This is a better presentation of the announcement on the 14th Dec imo.
Latrobe Magnesium A$23 million funding agreement means green light for high-grade, green magnesium plant
2021-12-14 11:43:00
The company is now fully funded to construct its plant in the Latrobe Valley and prove its patented technology and has its sights set on the American and Japanese markets.
Latrobe Magnesium Limited (ASX:LMG) has signed a binding term sheet for A$23 million in project funding plus capitalised interest, with A$20 million to be drawn next financial year and A$3 million in standby funds available the following year for contingencies.
The capital means LMG is now fully funded to complete the construction of its A$39 million plant designed to demonstrate the use of the company’s patented Hydromet extraction technology to extract high-grade magnesium and other valuable byproducts from both fly ash and ferronickel slag feedstocks.
Plant expansion plans
The project funding allows LMG to conduct a pre-feasibility study during 2022 on a potential 100,000 tonnes per annum magnesium plant.
This is a critical step in the company’s strategy to become a globally significant ESG-credentialled clean metals producer via a staged expansion pathway that uses world-first technology to produce high-grade magnesium and other valuable by-products, at a low net-operating cost relative to other global producers.
Loan terms
This loan facility will be available in three tranches: $10 million in full, on or before February 28, 2022, a further $10 million in full, on or before June 30, 2022, and a standby line of $3 million available to be drawn between January 1, 2023, and June 30, 2023.
The term of the loan is five years from the date of the first drawdown and the interest rate chargeable is 14% pa to October 31, 2023, after which it may be reset to a capped rate of 16% to December 31, 2024, and a capped rate of 24% from January 1, 2025, for the remaining term of the facility.
Loan repayments are budgeted to be sourced from a combination of R&D tax refunds and LMG’s offtake agreements. The establishment fee for the facility is 1% and it will be paid in LMG shares.
About Latrobe Magnesium
Latrobe Magnesium is developing a magnesium production plant in Victoria's Latrobe Valley using its patented extraction process.
The company will extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste stream from the Yallourn brown-coal power station.
LMG has completed a feasibility study validating its Hydromet and thermal reduction process, which extracts the metal.
Construction is estimated to start on its initial 1,000 tonnes per annum magnesium plant in the first quarter of 2022 with production to kick off up to 12 months later, in the fourth quarter of 2022. There are plans to expand the plant to a 10,000-tonnes-per-annum capacity shortly thereafter.
The plant will be in the heart of Victoria’s coal power generation precinct, providing immediate access to feedstock, infrastructure and labour.
LMG plans to sell refined magnesium under long-term contracts to USA and Japanese customers. Currently, Australia imports 100% of the 8,000 tonnes annually consumed.
LMG Price at posting:
10.0¢ Sentiment: Buy Disclosure: Held
