Liontown (ASX:LTR) Is Up 15.3% After Securing Canmax Offtake Deal – Has The Bull Case Changed?

• Liontown Resources recently executed a binding offtake agreement with Canmax Technologies, under which it will supply 150,000 wet metric tonnes of spodumene concentrate annually during 2027 and 2028.
• This long-term supply commitment broadens Liontown’s customer base across geographies and the battery value chain, reinforcing its position in the global lithium materials market.
• We’ll now explore how this long-term Canmax offtake agreement may influence Liontown’s investment narrative, particularly its earnings visibility and customer diversification.

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Liontown Investment Narrative Recap

To own Liontown, you need to believe in its ability to turn Kathleen Valley into a reliable, cost-competitive lithium operation and secure long-term buyers for its product. The new Canmax offtake meaningfully supports earnings visibility and customer diversification, but it does not remove the key short term catalyst of ramping underground production efficiently, nor the major risk that weaker lithium prices and higher costs could still squeeze cash flow.

The recent start of underground stoping at Kathleen Valley is particularly relevant here, as underground performance will determine whether Liontown can consistently deliver the volumes promised under its various offtake agreements. Together, the underground ramp-up and the Canmax contract sharpen the focus on execution risk, cost control and how effectively Liontown can convert technical progress into sustainable margins and improved financial outcomes over time.

Yet investors should also weigh how lower lithium prices, high cost stockpile drawdowns and rising operating costs might affect Liontown’s ability to sustain operations without incurring debt...

Read the full narrative on Liontown (it's free!)

Liontown's narrative projects A$725.1 million revenue and A$62.7 million earnings by 2028.

Uncover how Liontown's forecasts yield a A$1.07 fair value, a 31% downside to its current price.

Exploring Other Perspectives

Fifteen fair value estimates from the Simply Wall St Community span a wide range, from A$0.15 to A$5.47 per share, showing very different expectations. When you compare that spread with Liontown’s reliance on improving underground operations and cost control to support future earnings, it underlines why it is worth exploring several viewpoints before forming a view on the stock.

Explore 15 other fair value estimates on Liontown - why the stock might be worth less than half the current price!

Build Your Own Liontown Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Liontown research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Liontown research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Liontown's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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