UPDATE 1

(Adds deal details in paragraphs 3, 4 and 5)

Aug 3 (Reuters) - Australia's Liontown Resources Ltd said on Thursday it had agreed to deliver lithium direct shipping ore (DSO) product ahead of first concentrate production at its flagship Kathleen Valley lithium project.

DSO, which is a relatively unprocessed ore and is easier to produce, is expected to provide an early source of revenue for the company, which has been a takeover target.

The battery metals explorer said it had not chosen customers for its DSO shipment yet, but "is well advanced" in doing so, with the first shipment targeted by the end of 2023 calendar year.

Liontwon, which rejected Albemarle's $3.7 billion offer earlier this year, said it was targeting early revenue with an initial sale of 250,000 to 300,000 tonnes of DSO prior to first concentrate production.

Since mining operations commenced in the first quarter of 2023 at the Kathleens Corner and Mt Mann open pits, Liontown has stockpiled approximately 70,000 tonnes of DSO, the company said in a statement.

The Perth-based company also said it had executed a contract with Axis Mineral Services for the crushing, screening and sorting of the DSO material at Kathleen Valley. (Reporting by Nausheen Thusoo in Bengaluru; Editing by Subhranshu Sahu)

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