Ann: Progress Report, page-14

A very good update. It's obvious that their "media people"(Proactive) read Hotcopper and DP has been directed to it by them and probably some on here who contacted him (thanks Ken and others). There is obviously much management team input into this update because it's well above the past primary school English level with great clarity and no ambiguity.

The highlights for me:

1. • all equipment packages fully awarded with all equipment delivered before 30th June, tested and dry commissioned.
2. • Whilst major procurement packages are completed and delivered to site, procurement is focused on the purchase of miscellaneous items such as Spargers, Seal pots, Powerpacks and supporting plant operations.
3. • Electrical and instrumentation labour hire contract awarded to a local contractor. Structural, mechanical, and piping expected to be awarded in September.
4. • Yallourn Power Station is undergoing a maintenance shutdown on two of its units which is impacting labour availability in the Latrobe Valley. This event coupled with the drain of local labour to Melbourne for constructing the State's infrastructure program have also restricted resources and added pressure on labour rates.
5. • challenging for the project to remain on budget and required the project team to continually optimise the project strategy to rein in cost increases
6. • LMG were only recently advised by two of its suppliers of their skilled labour shortages
7. • The work to develop an alternative construction strategy and find labour solutions has not surprisingly taken time and impacted the schedule
8. • Spray Roaster being reassembled at Stable Engineering before being installed into the structural steelwork as one item to reduce field construction labour. As such the Spray Roaster has already passed Stage 2 commissioning
9. • The construction completion date is now the end of December 2023 with Stage 3 commissioning targeted to commence in January 2024. First Magnesium is targeted for March 2024. Any further changes to this timetable will be included in future monthly updates.
10. • LMG has now down-selected preferred supplies for both Industrial Gases and Industrial Acids. Contracts with these vendors are presently under final negotiation and will be announced in due course.
11. • Product trials have been conducted, or are planned to be conducted, for all the by-product materials produced by the demonstration plant.
12. • LMG will release monthly updates so that all stakeholders can follow the construction and commissioning journey of LMG's demonstration plant as it reaches completion and enters its production phase.

So, the two big underlying drivers of delay are the labour availability(particularly to contractors) and revisions to the construction strategy to try and keep within budget. These are two very good reasons for delay and I applaud senior management for their changes/decisions.

If we had a similar update in early August I think we would be sitting around 5.5 - 6c, however better late than never and I think this update may pull it back up to 5c again.

My faith is restored(tentatively), I will feel much better if the next update in early October actually eventuates(even if it's not an ASX announcement and just on the website), then I will know that communication has in fact improved.