Latrobe Magnesium Ltd (ASX:LMG, OTC:LTRBF) is making steady progress with its stage 1 demonstration magnesium plant at Hazelwood North in Victoria’s Latrobe Valley, 150 kilometres southeast of Melbourne, Australia.
LMG has developed a patented process to extract magnesium metal from magnesium-rich resources. This involves extracting magnesium metal from fly ash using a world-first hydrometallurgical extraction/thermal reduction process which includes the production of valuable by-products, minimising any waste streams and providing a more sustainable approach.
The company’s stage 1 demonstration plant project continues to make positive progress with no reportable health, safety or environmental (HSE) incidents to date, and during the commissioning trial, the project successfully produced magnesium oxide (MgO), meeting the required quality specification.
Near-term revenue
Following the successful commissioning trial and major construction for MgO production finished, the demonstration plant will now progress towards continuous operation of MgO production.
Detailed planning works are continuing in order to complete full construction and commissioning of the demonstration plant ahead of production of magnesium metal. LMG says that revenue from sales is now expected in the near term.
The MgO produced during the ore commissioning trial was more than 80% pure MgO. LMG says this is a positive result and in line with expectations, particularly given that the spray roaster was processing an understrength magnesium solution.
This gives the commissioning team significant confidence that the Spray Roaster will be able to achieve even higher quality MgO in its operational phase.
Ferrosilicon Bag Breaker erection (left) and Briquetting Ball Mill civil works (right).
Acid resistant epoxy coating for Spray Roaster (left) and SCM Dust Collector & Stack installed (right).
Looking to stage 2
The stage 2 commercial plant, producing more than 10,000 tonnes per annum, will utilise breakthrough technology and efficient materials handling to enable LMG to operate at globally competitive costs.
This comes as current annual demand for magnesium reaches approximately one million tonnes per annum, a figure that is projected to double over the next few years.
The stage 2 commercial plant workstreams are currently focused on location identification and vertical retort furnace design.
LMG has a strong balance sheet, following completion of the $12 million placement and with a further $6 million to be received in July from its underwritten rights issue, which is currently open to shareholders.
LMG notes that it paid down a significant $12.9 million of existing debt after receiving its ATO R&D rebate in May 2024.
The company is now considering a number of stage 2 and stage 3 project funding options, including the combination of a partial sale of site land and the sale and leaseback of the demonstration plant site to raise up to $15 million.