Liontown Farms Into Argentine Centenario Lithium Brine

Liontown (ASX:LTR) has executed a binding farm-in agreement with NEXT Lithium Corp. to earn up to a 100 per cent interest in the Centenario lithium brine exploration project in Salta Province, Argentina. The interest is earned by acquiring shares in Vertex Holdings (Argentina) Pty Ltd, NEXT Lithium's Australian subsidiary, which holds the project. Initial consideration for the grant of the farm-in rights, payable on initial completion, is US$5 million (approximately A$7 million) in cash plus Liontown shares valued at US$10 million (approximately A$14 million), calculated by reference to Liontown's 20-day volume weighted average price. Initial completion is subject to customary conditions precedent, including release of existing security interests over the shares in the local Argentine project vehicle and over the project's tenements, and repayment of outstanding intercompany loans. The conditions are for Liontown's benefit and must be satisfied, or waived by Liontown, within six months of signing or any later date the parties agree, failing which either party may withdraw without further liability; Liontown said it currently expects satisfaction shortly following execution.

Under the staged structure, Liontown may earn a 49 per cent interest by funding US$15 million of project expenditure over 24 months from completion, may then elect within 90 days to increase that to 51 per cent by paying a further US$15 million, and may increase to 75 per cent by funding an additional US$25 million of project expenditure over 24 months from the date it earns the Phase 1 interest. If it acquires the 75 per cent interest, Liontown must acquire the remaining 25 per cent for consideration determined by reference to the mineral resource estimate published after that phase and capped at US$125 million. Liontown described the overall pathway to up to 100 per cent as based on US$40 million (approximately A$56 million) of project expenditure over four years along with associated milestone payments linked to resources, comprising up to US$140 million, which it states as A$195 million assuming all milestones are satisfied, payable in cash, Liontown shares or a combination at NEXT Lithium's election. Any share election is limited to Liontown's available ASX Listing Rule 7.1 placement capacity at the relevant time, and Liontown is not obliged to proceed with the first three phases. An initial US$15 million work programme is planned over the first 12 to 24 months, including a drilling campaign targeting anomalies identified by a transient electromagnetic survey already completed across the project. Managing Director and Chief Executive Officer Tony Ottaviano said structuring the deal as a staged farm-in ties the company's capital to results and that Kathleen Valley remains its priority. The company said the project sits in close geographic proximity to the Pozuelos-Pastos Grandes project and the Centenario-Ratones operation.