The Liontown Resources Ltd (ASX: LTR) share price is trading lower on Friday.
In morning trade, the lithium developer's shares are down 1% to $2.75.
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Why is the Liontown share price falling?
The Liontown share price is under pressure today amid broad weakness in the lithium industry and the release of the company's quarterly update.
In respect to the former, a number of ASX lithium shares are deep in the red following a poor night of trade for their peers on Wall Street.
And although they are trading lower, Liontown's shares are actually performing relatively well in comparison. This could mean that investors are pleased with its update.
What was in the update?
Given that Liontown is still at the development stage, the company was operating at a loss again during the quarter. It burned through $6.75 million for operating activities and $111 million for investing activities. The latter includes money spent on developments.
But don't worry, because it has the balance sheet strength to cope with this. The company's cash balance at 30 June was still a sizeable $305.4 million.
In addition, it may not be long until Liontown is generating revenue from direct shipped ore (DSO). This is a precursor to full mining activities at the Kathleen Valley lithium project. The company advises:
The opportunity to monetise DSO material as a potential early source of revenue continued to be progressed with further material stockpiled through the quarter. Ore sorting test work achieved strong results and prospective customers were also provided bulk samples to conduct their own test work. […] A decision to proceed with DSO is planned for the September quarter.
The company has also made a key appointment in regard to mining activities and looks set to announce another shortly. Liontown's managing director, Tony Ottaviano, said:
We have now formally confirmed Iron Mine Contracting as our open pit mining contractor for the three-year life of surface mining, and we look forward to appointing a suitably qualified and experienced contractor as our underground mining contractor for Kathleen Valley shortly.
The Liontown share price is up almost 120% over the last 12 months.
