Liontown Farms Into Centenario Lithium Brine Project in Argentina

The Deal

Liontown Limited said on September 1, 2026 that it had executed a binding farm-in agreement with NEXT Lithium Corp. to earn up to a 100% interest in the Centenario lithium brine exploration project in Salta Province, Argentina. The interest is acquired through shares in Vertex Holdings (Argentina) Pty Ltd, NEXT Lithium’s Australian subsidiary, which owns the local project vehicle Centenario Lithium S.A.

Centenario sits close to the Pozuelos-Pastos Grandes project, jointly owned by Lithium Argentina and Ganfeng Lithium, and to Eramet’s Centenario-Ratones operation. NEXT Lithium describes the property as 14,577 hectares. A transient electromagnetic survey has already been completed across the project, and the anomalies it identified are the targets for a drilling campaign.

The release frames this as Liontown opening a new growth frontier in lithium brine, complementing its hard-rock operation. The company’s producing asset is the Kathleen Valley lithium operation in Western Australia, which concluded open pit mining and moved to a 100% underground operation during FY2026, and its FY2026 results deck also lists Buldania alongside Kathleen Valley as exploration to advance in FY2027. Nothing in the announcement changes that priority: the company states that Kathleen Valley remains the core focus and frames Centenario as early, low-cost access to a brine district.

Transaction Terms

Initial consideration for the grant of the farm-in rights is US$5 million in cash and US$10 million in Liontown shares, valued by reference to the company’s 20-day volume weighted average price. It is payable on initial completion, once conditions precedent are satisfied.

The earn-in then runs in four phases. Liontown may earn a 49% interest by funding US$15 million of project expenditure over 24 months from completion, and may then elect, within 90 days of earning that interest, to increase to 51% by paying a further US$15 million. It may further increase to 75% by funding an additional US$25 million of expenditure over 24 months from the date it earned the 49% interest. None of those three steps is compulsory, and Liontown may stop at any interest it has already earned. The fourth phase is different in kind: having acquired the 75% interest, it must acquire the remaining 25%, at a price set by the mineral resource estimate published after phase three and capped at US$125 million.

That final payment is calculated at US$25 per tonne of lithium carbonate equivalent for the first three million tonnes of resource averaging more than 350 mg/l lithium, and US$10 per tonne for resource above three million tonnes on the same grade test. NEXT Lithium elects whether milestone payments come in cash, Liontown shares, or a combination, subject to Liontown’s available placement capacity under ASX Listing Rule 7.1.

Aggregate project expenditure across the full earn-in is US$40 million, about A$56 million, over four years, with milestone payments of up to US$140 million, about A$195 million, if every milestone is satisfied.

The terms and principles of a shareholders’ agreement for the joint venture have been agreed as part of the farm-in, and the parties must enter into the definitive document when Liontown acquires its 49% interest.

Brine and the Capability Gap

Brine and hard rock are the two principal sources of the world’s lithium, and Liontown has until now been exposed only to one of them. Kathleen Valley is a spodumene operation, and the technical skills that run an underground hard-rock mine do not transfer to evaporation ponds and brine chemistry. The company is explicit that it is buying capability as much as ground.

Liontown’s release says NEXT Lithium’s founder has developed lithium brine assets in Argentina before, co-founding Millennial Lithium, which Lithium Americas acquired in 2022. NEXT Lithium describes itself as a privately held explorer founded in 2020 by Kyle Stevenson, its chief executive. Liontown says the partnership gives it access to NEXT Lithium’s brine expertise while it builds its own.

“This transaction gives Liontown a low-cost entry into lithium brine. Brine is one of the two primary sources of the world’s lithium, and this is our first step in building real understanding and capability in it.”

— Tony Ottaviano, Managing Director and Chief Executive Officer, Liontown Limited

“Structuring the deal as a staged farm-in ties our capital to results, so we invest more only as the project proves itself. Kathleen Valley remains our priority, and we will keep pursuing value-accretive growth where it fits our strategy.”

— Tony Ottaviano, Managing Director and Chief Executive Officer, Liontown Limited

For NEXT Lithium the appeal is funding and technical weight behind a project it has taken as far as geophysics. The company becomes a Liontown shareholder through the scrip component of the initial consideration.

“The Centenario Project is one of the last large-scale lithium brine exploration projects in Argentina. Partnering with Liontown provides the experience, technical capability and financial strength needed to advance Centenario and realise its full potential.”

— Kyle Stevenson, Chief Executive Officer, NEXT Lithium Corp.

Foreshadowed on the FY2026 Results Call

Liontown reported its FY2026 results on August 31, 2026, and the conditions for a brine entry were set out on that call the day before this agreement was signed. Lyndon Fagan of J.P. Morgan picked up on a slide dealing with M&A and asked Ottaviano to be more specific about jurisdiction and about brine versus hard rock, noting that it felt early in the company’s journey to be looking at acquisitions.

Ottaviano’s answer set out the conditions the Centenario farm-in satisfies. Kathleen Valley stays the priority and hard rock remains the core competency the company will keep evaluating. On brine, he said Liontown cannot ignore one of the largest sources of lithium units, but acknowledged that it lacks the capability today and would therefore partner with someone of demonstrable background.

The following day the company signed a staged farm-in with a counterparty whose founder built and sold an Argentine brine developer.

The FY2026 result gives the transaction its financial context. Revenue was A$639 million against A$298 million a year earlier, a 115% increase, on shipments of 381,997 dmt at a realized price of US$1,379 per dry metric tonne on an SC6-equivalent basis against US$788. Operating cash flow was A$182 million and underlying EBITDA A$147 million. Statutory net profit after tax was A$93 million including one-off items, and underlying net profit after tax was A$14 million, which the company describes as Kathleen Valley’s maiden profit. Liontown closed the year with A$561 million of cash and A$192 million of net cash, so net gearing is zero, and guided to FY2027 capital spending of A$320 million to A$370 million funded from operating cash flow, before any expansion capital.

Conditions, Dilution and Timetable

Initial completion remains subject to conditions precedent, which the release describes as customary and lists as the release of existing security interests over the shares in Centenario Lithium S.A., the release of any existing security interests over the project’s tenements, and repayment of outstanding intercompany loans between NEXT Lithium and Vertex or Centenario. The conditions are for Liontown’s benefit and must be satisfied or waived within six months of signing, or such later date as the parties agree, failing which either party may withdraw without further liability. Liontown expects satisfaction shortly following execution, and the release states there is no assurance that the conditions will be satisfied or waived or that completion will occur on the terms or timeframe currently anticipated.

The scrip component carries a dilution question that will not be settled until the shares are issued. The number of shares is fixed by the 20-day VWAP at the relevant time, so the count moves with the share price, and NEXT Lithium’s ability to elect scrip for later milestones is limited by Liontown’s available Listing Rule 7.1 capacity. Issues may be deferred where listing rule compliance requires it.

Exploration risk sits on top of that. The release describes Centenario as at an early stage of exploration, with no assurance that further exploration will identify economically viable mineralization, and the drilling campaign is still to come. The phase four price is based on the mineral resource estimate to be published following phase three. Under the formula, the first three million tonnes of LCE above 350 mg/l are worth up to US$75 million; reaching the US$125 million cap requires about five million tonnes more at US$10 per tonne, or roughly eight million tonnes of qualifying resource in total.

Liontown has said the final investment decision on the Kathleen Valley expansion remains on track for the end of Q1 FY2027, subject to market demand, and management has declined to restate a production target beyond 2.8 Mtpa until a definitive feasibility study is published. The first US$15 million at Centenario is spread over 12 to 24 months and includes drilling and related exploration.