LTR has entered a Strategic Partnership with LG Energy Solutions to solve the short-term funding for the Kathleen Valley project. The agreement will see LTR raise US$250m (~A$380m) via a five-year convertible note, with a conversion price of A$1.80. The offtake with LG Energy Solutions has been expanded from 5 years to 15 years. The convertible note replaces the A$550m syndicated facility, which was yet to be drawn and is now cancelled. LTR’s cash balance rises to A$500m post the convertible note, and with A$120m of commissioning costs remaining, is well funded to bring Kathleen Valley into production. We are reiterating our BUY rating and A$1.20 price target. The announcement of first spodumene production is due by the end of July and presents a key near-term catalyst.
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