Liontown Resources : Quarterly Activities and Cash Flow Report

SEPTEMBER 2020

QUARTERLY ACTIVITIES REPORT

Updated Kathleen Valley PFS delivers substantial increase in NPV to A$1.1B

and mine life to ~40 years as landmark $12.5m capital raise de-risks

Liontown's development pathway

HIGHLIGHTS

KATHLEEN VALLEY LITHIUM PROJECT (Western Australia:100%)

• Updated Pre-Feasibility Study (PFS) confirms the technical and financial viability of a standalone 2Mtpa mining and processing operation based on an updated Ore Reserve of 71Mt @ 1.4% Li2O and 130ppm Ta2O5.
• Ore Reserve underpins a 40-year mine life with average production of ~350ktpa 6% Li2O spodumene concentrate (SC6.0) and 430tpa of 30% Ta5O5 concentrate.
• Key financial outcomes of the PFS include:

1. LOM free cash flow after-tax of A$4.8B;

1. Project payback of ~3 years post-production;

1. Post-taxNPV8%(real) of A$1.12B and IRR of 37%;

1. Pre-productioncapital expenditure of A$325M; and

• 1. Cash costs of US$283/dmt Li2O concentrate (excluding royalties) in Years 1-10.
• A Downstream Scoping Study (DSS) leveraging off the PFS demonstrates the significant financial upside of an integrated mining, processing and refining operation based on the production of lithium hydroxide (LHM) or lithium sulphate (LSM) using SC6.0 from Kathleen Valley as feedstock.
• Liontown Resources ("Liontown" or the "Company") has commenced a Definitive Feasibility Study (DFS) focused on SC6.0 production that will review a number of opportunities to improve the Project's financial metrics, including additional test work to further develop the DSS, given the compelling economic upside.

MOORA GOLD-PGE*-NICKEL-COPPER PROJECT (Western Australia: 100%)

• Data from an Airborne Electromagnetic (AEM) survey has defined a number of large, conductive zones coincident with the previously delineated, 15km long, Mt Yule - Felton Gold-PGE corridor.
• The AEM conductors may indicate primary bedrock-hosted, sulphide zones beneath and down dip of the surface geochemical anomalies.
• • PGE - palladium-platinum

CORPORATE

• $12.5m capital raising announced subsequent to end of Quarter.
• Funds will ensure the continued development of Liontown's flagship Kathleen Valley Project, including the completion of a DFS, and initial drill testing of the Moora Project.

Drill rig at Kathleen Valley

INVESTMENT HIGHLIGHTS

• World class lithium-tantalum deposit defined at 100%- owned Kathleen Valley Project.
• Studies demonstrate the potential of Kathleen Valley to be a significant contributor to the battery metals market.
• Development momentum at Kathleen Valley being maintained with a DFS scheduled for completion in Q4 2021.
• Strategic land position at Moora, which is located in an emerging mineral province, with initial results confirming high order Au-PGE-Ni-Cu anomalism.

Auger drilling at Moora

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PROJECTS

1. Kathleen Valley Lithium Project, WA (Liontown: 100%)

The Kathleen Valley Project is located in Western Australia, ~680km north-east of Perth and ~350km north- northwest of Kalgoorlie, within the Eastern Goldfields of the Archaean Yilgarn Craton (Figure 1). Liontown commenced work at Kathleen Valley in 2017 and has since defined a world-class Mineral Resource Estimate of 156Mt @ 1.4% Li2O and 130ppm Ta2O5.

Figure 1: Kathleen Valley Lithium Project - Location and Geology Plan.

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Following the updated Mineral Resource Estimate (MRE) reported in May 2020, Liontown has continued to advance the Kathleen Valley Project with completion of:

1. An updated Pre-Feasibility Study (PFS) investigating the establishment of a mining and processing operation to produce spodumene and tantalum concentrates; and
2. A Scoping Study into the viability of refining the spodumene concentrate onsite to produce either lithium hydroxide or lithium sulphate.

UPDATED PRE-FEASIBILITY STUDY

The PFS, which builds on the previous study completed in December 2019, delivered an updated Ore Reserve of 71Mt @ 1.4% Li2O and 130ppm Ta2O5 which will underpin a 2Mtpa mining and processing operation over a 40-year mine life. The Ore Reserve was based on the May 2020 MRE of 156Mt @ 1.4% Li2O and 130ppm Ta2O5.

The PFS evaluated a mining and processing operation delivering an average of 350ktpa of SC6.0 and 430tpa of a 30% Ta2O5 tantalum concentrate. Following conventional underground and open pit mining and delivery to the Run-of-Mine pad, ore will be processed by Whole of Ore Flotation (WOF) to produce spodumene and tantalum concentrates which will then be transported in bulk for delivery to downstream customers. Figure 2 shows the proposed site layout including mining areas, processing facilities and non-process infrastructure.

Figure 2: Kathleen Valley Project - Proposed mine site and refinery layout.

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Updated Ore Reserve

Orelogy Consulting Pty Ltd (Orelogy) were responsible for the mining component of the PFS. As such, Orelogy has prepared an Ore Reserve Estimate for the Kathleen Valley underground and open pit as at 9th October 2020, in accordance with the guidelines of the JORC Code 2012.

The Ore Reserve Estimate is based on the MRE update released on the 11th May 2020 of 156Mt at 1.4% Li2O and 130ppm Ta2O5. The Measured, Indicated and Inferred MRE was prepared by independent specialist resource and mining consulting group Optiro Pty Ltd (Optiro) and is summarised in Table 1.

Table 1: Kathleen Valley Project - Mineral Resource Estimate (May 2020)

	Cut-off grade			Resource			Million			Li2O %			Li2O %			Ta2O5 ppm
	Li2O %			Category			tonnes			(Equiv)
				Measured	20		1.4		1.3		140
0.55			Indicated	105		1.5		1.4		130
				Inferred	32		1.4		1.3		110
	Total					156		1.5		1.4		130
	Notes: •	Reported above a Li2O cut-off grade of 0.55%

• Tonnages and grades have been rounded to reflect the relative uncertainty of the estimate.
• Li equivalency based on overall recoveries of 50% & 76% respectively for Ta2O5 and Li2O and pricing of US$69.9/lb for 30% Ta2O5 / $739/t for 6% Li2O.

The MRE is reported and classified in accordance with the guidelines of the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code; 2012). The Mineral Resource is inclusive of the Ore Reserve.

The summary of the Ore Reserve prepared by Orelogy is shown in Table 2.

Table 2: Kathleen Valley Project - Ore Reserve Estimate (October 2020)

	Category			Tonnage (Mt)			Li2O		Li2O		Ta2O5		Ta2O5
						(%)		(t)		(ppm)		(t)
							Underground
	Proved		3.9		1.4		56,000	130	500
	Probable		37.6		1.5		572,000	120	4700
	Sub-Total			41.5			1.5		628,000		120		5100
							Open Pit
	Proved		11.7		1.2		142,000	140	1,700
	Probable		17.6		1.2		205,000	130	2,300
	Sub-Total		29.3		1.2		346,000	130	3,900
	TOTAL		70.8		1.4		974,000	130	9,100
	Notes:	•		Tonnages and grades are diluted and reported at Li2O cut-off grade of 0.7-0.75% (open pit) and 1.2
		-1.5% (Underground). Tonnages and grades have been rounded.

Mineral Resources were converted to Ore Reserves in line with the material classifications which reflect the level of confidence within the resource estimate. The Ore Reserve reflects that portion of the Mineral Resource which can be economically extracted by open pit and underground mining methods.

The Ore Reserve considers modifying factors and other parameters including, but not limited to the mining, metallurgical, social, environmental, statutory and financial aspects of the Project. Figure 3 shows the proposed open pit and underground development. The open pit has been designed in two phases, the first being to supply ore for the plant in the first 3 - 4 years until the underground operation is up to full capacity. The second phase occurs after 25 years when the underground mining operation is nearing completion.

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