick has played
an instrumental role and made very valuable contributions to the Company’s growth and success.
Toolebuc Vanadium Project Sale
In August 2022, the Company completed the sale of the Toolebuc Vanadium Project, located in north-west Queensland,
to Currie Rose Resources Inc (Currie Rose) (TSXV: CUI) in consideration for 12,500,000 common shares in the capital of
Currie Rose, 4,000,000 common share purchase warrants of Currie Rose and a 2% net gross revenue royalty payable
on minerals extracted from the property.
The common share purchase warrants expire 24 months from the issue date, each of which is exercisable prior to the
expiry date to subscribe for one common share in the capital of Currie Rose for a subscription price of CAD$0.10.
Olympio Metals Ltd Farm-in Agreement
In April 2023, the Company executed a farm-in agreement for Olympio Metals Ltd (ASX: OLY) Mulline and Mulwarrie
Lithium Projects (the Projects) in the Eastern Goldfields of Western Australia.
Under the terms of the agreement, the Company will complete 1,100 soil samples across the Projects and make an initial
assessment before progressing to a possible Stage 1 earn-in. The Company may elect to progress further investments
within set time frames to increase its exposure to the Projects. Exploration work on the Projects commenced in the
June quarter.
Albemarle Indicative Non-Binding Proposal
In March 2023, the Company received an unsolicited, conditional and non-binding indicative proposal from global
lithium company Albemarle Corporation, at a price of $2.50 per share via a scheme of arrangement. The Board carefully
considered the indicative proposal and unanimously determined that it substantially undervalues the Company, and
therefore is not in the best interests of shareholders and rejected the offer. Please refer to events subsequent to
balance date for more information.
Business Strategies and Prospects for Future Financial Years
The strategy of the Group is to create long-term shareholder value, be an environmental, social and governance (ESG)
leader and be a globally significant provider of battery minerals for the rapidly growing clean energy market. To achieve
its objective, the Group currently has the following business strategies and prospects:
7 | D I R E C T O R S ’ R E P O R T
48 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
(i) Realise the Kathleen Valley Lithium Project’s full potential: by becoming a globally significant supplier of
spodumene;
(ii) Downstream Expansion: develop integrated operations to capture higher margins; and
(iii) Expand the portfolio through organic growth (including the Buldania Lithium Project), value accretive merger and
acquisition, and exposure to the circular economy.
The Groups’ activities have inherent risk and the Board is unable to provide certainty of the expected results of these
activities, or that any or all of these likely activities will be achieved. The material business risks faced by the Group
that could influence the Group’s future prospects, and how the Group manages these risks, are outlined below.
Development risks
As a result of the substantial expenditures involved in mine development projects and the impact on those expenditures
from a high inflation environment, mine developments are prone to material cost overruns, cost inflation, labour
shortages and supply chain interruptions. The capital expenditures and time required to develop new mines are
considerable and changes in cost or construction schedules can significantly increase both the time and capital
required to build the project.
Operational risks
The planned schedule for the commissioning and ramp up of the spodumene process plant are subject to operating
risks that could impact the amount and quality of spodumene produced or increase the cost of production for varying
lengths of time. Such difficulties include: changes or variations in ore grade, metallurgical performance; mining,
processing and loading equipment failures and unexpected maintenance problems; limited availability or increased
costs of mining, processing and loading equipment and parts and other materials from suppliers; mine safety accidents;
export port infrastructure and capacity allocation, adverse weather and natural disasters; and a shortage of skilled
labour. If any of these or other conditions or events occur in the future, they may increase the cost of mining or delay
or halt planned commissioning, ramp up and production, which could adversely affect our results of operations or
decrease the value of our assets. The Group has in place a framework for the management of operational risks and an
insurance program which provides coverage for a number of these operating risks.
Sufficient water resources
Securing good quality water sources (less than 3,000 total dissolved solids) has been identified as a key project
requirement. Good progress has been made in securing the necessary water required for commencement and
exploration work and development activity is continuing on numerous identified targets to further define additional
water resources. In the event sufficient locally sourced additional water resources cannot be identified, this may result
in an increase in the development cost, cost of operations or impact planned commissioning, ramp up and/or production.
Lithium prices and foreign exchange
The price of lithium products and other commodities fluctuate and are affected by numerous factors beyond the control
of the Company. Potential future production from the Company’s mineral properties will be dependent upon the price
of Lithium products and other commodities being adequate to make these properties economic. The Company executed
binding offtakes with high quality offtake partners at different levels of the supply chain and across different
jurisdictions. Project financing facilities with Ford are denominated in Australian dollars and most of the planned
development and operational activities are denominated in Australian dollars. Sales revenues will be denominated in
US dollars and the Company’s ability to fund activities and make debt repayments may be adversely affected if the
Australian dollar rises against the US dollar.
The Company’s activities will require further capital
The development of the Company’s projects will require additional funding. The directors have prepared a cash flow
forecast which indicates minimum additional funding of $450 million will be required progressively over the period
commencing from December 2023 to fund the remaining development costs associated with the Project, and to fund
the Group’s working capital requirements through to the point in time that the Group commences generating positive
net cash flows, which is currently forecast to occur in Q4 calendar year 2024 (with first concentrate production forecast
to commence mid calendar year 2024). Refer to note 3(f) for further information.
Native title and Aboriginal Heritage
There are areas of the Company’s projects over which common law and/or statutory Native Title rights of Aboriginal
Australians exist. Where Native Title rights do exist, the Company must obtain consent of the relevant landowner to
progress the exploration, development and mining phases of its operations. Where there is an Aboriginal Site for the
purposes of the Aboriginal Heritage legislation, the Company must obtain consents in accordance with the legislation.
The Company has executed a Native Title Land Access Agreement with the Native Title Owners for Kathleen Valley
and established a framework for ongoing engagement and obtaining required consents for the continuity of works, but
in the event that it is unable to obtain these consents, its activities may be adversely affected.
The Company’s activities are subject to Government regulations and approvals
The development of the Kathleen Valley Lithium Project is subject to obtaining further key approvals from relevant
government authorities. The Company has an approvals schedule and a management team with significant experience
in approvals required for mining projects in Western Australia. A delay or failure to obtain required permits may affect
8 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 49
Directors’ Report (Continued)
the Company’s schedule or ability to develop the project. Any material adverse changes in government policies or
legislation in Western Australia and Australia that affect mining, processing, development and mineral exploration
activities, export activities, income tax laws, royalty regulations, government subsidies and environmental issues may
affect the viability and profitability of any planned development the Kathleen Valley Lithium Project and other projects
in the Company’s portfolio. No assurance can be given that new rules and regulations will not be enacted or that existing
rules and regulations will not be applied in a manner which could adversely impact the Group’s mineral properties.
Global financial conditions may adversely affect the Company’s growth and profitability
Many industries, including the mineral resource industry, are impacted by the global economy. Some of the key impacts
of financial market turmoil, global geopolitical tensions and inflationary economic environments may result in
contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity,
commodity, foreign exchange and precious metal markets, and a lack of market liquidity. Due to the current nature of
the Company’s activities, a slowdown in the financial markets or other economic conditions may adversely affect the
Company’s growth and ability to finance its activities. If increased levels of volatility and market turmoil continue, the
Company’s activities could be adversely impacted and the trading price of the Company’s shares could be adversely
affected.
Business disruption resulting from cyber security breaches
Liontown embraces the use of technology as an important aspect of enhancing business performance. Accordingly,
any breach of our information technology platform could cause significant disruption to the business as well as
potentially damage the Company’s reputation through the loss of sensitive information. The Company takes an active
approach to mitigating its risks and exposure to cyber security threats through regular reviews of the information
technology control environment and understanding of new and emerging cyber security threats.
Significant Changes in the State of Affairs
There were no significant changes to the state of affairs other than those noted elsewhere in this financial report.
Dividends
No dividends were declared or paid during the period and the Directors recommend that no dividend be paid.
Events Subsequent to Reporting Date
Structural Mechanical Piping and Electrical & Instrumentation Contract
On 13 September 2023, the Company announced the Wet Plant Structural, Mechanical, Piping and Electrical &
Instrumentation contract for the Kathleen Valley Lithium Project had been awarded to Monodelphous. The value of the
contract over nine months is approximately $100 million.
Revised Proposal from Albemarle Corporation
On 4 September 2023, the Company announced it had received a revised conditional and non-binding indicative
proposal from Albemarle Corporation to acquire all of the ordinary shares on issue in Liontown for $3.00 cash per share
via a scheme of arrangement. The offer is conditional upon due diligence, the Liontown Board unanimously
recommending the proposal and entry into a mutually acceptable scheme implementation deed, subject to shareholder
approval. The Liontown Board has granted Albemarle a limited period of exclusive due diligence. Should Albemarle
make a binding proposal at $3.00 per share, subject to agreement of a mutually acceptable binding scheme
implementation agreement, the intention of the Liontown Board is to unanimously recommend shareholders vote in
favour of the proposal in the absence of a superior proposal and subject to an independent expert concluding (and
continuing to conclude) that the proposed transaction is in the best interests of shareholders.
S&P/ASX 100 Index
On 1 September 2023, S&P announced inclusion of the Company in the S&P/ASX 100 index effective from 18 September
2023.
Underground Mining Contract
On 17 August, Liontown announced the underground mining services contract at Kathleen Valley had been awarded to
Byrnecut Australia Pty Ltd.
Direct Shipped Ore
On 3 August 2023, the Company announced its intention to proceed with delivery of Direct Shipping Ore (DSO) product
to provide an early source of revenue ahead of the first concentrate production at the Kathleen Valley Lithium Project.
Due to softening market conditions the Company is now reviewing DSO options, including withholding sales and adding
the material to the stockpile as future mill feed. The Company is considering maintaining optionality to either sell DSO
material should market conditions improve or use the DSO product as mill feed to produce concentrate. The Company
9 | D I R E C T O R S ’ R E P O R T
50 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
will continue to progress the DSO crushing and sorting program to assist in the design of a potential large-scale sorting
circuit as part of the planned 4 Mtpa circuit expansion.
E36/876 Tenement
On 26 July 2023, Liontown reached agreement with the owners of tenement E36/876, including Mila Resources plc
(LON: MILA), providing Liontown a right to acquire up to 80% of the lithium rights under E36/876, approximately 8 km
to the south of the Kathleen Valley Lithium Project. Under the terms of the agreement, Liontown will invest $100,000
in Mila through an unsecured convertible loan note. Liontown may acquire a 51% interest in the lithium rights within 18
months by paying $200,000 and a further 29% interest in the lithium rights within 5 years paying a further $2,000,000.
Haulage Contract
On 19 July 2023, the Company announced it had awarded the spodumene and DSO haulage service contract for the
Kathleen Valley Lithium Project to Qube Holdings Ltd (Qube). The contract is conditional upon Qube finalising
arrangement to secure the storage facility at the Port of Geraldton and is valued at approximately $175 million over a
five year term.
Debt Facility
On 11 July 2023, a second draw down of funds was made under the facility agreement with the Ford Motor Company of
$128.6 million taking the total principal drawn down to $247.3 million.
Monjebup Tenements
On 10 July 2023, Red Mountain Mining Limited (ASX: RMX) announced a farm-in agreement with LBM (Aust) Pty Ltd, a
wholly owned subsidiary of Liontown, to acquire an 80 percent interest in the Monjebup Rare Earth Project, consisting
of 321 blocks covering ~910km2 in southern Western Australia. Red Mountain are required to issue 40 million shares to
Liontown and spend not less than $500,000 within the 24 month farm-in period to earn their interest. Red Mountain
shall also grant Liontown a 2% net smelter royalty upon earning their interest.
There has not been any other matter or circumstance that has arisen since 30 June 2023 that has significantly affected,
or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in
future financial years.
Rounding of Amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with the legislative instrument, amounts in the Directors’ Report and Financial Report have
been rounded off to the nearest thousand dollars, unless otherwise stated.
Likely Developments
Other than the development of the Kathleen Valley Lithium Project, there are no likely developments that will impact
on the Company other than as disclosed elsewhere in this report.
Insurance of Directors and Officers and Indemnities
During the financial year, the Company paid a premium under a contract insuring all Directors and Officers of the
Company against liability incurred in that capacity. Disclosure of the nature of liabilities insured and the premium is
subject to a confidentiality clause under the contract of insurance.
The Company has agreed to indemnify its auditors, Deloitte Touche Tohmatsu, to the extent permitted by law, against
any claim by a third party arising from Liontowns’ breach of their agreement. The indemnity stipulates that Liontown
will meet the full amount of any such liabilities including a reasonable amount of legal costs.
Proceedings on Behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of
those proceedings.
Environmental Regulations
The Company is subject to material environmental regulation in respect to its exploration, evaluation and project
development activities. The Company aims to ensure the appropriate standard of environmental care is achieved, and
in doing so, that it is aware of and is compliant with all environmental legislation. The Directors of the Company are not
aware of any breach of environmental legislation for the period under review.
1 0 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 51
Directors’ Report (Continued)
Non-Audit Services
During the year, the Company’s auditor, Deloitte Touche Tohmatsu, provided taxation and other corporate services.
Options, Service and Performance Rights Granted Over Unissued Shares
(a) Options
At the date of this report 4,000,000 fully paid ordinary shares of the Company are under option on the following terms
and conditions:
Exercisable at $0.2979 each on or before 25 November 2023
Exercisable at $0.5779 each on or before 9 February 2024
Exercisable at $2.45 each on or before 23 November 2024
Total Options
(b) Performance Rights
Number
1,000,000
2,500,000
500,000
4,000,000
At the date of this report 9,534,750 fully paid ordinary shares of the Company are under performance rights on the
following terms and conditions:
Sign on Performance Rights Expire 1 July 2024, with a nil exercise price
Short Term Incentive Performance Rights Expire 30 June 2025 with a nil exercise price
Short Term Incentive Performance Rights Expire 30 June 2026 with a nil exercise price
Long Term Incentive Performance Rights Expire 31 March 2025 with a nil exercise price
Long Term Incentive Performance Rights Expire 30 June 2025 with a nil exercise price
Long Term Incentive Performance Rights Expire 30 June 2027 with a nil exercise price
Long Term Incentive Performance Rights Expire 30 June 2028 with a nil exercise price
Total Performance Rights
Remuneration Report - Audited
(a) Introduction
Number
1,250,000
891,418
441,536
1,058,713
2,915,212
3,419,407
1,301,738
11,278,024
This remuneration report for the year ended 30 June 2023 outlines remuneration arrangements in place for Directors
and other members of the Key Management Personnel (KMP) of the Company in accordance with the requirements of
the Corporations Act 2001 (the Act) and its regulations. This information has been audited as required by section 308(3C)
of the Act.
The remuneration report details the remuneration for KMP who are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including
any Director (whether executive or otherwise) of the parent company. KMP’s during or since year end were:
(i) Non-Executive Directors
T Goyder - Chair
A Cipriano - Lead Independent Non-Executive Director
C Williams - Non-Executive Director
J Morris – Non-Executive Director
S McLeay - Non-Executive Director
A Parker – Non-Executive Director (appointed 1 October 2022)
S Chadwick - Non-Executive Director (resigned 4 July 2022)
(ii) Executives
T Ottaviano - Managing Director and Chief Executive Officer (CEO)
A Smits – Chief Operating Officer (COO)
G Donald – Chief Commercial Officer (CCO) (appointed 24 November 2022)
J Latto – Chief Financial Officer (CFO) (appointed 23 December 2022)
C Hasson – Chief Financial Officer (CFO) (resigned 23 December 2022)
There were no other changes to KMP after the reporting date and before the date the financial report was authorised
for issue.
1 1 | D I R E C T O R S ’ R E P O R T
52 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
(b) Remuneration Committee
The Remuneration Committee members are Ms Morris (Chair), Mr Goyder and Mr Cipriano (all non-executive directors)
and the Committee is responsible for advising and making recommendations to the Board regarding the remuneration
framework, policy, vesting of awards and compensation arrangements for the non-executive and executive directors,
executives and employees.
Details of the Remuneration Committees Charter can be found at the Company’s website www.ltresources.com.au.
Use of Remuneration Consultants
To ensure the Remuneration Committee is fully informed when making remuneration decisions, the Remuneration
Committee may seek external advice, as it requires, on remuneration policies and practices. Remuneration consultants
can be engaged by, and report directly to, the Committee. In selecting remuneration consultants, the Committee
considers potential conflicts of interest and independence from the Group’s KMP and other executives. During the
financial year the Remuneration Committee did not seek advice from external consultants in relation to remuneration
benchmarking nor did they receive any remuneration recommendations as defined by the Corporations Act 2001.
Remuneration Report approval at 2022 Annual General Meeting (AGM)
The Remuneration Report for the financial year ended 30 June 2022 received positive shareholder support at the 2022
Annual General Meeting with a vote of 98.35% in favour.
(c) Remuneration Framework
The performance of the Company depends upon the quality of the directors and executives. The strategy of the
Company in determining remuneration levels is to set competitive remuneration packages to attract and retain high
calibre Directors, Executives and employees and to link a significant component of executive rewards to shareholder
value creation. The size, nature and financial strength of the Company is also considered when setting remuneration
levels to ensure that the operations of the Company remain sustainable.
In accordance with best practice corporate governance, the structure of non-executive and executive remuneration is
separate and distinct.
The Company may issue equity securities (i.e. options, service rights or performance rights) under the Employee
Securities Incentive Plan (Incentive Plan) to retain and reward short and long term performance of directors, executives
and, employees which is aligned to strategic objectives and shareholder returns. The Incentive Plan was last approved
by Shareholders at the 2021 AGM.
Executive Remuneration
The Company’s executive remuneration strategy is designed to attract, motivate and retain high performance
individuals and align the interests of executives and shareholders. Remuneration consists of elements of fixed
remuneration and variable ‘at risk’ remuneration (comprising short-term and long-term incentive).
Fixed remuneration
Fixed remuneration is key in attracting and retaining executive talent and it is reviewed on an annual basis by the
Remuneration Committee and the Board. The annual review will generally include a comparison to relevant comparative
remuneration in the market which can be provided by an external consultant or sourced externally.
Short-term incentives
The Board may consider short-term ‘at risk’ performance related remuneration in the form of cash or share-based
payments to reward performance in relation to shorter term strategic objectives of the Company.
The Company currently has no formal performance related remuneration policy that governs the payment of annual
cash bonuses upon meeting pre-determined performance targets. There were no cash bonuses paid to or received by
KMP in the years ended 30 June 2022 and 30 June 2023.
Under the Incentive Plan, the Company can issue either share options or rights that focus on aligning the interests of
executives and shareholders. In addition to vesting service periods, performance hurdles are set on performance rights
issued to executives.
Short-term incentive (STI) performance rights will vest to the extent the Board, using its discretion, determines that the
short-term incentive criteria have been satisfied.
Short-term incentives for the 2023 financial year were issued to executives in November 2022 (refer section (g) of the
remuneration report).
Long-term incentives
The Company may issue equity securities (i.e. options or performance rights) under the Incentive Plan to reward longer
term performance and retention of Executives that provides an opportunity to participate in the growth of the Company.
The Company, under the Incentive Plan, can issue either share options or rights that focus on aligning the interests of
executives and shareholders. In addition to vesting service periods, performance hurdles are set on performance rights
issued to executives in certain circumstances. Options issued to executives can have performance hurdles or non-
1 2 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 53
Directors’ Report (Continued)
performance vesting service periods. Where options are issued the Company believes that by issuing options at a price
in excess of the Company’s share price at the date of issue of those options, there is an inherent performance hurdle
as the share price of the Company’s shares has to increase before any reward can accrue to the executive.
Long-term incentive (LTI) performance rights will vest to the extent the Board, using its sole discretion, determines that
the long-term incentive criteria have been satisfied.
Long-term incentives for the 2023 financial year were issued to executives in November 2022 (refer section (g) of the
remuneration report).
Link between performance and executive remuneration
The focus of executive remuneration over the financial year was fixed remuneration, options and performance rights
under the Incentive Plan (i.e. growing the value of Company as reflected through share price) which seeks to ensure
that executive remuneration is appropriately aligned with the Business strategy and shareholder interests.
The performance over the last 5 years is as follows:
Share price ($)
0.100
0.105
0.850
1.055
2.83
Market Capitalisation ($’000)
153,289
179,685
1,546,243
2,312,798
6,232,383
30 June 2019
30 June 2020
30 June 2021
30 June 2022
30 June 2023
Targeted remuneration mix
The target maximum remuneration is set each year for executives by the Committee in response to market conditions
and strategic business objectives.
The table below represents STI and LTI opportunities as a percentage of fixed annual remuneration (FAR) for
executives in the 2023 financial year.
Position
CEO
COO
CCO
Total STI and LTI as
% of FAR
Short-Term
Incentive as % of
FAR
Long-Term
Incentive as % of
FAR
At Risk
248%
158%
158%
60%
53%
53%
188%
105%
105%
0%
CFO
FAR: fixed annual remuneration consisting of base salary and superannuation. This excludes sign-on incentives.
0%
0%
The table below represents the target remuneration mix for executives based on maximum incentive opportunity in
the 2023 financial year.
Position
CEO
COO
CCO
CFO
FAR (1)
29%
39%
39%
100%
At Risk
Short-Term
Incentive
Long-Term
Incentive
17%
20%
20%
0%
54%
41%
41%
0%
(1)
.Refer to section (d) for details of executive fixed remuneration from 1 July 2023.
Non-Executive Director Remuneration
The Board recognises the importance of attracting and retaining talented non-executive directors and aims to align
remuneration with companies of a similar size and complexity in the mining and exploration industry. The Board seeks
to set aggregate remuneration at a level that provides the Company with the ability to attract and retain Directors of
the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The Company’s Constitution and the ASX Listing Rules specify that the aggregate fees to be paid to non-executive
directors for their role as a director are to be approved by shareholders at a general meeting. At the Company’s 2021
AGM, Shareholders approved to increase the total aggregate pool amount of fees of $500,000 that was approved in
November 2018 to $1,000,000 per annum (including superannuation). The increase in the total fees was to reflect the
increased time and commitment of non-executive directors given the rapid expansion in the scope and nature of the
Company’s activities and to ensure that the Company can attract new directors with the appropriate skills and
experience to complement the Board.
1 3 | D I R E C T O R S ’ R E P O R T
54 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
The amount of total compensation apportioned amongst directors is reviewed annually and the Board considers fees
paid to non-executive directors of comparable companies when undertaking the annual review process.
The remuneration of non-executive directors includes directors’ fees, and board committee fees as outlined below:
Annual Board fees
Chair
Lead independent director
Other non-executive directors
Annual Committee fees
Chair
Member
At 30 June 2023
$150,000
$100,000
$70,000
$15,000
$7,500
The non-executive directors are not entitled to receive retirement benefits and, at the discretion of the Board, may
participate in the Incentive Plan subject to approvals required by shareholders.
Use of non-executive directors as consultants
Apart from their duties as directors, some non-executive directors may undertake work for the Company on a
consultancy basis pursuant to the terms of any consultancy services agreement. The nature of the consultancy work
may vary depending on the expertise of the relevant non-executive director. Under the terms of any consultancy
agreements non-executive directors would receive a daily rate or a monthly retainer for the work performed at a rate
comparable to market rates that they would otherwise receive for their consultancy services.
During the year, Mr Chadwick received no fees for consultancy services (2022: $56,000). Refer section (i) of the
remuneration report for further details.
During the year, Mr Cipriano received no fees for consultancy services (2022: $147,500). Refer section (i) of the
remuneration report for further details.
No fees were paid to other non-executive directors under consultancy services agreements.
(d) Executive Remuneration in FY2024
The Remuneration Committee undertook a comprehensive review of KMP remuneration in mid 2023 that included the
external benchmarking of executives to comparator companies. The changes in remuneration are reflective of the
Company’s inclusion in the S&P ASX200 index, progression from explorer to developer and the laying of foundations
for future production. The change in total fixed remuneration for executives is effective from 1 July 2023 as follows:
Name
T Ottaviano
A Smits
G Donald
J Latto
Position
CEO
COO
CCO
CFO
(1)
Includes Base salary plus superannuation.
FAR effective 1 July 2023(1)
$900,000
$440,887
$353,785
$440,000
The table below represents STI and LTI opportunities as a percentage of FAR for executives for FY2024.
CEO
COO
CCO
CFO
At Risk
Total STI and LTI as
% of FAR
Short-Term
Incentive as % of
FAR
Long-Term
Incentive as % of
FAR
165%
105%
105%
105%
40%
35%
35%
35%
125%
70%
70%
70%
1 4 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 55
Directors’ Report (Continued)
(e) Remuneration of Key Management Personnel
The following table shows the fixed and variable remuneration for key management personnel.
2023
Short-Term Benefits
Employment
Long Term Incentives
Post-
s
e
e
F
d
n
a
y
r
a
l
a
S
$
s
e
e
F
y
c
n
a
t
l
u
s
n
o
C
$
Non-Executive Directors
T Goyder
A Cipriano
C Williams
J Morris(4)
S McLeay(5)
A Parker(6)
S Chadwick(7)
Executives
157,500
122,500
70,000
92,500
98,125
69,375
-
T Ottaviano
746,606
A Smits
G Donald(8)
J Latto(9)
C Hasson(10)
Total
380,091
177,786
230,531
146,677
2,291,691
-
-
-
-
-
-
-
-
-
-
-
-
-
s
t
h
g
R
e
c
i
i
v
r
e
S
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
s
e
e
F
d
n
a
y
r
a
l
a
S
$
s
e
e
F
y
c
n
a
t
l
u
s
n
o
C
$
Non-Executive Directors
T Goyder
A Cipriano(12)
C Williams
J Morris(4)
S McLeay(5)
S Chadwick(7)
Executives
T Ottaviano
A Smits
D Richards(11)
C Hasson(10)
149,886
-
85,470
147,500
64,703
55,710
11,402
-
-
-
60,358
56,000
550,126
296,804
79,611
255,708
-
-
-
-
Total
1,609,778
203,500
s
t
h
g
R
e
c
i
i
v
r
e
S
$
-
-
-
-
-
-
-
-
-
-
-
-
61,457
518,085
78,394
205,654
1,138,436
2,748,632
)
1
(
s
t
n
u
o
m
A
r
e
h
t
O
$
11,505
-
-
-
-
-
-
e
c
n
a
m
r
o
f
r
e
P
)
2
(
s
t
h
g
R
i
$
-
-
-
-
-
-
-
Benefits
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
16,538
12,862
7,350
9,712
10,303
7,284
-
)
3
(
s
n
o
i
t
p
O
$
-
-
-
-
-
-
-
41,756
229,674
27,837
133,550
23,192
14,533
-
92,603
39,909
17,417
24,206
14,476
-
-
-
-
)
1
(
s
t
n
u
o
m
A
r
e
h
t
O
$
4,459
-
-
-
-
-
e
c
n
a
m
r
o
f
r
e
P
)
2
(
s
t
h
g
R
i
$
-
-
-
-
-
-
Benefits
n
o
i
t
a
u
n
n
a
r
e
p
u
S
$
14,989
8,547
6,470
5,571
1,140
-
)
3
(
s
n
o
i
t
p
O
$
-
-
-
389,149
-
-
n
o
i
t
a
r
e
n
u
m
e
R
f
o
n
o
i
t
r
o
p
o
r
P
d
e
s
a
B
e
c
n
a
m
r
o
f
r
e
P
l
a
t
o
T
e
c
n
a
m
r
o
f
r
e
P
)
2
(
s
t
h
g
R
i
$
$
%
-
-
-
-
-
-
-
185,543
135,362
77,350
102,212
108,428
76,659
-
-
-
-
-
-
-
-
68
50
51
234,345
925,775
94,933
451,523
-
277,929
-
92,917
361,206
51
n
o
i
t
a
r
e
n
u
m
e
R
f
o
n
o
i
t
r
o
p
o
r
P
d
e
s
a
B
e
c
n
a
m
r
o
f
r
e
P
l
a
t
o
T
e
c
n
a
m
r
o
f
r
e
P
)
2
(
s
t
h
g
R
i
$
$
%
-
-
-
-
-
-
169,334
241,517
71,173
-
-
-
450,430
86
12,542
116,358
-
-
50,442
123,281
27,500
556,358
794,334
2,102,041
34,856
55,744
29,680
59,292
59,367
535,743
70
33
(3,640)
-
20,187
42,023
7,362
25,571
-
-
83,333
-
31,891
44,754
420,134
28
106,304
221,048
126,830
1,036,690
898,455
4,202,605
180,280
973,912
238,451
205,654
1,560,631
5,450,619
2022
Short-Term Benefits
Employment
Long Term Incentives
Post-
(1) Other amounts, where applicable, includes the cost to the Company of providing time off in lieu, annual leave, long service leave and fringe benefits.
(2)
The fair value of performance rights was calculated by an independent expert and allocated to each reporting period starting from the grant date to
vesting date.
The fair value of the options is calculated using a Black-Scholes valuation model and allocated to each reporting period starting from grant date to
vesting date.
(3)
(4) Ms Morris appointed 24 November 2021.
(5) Mr McLeay appointed 3 May 2022.
(6) Ms Parker appointed 1 October 2022.
1 5 | D I R E C T O R S ’ R E P O R T
56 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
(7) Mr Chadwick retired 4 July 2022. Up until retirement he received Directors’ fees and consulting fees via a consultancy agreement with the company.
Amounts were billed based on normal market rates for such consultancy services and were due and payable under normal payment terms.
(8) Mr Donald appointed 24 November 2022.
(9) Mr Latto appointed 23 December 2022.
(10) Mr Hasson resigned 23 December 2022.
(11) Mr Richards resigned 24 November 2021. Amounts above do not include unused leave entitlements of $74,535 transferred by way of payment to Minerals
260 Ltd.
(12) Mr Cipriano entered into a consultancy agreement with the Company to provide corporate, financial advisory and general support services through a
consultancy agreement (as disclosed to ASX on 12 May 2021). Amounts are billed on normal market rates for such consultancy services and are due and
payable under normal payment terms. The consultancy agreement was terminated on 31 December 2021.
(f) Key Management Personnel Shareholdings
The relevant interest of each of the key management personnel in the share capital of the Company was:
Balance
Held at
Commencement
1 July 2022
Date
Exercise of
Options &
Performance
Rights
Net
Held at
Acquisitions/
(Disposals) (1)
Resignation
Date
Balance
30 June 2023
No. Shares
Non-Executive Directors
T Goyder
A Cipriano
C Williams
J Morris
S McLeay
A Parker(2)
S Chadwick(3)
Executives
T Ottaviano
328,533,766
- - 1,145,000
- 329,678,766
18,531,343
- 1,000,000 (3,431,343)
- 16,100,000
29,767,515
- -
-
- 29,767,515
66,210
- -
-
- 66,210
160,000
- -
-
- 160,000
-
- -
-
-
-
10,047,636
- -
- 10,047,636
-
-
1,624,692
- 3,298,062
-
- 4,922,754
5,318,079
-
-
A Smits
G Donald(4)
J Latto(5)
C Hasson(6)
(1) Acquisitions and disposals refer to shares purchased and sold on the open market.
(2) Ms Parker appointed 1 October 2022.
(3) Mr Chadwick resigned 4 July 2022.
(4) Mr Donald appointed 24 November 2022.
(5) Mr Latto appointed 23 December 2022.
(6) Mr Hasson resigned 23 December 2022.
1,618,225
- 3,256,794 (1,000,000)
- - 11,500
- 7,574,873
- 11,500
- -
-
-
-
- - (500,000)
1,118,225
-
(g) Share-Based Payments
Directors, executives, key employees and consultants may be eligible to participate in equity-based compensation via
the Employee Securities Incentive Plan.
Options
Under the terms and conditions of the Incentive Plan, options issued allow the holder the right to subscribe to one fully
paid ordinary share. Any option not exercised before expiry will lapse on the expiry date.
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to
participate in new issues of capital offered to shareholders during the currency of the options. All shares allotted upon
the exercise of options will rank pari passu in all respect with other shares.
Options over Equity Instruments granted as Compensation Instruments
No options over ordinary shares were granted as compensation to any KMP or employees during the year.
The following table shows a reconciliation of the number of options held by each KMP during the year:
1 6 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 57
Directors’ Report (Continued)
2023
Non-Executive Directors
T Goyder
A Cipriano (1)
C Williams
J Morris
S McLeay
A Parker (2)
S Chadwick (3)
Executives
T Ottaviano (4)
A Smits (5)
G Donald (6)
J Latto (7)
C Hasson (8)
y
l
u
J
1
e
c
n
a
l
a
B
2
2
0
2
s
a
d
e
t
n
a
r
G
n
o
i
t
a
r
e
n
u
m
e
R
No.
No.
e
t
a
D
t
n
a
r
G
s
n
o
i
t
p
O
d
e
s
i
c
r
e
x
E
No.
i
d
a
p
t
n
u
o
m
A
e
r
a
h
s
r
e
p
f
o
e
t
a
D
t
a
d
l
e
H
n
o
i
t
a
n
g
i
s
e
R
0
3
e
c
n
a
l
a
B
3
2
0
2
e
n
u
J
No.
No.
-
1,000,000
1,000,000
500,000
-
-
-
5,000,000
3,333,334
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- (1,000,000)
$0.2979
-
-
-
-
-
-
-
-
-
-
- (2,500,000)
- (3,333,334)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
-
-
1,000,000
500,000
-
-
-
2,500,000
100%
-
-
-
-
-
-
-
-
d
l
e
H
–
d
e
t
s
e
V
%
-
-
100%
100%
-
-
-
Exercised 1,000,000 options at $0.2979 each.
(1)
(2) Ms Parker appointed 1 October 2022.
(3) Mr Chadwick resigned 4 July 2022.
(4) Exercised 2,500,000 options under the cashless exercise facility available under the Incentive Plan.
(5) Exercised 3,333,333 options under the cashless exercise facility available under the Incentive Plan.
(6) Mr Donald appointed 24 November 2022
(7) Mr Latto appointed 23 December 2022
(8) Mr Hasson resigned on 23 December 2022
Vesting of Options in FY2023
During the year the following KMP options vested:
T Ottaviano
2,500,000
The options had no performance conditions other than service periods.
10-Feb-21
1-May-23
9-Feb-24
Grant Date
No. Options Vested
Vesting Date
Expiry Date
Performance Rights
During the year 6,483,623 performance rights were issued to KMP and employees. At 30 June 2023, 6,003,358
performance rights with a nil exercise price were on issue to KMP. Specific performance hurdles are required to be
achieved (including market, non-market based and employment status) and are subject to Board approval before the
performance rights can vest.
The below table shows a reconciliation of the number of performance rights held by each KMP during the year:
2023
Executives
T Ottaviano
A Smits
G Donald
J Latto
C Hasson(1)
y
l
u
J
1
e
c
n
a
l
a
B
2
2
0
2
s
a
d
e
t
n
a
r
G
n
o
i
t
a
r
e
n
u
m
e
R
I
T
S
-
s
a
d
e
t
n
a
r
G
n
o
i
t
a
r
e
n
u
m
e
R
I
T
L
-
f
o
e
t
a
d
t
a
d
l
e
H
n
o
i
t
a
n
g
i
s
e
r
e
c
n
a
m
r
o
f
r
e
P
s
t
h
g
R
i
d
e
s
i
c
r
e
x
E
Number
0
3
e
c
n
a
l
a
B
3
2
0
2
e
n
u
J
4,075,466
455,633
1,423,854
1,643,866
712,385
202,964
405,928
178,096
-
-
162,866
386,224
-
-
537,028
161,888
323,776
-
-
-
-
-
-
-
1,022,692
4,311,087
1,143,181
549,090
-
-
(1)
Performance rights held by C Hasson at date of resignation were not forfeited. C Hasson remains in the employment of Liontown and is no longer included
as a KMP.
1 7 | D I R E C T O R S ’ R E P O R T
58 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
Vesting of Rights in FY2023 and Expiry Dates
FY2023 Sign-on Performance Rights
On 1 July 2022, 1,250,000 sign-on performance rights issued on 4 May 2021, vested. The performance rights were issued
to Mr Ottaviano the Managing Director and Chief Executive Officer when he commenced with the Company as a sign-
on incentive. The performance rights vested for nil consideration. The remaining 1,250,000 performance rights (expiring
1 July 2024) vested on 1 July 2023 for nil consideration.
STI Performance Rights – FY2023 Measurement
983,351 STI performance rights (expiring 30 June 2025) issued to KMP in November 2022 had a measurement date of
30 June 2023 with vesting subject to Board approval upon an assessment of the non-market conditions, as outlined
below. The number of performance rights issued to KMP was a stretch target of 150% of the base incentive. In July
2023, the Board assessed the performance against the criteria and determined some of the performance conditions
had been achieved and awarded 82% vesting of the base incentive performance rights (55% of the total issued). The
rights vested for nil consideration.
Performance
Conditions
Category
Financial
Performance Conditions Assessed
Against Board Criteria Relating To:
Effective capital cost management of
FY23 Budget. Tracking of costs
against expected costs for work
completed.
Critical Commercial contracts for
Project
‘good’
in place and with
commercial outcomes.
Target
Percentage
Upon
Vesting
Awarded
Percentage
Vesting Outcome
20%
10%
The Board assessed the Financial
outcomes and determined:
(1)
the Kathleen Valley Lithium
Project has been subject to cost
increases as seen across the
economy. The
revised capital
estimate
is $895m (inc $40m
contingency).
(2) Critical commercial contracts are
in place with ‘good’ commercial
outcomes.
Project Delivery Kathleen Valley Lithium Project
development on approved schedule.
25%
20%
The Board assessed the Project
Delivery outcomes and determined:
Earned value for the Lycopodium
scope of works as at June 2023.
(1) The Kathleen Valley Lithium
project remains on schedule to
in mid
deliver first production
2024.
(2) Earned value for the Lycopodium
scope was only 10% under target
at the date of assessment. Earned
values expected to remain on
target over the remainder of the
project life.
Health & Safety Total Recordable Injury Frequency
Rate.
15%
14%
The Board assessed the Health &
Safety outcomes and determined:
(1) No lost time
during FY2023.
injuries occurred
(2) The TRIFR for 2023 for Jan to June
2023 was 7.69.
ESG
Decarbonisation strategy developed
and approved.
10%
10%
Renewable Power.
People
Resourcing / Recruitment targets.
5%
5%
Board
The
the
Decarbonisation and Renewable Power
strategy outcomes and determined:
assessed
(1) Decarbonisation
strategy was
prepared and reviewed.
(2) Solar farm on schedule.
The Board assessed
outcomes
recruitment
the People
the
of
determined
on-boarding
and
and
1 8 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 59
Directors’ Report (Continued)
Performance
Conditions
Category
Performance Conditions Assessed
Against Board Criteria Relating To:
Target
Percentage
Upon
Vesting
Awarded
Percentage
Strategy &
Growth
Grow Reserve estimate at Kathleen
Valley.
5%
3%
Downstream Processing.
Vesting Outcome
required workforce
within target.
is progressing
The Board assessed the Reserve and
Downstream outcomes and
determined:
(1) Mine
planning
progressed,
however,
estimate
Reserve
upgrade not completed prior to
the end of FY2023.
Individual
Performance
Personal Metric Outcomes.
20%
20%
(2) Downstream strategy and PFS
test work completed.
Vesting outcomes specific to individual
goals and objectives.
LTI Performance Rights
2,118,660 LTI performance rights issued to KMP in May 2021 with an expiry of 30 June 2025 have a measurement date
of 30 June 2024 with vesting to occur for nil consideration based upon an assessment of the non-market conditions
outlined below, subject to Board discretion.
Performance
Conditions
Category
ESG and
Health and
Safety
Milestones
Strategic and
Commercial
Achievements
Shareholder
Return
Milestones
Performance Conditions Will Be Assessed Against Board Criteria Relating To:
(i) Permits and licences for commencement of Kathleen Valley operation;
(ii) Lost time injury frequency rates; and
(iii) ESG objectives.
In the event there is one or more breaches of the stated objectives, the Board will exercise
its discretion to reduce the allocation of any incentive commensurate with the nature and
severity of any breach.
(i) Offtake arrangements;
(ii) Downstream opportunities;
(iii) Project funding; and
(iv) Project advancement.
Board discretion to be applied in allocating this incentive.
Max
Percentage
Upon Vesting
15%
35%
Total Shareholder Return (TSR) will be assessed on both an Absolute and Relative basis.
50%
Absolute Total Shareholder Return (TSR) – 25% Allocation
•
•
•
0%, if Absolute TSR <50%
Pro-rata, if Absolute TSR between 50% - 100%
100% allocation, if Absolute TSR >100%
Relative Total Shareholder Return* (TSR) – 25% Allocation
•
•
•
Below 50th percentile, 0% allocation
Between 50th and 75th percentile, pro-rata, allocation
At or above 75th percentile, 100% of allocation
TSR measurement period is between 1 May 2021 and 30 June 2024 using 20 day-VWAP.
*Relative to a comparator group of companies.
1 9 | D I R E C T O R S ’ R E P O R T
60 | Liontown Resources | FY23 Annual Report
Directors’ Report (Continued)
2,479,291 LTI performance rights issued to KMP in November 2022 with an expiry of 30 June 2027 have a measurement
date of 30 June 2025 with vesting to occur for nil consideration based upon an assessment of the non-market conditions
outlined below over the period 01 July 2022 to 30 June 2025, subject to Board discretion.
Performance
Conditions
Category
ESG
Strategic and
Commercial
Achievements
Shareholder
Return
Milestones
Performance Conditions Will Be Assessed Against Board Criteria Relating To:
FY25 percentage of renewable power and FY25 carbon emissions (aggregate emissions per
tonne of concentrate).
Costs (FY25 C1 Operative cost FOB, adjusted for CPI and uncontrollable costs), Product sold
in FY25 and Product Quality performance.
Downstream opportunities, grow mineral resource estimate for the Kathleen Valley Lithium
Project and the Buldania Lithium Project and pursue value accretive opportunities in battery
minerals.
Max
Percentage
Upon Vesting
10%
40%
Total Shareholder Return (TSR) will be assessed on both an Absolute and Relative basis.
Absolute Total Shareholder Return (TSR) – 25% Allocation
50%
•
•
•
0%, if Absolute TSR <50%
Pro-rata, if Absolute TSR between 50% - 100%
100% allocation, if Absolute TSR >100%
Relative Total Shareholder Return* (TSR) – 25% Allocation
Below 50th percentile, 0% allocation
•
Between 50th and 75th percentile, pro-rata, allocation
•
At or above 75th percentile, 100% of allocation
•
*measured against the S&P/ASX 200 Resources (XJR)
60,491 LTI performance rights issued to KMP in June 2023 with an expiry of 31 March 2025 have a measurement date
of 31 December 2024 with vesting to occur for nil consideration. The performance rights vest upon continued service
and do not have attached performance hurdles.
Details of Equity Incentives affecting Reporting Period and Future Remuneration
Details of vesting profiles of unlisted options and performance rights held by each KMP of the Group during the year
ended 30 June 2023 are detailed below:
Instrument
No. Instruments
Grant Date % Vested In
Year
% Forfeited
in Year
Financial
Vesting Year
T Ottaviano
T Ottaviano
T Ottaviano
T Ottaviano
T Ottaviano
T Ottaviano
A Smits
A Smits
A Smits
A Smits
G Donald
G Donald
G Donald
C Hasson
C Hasson
C Hasson
C Hasson
Options
2,500,000
10-Feb-21
Performance Rights
2,500,000
4-May-21
Performance Rights
393,866
4-May-21
Performance Rights
1,181,600
4-May-21
Performance Rights
455,633
21-Nov-22
Performance Rights
1,423,854
21-Nov-22
100%
50%
100%
-
-
-
Performance Rights
178,096
4-May-21
100%
Performance Rights
534,289
4-May-21
Performance Rights
202,964
21-Nov-22
Performance Rights
405,928
21-Nov-22
Performance Rights
162,866
21-Nov-22
Performance Rights
325,733
21-Nov-22
Performance Rights
60,491
30-June-23
-
-
-
-
-
-
Performance Rights
134,257
4-May-21
100%
Performance Rights
402,771
4-May-21
Performance Rights
161,888
21-Nov-22
Performance Rights
323,776
21-Nov-22
-
-
-
-
2023
- 2023 and 2024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2023
2025
2023
2025
2023
2025
2023
2025
2023
2025
2025
2023
2025
2023
2025
2 0 | D I R E C T O R S ’ R E P O R T
Liontown Resources | FY23 Annual Report | 61
Directors’ Report (Continued)
(h) Employment Contracts
Remuneration arrangements for executives are formalised in employment agreements. Details of these contracts are
provided below.
Name
T Ottaviano(1)
A Smits
G Donald
J Latto
Employment Contract
Duration
Notice Period
Termination Provisions
Unlimited
Unlimited
Unlimited
Unlimited
6 months by the Company and
employee
3 months by the Company and
employee
3 months by the Company and
employee
3 months by the Company and
employee
6 months in the event of a material change
6 months in the event of a material change
6 months in the event of a material change
6 months in the event of a material change
(1)
The employment contract for T Ottaviano includes a payment of 12 months in the event of a change on control.
(i) Other Transactions with Key Management Personnel
Management personnel, or their related parties, may hold positions in other entities that result in them having control
or significant influence over the financial or operating policies of those entities.
One entity transacted with the Group during the reporting period. The terms and conditions of the transactions with
management persons and their related parties were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to non-Director related entities on an arm’s length basis.
Mr Chadwick provided general metallurgical and technical advisory services to the Company through a consultancy
agreement. There is no fixed remuneration component under the consultancy agreement for these services and those
services are provided on an “as required basis” at a rate of $2,000 per day. Either party may terminate the agreement
by providing one month’s notice. Consultancy fees are due and payable under normal payment terms. For the reporting
period, the amount incurred was nil (2022: $56,000) and the amount unpaid as at 30 June 2023 was nil (2022: $5,000).
Mr Cipriano provided corporate, financial advisory services and general support services to the Company through a
consultancy agreement (as disclosed to ASX on 12 May 2021). There was no fixed remuneration component under the
consultancy agreement for these services and those services were provided on an “as required basis” at a rate of
$2,500 per day. Consultancy fees were due and payable under normal payment terms. The consultancy arrangement
was terminated effective 31 December 2021. For the reporting period the amount incurred was nil (2022: $147,500) and
the amount unpaid as at 30 June 2023 was nil (2022: nil).
Mr McLeay is the Managing Director of mining consulting company Entech Pty Ltd. The Company used the services of
Entech Pty Ltd prior to the appointment Mr McLeay becoming non-executive director and the Company continues to
use Entech Pty Ltd for mining consulting services, as required. During the reporting period the amount incurred was
$84,830 (2022: $1,040) and the amount unpaid as at 30 June 2023 was nil (2022: nil).
End of the Audited Remuneration Report.
Auditor’s Independence Declaration
The auditor’s independence declaration is set out on page 63 and forms part of the Directors’ Report for the year ended
30 June 2023.
Corporate Governance
The Directors of the Group support and adhere to the principles of corporate governance, recognising the need for the
highest standard of corporate behaviour and accountability.
Please refer to the Company website at http://www.ltresources.com.au/corporate-governance.
This report is made with a resolution of the Directors:
Antonino Ottaviano
Managing Director
Dated at Perth the 29th day of September 2023
2 1 | D I R E C T O R S ’ R E P O R T
62 | Liontown Resources | FY23 Annual Report
Auditor’s Independence Declaration
Board of Directors
Liontown Resources Limited
Level 2, 32 Ord Street
West Perth WA 6005
29 September 2023
Dear Board Members
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Auditor’s Independence Declaration to Liontown Resources Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of
independence to the Directors of Liontown Resources Limited and its controlled entities.
As lead audit partner for the audit of the financial report of Liontown Resources Limited for the year ended 30 June
2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:
•
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• Any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liontown Resources | FY23 Annual Report | 63
64 | Liontown Resources | FY23 Annual Report
64 | Liontown Resources | FY23 Annual Report
Financial
Report
Liontown Resources | FY23 Annual Report | 65
Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2023
Other income
Gain on demerger
Exploration and evaluation expenditure expensed
Corporate and administration expenses
Share based payments
(Loss)/Profit before financing and tax
Note
5(a)
5(a), 17
5(d)
5(b)
8
2023
$'000
2022
$'000
496
-
(11,670)
(18,042)
(4,522)
(33,738)
1,314
90,960
(38,686)
(10,369)
(3,156)
40,063
Net financing income
5(e)
11,333
1,284
(Loss)/Profit before income tax
(22,405)
41,347
Income tax benefit/(expense)
6
192
(492)
Net (loss)/profit after tax
(22,213)
40,855
Other comprehensive income/(loss) Items that will not be
reclassified to profit or loss
Net gain/(loss) on fair value of financial assets, net of tax
Total comprehensive (loss)/income for the year attributable to
owners of the Company
332
(1,268)
(21,881)
39,587
Basic (loss)/earnings per share (dollars per share)
Diluted (loss)/earnings per share (dollars per share)
7
7
$(0.010)
$(0.010)
$0.020
$0.020
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
accompanying notes.
66 | Liontown Resources | FY23 Annual Report
2 3 | F I N A N C I A L R E P O R T
Financial Report (Continued)
Consolidated Statement of Financial Position
As at 30 June 2023
Note
2023
$'000
2022
$'000
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Total current assets
Non-current assets
Financial assets
Property, plant and equipment
Other assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Interest bearing loans and borrowings
Total current liabilities
Non-current liabilities
Interest bearing loans and borrowings
Lease liabilities
Provisions
Total liabilities
Net assets
Equity
Share capital
Accumulated losses
Reserves
Total equity
9
10
11
11
12
13
14
15
16
16
15
17
18
305,438
7,413
11,409
324,260
1,437
329,459
-
330,896
453,076
1,438
-
454,514
558
26,985
5,001
32,544
655,156
487,058
73,489
1,210
1,094
42
75,835
115,192
4,829
9,564
129,585
19,464
178
297
-
19,939
-
53
219
272
205,420
20,211
449,736
466,847
576,734
(133,226)
6,228
449,736
576,219
(112,683)
3,311
466,847
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
2 4 | F I N A N C I A L R E P O R T
Liontown Resources | FY23 Annual Report | 67
Financial Report (Continued)
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Issued
Capital
Accumulated
Losses
Share-
Based
Payments
Reserve
Investment
Revaluation
Reserve
Foreign
Currency
Translation
Reserve
Total
Equity
$’000
$’000
$’000
$’000
$’000
$’000
As at 1 July 2022
576,219
(112,683)
3,292
(120)
139
466,847
Loss for the year
Other comprehensive
gain/(loss)
Total comprehensive
gain/(loss) for the year
Transactions with owners in
their capacity as owners:
Issue of shares (net of costs)
Share-based payments
Transfer between equity
items
-
-
-
(22,213)
-
(22,213)
-
-
-
248
267
-
-
-
4,255
1,670
(1,670)
-
332
332
-
-
-
-
-
-
-
-
-
(22,213)
332
(21,881)
248
4,522
-
As at 30 June 2023
576,734
(133,226)
5,877
212
139
449,736
Issued
Capital
Accumulated
Losses
Share-
Based
Payments
Reserve
Investment
Revaluation
Reserve
Foreign
Currency
Translation
Reserve
Total
Equity
$’000
$’000
$’000
$’000
$’000
$’000
As at 1 July 2021
77,922
(68,469)
2,747
1,148
139
13,487
Profit for the year
Other comprehensive
gain/(loss)
Total comprehensive
gain/(loss) for the year
-
-
-
40,855
-
40,855
Transactions with owners in
their capacity as owners:
Issue of shares (net of costs)
501,577
Share-based payments
Transfer between equity
items
Demerger of Minerals 260
Ltd
820
-
-
-
1,791
(4,100)
(86,860)
-
-
-
-
-
2,336
(1,791)
-
(1,268)
(1,268)
-
-
-
-
-
-
-
-
-
-
-
40,855
(1,268)
39,587
501,577
3,156
-
(90,960)
As at 30 June 2022
576,219
(112,683)
3,292
(120)
139
466,847
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
2 5 | F I N A N C I A L R E P O R T
68 | Liontown Resources | FY23 Annual Report
Financial Report (Continued)
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Cash flows from operating activities
Cash paid to suppliers and employees
Payments for exploration and evaluation
Interest received
Government grants and incentives
Acquisition of royalty rights
Net cash used in operating activities
Cash flows from investing activities
Payments for plant and equipment
Payment for financial assets
Minerals 260 demerger and IPO costs
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Borrowing costs paid
Proceeds from issue of shares
Payment for share issue costs
Repayment of lease liabilities
Interest paid
Note
2023
$'000
2022
$'000
(15,846)
(11,450)
10,827
117
-
9
(16,352)
(232,654)
(11,416)
-
(8,403)
(9,136)
783
-
(30,250)
(47,006)
(13,274)
-
(680)
(244,070)
(13,954)
118,749
(6)
(5,213)
298
(50)
(880)
(114)
-
-
-
516,895
(15,319)
(68)
(17)
Net cash from financing activities
112,784
501,491
Net (decrease)/increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
9
(147,638)
440,531
-
453,076
305,438
-
12,545
453,076
The consolidated statement of cash flows to be read in conjunction with the accompanying notes.
2 6 | F I N A N C I A L R E P O R T
Liontown Resources | FY23 Annual Report | 69
70 | Liontown Resources | FY23 Annual Report
70 | Liontown Resources | FY23 Annual Report
70 | Liontown Resources | Annual Report 2023
Notes to the Consolidated Financial Statements
Contents of the Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Basis of Preparation
Note 1: Corporate information
Note 2: Reporting entity
Note 3: Basis of preparation
Performance for the Year
Note 4: Segment reporting
Note 5: Other income and expenses
Note 6: Income tax
Note 7: Earnings/(loss) per share
Share Based Payments
Note 8: Share-based payments
Assets
Note 9: Cash and cash equivalents
Note 10: Trade and other receivables
Note 11: Financial assets
Note 12: Property, plant and equipment
Note 13: Other assets
Equity and Liabilities
Note 14: Trade and other payables
Note 15: Provisions
Note 16: Interest bearing loans and borrowings
Note 17: Capital and capital management
Note 18: Reserves
Financial Instruments
Note 19: Financial instruments
Group Composition
Note 20: List of subsidiaries
Note 21: Parent entity information
Other Information
Note 22: Contingent assets and liabilities
Note 23: Remuneration of auditors
Note 24: Commitments
Note 25: Related party transactions
Note 26: Events occurring after the reporting period
2 7 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 71
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Basis of Preparation
This section of the financial report sets out the Group’s (being Liontown Resources Limited and its controlled entities)
accounting policies that relate to the Consolidated Financial Statements as a whole. Where an accounting policy is
specific to one note, the policy is described in the note to which it relates.
The notes include information which is required to understand the Consolidated Financial Statements and is material
and relevant to the operations and the financial position and performance of the Group.
Information is considered relevant and material if:
The amount is significant due to its size or nature
The amount is important in understanding the results of the Group
It helps to explain the impact of significant changes in the Group’s business
It relates to an aspect of the Group’s operations that is important to its future performance.
1. Corporate Information
The Consolidated Financial Statements of Liontown Resources Limited for the year ended 30 June 2023 was authorised
for issue on 28 September 2023.
Liontown Resources Limited (the ‘Company’ or ‘Liontown’) is a for-profit company limited by shares, whose shares are
publicly traded on the Australian Securities Exchange. The Company and most of its subsidiaries were incorporated
and domiciled in Australia. Refer to note 20 for details of subsidiaries and country of incorporation. The registered
office and principal place of business of the Company is Level 2, 32 Ord Street, West Perth, WA 6005.
The nature of the operations and principal activities are disclosed in the Directors’ Report.
2. Reporting Entity
The Financial Statements are for the Group consisting of Liontown Resources Limited and its subsidiaries. A list of the
Group’s subsidiaries is provided at note 20.
3. Basis of Preparation
These general purpose Consolidated Financial Statements have been prepared in accordance with Australian
Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (‘AIFRS’).
Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto,
complies with International Financial Reporting Standards (IFRS).
These Financial Statements have been prepared under the historical cost convention except where certain financial
assets and liabilities are required to be measured at fair value.
All amounts have been rounded to the nearest thousand, unless otherwise stated, in accordance with ASIC
Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and Instrument 2022/519.
(a) Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred
asset. Accounting policies of the subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Any non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and
consolidated statement of financial position respectively.
(b) Significant accounting judgements and key estimates
The preparation of a financial report requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities, income and expenses.
2 8 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
72 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
Key estimates and assumptions may have a significant risk of causing a material adjustment to the carrying amounts
of certain assets and liabilities within the next annual reporting period.
Judgement and estimates that are material to the financial report are found in the following sections:
Other income (note 5)
Share based payments (note 8)
Property, plant and equipment (note 12) - judgements in assessing the viability and timing of assets for capitalisation
- fair value recognition on the gain on demerger of Minerals 260 Ltd
- measurement of share based payment transactions
Employee benefits (note 15)
Rehabilitation liability (note 15)
- judgements in relation to lease extension options
- measurement of long service leave provisions
- measurement of mine closure provisions
(c) Functional currency translation
The functional currency of the Company is Australian dollars and the functional currency of the controlled entity based
in Tanzania is United States dollars (US$). The presentation currency of the Group is Australian dollars.
Transactions in foreign currencies are translated to the Group’s functional currency at exchange rates at the date of
the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional
currency spot rates of exchange at the reporting date. Foreign currency differences arising on retranslation are
recognised in profit or loss as incurred. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated at exchange rates at the date of the initial transaction.
Foreign currency differences are recognised in other comprehensive income and presented in foreign currency
translation reserve (translation reserve) in equity upon translation to presentation currency.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that foreign operation
is recognised in profit or loss.
(d) Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or
payable to, the Australia Taxation Office (ATO) is included as a current asset or liability in the consolidated statement
of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified
as operating cash flows.
(e) Adoption of new and revised Accounting Standards
In the year ended 30 June 2023, the Directors have reviewed the new and revised Standards and Interpretations issued
by the AASB that are relevant to the Group and effective for the current annual reporting period. It has been
determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the
Group.
Standards and Interpretations on issue not yet effective
Several accounting standards and interpretations have been issued and will be applicable in future periods. While
these remain subject to ongoing assessment, no significant impacts have been identified to date. The Group has not
early adopted the following standards and interpretations:
• AASB 2020-1 and AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as
Current or Non-current – effective date 1 January 2023;
• AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition
of Accounting Estimates – effective date 1 January 2023;
• AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities
arising from a Single Transaction – effective date 1 January 2023;
• AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants –
effective date 1 January 2023;
• AASB 2023-1 Amendments to Australian Accounting Standards - Supplier Finance Arrangements – effective date
1 January 2024;
2 9 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 73
Notes to the Consolidated Financial Statements (Continued)
• AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between Investor
and its Associate or Joint Venture – effective date 1 January 2025.
(f) Going concern
The financial statements have been prepared on the going concern basis of accounting, which contemplates the
continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business.
The Group incurred a net loss after tax for the year ended 30 June 2023 of $22.2 million (30 June 2022: $40.9 million
net profit after tax), and experienced net cash outflows from operating and investing activities of $261.4 million (30
June 2022: outflow of $70.0 million).
As at 30 June 2023 the Group held cash and cash equivalents of $305.4 million (30 June 2022: $453.1 million), had an
excess of current assets over current liabilities of $248.4 million (30 June 2022: $434.6 million), and had contractual
capital commitments for the acquisition of property, plant and equipment for the Kathleen Valley Lithium Project (the
Project) of $211.6 million (30 June 2022: $62 million).
In addition to the Group’s $305.4 million in cash and cash equivalents as at 30 June 2023, it also has a facility with Ford
Motor Company for $300 million, of which $181.3 million was undrawn and available for draw down as at 30 June 2023.
As at 31 August 2023, the Group’s cash and cash equivalents was $338.5 million, which includes proceeds from the
draw down of an additional $128.6 million under the Ford facility, with $52.7 million available for drawdown under the
Ford facility as at 31 August 2023.
On 20 January 2023, the Group announced a revised estimate of the project capital costs through to first production
of $895 million (an increase of $350 million). This revised estimate was a result of optimisation and scope adjustments
coupled with continued macro-level, and industry-wide cost escalation, along with additional expenditure associated
with delivering a 20% increase in Project throughput capacity to 3Mtpa.
On 29 September 2023, the Group announced an additional increase of $56 million in relation to the estimated project
capital cost through to first production, due largely to further macro-level, and industry-wide cost escalation. This
further increase takes the revised estimate for project capital costs through to first production to $951 million
(including contingencies of $25 million).
The directors have prepared a cash flow forecast which indicates minimum additional funding of $450 million will be
required progressively over the period commencing from December 2023, to fund the remaining development costs
associated with the Project, and to fund the Group’s working capital requirements through to the point in time that the
Group commences generating positive net cash flows, which is currently forecast to occur in Q4 calendar year 2024
(with first concentrate production forecast to commence mid calendar year 2024). Whilst not the Group’s current
expectation, should there be a delay in achieving first concentrate production or the Group starting to generate positive
net cash flows, the minimum funding requirement would be in excess of the amount noted above.
On 4 September 2023 the Group announced that Albemarle Corporation had made a revised conditional non-binding
indictive proposal to acquire all of the ordinary shares outstanding in Liontown via a scheme of arrangement (Indicative
Proposal).
Prior to receipt of this Indicative Proposal, Liontown was in advanced stage discussions with various parties to secure
additional sources of funding for the Project.
Discussions with respect to securing the required additional funding have continued to progress following the
announcement of the Indicative Proposal, and the subsequent agreement to grant Albemarle an exclusive period to
undertake due diligence to enable it to put forward a binding proposal, however completion of these fund raising
activities has been deferred pending completion of the due diligence.
On completion of the due diligence, should Albemarle not make a binding offer to acquire all of Liontown’s ordinary
shares, based on the advanced nature of fund raising activities from additional sources prior to announcement of the
Indicative Proposal, and the further discussions with various parties through to the date of approval of this report, the
Directors are confident that the additional funding will be secured in accordance with the required timeline noted
above, allowing development activities to progress as planned.
The directors reasonably believe that they will achieve the matters set out above and therefore that the going concern
basis of preparation is appropriate.
Should the Group be unable to achieve the additional funding above, there is a material uncertainty that may cast
significant doubt as to whether the Group will be able to continue as a going concern and, therefore, whether it will
realise its assets and discharge its liabilities in the normal course of business.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue
as a going concern.
3 0 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
74 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
Performance for the Year
This section provides additional information about those individual line items in the consolidated statement of profit or
loss and other comprehensive income that the Directors consider most relevant in the context of the operations of the
entity.
4. Segment Reporting
The Group has one reportable operating segment which is exploration and development of minerals in Western
Australia. The Group’s operating segment has been determined with regard to information and reporting provided to
the Group’s decision makers which are used to make strategic decisions regarding the Group’s resources. The
Managing Director is considered to be the chief decision maker. Reports to the Managing Director and the Board are
based upon the Group as one segment and the financial results of this segment are equivalent to the financial
statements of the Group as a whole.
5. Other Income and Expenses
(a) Other income and gain on demerger
Other income (1)
Gain on demerger (2)
2023
$’000
496
-
496
2022
$’000
1,314
90,960
92,274
(1)
(2)
Includes sale of the Toolebuc Vanadium Project tenements to Currie Rose Resources Inc for $0.3m (refer note 11).
Fair value gain on demerger of Minerals 260 Limited (refer note 17).
Accounting policy
Other income is recognised when it is received or when the right to receive payment is established.
(b) Corporate and administration expenses
Administration and general costs
Business development costs
Depreciation and amortisation
Personnel expenses (5(c))
Minerals 260 demerger and IPO costs
Currency (Gain) / Loss
(c) Personnel expenses
Directors’ fees, employee wages and salaries
Other associated personnel expenses
Leave entitlements
(d) Exploration and evaluation expenditure
Exploration Expenditure
Kathleen Valley, WA
Buldania, WA
Other (1)
2023
$’000
8,212
-
322
9,418
-
90
18,042
2023
$’000
7,299
1,863
256
9,418
2023
$’000
1,042
5,905
687
7,634
2022
$’000
3,446
2,017
226
4,000
680
-
10,369
2022
$’000
3,199
608
193
4,000
2022
$’000
3,962
1,549
319
5,830
3 1 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 75
Notes to the Consolidated Financial Statements (Continued)
Feasibility Studies and evaluation
Kathleen Valley, WA – Expansion and other evaluation
Kathleen Valley, WA – Definitive Feasibility Study and other evaluation
Royalty Acquisition (2)
2023
$’000
4,036
-
4,036
-
11,670
2022
$’000
-
2,606
2,606
30,250
38,686
(1)
(2)
During FY2022, the Company demerged the subsidiary Minerals 260 Limited which held the Moora Gold-Nickel-Copper-PGE Project, a right to earn an
interest in the Koojan JV Project, Dingo Rocks Project and the Yalwest Project. Other includes amounts related to these projects prior to demerging.
In August 2021 the Company completed an agreement to terminate the lithium royalty (that covered the majority of the Kathleen Valley Lithium Project)
owned by Ramelius Resources Ltd for $30.25M consideration in cash.
Accounting policy
Costs incurred in the exploration and evaluation stages of specific areas are expensed in the consolidated statement
of profit or loss and other comprehensive income as incurred. All exploration and evaluation expenditure, including
general permit activity, geological and geophysical costs, project generation and drilling costs, are expensed as
incurred. In addition, costs associated with acquiring interests in new exploration licences and study related costs are
also expensed. Once the technical feasibility and commercial viability of extracting a mineral resource is demonstrable
in respect to an area of interest, development expenditure is capitalised to the consolidated statement of financial
position.
(e) Net financing income
Interest income
Interest expense
Accounting policy
2023
$’000
11,564
(231)
11,333
2022
$’000
1,302
(18)
1,284
Net financing costs comprise interest receivable on funds invested, finance costs associated with lease liabilities for
right-of-use assets and interest expense on a government funded bond facility which the Company is progressively
cash backing. Please refer to note 11 for further information regarding the government funded bond facility.
Interest income is recognised in the consolidated statement of profit or loss and other comprehensive income as it
accrues, using the effective interest method. The interest expense component of lease liabilities is recognised in the
consolidated statement of profit or loss and other comprehensive income using the effective interest method.
6. Income Tax
Components of income tax as follows:
Current tax
Deferred tax
Total income tax benefit/(expense) reported in the statement of profit
of loss and other comprehensive income
Numerical reconciliation between tax expense and pre-tax net loss:
Profit/(loss) before tax
Income tax benefit using the domestic corporation tax rate of 30%
(2022 : 30%)
Decrease in income tax benefit due to:
Non-deductible expenses
Non-assessable income
Deferred tax assets and liabilities not recognised
Derecognition of tax assets
3 2 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
76 | Liontown Resources | FY23 Annual Report
2023
$’000
-
192
192
2023
$’000
(22,405)
(6,721)
1,366
-
5,355
-
2022
$’000
-
(492)
(492)
2022
$’000
41,347
12,404
954
(27,288)
13,930
(492)
Notes to the Consolidated Financial Statements (Continued)
Recognised tax losses to offset DTL on financial assets
Income tax benefit/(expense) on loss before tax
Recognised deferred tax balances
Deferred tax assets comprise:
Revenue tax losses recognised
Deferred tax liabilities comprise:
Investment in Equity Securities
Other deferred tax liabilities
Net DTA / (DTL)
2023
$’000
192
192
2023
$’000
655
(192)
(463)
-
2022
$’000
-
(492)
2022
$’000
-
-
-
Income tax in the consolidated statement of profit or loss and other comprehensive income comprises current and
deferred tax. Income tax is recognised in the consolidated statement of profit or loss and other comprehensive income
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on all temporary differences at balance date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance date.
Deferred tax assets of $0.7 million (2022: nil) were used to net off deferred tax liabilities including $0.2 million (2022:
nil) resulting from the fair-value gain recorded on financial assets which was recognised through other comprehensive
income.
Unrecognised deferred tax assets and liabilities for the Group are attributable to the following:
Assets
Revenue losses available to offset against future taxable income
Other deferred tax assets
Liabilities
Other deferred tax liabilities
2023
$’000
24,249
10,049
34,298
2022
$’000
16,982
11,773
28,755
-
-
(142)
(142)
The unrecognised benefit from temporary differences on capital items amounts to $2,898,298 (2022 $3,924,412).
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that
the related tax benefit will be realised.
Liontown and its 100% owned Australian resident subsidiaries have implemented the tax consolidation legislation.
Current and deferred amounts are accounted for in each individual entity as if each entity continued to act as a
taxpayer on its own. The Company recognises its own current and deferred tax amounts and those current tax
liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it
has assumed from its controlled entities within the tax consolidated Group.
3 3 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 77
Notes to the Consolidated Financial Statements (Continued)
7. Earnings/(Loss) Per Share
The calculation of basic earnings per share at 30 June 2023 is based on the loss attributable to ordinary shareholders
of the parent entity and a weighted average number of ordinary shares outstanding during the year ended 30 June
2023.
The weighted average number of ordinary shares outstanding during the financial years comprised the following:
Profit/(loss) attributable to ordinary shareholders for basic earnings ($’000)
Weighted average number of ordinary shares on issue at the end of the year
(’000)
Weighted average number of ordinary shares (diluted) on issue at the end of
the year (’000)
Basic (loss)/earnings per share (dollars per share)
Diluted (loss)/earnings per share (dollars per share)
Accounting policy
2023
(22,213)
2022
40,855
2,197,047
2,061,199
2,197,047
2,076,969
$(0.010)
$(0.010)
$0.020
$0.020
Basic earnings/loss per share is calculated as net profit/loss attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings/loss per share is calculated as net profit/loss attributable to members of the parent, adjusted for:
•
•
•
•
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
4,000,000 options (2022: 500,000 options) and 10,648,835 performance rights (2022: nil) were excluded from the
diluted earnings (loss) per share calculation.
Share-Based Payments
This section of the notes includes information that must be disclosed to comply with accounting standards and other
pronouncements relating to the provision of services and remuneration of employees and consultants of the Group,
but that is not immediately related to individual line items in the Consolidated Financial Statements.
8. Share-Based Payments
Employee securities incentives
The Company provides benefits to employees (including Directors) in the form of share-based payment transactions,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
The Company currently provides benefits under an Employee Securities Incentive Plan (Incentive Plan). The Incentive
Plan was last approved by Shareholders at the 2021 AGM.
The total expenditure recognised in the consolidated statement of profit and loss and comprehensive income is
$4,522,118, (2022: $3,155,518).
Under the terms of the Incentive Plan, the Board may offer equity securities (i.e. options, performance or service rights)
at no consideration to full-time or part-time employees (including persons engaged under a consultancy agreement)
and executive and non-executive directors.
Options issued
No options were issued during the 2023 financial year.
Each option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price for
the options. The exercise price for the options is such price as determined by the Board. An option may only be
exercised after that option has vested and any other conditions imposed by the Board on exercise are satisfied. The
Board may determine the vesting period, if any.
There are no voting or dividend rights attached to the options. There are no voting rights attached to the unissued
ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been exercised.
3 4 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
78 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
The following unlisted options were on issue at the end of the year:
Series
Number
Grant date
Expiry Date
Exercise
Price (1)
$
Fair Value at
Grant Date
$
Vesting Date
O20
O23
O24
TOTAL
(1) As a result of the Minerals 260 Demerger and as announced on 26 November 2021, the option exercise price of 12,333,334 options on issue at the date
1,000,000
2,500,000
500,000
4,000,000
25-Nov-23
9-Feb-24
23-Nov-24
25-Nov-20
1-May-23
24-Nov-21
25-Nov-20
10-Feb-21
24-Nov-21
0.1549
0.2180
0.7783
0.2979
0.5779
2.4500
of the demerger was reduced by $0.0021 per option.
The number and weighted average exercise prices of share options is as follows:
Weighted
Average
Exercise
Price
2023
$
Number of
Options
2023
Weighted
Average
Exercise Price
2022
$
Number of
Options
2022
Outstanding at beginning of the year
Granted during the period
Exercised during the period
Lapsed/expired during the period
Adjustment to exercise price for Minerals 260
Demerger (1)
-
0.742
Outstanding at the end of the year
Exercisable at the end of the year
0.742
(1) As a result of the Minerals 260 Demerger and as announced on 26th November 2021, the option exercise price of 12,333,334 options on issue
36,900,000
500,000
(24,566,666)
-
12,833,334
-
(8,833,334)
-
-
12,833,334
10,333,334
-
4,000,000
4,000,000
0.233
2.450
0.185
-
0.411
-
0.261
-
(0.002)
0.411
0.370
at the date of the demerger was reduced by $0.0021 per option.
The weighted average contractual life remaining as at 30 June 2023 is 0.66 years (2022: 1.08 years).
The weighted average fair value of options granted during the year was nil (2022: $0.778).
Non-market performance conditions are not taken into account in the grant date fair value measurement of the
services received.
The following share options were exercised during the year:
Series
2023
Exercised
Exercise Date
O17
O18
O20
O22
TOTAL
Number
2,000,000
3,333,334
1,000,000
2,500,000
8,833,334
4 May 2023
11 Aug 2022
18 Aug 2022
9 Feb 2023
Share
Price at
Exercise
Date
$
2.75
1.80
1.71
1.46
The fair value of the options is estimated at the grant date using a Black Scholes option-pricing model considering the
terms and conditions upon which the options were granted. Refer to the table below for weighted average inputs to
the Black Scholes option-pricing model:
Share price at grant date (weighted average)
Exercise price (weighted average)
Expected volatility (weighted average)
Expected life (weighted average years)
Vesting period (weighted average years)
Expected dividends
Risk-free interest rate (weighted average)
2023
-
-
-
-
-
-
-
2022
$1.805
$2.45
78%
3
Nil
Nil
0.99%
3 5 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 79
Notes to the Consolidated Financial Statements (Continued)
Performance rights issued
During the 2023 financial year 6,483,623 performance rights were issued. As at 30 June 2023, a total of 10,648,835
performance rights were on issue to some directors and employees. Specific performance hurdles are required to be
achieved (including market, non-market based and employment status) and are subject to Board approval before the
performance rights can vest. Performance rights granted have an expiry date and nil exercise price. The fair value of
the performance rights is calculated as at grant date.
A summary of the performance rights on issue during the year is as follows:
30 June 2023
Grant date
Opening
Balance
Granted
Vested
Exercised
Outstanding at 30 June
2023
Share Price
at Date of
grant ($)
Unvested
Vested
4 May 2021
6,386,948
-
2,221,736
2,221,736
4,165,212
21 Nov 2022
9 Feb 20023
30 June 2023
-
-
-
4,633,845
791,065
1,058,713
-
-
-
-
-
-
4,633,845
791,065
1,058,713
Total
6,386,948
6,483,623
2,221,736
2,221,736
10,648,835
0.400
2.030
1.455
2.830
-
-
-
-
-
Details of performance rights issued during the year is as follows:
Series Number
Grant date
Expiry date
Exercise
Price ($)
Fair value at grant date
($)
Vesting date
PR5
PR5
PR6
PR6
PRR
1,351,444
21 Nov 2022
30 June 2025
279,199
9 Feb 2023
30 June 2025
3,282,401
21 Nov 2022
30 June 2027
511,866
9 Feb 2023
30 June 2027
1,058,713
30 June 2023
31 Mar 2025
-
-
-
-
-
Total
6,483,623
2.007
1.498
2.007
1.498
2.852
30 June 2023
30 June 2023
30 June 2025
30 June 2025
31 Dec 2024
Other share-based payments
Shares
During the 2023 financial year, the Company issued 184,188 shares to employees. 131,454 shares were issued under
the Incentive Plan to employees in August 2022 in lieu of cash bonuses for the 2022 financial year, with a fair value of
$182,971. A further 52,734 shares were issued as a sign on incentive in February 2023 with a fair value of $84,256.
During the 2022 financial year the Company issued 500,000 shares to a consultant of the Company as consideration
for work performed. The fair value of the shares issued was $820,000.
Options
During the financial year the company issued nil (2022: nil) unlisted share options that were issued outside the Incentive
Plan (Non-Incentive Plan).
Each option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price for
the options. The exercise price for the options is determined by the Board. An option may only be exercised after that
option has vested and any other conditions imposed by the Board on exercise are satisfied. The Board may determine
the vesting period, if any.
There are no voting or dividend rights attached to the options. There are no voting rights attached to the unissued
ordinary shares. Voting rights will be attached to the unissued ordinary shares when the options have been exercised.
There were no Non-Incentive Plan unlisted options on issue at the end of the year.
3 6 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
80 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
The number and weighted average exercise prices of Non-Incentive Plan options is as follows:
Weighted
Average
Exercise
Price
2023
$
Number of
Options
2023
Outstanding at beginning of the year
Granted during the period
Exercised during the period
Outstanding at the end of the year
Exercisable at the end of the year
-
-
-
-
-
Weighted
Average
Exercise
Price
2022
$
Number of
Options
2022
-
-
-
-
-
0.035
-
0.035
-
-
1,500,000
-
(1,500,000)
-
-
Non-market performance conditions are not taken into account in the grant date fair value measurement of the
services received.
The following Non-Incentive Plan share options were exercised during the year:
Series
2023
Exercised
Exercise Date
O14
O14
O14
Total
Number
-
-
-
-
-
-
-
Share Price
at Exercise
Date
$
-
-
-
2022
Exercised
Exercise Date
Number
500,000
500,000
500,000
1,500,000
6-Jul-21
29-Jul-21
2-Aug-21
Share Price
at Exercise
Date
$
0.728
0.750
0.812
Accounting policy
The cost of equity-settled transactions with employees and KMP and those providing similar services are measured by
reference to the fair value of the share options or performance rights at grant date.
In valuing equity-settled transactions, account is taken of any performance conditions, conditions linked to the price
of the shares of the Company (market conditions) and non-market conditions. The cost of equity-settled transactions
is recognised, together with a corresponding increase in equity, over the period in which the performance conditions
are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
(i)
(ii)
the extent to which the vesting period has expired; and
the number of awards that, in the opinion of the Directors, will ultimately vest. This opinion is formed based on
the best available information at balance date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon
a market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any increase in the value of the transaction arising from
the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options and rights is reflected as additional share dilution in the computation
of earnings per share.
Significant accounting judgements and key estimates
The Group measures the cost of equity-settled share-based payments at fair value at the grant date using a Black
Scholes or Monte Carlo simulation pricing model taking into account the terms and conditions upon which the
instruments were granted and the assumptions outlined in this note.
The expected life of the share-based payments is based on historical data and is not necessarily indicative of exercise
patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of
future trends, which may also not necessarily be the actual outcome.
3 7 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 81
Notes to the Consolidated Financial Statements (Continued)
The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on
the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and
equity.
Assets
This section provides additional information about those individual line items in the consolidated statement of financial
position that the Directors consider most relevant in the context of the operations of the entity.
9. Cash and Cash Equivalents
Cash at bank(1)
Term deposits
Petty cash
2023
$’000
130,438
175,000
-
305,438
2022
$’000
28,057
425,018
1
453,076
(1)
$970,080 of cash held at 30 June 2023 relates to supplier retentions, held under the Building and Construction Industry (Security of Payment) Act 2021.
Reconciliation of profit/(loss) after income tax to net cash flows from operating activities:
Profit/(loss) for the year
Depreciation and amortisation
Interest expense
Gain on demerger, net of costs
(Gain) from disposal of tenement
Share-based payments
Loss on asset disposal
Changes in operating assets and liabilities:
(Increase) in trade and other receivables
Increase/(decrease) in trade and other payables
(Increase)/decrease in deferred taxes
Increase in provisions
Net operating cash flows
Non-cash and financing activities
2023
$’000
(22,213)
322
231
-
(349)
4,522
-
(17,487)
(4,547)
5,065
(192)
809
(16,352)
2022
$’000
40,855
226
18
(90,280)
-
3,156
1
(46,024)
(1,152)
(439)
492
117
(47,006)
During the year the Company made additions of $6,507,973 to right-of-use assets gross of lease incentives received
of $1,439,178 (2022: $222,614).
Changes in liabilities arising from financing activities
Balance at 30 June 2021
Additions
Interest expense
Payments
Balance at 30 June 2022
Additions
Interest expense
Payments
Balance at 30 June 2023
Lease
Liability
$’000
76
223
17
(85)
231
6,508
180
(880)
6,039
3 8 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
82 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
Accounting policy
Cash and cash equivalents comprise cash balances and term deposits with an original maturity of three months or less,
which are subject to an insignificant risk of changes in value. The carrying value of cash and cash equivalents is
considered to approximate fair value.
10. Trade and Other Receivables
Current – Trade and other receivables
Trade and other receivables (1)
Prepayments
2023
$’000
7,048
365
7,413
2022
$’000
1,112
326
1,438
(1)
Trade and other receivables includes GST receivable, interest receivable and recharges to suppliers. There was no expected credit loss at balance date.
Accounting policy
Trade receivables and other receivables are initially recognised at transaction price and subsequently at the amortised
cost after providing for expected credit losses. Trade receivables are generally due for settlement within periods
ranging from 30 to 60 days. Any expected credit loss is provided for.
11. Financial Assets
Current – Financial assets
Bank and other guarantees
Non-current – Financial assets
Investment in equity securities
Other financial assets
2023
$’000
11,409
11,409
2023
$’000
1,352
85
1,437
2022
$’000
-
-
2022
$’000
480
78
558
Accounting policy
The value of equity securities held as an investment are initially measured at fair value. These are assessed at reporting
date to ensure their separate carrying values represents their fair value. Any fair value movements (net of tax) are
recorded through the Investment Revaluation reserve and through Other Comprehensive Income.
Investments held in Equity Securities
The Company received 40,000,000 shares in Lachlan Star Limited (ASX: LSA) in April 2021 for the sale of the Killaloe
Gold Project. These shares have been revalued at year end to market value, based on Lachlan Stars share price on ASX
at 30 June 2023.
The Company received 12,500,000 shares in Currie Rose Resources Inc (TSX: CUI) in August 2022 for the sale of the
Toolebuc Vanadium Project. These shares have been revalued at year end to market value, based on the Currie Rose
Resources Inc share price on the TSX at 30 June 2023.
The Board views both shareholdings as long-term investments and as such have elected to designate this investment
as at Fair Value through Other Comprehensive Income. Fair value changes on the investment are therefore accounted
for through Other Comprehensive Income and in equity through an Investment Revaluation Reserve (refer note 18).
The financial asset is level 1 in the fair value measurement hierarchy.
Bank & Other Guarantees
During the year, the Company secured a $25 million demand guarantee facility from Export Finance Australia (EFA) as
part of the security package underpinning the construction of the Hybrid Power Station at Kathleen Valley. The terms
of the guarantee require the Company to make incremental cash payments to EFA to cover the $25 million guarantee
facility. At reporting date, the Company had deposited $10 million in an interest bearing account with EFA.
3 9 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 83
Notes to the Consolidated Financial Statements (Continued)
12. Property, Plant and Equipment
2023
Cost
Accumulated depreciation
Net book value
Opening net book value
Additions
Disposals
Depreciation charge
Net book value
2022
Cost
Accumulated depreciation
Net book value
Opening net book value
Additions
Disposals
Depreciation charge
Net book value
Mine
Properties
Plant and
equipment
Right-of-use
assets
Assets under
construction
$’000
$’000
$’000
$’000
Total
$’000
9,520
-
9,520
186
9,334
-
-
9,520
186
-
186
-
186
-
-
186
4,887
(331)
4,556
473
4,234
(9)
(142)
4,556
661
(188)
473
181
394
(12)
(90)
473
5,291
(713)
4,578
148
5,068
-
(638)
4,578
369
(221)
148
61
223
-
(136)
148
310,805
330,503
-
(1,044)
310,805
329,459
26,178
26,985
284,627
303,263
-
-
(9)
(780)
310,805
329,459
26,178
27,394
-
(409)
26,178
26,985
-
242
26,178
26,981
-
-
(12)
(226)
26,178
26,985
At 30 June 2023 the Group had outstanding contractual capital commitments of $211.6 million (2022: $62.0 million)
which are expected to be settled prior to 30 June 2024.
Accounting policy
Mine properties
Mine property assets include costs incurred in accessing the ore body and costs to develop the mine to the production
phase once the technical feasibility and commercial viability of a mining operation has been established. Assets are
stated at historical cost less accumulated amortisation and any accumulated impairment losses recognised. The initial
cost of an asset comprises of its purchase price or construction cost, any costs directly attributable to bringing the
asset into operation and the estimate of the rehabilitation costs.
Plant and equipment
Plant and equipment assets are stated at historical cost less accumulated depreciation and accumulated impairment
losses recognised. Historical cost includes expenditure that is directly attributable to the acquisition of the items and
costs incurred in bringing the asset into use. Items of plant and equipment that were initially recognised are
derecognised upon disposal or when no future economic benefit is expected from its use or disposal. Gains or losses
arising on derecognition of the asset are included in the Consolidated Statement of Profit or Loss when the asset is
derecognised.
Right-of-use asset
The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. The
recognised right-of-use assets are depreciated on a straight-line basis over the lease term. Right-of-use assets are
subject to impairment.
Assets under construction
Assets under construction include the cost of developing mine property and plant and equipment assets once the
technical feasibility and commercial viability of a project has been established. When construction is completed, or
commercial production has been determined the asset is reclassified to the relevant category of property, plant and
equipment.
4 0 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
84 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
Development expenditure includes the direct costs of construction, pre-production costs and qualifying borrowing
costs incurred during the construction phase. During the year, $0.04 million of borrowing costs and $1.5 million of
interest were capitalised into Assets under construction (refer note 16). These costs are not amortised until the asset
is determined to be available for use. The carrying value is assessed for impairment whenever the facts and
circumstances suggest that the carrying amount of the asset may exceed the recoverable amount.
13. Other Assets
Borrowing costs
2023
$’000
-
2022
$’000
5,001
Borrowing costs relate to the $300 million debt facility the Company executed in late June 2022 with the Ford Motor
Company. The facility was not available for use as at 30 June 2022. The first tranche of facility funding was drawn down
in April 2023 and the borrowing costs were transferred to offset borrowing liabilities on the consolidated statement of
financial position. The borrowing costs will be amortised over the term of the debt facility (refer note 16).
Accounting policy
Borrowings are initially measured at fair value less any directly attributable borrowing costs. Subsequent to initial
recognition, these liabilities are measured and amortised at cost using the effective interest method.
Equity and Liabilities
14. Trade and Other Payables
Trade payables
Accrued expenses
Other payables
Accounting policy
2023
$’000
2,765
69,180
1,544
73,489
2022
$’000
403
18,857
204
19,464
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months.
4 1 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 85
Notes to the Consolidated Financial Statements (Continued)
15. Provisions
Current
Annual leave
Other accrued employee entitlements
Non-Current
Restoration and rehabilitation
Provision for long service leave
Other provisions
Reconciliation of rehabilitation and restoration costs:
Opening book value
Revision of provision during the year
Expenditure on rehabilitation and restoration
Discount unwound
Accounting policy
2023
$’000
1,089
5
1,094
9,520
27
17
9,564
2023
$’000
186
9,334
-
-
9,520
2022
$’000
292
5
297
186
18
15
219
2022
$’000
-
186
-
-
186
Liabilities for employee benefits for annual leave and other current entitlements represent present obligations
resulting from employees' services provided to reporting date, calculated at undiscounted amounts based on
remuneration wage and salary rates that the consolidated entity expects to pay as at reporting date, including related
on-costs.
The Group’s obligation in respect of long-term employee benefits such as long service leave is the amount of future
benefit that employees have earned in return for their service in the current and prior periods. That benefit is
discounted to determine its present value using corresponding government bond yields as a discount rate.
Provision for rehabilitation and restoration costs include the dismantling and removal of plant, equipment and other
structures, rehabilitation of the site as required by mining permits granted and other waste removal. The provision is
calculated on disturbed areas at reporting date and is determined using estimates of future costs. Estimates for future
rehabilitation cash flows are discounted to their present value.
Rehabilitation and restoration costs are recognised in full at present value as a non-current liability and a
corresponding asset is recognised for the same value. The capitalised asset is amortised over the life of the project.
The provision for rehabilitation and restoration costs are increased over time as the discounted present value is
unwound and expensed as a finance cost. The discount rate used to determine the present value is the Australian risk
free rate which approximates the estimated time period for when the majority of future rehabilitation costs are
expected to be incurred.
The Group assesses its rehabilitation and restoration provision at each reporting date. Significant estimates and
assumptions are made in determining the provision as there are numerous factors that will affect the ultimate amount
payable. These factors include estimates of the extend, timing and costs of rehabilitation activities, technological
changes, regulatory changes, cost increases as compared to the inflation rates, and changes in discount rates. These
uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision at
reporting date represents management’s best estimate of the present value of the future rehabilitation costs.
The key assumptions used are as follows:
•
•
Life of mine of 23 years
Inflation rate of 2.5% per annum
• Discount rate of 4.25% per annum
4 2 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
86 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
16. Interest Bearing Loans and Borrowings
Secured
Debt Facility
Other Loans
Total Borrowings
Current
$’000
-
42
42
2023
Non-
Current
$’000
115,082
110
115,192
Total
Current
$’000
$’000
2022
Non-
Current
$’000
115,082
152
115,234
-
-
-
-
-
-
Total
$’000
-
-
-
Reconciliation of interest bearing loans and borrowings:
Balance at 30 June 2021
Additions
Interest
Payments
Borrowing Costs
Balance at 30 June 2022
Additions
Interest
Payments
Borrowing Costs
Balance at 30 June 2023
Accounting policy
Debt Facility
$’000
Other Loans
$’000
Total
$’000
-
-
-
-
-
-
118,749
1,507
-
(5,174)
115,082
-
-
-
-
-
-
158
1
(7)
-
152
-
-
-
-
-
-
118,907
1,508
(7)
(5,174)
115,234
Borrowings are initially recognised at fair value, net of borrowing costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of borrowing costs) and the redemption amount
is recognised in profit or loss over the period of borrowings using the effective interest rate method. If the proceeds of
the loan have been deployed for project development, the difference between the proceeds (net of borrowing costs)
and the redemption amount is capitalised to the relevant asset using the effective interest rate method. Fees paid on
establishment of loan facilities are recognised as borrowing costs of the loan and are amortised over the repayment
period of the facility.
Ford Debt Facility
The Company entered into a Funding Facility with a subsidiary of the Ford Motor Company to partially fund the
development costs of the Kathleen Valley Lithium Project in June 2022.
The terms of the Ford debt facility are as follows:
Total debt facility of up to $300 million.
•
• Draw down condition of minimum spend on Kathleen Valley Lithium Project.
•
•
• Maturity date of five years from the commencement of supply.
• Quarterly repayments over the life of the loan, from commencement of supply with a balloon payment upon
Interest rate of 1.5% per annum + Australian Bank Bill Swap Rate, updated quarterly.
Interest capitalised until earliest of commencement of supply or 1 September 2025.
maturity.
• Senior security over Kathleen Valley Lithium Project assets and shares held in the borrower in the wholly
owned subsidiary, LRL (Aust) Pty Ltd.
On 4th April 2023, the first draw down of the facility was made of $118.7 million. $5.2 million of borrowing costs were
reclassified from Other Assets to Borrowings during the year. Using the effective interest rate method, $0.04 million
of borrowing costs and $1.5 million of interest was amortised from 4th April to 30 June 2023 and capitalised into Asset
Under Construction.
4 3 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 87
Notes to the Consolidated Financial Statements (Continued)
17. Capital and Capital Management
Ordinary shares on issue:
On issue at the beginning of the year
Rights issues and placements (1) (2)
Issue of shares for unlisted options (3)
Issue of shares (share purchase plan) (4)
Issue of shares for performance rights (7)
Issue of shares to employees (incentive plan)
(8)
Issue of shares for consulting services (5)
Less reduction in share capital (6)
Less share issue costs
Movement during the year
On issue at the end of the year
2023
2022
No. (‘000)
$’000
No. (‘000)
$’000
2,192,225
-
7,937
-
1,909
184
-
-
-
10,030
2,202,255
576,219
-
298
-
-
267
-
-
(50)
515
576,734
1,819,110
341,147
23,648
7,820
-
-
500
-
-
373,115
2,192,225
77,922
501,999
1,993
12,903
-
-
820
(4,100)
(15,318)
498,297
576,219
(1) On 22 July 2021, the Company completed a placement to raise $52 million (before costs) by issuing 68,420,000 fully paid ordinary shares at
an issue price of $0.76 per share.
(2) On 7 December 2021, the Company completed a placement to raise $450 million (before costs) by issuing 272,727,273 fully paid ordinary
(3)
shares at an issue price of $1.65 per share.
In FY2023, 7,833,334 options were exercised on a cashless basis for 6,936,817 ordinary shares. 1,000,000 additional options were exercised
with an exercise price of $0.2979 per share. In FY2022, 12,091,666 options were exercised on a cashless basis for 9,673,401 ordinary shares.
(4) On 4 February 2022, the Company completed a Share Purchase Plan to raise $12.9 million by issuing 7,819,543 fully paid ordinary shares at
an issue price of $1.65 per share.
(5) 5.The shares were recognised as share-based payments and were expensed during the year.
(6) Refer to the note below and the announcement dated 26 November 2021 for further information regarding reduction in share capital in relation
(7)
(8)
to the demerger of Minerals 260 Limited.
In FY2023, 1,909,383 performance rights vested and were issued to KMP and other employees. The shares were issued for nil consideration.
In FY2023, 184,188 shares were issued to employees in lieu of cash bonuses under the Incentive Plan. The shares were issued for nil
consideration and were recognised as share based payments and expensed during the year.
Demerger of Minerals 260 Limited
On 1 October 2021, by way of an in-specie distribution, the Company completed the demerger of Minerals 260 Limited
(a wholly owned subsidiary). The demerger was undertaken to divest the non-lithium exploration assets in Western
Australia. Projects divested include Moora, Koojan JV, Dingo Rocks and Yalwest.
The fair value of Minerals 260 at the date of demerger was determined to be of $90.96 million calculated using the
volume weighted average price (VWAP) of Mineral 260s’ shares as traded on the ASX over the first five trading days
after the IPO date ($0.5685) multiplied by the number of Mineral 260s’ shares on initial listing (160,000,000). The
demerger has no tax impact for the Group and the demerged assets were carried at zero value resulting in the fair
value being equal to the gain on demerger.
The demerger distribution is accounted for as a reduction in equity, split between a reduction in share capital of $4.10
million and a reduction in accumulated losses (Demerger Dividend) of $86.86 million. The amount treated as a reduction
in share capital has been calculated by reference to the market value of Mineral 260 Limited’s shares and the market
value of the Company’s shares post demerger. The difference between the fair value and the capital reduction amount
is the Demerger Dividend.
Refer to the announcement dated 26 November 2021 for further information regarding the Australian Tax Office Class
Ruling 2021/81 and reduction in share capital in relation to the demerger of Minerals 260 Limited.
Accounting policy
Issued share capital is recognised at the fair value of the consideration received by the Company. Any borrowing costs
arising on the issue of ordinary shares are recognised, net of tax, directly in equity as a reduction of the share proceeds
received.
Ordinary shares entitle the holder to participate in dividends in proportion to the number of and amounts paid on the
shares held.
On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote
and upon a poll, each share is entitled to one vote.
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return
to shareholders.
4 4 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
88 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
18. Reserves
Share-based payments reserve
Investment revaluation reserve
Foreign currency translation reserve
Total Reserves
Share-based payment reserve
2023
$’000
5,877
212
139
6,228
2022
$’000
3,292
(120)
139
3,311
The share-based payments reserve is used to record the value of equity benefits provided to employees and directors
as part of their remuneration and other parties as part of their compensation for services. Refer to note 8 for further
details of share-based payment plans.
Balance at beginning of the financial year
Share-based payments
Transfers to Accumulated Losses and Share Capital
Investment revaluation reserve
2023
$
3,292
4,255
(1,670)
5,877
2022
$
2,747
2,336
(1,791)
3,292
The investment revaluation reserve is used to record the fair value movement of investments in listed equity securities
at balance date. Refer to note 11 for further details.
Balance at beginning of the financial year
Fair value movement on revaluation of financial assets
Tax effect on investment revaluations and disposals
Balance at the end of the financial year
Foreign currency translation reserve
2023
$’000
(120)
524
(192)
212
2022
$’000
1,148
(1,760)
492
(120)
The foreign currency translation reserve is used to record the exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
Financial Instruments
19. Financial Instruments
(a) Capital risk management
The capital structure of the Group consists of equity attributable to equity holders, comprising issued capital, reserves
and accumulated losses as disclosed in notes 17 and 18, and in the consolidated statement of financial position. A $300
million debt facility was executed in late June 2022 with the Ford Motor Company. The first draw down of the facility
was made in April 2023 of $118.7 million.
The Board reviews the capital structure on a regular basis and considers the cost of capital and the risks associated
with each class of capital. The Group will balance its overall capital structure through new share issues as well as debt
funding or refinancing of debt (where appropriate), if the need arises.
(b) Market risk
Market risk is the risk that changes in market prices such as foreign exchange rates, equity prices, commodity prices
and interest rates will affect the Group’s income or value of its holdings of financial instruments.
The Group currently has exposure to both equity price risk and interest rate risk. As part of the Kathleen Valley Lithium
Project development and operations, the Company will have exposure to commodity price risk. The Board reviews the
exposure to these risks on a regular basis to ensure that the Group is not adversely affected by movements in these
exposures.
4 5 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 89
Notes to the Consolidated Financial Statements (Continued)
(c) Foreign exchange rate risk
The Group undertakes certain transactions denominated in foreign currencies, hence has exposure to exchange rate
fluctuations. The Group does not currently hedge this exposure. The Group currently has no significant exposure to
foreign exchange rates.
The Board reviews the exposure to these risks on a regular basis to ensure that the Group is not adversely affected by
movements in these exposures.
(d) Interest rate risk
Interest rate risk is the risk that changes in deposit or borrowing rates either affects the consolidated entity’s income
and future cash flow from interest income in the cash of deposits or affects the consolidated entity’s expenses and
future cash outflow on interest expenses in the case of borrowings.
The exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and
financial liabilities is set out below:
Interest Maturing in:
2023
<1 Year
$’000
1-5 Years
$’000
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Interest bearing loans and
borrowings
-
-
11,409
-
(1,210)
(42)
Floating
Interest
$’000
Non-
Interest
Bearing
$’000
-
-
-
305,438
-
-
-
7,413
1,437
-
(4,829)
(115,192)
-
-
-
(73,489)
-
-
Weighted
Average
Interest Rate
%
3.03
-
3.15
-
8.79
5.57
Total
$’000
305,438
7,413
12,846
(73,489)
(6,039)
(115,234)
Interest Maturing in:
2022
<1 Year
$’000
1-5 Years
$’000
Floating
Interest
$’000
Non-
Interest
Bearing
$’000
Weighted
Average
Interest Rate
%
Total
$’000
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets
Financial liabilities
Trade and other payables
Lease liabilities
-
-
78
-
(178)
-
-
-
-
(53)
453,075
-
-
1
1,438
-
453,076
1,438
78
-
-
(19,464)
-
(19,464)
(231)
1.37
-
0.03
-
8.85
An increase of 100 basis points in interest rates on bank balances, term deposits and interest bearing liabilities over
the reporting period would have increased the Group’s profit by $3,940,067 (2022: $2,648,672). A decrease of 100
basis points in interest rates (other than where a decrease would result in negative interest rates) would have
decreased the Group’s profit by $3,940,067 (2022: $1,236,836).
The Company also pays interest costs at the Bank Bill Swap Rate (BBSW) plus a fixed margin of 1.5% on funding
provided under the Ford financing facility. The Company has exposure to Interest rate risk on movements in the BBSW
rate.
(e) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations. The consolidated entity’s exposure to credit risk is not significant and currently arises
principally from sundry receivables which represent an insignificant proportion of the Group’s activities and cash and
cash equivalents.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the notes to
the financial statements.
4 6 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
90 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
(f) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board
actively monitors the Group’s ability to pay its debts as and when they fall due by regularly reviewing the current and
forecast cash position based on the expected future activities.
30 June 2023
Trade and other
payables
Lease Liabilities
Interest bearing loans
and borrowings
Less than
6 months
$’000
73,489
899
23
6 to 12
months
$’000
1 to 2
years
$’000
2 to 5
years
$’000
Over 5
years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
-
848
23
-
-
-
-
73,489
1,715
32,163
2,866
98,817
1,349
7,677
6,039
-
131,026
115,234
30 June 2022
Less than
6 months
$’000
6 to 12
months
$’000
1 to 2
years
$’000
2 to 5
years
$’000
Over 5
years
$’000
Total
contractua
l cash
flows
$’000
Carrying
amount
$’000
Trade and other payables
19,464
Lease Liabilities
107
-
86
-
54
-
-
-
-
-
19,464
247
231
(g) Net fair values of financial instruments
The carrying amount of all financial assets and liabilities approximate their net fair values.
Group Composition
This section of the notes includes information that must be disclosed to comply with accounting standards and other
pronouncements relating to the structure of the Group, but that is not immediately related to individual line items in
the Financial Statements.
20. List of Subsidiaries
Parent entity
Liontown Resources Limited
Subsidiaries
Liontown Resources (Tanzania) Limited
LRL (Aust) Pty Ltd
Kathleen Valley Holdings Pty Ltd
LTR BM Pty Ltd
LBM (Aust) Pty Ltd
Buldania Holdings Pty Ltd
Buldania Lithium Pty Ltd
Country of
Incorporation
Ownership Interest
2023
%
100%
100%
100%
100%
100%
100%
100%
2022
%
100%
100%
100%
100%
100%
100%
100%
Australia
Tanzania
Australia
Australia
Australia
Australia
Australia
Australia
4 7 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 91
Notes to the Consolidated Financial Statements (Continued)
21. Parent Entity Information
The financial information for the parent entity, Liontown Resources Limited, has been prepared on the same basis as
the Consolidated Financial Statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries are accounted for at cost less impairment in the parent entity’s financial statements.
Statement of profit and loss and other comprehensive income
(Loss)/profit for the year
Total comprehensive (loss)/profit
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Other Information
2023
$’000
(10,001)
(10,001)
188,083
268,671
456,754
3,908
3,110
7,018
2022
$’000
77,143
77,143
453,971
84,740
538,711
6,444
106
6,550
449,736
532,161
576,734
6,228
(133,226)
449,736
576,219
3,172
(47,230)
532,161
This section of the notes includes other information that must be disclosed to comply with accounting standards and
other pronouncements, but that is not immediately related to individual line items in the Financial Statements.
22. Contingent Assets and Liabilities
For the year ended 30 June 2023, there are no contingent assets (2022: $1,160,000).
For the year ended 30 June 2023, there are no contingent liabilities (2022: nil).
23. Remuneration of Auditors
Deloitte
Audit and review services
Other - tax compliance and other services
HLB Mann Judd
Audit and review services
Other - tax compliance and other services
2023
$’000
2022
$’000
116
45
-
-
161
-
-
41
2
43
4 8 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
92 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
24. Commitments
Tenement Commitments
In order to maintain current rights of tenure to exploration tenements the Group, together with its joint venture
partners, is required to perform exploration work to meet the minimum expenditure requirements specified by various
State governments. These amounts are subject to negotiation when application for a lease application and renewal is
made and at other times. The approximate minimum level of expenditure to retain current tenements which are not
provided for in the Consolidated Financial Statements are detailed below:
Within 1 year
1-5 years
>5 years
2023
$’000
735
2,208
3,119
6,062
2022
$’000
590
2,425
3,418
6,433
To the extent that expenditure commitments are not met, tenement areas may be reduced, and other arrangements
made in negotiation with the relevant State and Territory government departments on renewal of tenements to defer
expenditure commitments or partially exempt the Company.
Guarantee Commitments
At reporting date, $10 million had been deposited with Export Finance Australia (EFA) as part of the $25 million demand
guarantee facility provided by EFA as security for the construction of the Hybrid Power Station at Kathleen Valley.
Three further quarterly payments of $5 million will be made by the Company and deposited with EFA over the nine
months to the third quarter of FY2024.
Power Purchase Agreement
In December 2022, the Company executed a 15-year Power Purchase Agreement with Zenith Energy for the long term
supply of electricity for the Kathleen Valley Lithium Project. Zenith Energy will build, own and operate the power
station, exclusively for the Company, with completion planned to coincide with commissioning of the process plant in
mid 2024. Construction of the power station commenced during the financial year. Prior to the commencement of
electricity supply, Liontown’s contractual exposure relates to termination costs of $147.9 million as at 30 June 2023.
Refer to note 12 for information in relation to outstanding contractual capital commitments as at 30 June 2023.
25. Related Party Transactions
(a) Key management personnel
The following were key management personnel of the Group at any time during the reporting period and unless
otherwise indicated were key management personnel for the entire period:
T Goyder – Chair
Non-Executive Directors
•
• A Cipriano - Lead Independent Non-Executive Director
• C Williams - Non-Executive Director
•
• S McLeay - Non-Executive Director (appointed 3 May 2022)
• A Parker – Non-Executive Director (appointed 1 October 2022)
• S Chadwick - Non-Executive Director (resigned 4 July 2022)
J Morris – Non-Executive Director (appointed 24 November 2021)
T Ottaviano - Managing Director and Chief Executive Officer (CEO)
Executives
•
• A Smits – Chief Operating Officer (COO)
• G Donald – Chief Commercial Officer (CCO) (appointed 24 November 2022)
•
J Latto – Chief Financial Officer (CFO) (appointed 23 December 2022)
• C Hasson – Chief Financial Officer (CFO) (resigned 23 December 2022)
• D Richards - Technical Director (resigned 24 November 2021)
4 9 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Liontown Resources | FY23 Annual Report | 93
Notes to the Consolidated Financial Statements (Continued)
The key management personnel compensation is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2023
$
3,445,883
238,451
1,766,285
5,450,619
2022
$
1,919,582
126,830
2,156,193
4,202,605
(b) Loans made to key management personnel and related parties
No loans were made to key management personnel and their related parties.
(c) Other transactions with key management personnel
Management personnel, or their related parties, may hold positions in other entities that result in them having control
or significant influence over the financial or operating policies of those entities.
One entity transacted with the Group during the reporting period. The terms and conditions of the transactions with
key management personnel and their related parties were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to non-key management personnel related entities on
an arm’s length basis.
The aggregate amounts recognised during the year relating to key management personnel and their related parties
were as follows:
Corporate services recharge(1)
Minerals 260 Demerger and IPO related costs(2)
Corporate advisory services of KMP(3)
Technical consultancy services of KMP(4)
Mining consulting services (5)
Database management and field services(6)
2023
$
-
-
-
-
84,830
-
84,830
2022
$
102,965
943,419
147,500
56,000
1,040
41,063
1,291,987
(1)
(2)
(3)
(4)
The Company supplied office facilities and corporate services to Minerals 260 Limited under a share service agreement. Amounts were billed on a
proportionate share of the costs to the Company of providing the services and are due and payable under normal commercial terms. Mr Richards was
concurrently a director of the demerged Minerals 260 Limited and the Company between October and November 2021.
The Company incurred costs related to the Demerger, Initial Public Offer (IPO) and project costs of Minerals 260 Limited which were recharged
subsequent to and conditional on the successful listing on the Australian Securities Exchange (ASX) in October 2021.
The Company received corporate, financial advisory and general support services through a consultancy agreement (as disclosed to ASX on 12 May 2021)
from Mr Cipriano at a rate of $2,500 per day and are payable under normal payment terms. The consultancy agreement was terminated on 31 December
2021.
The Company’s non-executive director Mr Chadwick provided general metallurgical and technical advisory services to the Company through a
consultancy agreement. There was no fixed remuneration component under the consultancy agreement for these services and those services were
provided on an “as required basis” at a rate of $2,000 per day and are payable on normal payment terms. Either party may terminate the agreement by
providing one months’ notice.
(5) The Company’s non-executive director Mr Shane McLeay is Managing Director of Entech Pty Ltd who provide mining consulting services to the Company.
(6)
The services are provided on “as required basis" and on normal commercial terms.
The Group received database management and field services from related parties of Director, Mr Richards. Amounts paid were on normal commercial
terms.
Amounts payable to KMP and related parties at reporting date arising from these transactions was nil (2022: $6,040).
26. Events Occurring after the Reporting Period
Structural Mechanical Piping and Electrical & Instrumentation Contract
On 13 September 2023, the Company announced the Wet Plant Structural, Mechanical, Piping and Electrical &
Instrumentation contract for the Kathleen Valley Lithium Project had been awarded to Monodelphous. The value of the
contract over nine months is approximately $100 million.
Revised Proposal from Albemarle Corporation
On 4 September 2023, the Company announced it had received a revised conditional and non-binding indicative
proposal from Albemarle Corporation to acquire all of the ordinary shares on issue in Liontown for $3.00 cash per share
via a scheme of arrangement. The offer is conditional upon due diligence, the Liontown Board unanimously
recommending the proposal and entry into a mutually acceptable scheme implementation deed, subject to shareholder
approval. The Liontown Board has granted Albemarle a limited period of exclusive due diligence. Should Albemarle
make a binding proposal at $3.00 per share, subject to agreement of a mutually acceptable binding scheme
5 0 | N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
94 | Liontown Resources | FY23 Annual Report
Notes to the Consolidated Financial Statements (Continued)
implementation agreement, the intention of the Liontown Board is to unanimously recommend shareholders vote in
favour of the proposal in the absence of a superior proposal and subject to an independent expert concluding (and
continuing to conclude) that the proposed transaction is in the best interests of shareholders.
S&P/ASX 100 Index
On 1 September 2023, S&P announced inclusion of the Company in the S&P/ASX 100 index effective from 18
September 2023.
Underground Mining Contract
On 17 August, Liontown announced the underground mining services contract at Kathleen Valley had been awarded to
Byrnecut Australia Pty Ltd.
Direct Shipped Ore
On 3 August 2023, the Company announced its intention to proceed with delivery of Direct Shipping Ore (DSO) product
to provide an early source of revenue ahead of the first concentrate production at the Kathleen Valley Lithium Project.
Due to softening market conditions the Company is now reviewing DSO options, including withholding sales and adding
the material to the stockpile as future mill feed. The Company is considering maintaining optionality to either sell DSO
material should market conditions improve or use the DSO product as mill feed to produce concentrate. The Company
will continue to progress the DSO crushing and sorting program to assist in the design of a potential large-scale sorting
circuit as part of the planned 4 Mtpa circuit expansion.
E36/876 Tenement
On 26 July 2023, Liontown reached agreement with the owners of tenement E36/876, including Mila Resources plc
(LON: MILA), providing Liontown a right to acquire up to 80% of the lithium rights under E36/876, approximately 8 km
to the south of the Kathleen Valley Lithium Project. Under the terms of the agreement, Liontown will invest $100,000
in Mila through an unsecured convertible loan note. Liontown may acquire a 51% interest in the lithium rights within 18
months by paying $200,000 and a further 29% interest in the lithium rights within 5 years paying a further $2,000,000.
Haulage Contract
On 19 July 2023, the Company announced it had awarded the spodumene and DSO haulage service contract for the
Kathleen Valley Lithium Project to Qube Holdings Ltd (Qube). The contract is conditional upon Qube finalising
arrangement to secure the storage facility at the Port of Geraldton and is valued at approximately $175 million over a
five year term.
Debt Facility
On 11 July 2023, a second draw down of funds was made from the Ford Motor Company debt facility of $128.6 million
taking the total principal drawn down to $247.3 million.
Monjebup Tenements
On 10 July 2023, Red Mountain Mining Limited (ASX: RMX) announced a farm-in agreement with LBM (Aust) Pty Ltd, a
wholly owned subsidiary of Liontown, to acquire an 80 percent interest in the Monjebup Rare Earth Project, consisting
of 321 blocks covering ~910km2 in southern Western Australia. Red Mountain are required to issue 40 million shares
to Liontown and spend not less than $500,000 within the 24 month farm-in period to earn their interest. Red Mountain
shall also grant Liontown a 2% net smelter royalty upon earning their interest.
There has not been any other matter or circumstance that has arisen since 30 June 2023 that has significantly affected,
or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in
future financial years.
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Liontown Resources | FY23 Annual Report | 95
Directors’ Declaration
Directors’ Declaration
1.
In the opinion of the Directors of Liontown Resources Limited (the Company):
(a)
the financial statements, notes and additional disclosures of the Group are in accordance with the
Corporations Act 2001 including:
i.
ii.
(b)
(c)
giving a true and fair view of the financial position of the Group as at 30 June 2023 and of its performance
for the year then ended; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2023.
This declaration is signed in accordance with a resolution of the Directors:
Antonino Ottaviano
Managing Director
Dated this 29th day of September 2023
96 | Liontown Resources | FY23 Annual Report
5 2 | D I R E C T O R S ’ D E C L A R A T I O N
Independent Auditor’s Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2
Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report to the
members of Liontown Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Liontown Resources Limited (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance
for the year then ended; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We
are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 3 in the financial report, which indicates that the Group has incurred a net loss after tax for
the year ended 30 June 2023 of $22.2 million, and experienced net cash outflows from operating and investing activities
of $260.4 million. As at 30 June 2023 the Group held cash and cash equivalents of $305.4 million, had undrawn
borrowings, that were available for drawdown of $181.3 million, and had an excess of current assets over current
liabilities of $248.4 million. Additionally, as at 30 June 2023 the Group also had contractual capital commitments
associated with the development of the Kathleen Valley Lithium Project of $211.6 million. These conditions, along with
other matters set forth in Note 3, indicate that a material uncertainty exists that may cast significant doubt over the
Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition
to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters
described below to be the key audit matters to be communicated in our report.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liontown Resources | FY23 Annual Report | 97
Independent Auditor’s Report (Continued)
Key Audit Matter
How the scope of our audit responded to the Key Audit Matter
Accounting for development assets
During the financial year ended 30 June 2023, the
Group incurred $284.6 million of expenditure related
to the development of the Kathleen Valley Project,
which has been capitalised as part of assets under
construction within Property, Plant and Equipment,
taking the closing balance of assets under construction
to $310.8 million as at 30 June 2023.
Accounting
for development assets has been
identified as a key audit matter due to the material
nature of the additions incurred during the year, and
judgement with respect to whether underlying
incurred should be capitalised or
expenditure
expensed.
Restoration and rehabilitation provision
At 30 June 2023, the Group recorded restoration and
rehabilitation provisions of $9.5 million.
and
The determination of
rehabilitation provision requires the use of significant
estimates and judgements, including:
restoration
the
•
•
•
the expected future costs of performing
restoration and rehabilitation activities;
the timing of when such activities are
expected to take place; and
economic assumptions such as the inflation
rate and discount rate used to discount this
estimate to its net present value.
for
restoration and
Accounting
rehabilitation
provisions has been identified as a key audit matter
due to the significant judgements and estimates
applied.
98 | Liontown Resources | FY23 Annual Report
Our procedures included, but were not limited to:
•
•
•
•
•
the key controls
obtaining an understanding of
management has in place with respect to accounting for
costs associated with the development of the Kathleen
Valley Project;
on a sample basis, testing the additions to assets under
construction through agreeing to source documents,
including assessing the appropriateness of capitalising the
expenditure incurred, and ensuring that additions are
recognised in the correct period;
assessing the appropriateness of capitalising borrowing
costs as part of assets under construction in accordance
with the requirements of AASB 123 Borrowing Costs;
independently recalculating the borrowing costs capitalised
during the year, with reference to the terms of the Group’s
Ford debt facility; and
assessing the classification of additions to assets under
construction during the year, to ensure that they remain
appropriately classified within assets under construction as
at 30 June 2023, and that the related assets are not ready
for their intended use as at 30 June 2023.
We also assessed the adequacy of the disclosures included in Note
12 to the financial statements.
Our procedures included, but were not limited to:
•
•
•
•
•
•
•
•
obtaining an understanding of
the key controls
management has in place to estimate the restoration and
rehabilitation provision;
agreeing restoration and rehabilitation cost estimates to
underlying support, including, where applicable, reports
from management’s external experts;
assessing the independence, competence and objectivity of
experts used by management;
on a sample basis, comparing assumed unit cost
assumptions applied in calculating the cost estimate to
current market rates;
challenging the completeness of provisions considering
development activities undertaken during the year;
confirming the closure and related rehabilitation dates are
consistent with the latest estimates of life of mines;
comparing the inflation and discount rates to available
market information; and
testing the mathematical accuracy of the rehabilitation
provision model.
We also assessed the adequacy of the disclosures included in Note
15 to the financial statements.
Independent Auditor’s Report (Continued)
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as
the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure, and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that achieves
fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision, and performance of the Group’s audit. We remain solely responsible for our audit opinion.
Liontown Resources | FY23 Annual Report | 99
Independant Auditor’s Report (Continued)
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 52 to 62 of the Directors’ Report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of Liontown Resources Limited, for the year ended 30 June 2023, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Perth, 29 September 2023
100 | Liontown Resources | FY23 Annual Report
Liontown Resources | FY23 Annual Report | 101
102 | Liontown Resources | FY23 Annual Report
Mineral Resources
and Ore Reserves
Liontown Resources | FY23 Annual Report | 103
Ore Reserve and Mineral Resource Statement
The Company reviews
and reports its
Ore Reserves and
Mineral Resources
at least annually
Ore Reserve and Mineral Resource Statement
The Company reviews and reports its Ore Reserves and Mineral Resources at least annually. The
date of reporting is 30 June each year, to coincide with the Company’s end of financial year balance
date. If there are any material changes to the Ore Reserves and Mineral Resource estimates for
the Company’s mining projects over the course of the year, the Company is required to report these
changes.
Kathleen Valley Lithium Project
The Kathleen Valley Project Mineral Resource Estimate:
The Company reported its maiden Mineral Resource estimate for the Kathleen Valley Lithium
Project in Western Australia on 4 September 2018. The Company has since announced updated
Mineral Resource estimates for the Project on 9 July 2019 and 11 May 2020 and 8 April 2021. There
was no change to the Mineral Resource estimate during the year ended 30 June 2023, although
approximately 0.2 Mt of Measured material is now present in surface stockpiles following open pit
mining. Mineral Resources are inclusive of Ore Reserves.
As at 30 June 20231
As at 30 June 20221
Mineral
Resource
Category
Measured2
Indicated
Inferred
Total
Million
Tonnes
20
109
27
156
Li2O %
Ta2O5 ppm
1.3
1.4
1.3
1.4
145
130
113
130
Million
Tonnes
20
109
27
156
Li2O %
Ta2O5 ppm
1.3
1.4
1.3
1.4
145
130
113
130
1 Reported above a Li2O cut-off grade of 0.55% which is commensurate with the cut-off grade determined during the Ore Reserve estimate.
2 Measured Mineral Resource includes stockpiled material. Tonnages and grades have been rounded to reflect the relative uncertainty of the estimate.
Inconsistencies in the totals are due to rounding.
No material differences are yielded by reporting the Mineral Resources above the lower open pit Ore Reserve cut-off grade of 0.5% Li2O.
104 | Liontown Resources | FY23 Annual Report
The Kathleen Valley Project Ore Reserve:
The Company reported its Ore Reserve as part of the Definitive Feasibility Study released on 11
November 2021 and again on 30 June 2022. Open pit mining commenced during the year and a small
volume of ore has stockpiled. There was no material change to the Ore Reserve during the year ended
30 June 2023.
Category
Underground
Proved
Probable
Sub-Total
Open Pit
Proved
Probable
Sub-Total
Total
As at 30 June 20231,2
As at 30 June 20221
Million
Tonnes
Li2O %
Ta2O5 ppm
Million
Tonnes
Li2O %
Ta2O5 ppm
-
65.4
65.4
2.7
0.5
3.2
68.5
-
1.3
1.3
1.3
0.9
1.2
1.3
-
119
119
141
148
142
120
-
65.4
65.4
2.7
0.5
3.2
68.5
-
1.3
1.3
1.3
0.9
1.2
1.3
-
119
119
141
148
142
120
1 Tonnages and grades are diluted and reported at a Li2O cut-off grade of 0.5% (open pit) and 0.7-1.2% (underground) and use a US$740/dmt FOB
SC6.0 pricing assumption.
2 Proved Ore Reserves includes stockpiled material.
Tonnages and grades have been rounded to reflect the relative uncertainty of the estimate. Inconsistencies in the totals are due to rounding.
Liontown Resources | FY23 Annual Report | 105
Ore Reserve and Mineral Resource Statement
Ore Reserve and Mineral Resource Statement (Continued)
Buldania Lithium Project
The Anna Deposit, Buldania Project Mineral Resource Estimate:
The Company reported its maiden Mineral Resource estimate for the Anna Deposit, Buldania Lithium
Project in Western Australia on 8 November 2019. There was no change during the year ended 30
June 2023.
As at 30 June 20231
As at 30 June 20221
Resource
Category
Indicated
Inferred
Total
Million
Tonnes
9.1
5.9
15
Li2O %
Ta2O5 ppm
1.0
1.0
1.0
45
42
44
Million
Tonnes
9.1
5.9
15
Li2O %
Ta2O5 ppm
1.0
1.0
1.0
45
42
44
1 Reported above a Li2O cut-off grade of 0.5% for open pit potential.
Tonnages and grades have been rounded to reflect the relative uncertainty of the estimate. Inconsistencies in the totals are due to rounding.
Toolebuc Vanadium Project
A conditional agreement to divest the Toolebuc Project was entered during the December 2021
Quarter. The disposal was completed in the September 2022 Quarter.
Governance Arrangements and Internal Controls
The Company has ensured that the Ore Reserve and Mineral Resources reported are subject to
thorough governance arrangements and internal controls.
The Ore Reserve for the Kathleen Valley Project was prepared by independent mining consulting
group Snowden Mining Industry Consultants Pty Ltd (now Snowden Optiro) with metallurgical and
engineering input provided by Lycopodium.
The Mineral Resource estimates for the Kathleen Valley and Buldania Projects were prepared by
independent specialist resource and mining consulting group Optiro Pty Ltd (now SnowdenOptiro).
The Company’s management carries out regular reviews and audits of internal processes and
external consultants that have been engaged by the Company.
The Company confirms the following:
• The Ore Reserve and Mineral Resource statements above are based on and fairly represents
information and supporting documentation prepared by a Competent Person or Persons.
• The Mineral Resource statement above has, as a whole, been approved by Mrs Christine Standing.
Mrs Standing is an employee of Snowden Optiro and a Member of the Australian Institute of Mining
and Metallurgy.
• Mrs Standing has provided prior written consent to the issue of the Mineral Resource statement in
the form and context in which it appears in this report.
• The Ore Reserve statement above has, as a whole, been approved by Mr Allan Earl. Mr Earl is
a full-time employee of Snowden Optiro and a Fellow of the Australasian Institute of Mining and
Metallurgy.
• Mr Earl has provided prior written consent to the issue of the Ore Reserve statement in the form
and context in which it appears in this report.
106 | Liontown Resources | FY23 Annual Report
Additional
Information
Liontown Resources | FY23 Annual Report | 107
Liontown Resources | FY23 Annual Report | 107
Additional Information -
Tenement Schedule as at 30 June 2023
Listing of tenements held in Australia (directly or beneficially).
Country
Project
Tenement
No.
Registered
Holder
Nature of
interests
LRL (Aust) Pty Ltd
(wholly owned subsidiary of Liontown
Resources Limited).
100% - nickel claw back rights
retained by other party
LRL (Aust) Pty Ltd
100%
LRL (Aust) Pty Ltd
0% - pending application
Austalia
Kathleen
Valley
M36/264
M36/265
M36/459
M36/460
M36/696
E36/879
L36/236
L36/237
L36/248
L36/250
L36/251
L36/255
L36/256
L36/261
L36/262
L36/263
L36/270
L53/253
L53/254
L53/255
L53/256
G36/52
L53/263
L53/264
L53/265
L36/264
L36/265
L36/266
L36/267
L36/268
L53/266
L53/267
E36/1041
L36/271
L36/272
L36/273
L36/274
L36/275
L36/276
L36/278
108 | Liontown Resources | FY23 Annual Report
Additional Information -
Tenement Schedule as at 30 June 2023 (Continued)
Country
Project
Tenement
No.
Registered
Holder
Nature of
interests
Kathleen
Valley
Austalia
L36/279
L36/280
L53/272
L53/273
L53/274
L53/277
L53/278
L53/279
L53/280
L53/281
L53/282
L53/283
L53/284
L53/285
L53/286
L53/287
L53/288
L53/289
L53/290
L36/281
L36/282
L36/283
E63/856
P63/1977
M63/647
LRL (Aust) Pty Ltd
0% - pending application
Avoca Resources Pty Ltd
100% of rights to lithium
and related metals secured by
Lithium Rights Agreement
Buldania
M63/676
0% - pending application
E63/1660
E63/2267
E63/2268
E70/6042
Buldania Lithium Pty Ltd
100%
LRL (Aust) Pty Ltd
0% - pending application
Monjebup
E70/6043
LRL (Aust) Pty Ltd
100%
E70/6044
Liontown Resources | FY23 Annual Report | 109
Additional Information - Shareholder Information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not
disclosed elsewhere in this report applicable as at 20 September 2023 is set out below.
Shareholdings
Substantial shareholders
Shareholder
Mr Timothy Goyder
Mrs Georgina Hope Rinehart and
Hancock Prospecting Pty Ltd (HPPL) and
subsidiaries of HPPL3
Number of ordinary
shares held1
Percentage of
capital held %2
329,678,766
169,914,764
14.97
7.72
5.11
State Street Corporation and subsidiaries
112,499,662
Notes:
1. This refers to the number of shares held by each substantial shareholder as disclosed to the Company by the shareholders as at 20 September 2023.
2. The relevant interest percentage has been calculated on the basis of the Company’s issued share capital on an undiluted basis as at 20 September
2023 (being, 2,202,255,586 shares).
3 Ms Bianca Hope Rinehart in her capacity as trustee of the Hope Margaret Hancock Trust filed a substantial holder notice on 13 September 2023 in
respect of the 169,914,764 shares which were the subject of the substantial holding notice lodged by Mrs Rinehart, HPPL and subsidiaries of HPPL
on 12 September 2023 on the basis that a relevant interest arises by virtue of the operation of section 608(3)(a) of the Corporations Act.
Issued Capital
Share capital comprised 2,202,255,586 fully paid ordinary shares of the Company and the Company
had 28,737 holders of fully paid ordinary shares.
Unquoted securities
Unlisted Security 1, 2
Total in Class
Number of Holders
Options (expiring 25 November 2023)
Options (expiring 9 February 2024)
Options (expiring 23 November 2024)
Performance rights (expiring 1 July 2024)
Performance rights (expiring 31 March 2025
Performance rights (expiring 30 June 2025)
Performance rights (expiring 30 June 2025)
Performance rights (expiring 30 June 2027)
Performance rights (expiring 30 June 2026)
Performance rights (expiring 30 June 2028)
1,000,000
2,500,000
500,000
1,250,000
1,058,713
2,915,212
891,418
3,419,407
441,536
1,301,738
1
1
1
1
84
5
10
9
8
8
Notes:
1. The unlisted securities above were issued under an employee incentive scheme
2. There were no holders of unquoted equity securities, excluding securities held under an employee incentive scheme, where the holder held 20% or
more of a class of unlisted security as at 20 September 2023.
110 | Liontown Resources | FY23 Annual Report
Additional Information - Shareholder Information (Continued)
Distribution of equity security holders
Size of Holding
No. Holders
% Held
No. Holders
% Held
No. Holders
% Held
Ordinary Shares
Unlisted Share Options
Performance Rights
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
9,919
9,382
3,194
4,921
1,321
0.24
1.12
1.11
7.32
90.20
Total
28,737
100.00
Marketable Parcel
-
-
-
-
3
3
-
-
-
-
100
100
-
59
-
41
25
-
1.31
-
16.70
81.99
125
100.00
The number of shareholders holding less than a marketable parcel was 444.
Voting Rights
The voting rights to the ordinary shares set out in the Company’s Constitution are:
“Subject to any rights or restrictions for the time being attached to any class or Classes of shares -
(a) at meetings of members or classes of members each member entitled to vote in person or by
proxy or attorney; and
(b) on a show of hands every person who is a member has one vote and on a poll every person in
person or by proxy or attorney has one vote for each ordinary share held.”
Holders of options or performance rights do not have voting rights.
Restricted Securities
There are no restricted ordinary shares on issue.
On-Market Buy-Back
There are no current no-market buy-back of securities.
Liontown Resources | FY23 Annual Report | 111
9.44
5.48
5.38
4.37
4.20
3.14
1.63
1.35
1.34
1.19
1.07
0.91
0.80
0.73
0.67
0.59
0.47
0.44
0.44
58.61
41.39
Number of
ordinary shares
held
Percentage
of capital
held %
329,678,766
14.97
Additional Information - Shareholder Information (Continued)
Twenty largest ordinary fully paid shareholders
Name
Mr Timothy Rupert Barr Goyder
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
RT Lithium Ltd
BNP Paribas Nominees Pty Ltd ACF Clearstream
Zero Nominees Pty Ltd
Clement Pty Ltd
Invia Custodian Pty Limited
GKCF Super Pty Ltd
The Universal Zone Pty Ltd
BNP Paribas Noms Pty Ltd
Anisimoff Super Fund Pty Limited
HSBC Custody Nominees (Australia) Limited - A/C 2
Mr Anthony Cipriano
National Nominees Limited
Warbont Nominees Pty Ltd
Double Eagle Pty Ltd
207,882,558
120,568,676
118,525,389
96,257,865
92,499,320
69,193,846
35,930,000
29,767,515
29,405,998
26,290,000
23,597,552
19,911,778
17,681,496
16,100,000
14,781,961
13,000,625
10,324,882
Kenma Investment Advisors Pty Limited
9,705,000
BNP Paribas Noms Pty Ltd Uobkh A/C R'Miers
Total Top 20
Others
Total
9,687,000
1,290,790,227
911,465,359
2,202,255,586
100.00
Corporate Governance Statement
Liontown has adopted a Corporate Governance Manual which forms the basis of a comprehensive
system of control and accountability for the administration of corporate governance. The Board is
committed to administering the policies and procedures with openness and integrity, pursuing the
true spirit of corporate governance commensurate with the Company’s needs.
In establishing the Company’s corporate governance framework, to the extent they are applicable
to the Company, the Board has referred to the recommendations set out in the ASX Corporate
Governance Council’s ‘Corporate Governance Principles and Recommendations – 4th Edition’.
The Company’s Corporate Governance Statement 2023, which explains how Liontown complies with
the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations
– 4th Edition’ in relation to the year ended 30 June 2023, is available in the Corporate Governance
section of the Company’s website, www.ltresources.com.au/about/corporate-governance and will be
lodged with ASX together with an Appendix 4G at the same time that this Annual Report is lodged
with ASX.
112 | Liontown Resources | FY23 Annual Report
Additional Information - Glossary of terms and abbreviations
AC
Aboriginal Corporation
ACCP
Access, Construction or Change Permit
AEP
Annual Exceedance Probability
AGM
Annual General Meeting
AMEC
Association of Mining and Exploration Companies
ANCOLD
Australian National Committee on Large Dams
Aquifer
An area underground where spaces between gravel,
sand, clay, or rock fill with water
ARI
Average Recurrence Interval
Association of Mining and Exploration Companies
(AMEC)
An Australian industry association whose
membership comprises explorers, emerging miners,
producers and a wide range of businesses and
service providers
ASX 300/ASX 200/ASX 100
A stock market index that measures the
performance of the top 300/200/100 companies
listed on the Australian Securities Exchange
Australian Securities Exchange (ASX)
An Australian public company that operates
Australia’s primary securities exchange
BESS
Battery Energy Storage System
Biofuel
Any fuel that is derived from biomass (plant or algae
material or animal waste). It is considered to be a
source of renewable energy
BOO
Build, Own and Operate
Borefield
An area where bores or wells are drilled
CCWP
Clearing and Civil Works Permit
CEO
Chief Executive Officer
Chamber of Minerals and Energy (CME) WA
A resources representative body in Western
Australia
CHMP
Cultural Heritage Management Protocol
CME
Chamber of Minerals and Energy
COO
Chief Operating Officer
CRA
Construction Risk Assessment
CY
Calendar Year
Competent Person
A minerals industry professional who is a Member
or Fellow of The Australasian Institute of Mining
and Metallurgy, or of the Australian Institute of
Geoscientists, or of a ‘Recognised Professional
Organisation’, as included in a list available on the
JORC and ASX websites. These organisations have
enforceable disciplinary processes, including the
powers to suspend or expel a member.
A Competent Person must have a minimum
of five years’ relevant experience in the style
of mineralisation or type of deposit under
consideration and in the activity that the person is
undertaking (JORC Code)
DBCA
Department of Biodiversity Conservation and
Attractions (Western Australia)
Definitive Feasibility Study
A feasibility study undertaken to a high degree of
accuracy (+15%) which may be used as a basis for
raising finance for the construction of a project
Determined Native Title Claim
A claim of Native Title that has been recognised by
law. Native Title exists where Aboriginal people have
maintained a traditional connection to their land and
waters substantially uninterrupted since Australian
sovereignty
DFS
Definitive Feasibility Study
DMIRS
Department of Mines, Industry Regulation and
Safety (Western Australia)
Downstream Scoping Study
A desktop feasibility study undertaken to a
relatively low degree of accuracy (+35%) which may
be used as a basis for further studies and test work
on downstream processing of lithium concentrate
DSS
Downstream Scoping Study
E
Exploration licence
EAP
Employee Assistance Program
EGM
Extraordinary General Meeting
EPCM
Engineering, Procurement and Construction
Management
Liontown Resources | FY23 Annual Report | 113
Additional Information - Glossary of terms and abbreviations (Continued)
EPM
Exploration permit
EPRP
Emergency Preparedness Response Plan
ESG
Environmental, Social and Governance
EV
Electric vehicle
FID
Financial investment decision
FY
Financial year
Fugitive Emissions
Non-liquid leaks or unintended releases of
pollutants from a contained source into the
surrounding atmosphere
Geophysics
Study of the earth
GHG
Greenhouse gas
Greenfield
An undeveloped site
GRI
Global Reporting Initiative
Groundwater
Water that exists underground in saturated zones
beneath the land surface
HAZOP
Hazard and Operability
HDPE
High-density polythene
HSE
Health, Safety and Environment
HRWL
High Risk Work Licenses
Hydrocarbon
An organic chemical compound that is
composed exclusively of hydrogen and carbon
atoms. They are naturally occurring and form the
basis of crude oil, natural gas, coal, and other
important energy sources
Hydrogeological
The occurrence, distribution, and movement of
groundwater
ICAM
Incident Cause Analysis Method
IEA
International Energy Agency
Inferred Mineral Resource
That part of a Mineral Resource for which quantity
and grade (or quality) are estimated on the basis
of limited geological evidence and sampling.
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Geological evidence is sufficient to imply but not
verify geological and grade (or quality) continuity
(JORC Code)
Intergovernmental Panel on Climate Change (IPCC)
An intergovernmental body of the United Nations
responsible for advancing knowledge on human-
induced climate change
IPCC
International Panel on Climate Change
IRMA
Initiative for Responsible Mining Association
JHA
Job hazards analysis
JORC
Joint Ore Reserves Committee comprising
representatives of The Australasian Institute
of Mining and Metallurgy (AusIMM), Australian
Institute of Geoscientists (AIG) and Minerals
Council of Australia (MCA) as well as the Australian
Securities Exchange (ASX), the Financial Services
Institute of Australasia (FinSIA) and the accounting
profession
JORC Code
The Australasian Code for reporting of Exploration
Results, Mineral Resources and Ore Reserves 2012
Edition prepared by the JORC
KPI
Key Performance Indicator
LCT
Lithium-caesium-tantalum
Li2O
Lithium oxide
Lithium
Lithium is the lightest of all the solid metals. It
is highly combustible and reactive, and it readily
bonds with other metals. Lithium has an exceptional
ability to conduct electricity, making it a preferred
component for batteries
Lithium hydroxide
Lithium hydroxide monohydrate is a refined lithium
product used in the production of cathode material
for lithium-ion electric vehicle batteries
Lost Time Injury Frequency Rate (LTIFR)
The number of lost-time injuries within a given
accounting period, relative to the total number of
hours worked in that period
Medically Treated Injury Frequency Rate (MTIFR)
Work related injuries that require medical treatment
L
Miscellaneous licence
LTIFR
Lost time injury frequency rate
M
Mining lease
Additional Information - Glossary of terms and abbreviations (Continued)
MAT
Materiality Assessment Tool
RC
Reversed Circulation
MTIFR
Medically treated injury frequency rate
RIWI
Rights in Water and Irrigation (Act)
NAF
Non-acid forming
ROM
Run of mine
National Greenhouse Accounts Factors
Guidance provided by the Australian Government’s
Department of Industry, Sciences, Energy and
Resources that provides methods to help estimate
greenhouse gas emissions
Native Title Agreement
Native title is the designation given to the common
law doctrine of Aboriginal title in Australia, which
is the recognition by Australian law that Indigenous
Australians (both Aboriginal Australian and Torres
Strait Islander people) have rights and interests to
their land that derive from their traditional laws and
customs
Net-zero emissions
Achieving an overall balance between greenhouse
gas emissions produced and greenhouse gas
emissions taken out of the atmosphere
NTA
Native Title Agreement
Offtake agreement
A contract between the producer of a resource
and a buyer of the resource, who is known as the
offtaker, to sell and purchase all or substantially all
of the future production from the project
Open-cut mining
A surface mining technique of extracting rock or
minerals from the earth from an open-air pit
Ore Reserve
The parts of a mineral resource that can be
economically mined
Paris Agreement
A legally binding international treaty on climate
change to limit global warming to well below two
degrees Celsius (2°C) above pre-industrial times,
and as close to 1.5°C as possible
Pastefill
A method developed to fill the mined out voids
underground and to stabilise ground support
Power Purchase Agreement
A long-term electricity supply agreement between
two parties, usually between a power producer and
a customer (electricity consumer)
Pre-Feasibility Study
A preparatory study required to enable funders
to undertake a successful feasibility study for a
particular investment opportunity
PFS
Pre-Feasibility Study
Run-of-Mine (ROM) pad
Area designated for storage/stockpiling of ore
received from the mine prior to processing
S&P
Standard & Poor’s
SAG
Semi autogenous (mill)
SAG Mill
Semi-Autogenous Grinding Mill used for grinding
large fragments into small pieces which are then
used for further processing
SASB
Sustainability Accounting Standards Board
SC6.O
Spodumene concentrate is a high-purity lithium ore
with approximately 6 percent lithium content being
produced as a raw material for the subsequent
production of lithium-ion batteries for electric
vehicles
Scope 1 GHG emissions
Direct greenhouse (GHG) emissions that occur
from sources that are controlled or owned by an
organisation (e.g. on-site fossil fuel combustion and
fleet fuel consumption)
Scope 2 GHG emissions
Indirect emissions from sources that are owned or
controlled by an organisation (e.g. emissions that
result from the generation of electricity, heat or
steam purchased by the organisation from a utility
provider)
Scope 3 GHG emissions
Indirect greenhouse gas emissions other than
Scope 2 emissions that are generated in the
wider economy. They occur as a consequence of
the activities of a facility, but from sources not
owned or controlled by that facility’s business.
(e.g. employee travel; emissions associated with
contracted solid waste disposal and wastewater
treatment)
Scoping Study
An initial appraisal carried out early in the life of a
resource project. They are based on initial drilling
and informed assumptions, and commonly include
an elementary mine plan
SDG
Sustainable Development Goals
Solar voltaic array
A linked collection of solar panels
Liontown Resources | Annual Report 2023 | 115
Additional Information - Glossary of terms and abbreviations (Continued)
Units of Measurement
%
percentage or per cent
A$/t
Australian dollars per tonne
GJ
Gigajoules
kL
kilolitre
km
Kilometre
Kt
Kilo tonnes
ktpa
kilo tonnes per annum
kW
kilo watt
L
Litre
M
metre
ML
megalitre
Mt
Million tonnes
Mtpa
Million tonnes per annum
tpa
Tonnes per annum
US$/t
US dollars per tonne
Spodumene
A pyroxene mineral consisting of lithium aluminium
inosilicate and is a source of lithium
SRS
Safety Reporting System
Subterranean fauna
Animal species that are adapted to live in an
underground environment
SWMS
Safe Work Method Statement
Ta2O5
Tantalum pentoxide
Tailings Storage Facility
A structure built for the purposes of storing the
uneconomical ore and water from the mining
process
TCFD
Task Force on Climate Related Financial Disclosures
Telemetry
Technologies that accommodate collecting
information in the form of measurements or
statistical data and forward it to IT systems in a
remote location
Tenement
Collective mining rights that include prospecting
licences, exploration licences, retention licences
and mining leases
Tier-1
Tier 1 deposits are company-making mines and
are large, long life and low cost with NPV at the
Decision-to-Build stage of >$1000m (in 2013 US
Dollars - Source: MinEx Consulting © October 2019)
TRIFR
Total recorded injury frequency rate
TSF
Tailings storage facility
US
United States
V2O5
Vanadium oxide
Value chain
A series of consecutive steps that go into the
creation of a finished product, from its initial design
to when it reaches the customer
VOC
Verifications of Competency
WA
Western Australia
WHS
Work Health & Safety
WHSMS
Work Health Safety Management System
WWTP
Wastewater Treatment Plant
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Additional Information - Corporate Directory
Directors
Timothy R B Goyder
Chair
Tony Ottaviano
Managing Director/CEO
Anthony Cipriano
Lead Independent Non-Executive Director
Craig Williams
Independent Non-Executive Director
Jennifer Morris
Independent Non-Executive Director
Shane McLeay
Independent Non-Executive Director
Adrienne Parker
Independent Non-Executive Director
Company Secretary
Clint McGhie
Principal Place of Business
and Registered Office
Level 2, 32 Ord Street,
West Perth WA
PO Box 284
West Perth WA 6872
Tel: +61 8 6186 4600
Email:info@ltresources.com.au
Web: ltresources.com.au
ABN: 39 118 153 825
Auditor
Deloitte Touche Tohmatsu
Brookfield Place, Tower 2
123 St Georges Terrace
Perth WA 6000
Solicitor
Allens
Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Share Registry
Computershare Investor Services
Pty Limited
Level 17, 221 St Georges Terrace
Perth WA 6000
Tel: 1300 557 010
ASX Share Code
LTR
Printed copies of this Annual Report will only be posted to shareholders who have requested a printed copy.
Shareholders who have elected to receive communications electronically are notified when the Annual Report
becomes available and given details of where to access it electronically.
This publication is sustainably printed, utilising solar electricity and FSC certified paper.
The printer is ISO14001 accredited, the highest environmental standard.
118 | Liontown Resources | FY23 Annual Report
ltresources.com.au
ASX: LTR