- Latrobe Magnesium (LMG) raises $11.5 million through a placement to sophisticated and institutional investors
- The company will issue 115 million shares to investors at 10 cents each, along with 28.75 million attaching options exercisable at 4 cents within the next two years
- The proceeds will be used to fund the construction of its magnesium production plant at its Latrobe Valley Project in Victoria
- Construction of the initial 1000-tonnes-per-year plant is scheduled to begin in the first quarter of 2022, with production set to begin roughly a year later
- Shares in Latrobe Magnesium are up 3.85 per cent to $0.14 at 10:33 am AEDT
Latrobe Magnesium (LMG) has raised $11.5 million through a placement to sophisticated and institutional investors, which will be used to fast-track the construction of a magnesium production plant at its Latrobe Valley Project.
Under the terms of the placement — led by Melbourne-based Peak Asset Management — 115 million ordinary shares will be issued to investors at 10 cents each, along with 28.75 million attaching options exercisable at 4 cents within the next two years.
Construction of the initial 1000-tonnes-per-year plant is scheduled to begin in the first quarter of 2022, with production set to begin roughly a year later. The plant will then be expanded to 10,000 tonnes per year, with further capacity to be considered thereafter.
Latrobe intends to sell the refined magnesium under long-term contracts to customers in Australia, the United States and Japan. Currently, Australia imports all of the 8000 tonnes of magnesium it consumes each year.
Located in the heart of Victoria’s coal power generation precinct, the plant’s construction had originally been estimated to cost $45 million. However, cost reductions have brought that figure down by $6 million to $39 million.
So far, around $2.5 million has been spent on the plant. Of the $36.5 remaining, $3.6 million will come from existing cash and $10.8 million — after costs — will come from the now-completed financing.
Another $4 million will come from a Victorian State Government grant, while $20 million will fall under “project debt funding”. According to this morning’s announcement, Latrobe is currently in discussions with three debt providers who have presented term sheets to provide the $20 million project debt facilities.
The company has also been discussing funding measures for the expanded 10,000-tonnes-per-year facility, “and it believes that it will secure the $75 million estimated cost through offtake project funding.”
Shares in Latrobe Magnesium are up 3.85 per cent to $0.14 at 10:33 am AEDT.