Perth-based mining executive Tim Goyder’s Liontown Resources has raised $450 million to develop its Kathleen Valley lithium mine in WA’s Goldfields region, as investors continue to flock towards battery minerals.

The fundraising announced on Wednesday came a month after shares in Chalice Mining, also chaired by Mr Goyder, rose 44 per cent in the week after it announced the initial mineral resource estimate for its Julimar nickel-copper-platinum deposit 70 km from Perth.

With lithium shaping up as a crucial commodity for the electric vehicle revolution, miners like Liontown are scrambling to scoop up engineering contractors and labour in WA.

Liontown CEO Tony Ottaviano said investors were attracted by “probably one of the best undeveloped spodumene deposits in the world” and its location in the “tier one” mining jurisdiction of WA.

The Perth-based miner plans to raise an additional up to $40 million from existing shareholders at $1.65 a share, the same price as the institutional placement and a 14 per cent discount to the closing price of $1.92 on Tuesday. Liontown shares were trading as low as 10c in July last year.

It will use the equity funds and up to $121 million in debt to build a $473 million underground lithium mine at Kathleen Valley 400 km north of Kalgoorlie to extract 2.5 million tonnes of ore a year to produce about 500,000 tonnes of 6 per cent spodumene concentrate. An increase in annual capacity to 4 million tonnes of ore and 700,000 tonnes of spodumene is planned for 2030.

The cost to build Kathleen Valley has been hit by the tight WA labour market, which has been further squeezed by COVID-induced international and interstate travel restrictions.

Mr Ottaviano said the latest cost estimate issued in November assumed an average labour rate on site of $190 an hour, up from $154 an hour a year before.

Lower productivity compared to previous years is also expected due to a less experienced workforce and the shorter fly in-fly out rosters now demanded by workers.