Liontown Resources Ltd (ASX: LTR) is an Australian lithium developer focused on delivering the Kathleen Valley Lithium Project in Western Australia. Positioned as a future supplier of battery-grade spodumene concentrate, Liontown aims to become a key player in the global electric vehicle (EV) supply chain. Backed by major offtake partners including Tesla and Ford, the company’s strategy centres on ESG-integrated development, scalable production, and technical innovation. Liontown is now entering a transformative operational phase as it shifts from construction to production.
Underground Mining Commences: Operational Milestone
On 9 April 2025, Liontown Resources announced the successful commencement of underground production at its flagship Kathleen Valley Lithium Project, making it the first underground lithium mine in Australia. The milestone marks a critical transition point in Liontown’s journey from developer to producer, reinforcing its status as a frontrunner in Australia’s clean energy supply chain.
The first production blast was completed at the Mt Mann orebody, yielding approximately 1,500 tonnes of ore, which will be used for commissioning plant operations. This move follows months of development work on access drives and orebody exposure, with mining now ramping up across multiple underground zones.
According to Liontown, the initial ore processing trials delivered recoveries exceeding 70%, with further process optimisation expected to lift that number as the project scales. The company has implemented early improvements to support mill throughput, water recovery, and spodumene grade stability ahead of full operational ramp-up.
This early production serves a dual purpose: testing processing infrastructure and de-risking full-scale ramp-up, which is targeted for Q4 FY26, when underground ore is expected to comprise the majority of mill feed. This approach underscores Liontown’s long-term cost control and mine life extension strategy, especially in a pricing environment where lithium margins have compressed.
Investors responded positively, sending the stock 8.05% higher to $0.47, a welcome bounce after a 63.71% decline over the past year. The announcement provides renewed confidence that Liontown remains on track to deliver spodumene concentrate into long-term offtake agreements and into a global market still hungry for battery minerals.
Investor Sentiment and Sector Positioning
While 2024 proved challenging for lithium developers, Liontown’s operational milestone has reignited optimism. With market scepticism around project delays and cost overruns lingering, the early delivery of underground production at Kathleen Valley stands as a reassuring signal to investors.
Liontown shares have been under pressure, losing over 63% in the past 12 months, largely due to lithium price weakness and capex escalations. However, the company’s fundamentals — including strategic offtake agreements with Tesla, LG Energy, and Ford, and its fully funded capex profile — position it as a standout among ASX-listed lithium juniors.
The market now views execution risk as the key valuation driver. By demonstrating underground ore recovery and initial plant commissioning, Liontown has materially de-risked its near-term trajectory. The $1.14 billion market cap and strong daily volume (12.26 million shares) indicate that institutional interest remains active.
With a PE ratio of 0, the company is still pre-revenue — but this is expected to change rapidly once nameplate capacity is reached. Guidance suggests first spodumene concentrate exports in 2026, positioning Liontown as a critical supplier during the next upcycle in EV demand.
What sets Liontown apart is its underground design — a rarity in the lithium space — allowing for lower environmental footprint and more consistent grade control compared to open-pit operations. If execution continues smoothly, Liontown may become a case study in how new-gen lithium miners can scale responsibly and competitively.
The next key milestones include full concentrator commissioning, ramp-up progress reporting, and initial sales metrics. These updates will be closely watched as the company shifts toward cash generation and ultimately delivers on its vision of becoming a top-tier global lithium producer.