Latrobe Magnesium Limited (ASX:LMG) has exercised its option and will pay $2.25 million in cash and $2.25 million in LMG shares at 10 cents (22.5 million LMG shares) to buy 320 Tramway Road in Hazelwood North from DG & J Di Fabrizio Steel Fabrications Pty Ltd.
The Di Fabrizzio family has accepted the fixed price of $4.5 million in its three-year lease, with the timing for the issue of the shares subject to LMG refreshing its issuing capacity at its upcoming AGM in January 2022.
This site will enable LMG to house and expand its plants.
LMG is developing a magnesium production plant in Victoria's Latrobe Valley using its world-first patented extraction process.
The company intends to extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste stream from the Yallourn brown coal power generation.
Ideal property
In October this year, LMG secured an option for 12 months to enter into a three-year lease over the site at fixed rentals and a right to buy the property at a fixed price during this period.
Read: Latrobe Magnesium snaps up magnesium plant site in Latrobe Valley, Victoria
320 Tramway Road contains 14,000 square metres of buildings in the form of an administration building and a number of large industrial buildings which are 12 metres high —perfect for LMG’s needs.
The site is close to rail, freeway, gas and water pipelines, as well as a new solar power development which has been passed by the Latrobe City Council and is in the permitting stage with the Victorian State Government.
LMG has the ability to connect to this solar power development and thus its magnesium and other products will produce zero or very little CO2 emissions.
The purchase of the site allows LMG to plan its future expansions, obtain appropriate business insurance, save rent through the construction phase and benefit from its own site improvements.