Latrobe Magnesium boosts demonstration plant fund with $1.93m capital raising
Latrobe Magnesium (ASX: LMG) has raised an additional $1.93 million to help fund cost overruns at its Victorian demonstration plant with the completion of a successful share purchase plan.
The capital raising comes at a time when Latrobe is racing towards a start-up of initial production and product sales of magnesium oxide from the demonstration plant.
The company has confirmed that construction of phase 1 of the demonstration plant will be completed by the end of this month, with the production of magnesium oxide (MgO) to follow by 16 April 2024.
Fine weather helping
Latrobe reported to shareholders that recent fine weather in Victoria has seen it make strong progress at the plant, with several of the stages in the unique hydromet process already commissioned.
Chief executive officer David Paterson said the lowest February rainfall in history and lower than average rainfall in March has meant greater workdays outdoors, helping the company to keep the schedule on track.
“While the focus continues on completing construction, labour in the commissioning team has been ramped up to meet the typical challenges of commissioning,” Mr Paterson said.
“Construction is on track for the end of March completion with the first MgO planned for 16th April.”
“The commissioning team is working hard to make this happen as soon as possible, with the operations team ramping up to meet this challenge.”
Magnesium oxide strategy
Latrobe elected to include a fast-tracked magnesium oxide strategy in 2023 to help test the technology being used in the demonstration plant and to bring on board an early revenue-earning opportunity.
The project’s site team has continued to progress the construction of the plant areas required to produce bulk bags of MgO, an intermediate product, for customer sales prior to the production of magnesium metal.
Latrobe said the construction and commissioning of the remaining plant areas (the briquetting system, reduction furnace area, furnace automation and vacuum system) will be the second phase of the plant to be fully commissioned.
“This strategy will demonstrate that LMG’s patented, world-first hydromet process can be operated successfully and prove to all stakeholders the true value of LMG’s intellectual property,” Mr Paterson said.
Bagging plant commissioned
The bagging plant associated with the initial MgO production and sales has been completed and handed over to commissioning for testing.
The Latrobe operations team is also gradually increasing activity to support production of MgO next month.
With commissioning expertise becoming harder to come by, Mr Paterson said the company’s partners such as Rockwell and Tenova have added additional personnel to resolve issues and speed up the process.
Latrobe also continues to look for additional manpower, holding numerous conversations with recruitment firms, government-supported labour organisations and contractors about options for supplying labour.
The company has identified that the recent shutdown of a white paper line at the Opal paper mill in Maryvale and the subsequent worker redundancy have presented opportunities to recruit personnel with skills in similar processes and equipment and would be a logical fit for the process plant.