Latrobe Magnesium gears up for production with successful $3 million placement
Latrobe Magnesium (ASX: LMG) is in a strong financial position to support its Victorian demonstration plant as it approaches the commissioning stage after successfully raising $3.06 million.
The capital raising was supported by sophisticated and professional investors, while the company’s directors and senior management subscribed for $700,000 of the shares.
The new injection of cash means that Latrobe has the funds to easily cover the current $41.7m budget estimate for its 1,000 tonnes per annum demonstration plant.
As at 20 December 2023, the company had spent $37m on the demonstration plant, with $8.2m available in the bank to cover the remaining cost of $4.7m.
The company intends to utilise the surplus $3.5m to provide working capital to operate the demonstration plant.
Production start-up in early 2024
Earlier this month, Latrobe confirmed it is on track to commence production in early 2024 and start receiving initial cash returns through its new magnesium oxide (MgO) strategy.
The company has elected to include the MgO strategy to create early cashflow and to accelerate assessment of the operability of the unique technology being utilised at the plant.
The project is currently focused on fast-tracking the construction of the plant areas required to produce one-tonne bulk bags of MgO, an intermediate product for customer sales, prior to the project’s main focus on the production of magnesium metal.
Magnesium oxide widely used
Magnesium oxide is used extensively in the soil and groundwater remediation, along with wastewater, drinking water, air emissions and waste treatment industries, for its acid-buffering capacity and related effectiveness in stabilising dissolved heavy metal species.
It also has medical applications.
The MgO bagging plant is scheduled to be completely fabricated and ready for delivery to site next month, with MgO production now expected to commence in March.
To assist with ensuring that schedule remains on target, Latrobe’s construction team has realigned its organisation and planning to focus on the plant areas required to produce MgO.
This includes systems common to all areas of the process – such as water, air and liquified petroleum gas (LPG) – being completed to the extent required for MgO production.
Latrobe has also re-adjusted its commissioning methodology to allow construction teams to transition to other areas of the plant as sub-systems are handed over to the company’s operations personnel.
Improving workforce availability
The construction of the demonstration plant has been delayed due to issues in obtaining sufficient labour.
Latrobe recently commenced discussions with government agencies and employment groups to help identify opportunities for workers from downsizing industries such as paper manufacturing and power generation.
These discussions are ongoing.
Cutting-edge technology
Latrobe is utilising a world-first patented extraction process in its development of the pilot magnesium production plant in the Latrobe Valley.
The project will extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste resource from the nearby Yallourn brown coal power generation.
Following construction and testing of the pilot plant, the company aims to build a commercial plant with a capacity of more than 10,000 tonnes per annum magnesium.