Liontown (ASX: LTR) Targets Full Ownership of Argentina Lithium Brine Project

Liontown Limited has signed a binding agreement with NEXT Lithium Corp. covering the Centenario lithium brine project in Argentina.

The staged farm-in gives Liontown a pathway to acquire up to 100% of the early-stage project. It also expands Liontown beyond hard-rock lithium, while Kathleen Valley in Western Australia remains its core focus.

Centenario is located in Salta Province, near two established lithium developments. These are Pozuelos-Pastos Grandes and Eramet’s Centenario-Ratones operation.

Entry Price and First Earn-In

Liontown will initially pay US$5 million in cash and issue US$10 million of its shares. The shares will be valued using Liontown’s 20-day volume-weighted average price.

That consideration secures the farm-in rights once customary conditions are met. Completion is expected shortly after execution, according to the announcement.

Liontown can then earn 49% by funding US$15 million of project expenditure within 24 months. The planned initial work programme includes drilling anomalies identified by a completed transient electromagnetic survey.

Managing Director and Chief Executive Officer Tony Ottaviano said the structure links additional spending to exploration outcomes.

“Structuring the deal as a staged farm-in ties our capital to results, so we invest more only as the project proves itself. Kathleen Valley remains our priority, and we will keep pursuing value-accretive growth where it fits our strategy.”

Pathway From 49% to Full Control

After earning 49%, Liontown has 90 days to elect to move to 51%. That step requires a further US$15 million payment to NEXT Lithium.

Payment may comprise cash, Liontown shares or both, at NEXT Lithium’s election. Share consideration remains subject to Liontown’s available placement capacity.

Liontown may reach 75% by funding another US$25 million of expenditure over the following 24-month period. This brings planned project expenditure across the earn-in stages to US$40 million over four years.

However, reaching 75% triggers an obligation to buy the remaining 25%. That final payment is capped at US$125 million and linked to the resulting mineral resource estimate.

The formula applies US$25 per tonne of lithium carbonate equivalent for the first three million tonnes above the specified grade threshold. It then applies US$10 per tonne for resources beyond three million tonnes above that threshold.

Portfolio Context and Deal Conditions

Brine is one of the world’s two principal lithium sources, alongside hard-rock deposits. Centenario therefore gives Liontown exposure to a different resource type and operating jurisdiction.

The project remains at an early exploration stage, with no assurance that economically viable mineralisation will be identified. Liontown can stop after earlier phases, but cannot stop at 75%.

Completion requires existing security interests over project entities and tenements to be released. Outstanding intercompany loans must also be repaid.

These conditions must be satisfied or waived within six months, unless both parties extend the deadline. Either party may withdraw without further liability if that does not occur.

Any Liontown shares issued as consideration will dilute existing holdings. The degree of dilution will depend partly on Liontown’s share price at the relevant calculation dates.