Hi @tropic Great post. A few comments if you please. " They have...

Hi @tropic

Great post.

A few comments if you please.

" They have been very silent here on the SCM. They will have to store it somewhere and not sure how much space they have on-site or how much itheir permit allows them to store on-site. Unless they have a buyer lined up I'd like to know what are they going to do with the SCM from the demo plant."

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I doubt that Tropic given what I have read in reports and emails. .

I went scanning through reports and announcements as I am sure the SCM sales have been mentioned. Even with a keen eye I could not find it, but I'm still positive it has been reported.

Instead, I will provide email correspondence regarding SCM"s, from David Paterson.

18th July 2023

I asked David about SCM marketing and sales. David provided the following response:

"As I mentioned in my email last week, pricing and quantities of our by-products is commercial in confidence. We have identified, in negotiation or secured deals with customers for all products. The by-product % of revenue for the 10,000tpa plant is around 25%. The 100,000tpa plant is in the order of 35%. Remember financials percentages can change depending upon feed stock and also the markets where we sell our Magnesium."

(We have identified, in negotiation or secured deals with customers for all products.")

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The following is another quote from an email I recieved from David Paterson, in response to a guestion I asked about ferro nickel slag by products.

15th November 2022

"The by products are similar to what we make from Yallourn fly ash being:

SCM used as a cement pick up agent

Hematite from the iron either used as a iron ore replacement for steel manufacture or as a substitute for iron sulfate used as a water treatment flocculant.

Amorphous Silica used as a binder in cement."

All products are premium products."

Premium products are generally not difficult to sell. Premium becuse of demand, quality, continuity of supply and price make them so.

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In the process of skim reading reports, announcements and emails lol, I found the following interesting snippit.

From 8th September 2023

" The US anti-dumping duty on imported China magnesium has been in existence since 1954 and was recently extended for another 5 years until 2026. The duty means that the USA magnesium price is more than twice the FOB China magnesium price, due to the anti-dumping duty placed on most imports from China of 141.49%."

Do you notice that the US anti-dumping duty of 141.49% is currently only extended to 2026.

Now don't get me wrong, I totally believe that tensions with China are only going to keep increasing. There is no answer in sight for China's upheaval of the world, their threat to world peace and how they may be appeased.

The US increased resilience against the dictatorship will ensure the tax not only continues but increases. There are some positives in the situation in that demand is furthermore diverted in part/or whole, to be addressed by LMG. With LMG having its 10, 000tpa plus plant, 100,000tpa plant and onwards, busting their boiler keeping up.

Nevertheless, if there is some miraculous turn of events and there is a period of subdued tention, the decrease of LMG's profitability by 141. 5% from 2026 forward would certainly be a massive blow, especially if LMG are not well prepared.

imo

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2023 Annual Report

" Commodity prices – The global magnesium market is subject to demand and supply fluctuations. These fluctuations, along with fluctuations in the A$:US$ exchange rate, will affect the project economics of the Group’s projects.

Absolutely! As the Australian dollar climbs on the American dollar, the cost of shipping goes through the roof!

when the AUD goes up, our exports become more expensive.

The US Dollar may respond to massive inflation as a result of outrageous expenditure (Home and abroad) in preparation for possible future multiple war fronts.

The price of Magesium then would likely reply, as woult most commodities It certainly would be a radically different market. (Have fun with that one Bechtel)

One of my sayings, "As things change......... Things change." Cause and effect.

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Progress Report 18th September 2023

"The additional 200 tpa and 2,000 tpa volume secured by MEC was previously allocated to the Japanese market. Japan remains an important strategic market for LMG, for which exports will now be deferred until the commissioning of LMG’s 100,000 tpa Stage 3 project in Sarawak, Malaysia."

I would not be surprised at all if the Japanese become a JV parter for the 100,000tpa plant in Malaysia.

The Japanese have defered offtake, for now...

I don't forget they offered finance towards the 10,000tpa plant of 10 million.

They have had various offtake agreements already and are well positioned to act as a solid Investor.

I don't forget that Japan is the World's third largest vehicle manufacturer.

Just a thought

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Hope you all may glean something from the snippets above. Very importent to keep a peripheral view in the market but watch out from behind also.

Regards Ken