general discussion, page-1221

Hi all,

Just a quick reminder of the announcements that should/could be delivered within the next two months.
Also my opinion of their likely implications (*).

1.0 "LMG expects to sign a binding MoU with this supplier within the next month. The major terms and conditions have already been agreed between the parties and is now awaiting Board approval."

*Even though the signing was scheduled for July, the new signing schedule was announced on the 30th of July so it is possible to be expected in August or September.

2.0 "The PFS - A phase is expected to be completed by the end of August and will be presented
to potential partners. The full PFS (PFS-B phase) will be completed by the end of the year."

*It may be possible that some of information within Part A of the PFS could be announced to the market either in late August or early September.

3.0 "LMG personnel will be attending the International Magnesium Association Conference in Barcelona
at the end of August."

*Attendance is not necessarily a presentation but the conference should be an excellent networking opportunity that may assist in project promotion and perhaps further expansion/partners.

"Construction for the car parking is nearing completion with most works completed except for final asphalt paving due for completion later this month."

*Again, since this was announced on the 30th of July, it is likely referring to August. The car park may not seem to mean much but site progression is pretty darn important.

"Final commercial terms are being finalised for the full award of the packages and this is anticipated early next month."

*August or early September and so it is very conceivable that a project update regarding tender award would be made during this period. Both the Spray Roaster and the Reduction Furnace are MAJOR purchases.

"The second $10M advance is due to be drawn by 1 September 2022."

*We saw an impact on the sp with the first tranche of $10m drawdown, we are likely to see a similar response imo.


On another note:
"The project team is also preparing the necessary documentation to provide to regulators as part of the commitments in its permit conditions, as part of its progression through the project."

*I would say these regulator permit conditions being prepared are for 2 essential upgrades:
1. Expansion of the EPA approval from 1000tpa to 10,000tpa plant capacity (Revised Environmental Impact Study)
2. Local Government approval of a 'Material change of use". (Change in Scale and Intensity from 1000tps to 10,000tpa production).

Even though Yallourn is not a regulator, there will also be a revised agreement with Yallourn for a larger supply agreement for the 10,000tpa plant. The need for the revision of the supply agreement was mentioned in an announcement last year.

Finally:
Our project is making very solid advancements and I appreciate the way the LMG management have modified the sourcing location of fabrication for the Spray Roaster, to Vietnam and the second Reduction Furnace, to Malaysia. The mitigate of inflationary cost pressure as well as supply chain disruptions is highly beneficial in maintaining the project schedule and budget. Contingency planning and enactment is fundamental to good project management.

Kind regards

Ken