Bell Potter lifts Liontown price target to 55c following Moora drilling success

The value of lithium developer Liontown Resources (ASX: LTR) is “increasingly leveraged” to exploration success at its earlier stage Moora exploration project in WA, according to Bell Potter Securities
22nd January 2021
Resources Rising Stars

The value of lithium developer Liontown Resources (ASX: LTR) is “increasingly leveraged” to exploration success at its earlier stage Moora exploration project in WA, according to Bell Potter Securities, but remains underpinned by its “globally significant” Kathleen Valley lithium project.

In an updated research note, Bell Potter analyst Stuart Howe has increased his risked valuation of the stock to 55c (compared with its current price of ~40c) and reiterated a Speculative BUY recommendation.

The new research follows the announcement earlier this week of initial air-core drilling results from the Moora project, located 150km north-east of Perth in the same geological terrain as Chalice Mining’s (ASX: CHN) world-class Julimar nickel-copper-PGE discovery.

Shallow wide-spaced air-core drilling returned intercepts of 10m at 1.9% copper including 4m at 2.5% copper and 12m at 0.5g/t gold including 4m at 1.1g/t.

“An extensive copper-gold zone extends over 1km in length and up to 200m in width,” Howe said.

“Mineralisation is associate with elevated nickel and platinum, indicating possible magmatic sulphides at depth.

“We view these results as highly encouraging and look forward to the release of further assay results as they become available over the following weeks and months.”

Liontown is also expected to generate regular news-flow from its Kathleen Valley project, which is currently undergoing a Definitive Feasibility Study set for delivery in Q4 2021.

“Over 2021, LTR will progress the globally significant Kathleen Valley lithium project through a DFS and a potential downstream lithium processing facility through a pre-feasibility study,” Bell Potter said.

“The company is taking a methodical, technical approach with these studies to mitigate the risks experienced by other lithium groups.

“Kathleen Valley is timed such that development and production can commence when the lithium market is expected to be supply-short and support higher product prices.

“Kathleen Valley forms the largest component of our LTR valuation.”

To read a full copy of the new Bell Potter research note, click here.

Meanwhile, Sydney-based Bridge Street Capital has said its 43cps valuation of Liontown is “under review” following the Moora drilling results. Bridge Street analyst Dr Chris Baker said his current valuation contains a nominal value of under 1c for Moora.

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