Gina Rinehart’s Hancock Prospecting has increased its strategic stake in Liontown Resources to 10.7 per cent.
This is a leap from Hancock’s initial 7.72 per cent investment earlier in September.
Hancock said the strategic stake was acquired for $3.00 per share with an average price per share well below that level.
Lithium prices have continued to fall since Hancock first became a Liontown shareholder, with spodumene concentrate prices falling by about 60 per cent over the last nine months.
But Hancock said it is taking a long-term approach to commodity markets and its investments with the intention of providing Liontown with the opportunity to manage its project execution and operational ramp-up risks.
Liontown’s Kathleen Valley project in WA has an indicated production rate of three million tonnes per year with the potential to increase to four million tonnes per year.
Hancock has said that this, combined with a target recovery rate of 78 per cent for consummate production and operating costs, makes Liontown and Kathleen Valley a significant opportunity for investment.
With demonstrated project development and operations ramp-up capabilities, Hancock is primed to become a strong decision-maker in Liontown’s future.
Hancock’s $10 billion Roy Hill iron ore project in WA was delivered on schedule and below budget and followed by significant production ramp up, proving its capability as a mining powerhouse.
But the investment from Hancock complicates Albermarle’s planned $6.6 billion acquisition of Liontown.
The Liontown board accepted a $3 per share takeover from Albermarle in early September, before Rinehart sought to snap up its initial 7.72 per cent of shares.
Though there is no takeover bid from Hancock to rival Albermarle yet, the scene is certainly being set for Hancock to make a move on Liontown.
Albermarle’s due diligence period in assessing Liontown is set to end in the coming weeks.