Latrobe Magnesium raises $12m to accelerate demonstration plant operations
Fresh from celebrating initial production at its demonstration plant in Victoria, Latrobe Magnesium (ASX: LMG) has reported further positive news with a new $12 million cash injection.
The company has emerged from a trading halt to announce it has received firm commitments to raise the capital from several new and existing investors via an institutional placement.
The placement has received strong backing from the company’s directors and management, who have subscribed for a combined $650,000 worth of shares.
Additional raising
Latrobe has also revealed plans to undertake a fully underwritten, non-renounceable entitlement offer to raise a further $6m.
The capital raising will support the completion of final structural works and commissioning of the demonstration plant, as well as final engineering ahead of steady-state magnesium metal production of 1,000 tonnes per annum.
“It is pleasing to see the market recognise the importance of LMG as the world’s first producer of magnesium from brown coal fly ash,” Managing director David Paterson said.
“The support from both new and existing investors is a testament to our team, patented process and the positive macroeconomic outlook for magnesium.”
“This equity raise will help fund our demonstration plant to produce magnesium metal and saleable by-products, demonstrating the commercial viability of our full flowsheet.”
Commercial plant proceeding
Along with finalising the engineering of the demonstration plant to produce magnesium metal ingots, Latrobe continues to advance plans for its proposed 10,000tpa commercial plant.
Latrobe recently achieved a major milestone with the start-up of early-stage magnesium oxide (MgO) sales from its demonstration plant project and is using the bagging plant to help demonstrate its patented world-first hydromet process to all stakeholders.
The company is selling the MgO produced in the initial phase to Rainstorm Dust Control under an existing memorandum of understanding, prior to the production of magnesium metal.
The new funds will support an upcoming bankable feasibility study with a final investment decision on the calendar to be announced by year’s end.
Diversified register
“The placement has also been a fantastic opportunity to diversify our shareholder register ahead of a significant period of growth for the company,” Mr Paterson added.
“The next 12 months promise to be an exciting time for us and we are very appreciative of the continued support of our existing shareholder base.”
“Therefore, we want our existing retail shareholder base to have the chance to participate on the same terms as institutional investors through the entitlement offer.”
The new capital injection will also support research and development work currently being undertaken alongside leading Australian science body, the CSIRO.