Liontown to award underground mining contract for Kathleen Valley lithium project to Byrnecut

Liontown Resources Ltd has issued a letter of award to Byrnecut Australia Pty Ltd for Underground Mining Services to underpin the development and production of the Kathleen Valley hard rock lithium project. The appointment of Byrnecut is a significant milestone for Kathleen Valley which has a Mineral Resource Estimate of 156 Mt at 1.4% Li2O and 130 ppm Ta2O5. Liontown said Byrnecut’s demonstrable record and capability across the entire underground value chain, from mine start to full and ongoing production and at a size and scale required at Kathleen Valley, was critical to its success in the tender process.

The operations have been optimised for an initial 3 Mt/y, producing approximately 500,000 t/y of spodumene concentrate with a 4 Mt/y expansion planned in Year 6, to deliver approximately 700,000 t/y of spodumene concentrate. Mining will predominately be underground, allowing direct access to higher grade mineralisation while minimising waste and the environmental footprint of the project. Mined ore will be processed through a whole-of-ore flotation circuit which will provide an estimated recovery rate of 78% across the mine life and an estimated site recovery for tantalum concentrate of 42%.

The letter of award it says follows a transparent and competitive tender process that commenced in March 2023 and concluded this month, in line with the project’s schedule. The tender and award covers all aspects of underground construction, including significant early capitalised development (approximately 60 km of a total 90 km during the contract period) and production across the Mt Mann and Northwest Flats orebodies as the operation expands to support the initial plant throughput capacity of 3 Mt/y.

Given the services will cover both production and capitalised long-term development, the full contract value of approximately A$1 billion over four years comprises operating costs, sustaining capital, and early enabling works for the planned 4 Mt/y expansion as part of the longer-term operation of the underground mine.

The evaluation process also included Health, Safety, Environment and Quality (HSEQ), innovation, community engagement and performance history. Importantly Byrnecut is committed to working in collaboration with the Tjiwarl Traditional Owners to increase Indigenous participation in mining.

Byrnecut was ultimately selected in recognition of its extensive expertise in large-scale underground mining, including state-of-the-art and technologically advanced mining equipment and processes, robust safety and training systems and logistical support. Byrnecut will invest more than A$125 million in new equipment highlighting their commitment to the successful delivery of underground mining services.

They will begin mobilising to site throughout the September quarter, aligned with the on-schedule conclusion of open pit mining activities at Mt Mann. Mt Mann will be the central location for the future portals – six in total – into the underground operations, with development to commence in the December quarter.

The award of the Underground Mining Services to Byrnecut is subject to finalisation of a binding full-form contract. Now that the commercial terms have been agreed, this information will allow the company to finalise its operating costs review for Kathleen Valley Project which will be the subject of a future update.

Liontown’s Managing Director and CEO, Tony Ottaviano, said: “Today marks a significant milestone for Kathleen Valley as we have issued a letter of award for the Underground Mining Services contract to Byrnecut. Byrnecut is a Tier-1 underground mining services contractor with a global footprint. Its underground expertise is highly respected and well recognised throughout the mining industry and investment community, underpinned by the people they attract and retain. As part of the tender process, I was pleased to learn that around 400 people have worked for Byrnecut for 10 years or more. I believe this is evidence of a highly engaged and motivated team, which is vital to operating safely in an underground mining environment.”

He added: “Our collaboration with Byrnecut has already delivered value in the form of the updated ‘one mine, two orebodies’ mine plan, which was optimised as an outcome of the tender evaluation process. Byrnecut will invest more than A$125 million in new equipment, highlighting their commitment to the successful delivery of underground mining services at Kathleen Valley. At around A$1 billion this is the largest contract to be awarded by Liontown and is reflective of operational requirements, external factors and the four-year duration. We remain on track for first production from Kathleen Valley by mid-2024 and I look forward to partnering with Byrnecut for the next stage of our project development.”