Ann: LMG increases project finance facility by $3M, page-10

Thanks for pointing out those items Patmeate,
Agree that it's a sensible move to extend maturity by the 9 months to hopefully have the 2027 tax rebate in hand even if we will be paying an extra 9 months interest(14%) on whatever is still outstanding on the loan.

No matter from which angle I look at this, I just can't see how the financials add up. Maybe I'm missing something.

• They have pulled down the last $3M available on the loan I expect to get the plant operational.
• The $6M part of capital raise is spent or committed.
• DP has said that when the demo plant was 100% Mg ingots production it would just cover the operational cost.
• Revenue from MgO production will be much less for 2 reasons. Demo plant operating at about 2/3 capacity; and because it's MgO which is 60% Mg rather than 100%. - the product will be a MgO/SCM composite.
• That shortfall in revenue will have to be covered by cash. Where is that cash coming from when we have exhausted the loan, and little if any cash reserves??
• In addition they need to progress stage 2 and cash is needed to finalise the studies for new location and BFS & FID.

I can only assume that they intend to:

• do another capital raise when they announce MgO production? - doubt that Ord will be interested in underwriting it!
• relying on an application to the critical minerals fund?
• A new investor stumping up some cash for shares and options?(We are at 2.35B now so are they taking it toward 3B on issue?)
• Use the 2024 tax rebate for working capital in the hope that they will have a more successful CR later or lure an investor. That would mean our interest payments on the loan would remain higher.

If it's an investor, I doubt they would thow cash at it for stage 1 - it would need to be for stage 2.

Am I missing a source of revenue?