Latrobe Magnesium Limited (ASX:LMG) has drawn down the first A$10 million from its A$23 million project finance facility towards the construction of a demonstration plant in Victoria’s Latrobe Valley.
This drawdown allows the company to enter into agreements for the supply of long lead time capital items, including the spray roaster and furnaces.
Once the demonstration plant is operating successfully, a commercial plant will be developed to a capacity of more than 10,000 tonnes per annum, which is expected to generate in the order of $110 million in revenue and EBITDA of $42 million.
Latrobe Magnesium is on track to complete construction of the demonstration plant by March 2023 with the commissioning to take place by June 30, 2023.
Construction progress
Project activities remain on schedule with more than 46% of engineering completed and half of the equipment packages tendered to the market.
Engineering has been focused on developing procurement packages with 13 major equipment packages issued to the market (briquetting plant, filters, pumps, evaporator, automation, thickeners, agitators, non-metallic tanks, scrubber, RO Plant and cooling tower).
A further six packages are under development, representing 42% of the equipment packages planned to be tendered.
Additionally, LMG has started the process to engage a logistics and freight forwarding partner, for the construction and operation phases of the project, to mitigate current global supply chain challenges.
3D modelling of piping layout.
Forward plan
The earthworks civil package is progressing, ready for tender to market by the end of the month.
Construction is progressing for the car parking with excavation, crushed rock placement & kerbing complete and final asphalt paving due for completion later this month.
The security gatehouse is due for site instalment next week with associated works progressing and ready for contractors to mobilise to the site.
Latrobe Magnesium has presented project plans to the Yallourn North Action Group and the Yallourn North Environmental Committee group, with positive feedback received from both groups.
The company is developing a magnesium production plant in Victoria's Latrobe Valley using its world-first patented extraction process.
LMG intends to extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste resource from Yallourn brown coal power generation.