Latrobe Magnesium Ltd is aiming to restart its demonstration plant in late May, with plans to commence production of magnesium oxide (MgO) and progress towards steady-state operations.
The company has secured A$2.75 million through an institutional placement and launched a fully underwritten Share Purchase Plan (SPP) to raise an additional A$750,000, bringing the total capital raising to A$3.5 million. Latrobe will issue 250 million new shares at $0.011 per share, representing a 15.4% discount to the last traded price of $0.013 per share.
Directors have shown strong support for the raise, subscribing for A$550,000 of shares under the Placement.
LMG has also received approval to draw down A$2.8 million in debt finance, with interest rates significantly reduced to 10% and is aiming to further strengthen its financial position, by advancing the sale of approximately 4.3 hectares of excess land at its Tramway Road site.
The transaction is expected to generate up to A$5 million and is anticipated to complete by June 30, 2025.
“I am pleased with our funding progress to allow the start of operations as per our revised strategy of producing steady-state MgO from our 1,000tpa Demonstration Plant, whilst we progress the construction of magnesium metal. The strong support for this equity raising reflects the desire to commence operations to demonstrate our ongoing success in derisking our technology and process, amidst difficult equity market conditions. It is gratifying to see the continued support to make us the first new producer of magnesium in the western world,” Latrobe Magnesium’s CEO, David Paterson said.
“The new funding will enable Demonstration Plant operation to produce MgO, demonstrate sustainable on-spec MgO production to the market, which LMG intends to sell to its Australian customers, collect data to support permitting activities for Stage 2 and build our experience base with our workforce.
“2025 promises to be a significantly better year for achieving our goals of metal production, progressing the Stage 2 commercial project and improving the share price. We are very appreciative of the support from both our new and existing shareholder base to help move the company forward.”
Latrobe is aiming to start operations at its Demonstration Plant by the end of May and will look to secure labour, restock reagents, finalise the ash stockpile, reinstate the management team, and complete the Environmental Protection Authority’s (EPA) ongoing review of the plant’s operating plans.
The capital raised will enable the plant to operate under steady-state conditions for the foreseeable future, although this remains dependent on the labour rates LMG is able to negotiate with unions and contractors.
The company intends to sell the magnesium oxide (MgO) produced at the plant to its customer base.
Use of funds
Latrobe will use the raised funds in the following way:
As a result of the raise, RnD Funding (RnD) has agreed to release A$550,000 into Latrobe’s controlled bank account and advance an additional A$2.3 million under its existing facility. RnD has also agreed to reduce the interest rate on the loan to 10%, delivering material savings for the company.
As at December 31, LMG’s outstanding debt to RnD stood at A$5.1 million. Following the new advance, total debt will rise to A$7.4 million plus interest. The facility is expected to be repaid from LMG’s anticipated 2025 tax rebate, which is forecast to be between A$8 million and A$10 million, depending on expenditure at the Demonstration Plant through to 30 June 2025.