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Latrobe Magnesium raises A$11.5 million in oversubscribed placement to fast-track clean magnesium plant

Last updated: 11:58 12 Nov 2021 AEDT, First published: 11:38 12 Nov 2021 AEDT

Latrobe Magnesium Ltd - Latrobe Magnesium raises A$11.5M for clean magnesium plant 

Latrobe Magnesium Ltd (ASX:LMG) is well-positioned to become a low-CO2 producer and supplier of magnesium, having added A$11.5 million to the store cupboard in its recent capital-raiser.

Following the oversubscribed placement that drew large interest from professional, sophisticated and overseas institutional investors, the company will issue 115 million ordinary shares at A$0.10 per share.

Funds for clean magnesium plant 

LMG is an environmental, social and governance (ESG) credentialled clean metals producer. The company has completed a feasibility study validating its combined hydromet/thermal reduction process, which extracts the metal from waste materials.

The capital will help fund the construction of an initial 1,000 tonnes per annum (tpa) magnesium plant in the Latrobe Valley of Victoria during the first quarter of 2022, which will then increase capacity to 10,000 tonnes by the end of 2023.

The plant will be in the heart of Victoria’s coal power generation precinct, providing immediate access to feedstock, infrastructure and labour.

Capital cost savings

Following the completion of a number of value engineering studies, LMG estimates that the current cost of the initial 1,000 tpa plant will be reduced to $39 million from A$45 million, increasing initial gross returns.

Further capital cost savings may result from the completion of the design and engineering activities together with additional test-work results.

To date there has been some A$2.5 million has been spent on the initial plant.

The remaining cost of A$36.5 million will be funded as follows:

Environmental credentials 

The company is developing the magnesium production plant using its world-first patented extraction process.  

The plant uses the principles of the circular economy, recycling power plant waste and thereby avoiding landfill. LMG will extract magnesium metal and cementitious material from industrial fly ash, which is currently a waste stream from the Yallourn brown coal power generation. 

LMG is a low CO2 emitter.

International aspirations 

LMG plans to sell refined magnesium to Australian, USA and Japanese customers over the long term. Australia currently imports the commodity.  

With the best strength-to-weight ratio of all common structural metals, magnesium is increasingly used in the manufacture of car parts, laptop computers, mobile phones and power tools. 

LMG CEO David Paterson will outline the company's investment case during the Proactive Resource Webinar on Tuesday, November 16. To register for the webinar to be held from 12 noon Sydney time, please click here.

Latrobe Magnesium to send all initial product to high-value US market

Latrobe Magnesium Ltd (ASX:LMG) CEO David Paterson tells Proactive that under an amended contract with Metal Exchange Corporation (MEC) LMG will now provide all magnesium from its 1,000 tonnes per annum demonstration plant and its subsequent 10,000 tonnes commercial plant for markets in North,...

on 13/9/23