Discussion:I have been considering the importance of the role of...

Discussion:
I have been considering the importance of the role of the by-products from both fly ash and ferro nickel slag as feedstocks.
The by-products of both feed stocks play an integral role in supporting the viability of LMG's magnesium production.
In my opinion, by-products deserve much greater scrutiny and the provision of more detail by LMG.

• Fly ash, initially in Latrobe for the 1000ta plant and then expanding to 10,000tpa plus.
• Ferro nickel slag, oversees for the 100,000tpa plant(s)

My sources include:

1. Investor Presentations
2. Websites
3. Emails to David Paterson

Fly Ash:

For every one tonne of magnesium produced from the Latrobe Valley plant, 4 to 5.8 tonnes of by-product are produced.
This range has been calculated from numerous Investor Presentations
1,000tpa Magnesium = ~4,000 to 5,800tpa of by-products (Supplementary Cementitious Material - SCM and other)
10,000tpa Magnesium = ~40,000 to 58,000tpa by-product (Supplementary Cementitious Material - SCM and other)

About SCM:

• SCM has a similar chemistry and mineralogy as Portland cement, the most common type of cement used globally.
• Tests have shown it has the same strength and set times as Portland cement over a 2 hour and 7-day period.
• Test results have indicated that some 30% of Portland cement can optimally be replaced with LMG’s SCM.
• This has additional benefit of reducing the overall CO2 footprint for Portland cement by 30%, a reduction of 0.8 tonnes of CO2 per tonne.

By-products include; SCM, char, silica, iron oxide and calcium carbonate
I can find no reference to the tonnage/percentage of either char, silica, iron oxide and calcium carbonate
I can find no reference to the values per tonne of SCM or char, silica, iron oxide and calcium carbonate
(No doubt some are combined for the SCM. I have kept them separate as they are always presented as separate by LMG)

"Supplementary cementing materials (SCMs) contribute to the properties of hardened concrete through hydraulic or pozzolanic activity. Typical examples are fly ashes, slag cement (ground, granulated blast-furnace slag), and silica fume. These can be used individually with Portland or blended cement or in different combinations."
Reference Link Click Here

Waste:
Quote from LMG website "Latrobe Valley demonstration plant project will process almost 100% of fly ash into valuable products"

By-product value:
Transposing the percentage of revenue from by-products of processing ferro nickel slag (Example uses percentage from ferro nickel slag - see below). I believe conservative as ferro nickel slag has a much higher magnesium oxide content than fly ash.

The 10,000tpa plants forecast $93m revenue (Up to ~40%??) = By-products worth AU$37,200,000.00 Wowee!
Certainly a very significant and important proportion of revenue and worthy of far more explanation and justification.
Who, what, where, when, how and value thanks?



Ferro Nickel Slag:
N.B.: In my last email I did not ask about the tonnes of by-product per tonne of magnesium produced using ferro nickel slag.
I will use 50% of that produced by fly ash only as an example of possible volume from the 100,000tpa plant.
Range 4 to 5.8 tonnes of by-product per tonne of magnesium. 50 percent of the average 4.9/2 = 2.45 tonnes of by-product. Extrapolation = 245,000tpa of by-product for 100,000tpa of magnesium produced.

Almost sounds like the magnesium is the secondary by-product.

Question put to David Paterson: What percentage of the 100,000tpa plants revenue generation do you foresee that by-products will provide?
Answer: Up to 40% (Email responses from David Paterson)

Question: What type of by-products will the 100,000tpa plant produce?
Answer: Byproducts are similar to what we make from Yallourn fly ash (David Paterson)

• Hematite from the iron either used as a iron ore replacement for steel manufacture
• Hematite as a substitute for iron sulfate used as a water treatment flocculant.
• Amorphous Silica used as a binder in cement

By-product value:
The 100,000tpa plants forecast $839m revenue (Up to ~40% stated by David Paterson) = By-products worth AU$335,600,000 WHOA!
Again, a massive and very significant proportion of revenue and worthy of far more explanation and justification.
Who, what, where, when, how and value thanks? I hope the Pre-Feasibility study will divulge some information and the BFS certainly must.

Question: Would you please elaborate on the following quote:
"Cost competitive, making LMG’s ferro nickel slag processing only half the operating cost of Chinese producers,
with further cost offsetting from by-products."? Wow, that is a heck of a lot of offsetting of costs! (AU$335,600,000.00)
Answer: Ferro nickel slag's Magnesium Oxide content is higher (David Paterson)
Much higher than fly ash and much higher than the Chinese feedstock, resulting in far greater production efficiency.

Waste:
What waste material is produced using ferro nickel slag as the freed stock for the 100,000tpa plant?
Answer: There is nowaste stream from processing the ferro nickel slag (David Paterson)


Conclusion:
The tonnage of by-products produced per tonne of magnesium produced is massive.
The by-products have a major role in supporting downward pressure on LMG's magnesium production and in turn, profitability.
By-product may not be the primary focus of LMG but certainly should be as part of the full business plan. LMG are NOT just Magnesium producers.
LMG have provided very limited insight into by-product individual vales, markets, off-takes for what equates to 40% of our projects.
The who, what, where, when, how and value have major implications, off-takes, handling and logistics alone could be a mammoth undertaking.

The above is a critique and I welcome further insights.

Reference to Investor Presentations - Click Here

Regards
Ken