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The battery mineral producer, Liontown Resources (ASX:LTR) faces a legal challenge concerning a royalty deed pertaining to specific tenements within its Kathleen Valley Lithium Project. The challenge was initiated by a private royalty holder, Drem Pty.
LTR’s shares faced a significant downturn, experiencing a 8.33% fall in its stock price to AU$1.54 apiece.
Details of the Dispute
The core of the dispute revolves around the calculation of the royalty amount, with Drem Pty asserting a discrepancy in the calculation method. The contention is whether the royalty should be computed at 2% or at a lower percentage of the gross sales of production from the relevant tenements.
Company's Response
Liontown Resources clarified its stance on the matter, asserting that it perceives Drem's claim as non-material. The company emphasized that the dispute does not impact the scheduled commencement of first production in mid-2024.
Conclusion
Despite the stock's decline and the ongoing legal challenge, Liontown Resources maintains its operational trajectory. The dispute's resolution will determine the impact, if any, on the company's Kathleen Valley Lithium Project.
