general discussion, page-2036

H-Rick,
You are right that if they can produce Mg ingots in the lab they should be able to do it in a large scale plant. The key question is; Is it commercially viable?
Whatever problem they are trying to solve with CSIRO at the demo plant, I hope the solution does not mean higher cost of production, thus reducing profitability.

Looks like the share price is headed for 4.1c so I might get in-line and try to pick up a few.

Something that bothers me when I look at the Prospectus, on page 8/9, Section 1.4:

	Proposed use of funds	$	%
1	Capital costs of the Demonstration Plant for magnesium oxide production	8,700,000	48.33%
2	Capital costs of the Demonstration Plant for magnesium metal production and research and development	4,300,000	23.89%
3	Operating costs and corporate costs	1,900,000	10.56%
4	Estimated costs of the Placement and the Issue	1,500,000	8.33%
5	Working capital	1,600,000	8.89%
6	Total (maximum raising)	18,000,000	100%

• They plan to spend almost half the funds, $8.7M to finish the demo plant for MgO production. Do we assume that the plant is not properly finished for MgO production ??
• $4.3M to get to producing ingots with R&D help from probably CSIRO to improve the process - no surprises there.
• $1.9M for operating costs of the demo plant as well as help pay the bills(wages, power, rates, offices, Directors remuneration etc).

In the end, left with $1.6M working capital which I assume will be used to progress stages 2 and 3. That hardly seems enough even if we do save a few million out of the tax rebate after paying off remainder of the loan. We really do need the demo plant to be covering its own costs.

I sure hope that they have a built-in contingency for items 1 and 2 above!