Latrobe Magnesium increases project funding and targets next phase of MgO production

Latrobe Magnesium (ASX: LMG) has negotiated a $3 million increase in its project finance facility to provide a funding buffer as it wraps up activities at its innovative Victorian plant.

The funding facility now sits at $28m and Latrobe has also successfully extended its maturity date by nine months to 31 December 2027.

The change is supported by an expected increase in refundable research and development (R&D) tax offsets projected to be received by the company.

Sizeable R&D refund

Latrobe’s total R&D refundable offsets for the year ended 30 June 2024 are expected to be around $16m and $13 million for FY25.

The company received an offset of $12.9m for FY23 in May 2024, with the funds used to reduce the amount owing under the loan facility.

Chief executive officer David Paterson said the additional funding will provide operational working capital for ongoing magnesium oxide (MgO) production as the company ramps up.

Unique technology

Latrobe’s hydromet technology extracts magnesium from brown coal fly ash – a waste resource from local brown coal power generation in Victoria – and ferro-nickel slag tailings, converting the unwanted waste resource into saleable products while emitting 60% less carbon dioxide than the industry average.

Latrobe recently produced the world’s first batch of MgO from fly ash, which along with the recent commissioning of the first phase of its 1,000-tonnes-per-annum Stage 1 demonstration plant, has demonstrated the company’s unique technology while bringing in capital via the sale of the environmentally-friendly product.

The early-stage MgO production is being sold under an agreement to Western Australia-based specialist company Rainstorm Dust Control.

After achieving this initial success, Latrobe is now focused on undertaking a bankable feasibility study and financing discussions in relation to a 10,000tpa Stage 2 commercial plant.