Why are Liontown shares roaring 14% higher today?

Liontown Resources Ltd (ASX: LTR) shares are rocketing on Tuesday morning.

At the time of writing, the lithium miner's shares are up 14% to 72 cents.

Why are Liontown shares rocketing?

Investors have been buying the company's shares today after being impressed with its quarterly update.

According to the release, the ramp up at the Kathleen Valley Lithium Operation has continued to deliver a strong performance.

Liontown recorded a 215% quarter on quarter increase in spodumene concentrate production to 88,683 dry metric tonnes (dmt) for the three months ended 31 December.

This underpinned a significant increase in sales for the period. The lithium miner revealed that it shipped 81,341 dmt of spodumene concentrate to customers during the quarter, which represents a 651% increase on the first quarter.

And with an average realised price of US$806 per tonne (down 5% quarter on quarter), Liontown generated total revenue of $89.8 million for the period. This represents a 674% increase on first quarter revenue.

Another positive is that the company delivered its production with an all-in sustaining cost of US$763 per tonne. This means that its operations were modestly profitable during the period despite the weaker prices.

As a result, the company achieved net cash from operating activities of $16.7 million for the three months, which led to it finishing the period with $192.9 million in cash. It is likely to be this that is giving Liontown shares the biggest boost today. Especially given how many lithium miners are operating at a loss right now.

'Strong progress'

Liontown's Managing Director and CEO, Tony Ottaviano, was pleased with the company's progress. He said:

Liontown has continued to make strong progress at Kathleen Valley during the December 2024 quarter, with the rampup of production continuing to meet, and in some areas exceed expectations. We are now a fully operational producer, having shipped over 100,000 wet metric tonnes of spodumene concentrate to customers since the commencement of production at the end of July 2024.

Notably, the Company generated positive net cash from operations in the first full quarter since we commenced production, in July 2024. Our performance this quarter reinforces that Liontown is firmly on track to achieve its ambition of becoming an established world-class producer in the lithium sector.

Ottaviano also spoke positively about the future. He adds:

As we navigate the current low-price lithium environment and given our strategic approach to continuous improvement, ongoing optimisation will continue across our business. We remain focused on concluding our processing plant rampup, starting underground stoping production and lifting processing plant performance.

The post Why are Liontown shares roaring 14% higher today? appeared first on The Motley Fool Australia.

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