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LMG - Latrobe Magnesium

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This is a high risk spec with potential good returns. I am willing to hold for a while. A few buy orders building.
 
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Yeah I agree, it got battered today but everything was practically in the red today, like YT said before a high risk however something that can pose huge rewards:2twocents:2twocents
 
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LMG was one of the Top Risers last Friday ……

The chart has been in a sustained 12 month downtrend and Friday was the first sign of life for a while.

A recent announcement regarding optimisation testing for their Magnesium Furnace seems to be the catalyst for the spike but a quick read through their recent announcements shows very cash left in the coffers.

Little or no cash for a Spec is an immediate "leave it alone for the moment" for me so this one is currently a "Faker":cautious:
 
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From LMG 2021 Annual Report 20/9/21

LATROBE MAGNESIUM PROJECT

1. Overview
During the year, the Company has made significant progress with its Latrobe Magnesium Project in the
following areas:
• continuing test work and completing value engineering exercise;
• secured Advance Finding under the Section 28A of the Industry Research and Development Act for
its 3,000 tpa magnesium plant;
• achieved Latrobe Council and EPA approval to develop the project in the Latrobe Valley;
• engaging GHD undertaking ongoing environmental and traffic assessment;
• commencing detailed engineering and design of the demonstration plant, and the tendering of the
spray roaster, the long lead time equipment item;
• exercised option to lease 320 Tramway Road, Hazelwood North, the site has been surveyed and
early upgrade work will be tendered; and
• awarded Engineering, Procurement and Construction Management Contract to construct the
demonstration plant.
2. Magnesium Markets
In the calendar year ended 31 December 2020, the primary world production of magnesium increased
to 1 million tonnes. China’s estimated primary production for the calendar year 2020 was approximately
85% of the world’s production. Some 50% of China’s production is used locally. World growth in
demand is expected to continue at an annual rate between 6% and 7% until 2027 when it is projected
the market will produce some 2 million tonnes.
Australian and New Zealand consumption of magnesium has been recorded in the order of 7,000 tonnes
per annum. All this magnesium is imported.
During the year, the magnesium price traded at a higher level that the previous year’s high in line with
many commodities, owing to the effects of the corona virus on the reduction in the worldwide production
of cars. The spot prices as at 30 June were, as follows:
30-Jun-21 30-Jun-20
FOB China US$ per tonne 3,260 2,207
Owing to United States anti-dumping duties, the annual delivered price for 2020 was in the order of
US$2.30 per lb or US$5,071 per tonne.
In China, the operating costs of production stayed within the range between US$2,000 to US$2,500 per
tonne. However, a number of China plants were either closed or scaled back production due to the
introduction of environmental regulations.
With the adoption of light-weighting of motor vehicles and the legislated emission standards in many
countries in the World, there is a growing demand by car companies to use more magnesium and
aluminium sheet in cars. The car business has adopted aluminium sheet in outside panels and with this
sheet there is up to 6 percent of magnesium. With the development of new magnesium alloys and new
production techniques, the use of magnesium car parts and sheet provides many exciting opportunities.
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
5
3. Upgraded Study
Following the completion of the value engineering studies, LMG updated its feasibility study for its 3,000
tpa magnesium plant to incorporate various changes. The updated estimate for its capital costs are in
the range between $60 million to $64 million and its EBITDA is in the range between $4.0 million to $4.5
million per annum when it is operating at its name plate capacity. These ranges will be refined once the
design and engineering has progressed and the various equipment packages been tendered later in
2021.
The initial plant is estimated to still employ up to 54 on-going direct employees and contractors and 50
to 75 construction jobs.
4. Ash Supply Agreement
In October 2019, Latrobe Magnesium Limited signed an agreement with EnergyAustralia Yallourn Pty
Ltd (Yallourn) to secure ash supply to LMG’s initial 3,000 tonnes per annum (tpa) magnesium plant for
the next ten years. The agreement requires certain approvals and conditions to be satisfied. It also
deals with the principal issues in relation to Yallourn increasing its supply of ash to LMG’s 40,000 tpa
planned expanded magnesium plant.
On 10 March 2021, EnergyAustralia announced that they would be closing its Yallourn Power Station in
mid 2028. LMG believes there is sufficient fly ash that can be mined from their current ash repository
and the fly ash produced over the next seven years to provide sufficient feedstock to supply a 30,000
tpa magnesium plant for a period of 20 years. New agreements will need to be entered into between
LMG and EnergyAustralia before the expansion of LMG’s plant can take place.
During the next 20 years LMG is hopeful that the Hazelwood HAP4 ash dam may become available to
be processed through their expanded plant. Should this not become available LMG has identified an
alternative supply of feedstock that could be processed by its expanded plant.
5. Community Briefing
Due to COVID-19 restrictions on public gatherings, LMG could not hold a second public meeting during
this year. LMG placed two advertisements in the Latrobe Valley Express notifying the public that project
information in relation to the EPA reports was available.
LMG has also updated its website so that it is more interactive with all stakeholders. It also has a
Linkedin and Twitter sites for the provision of information.
LMG has committed to hold two further Community briefings through the development of the project and
report on the emissions and other matters. LMG believes in having a social licence with the Community
in which it operates.
6. Latrobe Council Planning Permit
On 5 June 2020, LMG.s application to the Latrobe City Council for planning approval to use and develop
the site for its initial 3,000 tpa magnesium plant at 320 Tramway Road Hazelwood North was approved
and a certificate issued.
LMG remains committed to progressing this project to safely re-process mining waste, generating jobs
and developing a new industry in the Latrobe Valley.
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
6
7. EPA Planning Approval
On 16 September 2020, LMG’s application to the Environmental Protection Authority (EPA) for its
research, development and demonstration application for its initial 3,000 tpa magnesium plant at 320
Tramway Road Hazelwood North was approved and a certificate issued. The approval allows LMG to
operate the plant for a period of 18 months post the commissioning stage.
The EPA’s approval comes with mainly standard conditions which need to be fulfilled before construction
or commissioning of the plant.
8. The Magnesium Metal Production Facility
LMG plans to establish a “demonstration-scale” magnesium metal production facility using ash from the
Yallourn W power station as raw material. Construction will commence on site in the fourth quarter of
2021.
The chosen site, at 320 Tramway Road, Hazelwood North, is part of industrial zone, and is some 19
kms from the Yallourn Power Station. The plan is to re-purpose the existing buildings, bringing in new
equipment and facilities. The bulk of the production facility is to be housed within the existing building
located at the southern end of the site. Truck access will be from Second Avenue (not the main road)
and loading/unloading will be on the west side of the existing building.
The intention is that the facility would then operate for about 18 months, in order to demonstrate the
production process. Operations beyond that time are possible but LMG has made no decision and any
plan to do so would also need further Council and EPA approval.
The extraction of magnesium from brown coal fly ash is a new and innovative hydromet process. It
involves dissolving magnesium from the ash and its recovery as solid magnesium oxide. This can then
be reduced to magnesium metal using the conventional high-temperature process. Because the
magnesium is removed to a high degree, the material remaining will be utilised as a cement substitute
in the construction industry.
The process is anticipated to have a least an estimated 50 percent reduction in carbon emissions
compared to the usual normal magnesium industry performance. This is due to the lower concentration
of carbonates in the fly ash, compared with the normal Dolomite ore feedstock. Also, the key chemical
consumable, ferrosilicon, is manufactured using hydro-electricity.
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
7
9. Warrant Issue
Under the October 2018 funding agreement with RnD Funding Pty Ltd, LMG issued 12,495,000 unlisted
warrants. The warrants have an exercise price of $0.02 and are exercisable for a period up to 3 years
post the drawdown dates.
Under the October 2019 funding agreement with RnD Funding Pty Ltd, LMG has issued 35,889,199
unlisted warrants. The warrants have an exercise price of $0.03 and are exercisable for a period up to
3 years post the drawdown date.
10. Company Funding
On 30 July 2020, LMG received an Advance Finding Certificate under Section 28A of the Industry
Research and Development Act 1986 (Act) for its 3,000tpa magnesium plant using its new acid
hydromet process. LMG is entitled to receive a cash rebate for 43.5% of all eligible expenditure spent
on its seven experimental activities. This rebate should be up to $24 million over the next three years.
2020 was the first of these three years.
On 24 December 2020, the review of LMG’s R&D Tax Incentive 2019-20 application was completed and
LMG received a rebate of $8.79 million on 7 January 2021.
On 6 January 2021, the review of LMG’s BAS September 2020 quarter was completed and LMG
received a GST refund of $1.89 million on 9 January 2021.
From the $10.68 million received, the Company was able to repay its debt financing and trade creditors.
The remaining $5.15 million provides funding to continue development of its initial plant and working
capital.
11. Capital Issue
During the year, the Directors and the Project Director have provided loans to the Company which
equated to their fees. They agreed to convert these loans into fully paid ordinary shares at the volume
weighted average price of the first five trading days of November 2020 being approximately 7 weeks
prior to the Company’s Annual General Meeting. The conversion of these loans was approved by
resolutions passed by LMG’s shareholders at the AGM held on 23 December 2020. On 12 January
2021, LMG issued a total of 17,334,182 shares to the Directors and the Project Director at $0.022 per
share with a total value of $381,252.
LATROBE MAGNESIUM LIMITED and its Controlled Entities
ABN 52 009 173 611
REVIEW OF OPERATIONS
8
12. Project Funding
LMG intends to fund up to $60 million of its capital costs by raising the following finances:
Type of Finance A$M’s
Project Finance 30
Equity Placement and Cash 30
Total Funds 60
(i) Project Finance
The Company has received non-binding Term Sheets from two separate parties who have agreed
to provide these funds. The Company is currently still in negotiations with these parties.
(ii) Equity Placement
LMG will provide both magnesium and supplementary cementitious materials samples produced
from the Yallourn fly ash to two potential cornerstone investors. LMG expects the testing of these
samples will be concluded in the first 6 months of next year and also the funding arrangements.
(iii) Grant Applications
LMG has a grant application with the Victoria State Government which is currently being assessed.
 
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From 21/10/21
RTL MINING & EA
RTHWORKS SUBLEASE AGREEMENT 21 October 2021, Sydney Australia:
Latrobe Magnesium Limited (ASX: LMG)h RTL Mini has entered into an agreement witng and Earthworks Pty Ltd to sublease a portion of their 3,000tpa Demonstration Plant Site at 320 Tramway Road, Hazelwood North, VIC 3840. Latrobe Magnesium finalised a sublease agreement with RTL to utilise 20,000 square meters within Lot 6 of the Hazelwood North Site to establish a new base for RTL’s transport operations after the announcement of Energy Australia Yallourn West Power Plant closure in 2028. Under the subtenant’s agreement, RTL will clear the land of vegetation in accordance with any laws and regulations or as obliged under the current lease agreement, remediate the subleased premises including construction of required hardstands and arrange and install general utilities including potable water, electricity, power & IT communications, and wastewater / sewerage facilities. Latrobe Magnesium welcomes RTL to the Hazelwood North Site. RTL's extensive experience in civil construction and transport of materials to and from the Yallourn Power Plant make them a welcome fit for the Hazelwood Site, and LMG hopes to foster a strong partnership with RTL as the demonstration plant is designed and developed. For more information and any project updates, please visit our website at latrobemagnesium.com. RTL Established in 1992, RTL Mining and Earthworks Pty Ltd is a significant provider of mining, rehabilitation, civil construction, and heavy earthmoving plant hire services as well as general and over dimensional transport services in the Latrobe Valley and surrounding regions. Owned by Thiess (88%) and Linfox (12%), RTL generates annual turnover in excess of AU$100 million and employs up to 500 employees during the earthworks season. RTL are the current contract miner at Energy Australia’s Yallourn West Power Plant consistently providing up to 2500t of coal per hour, totalling up to 17.5 million t per annum maintaining coal reliability. RTL has significant civil, road works and general earthworks capability with the following recent projects completed:
● All earthworks and other civil services on the $1b Victorian Desalination Project.
● Two separate diversions of the Morwell River: Yallourn and Hazelwood.
● Design and construction of the Princes Highway duplication east section between Flynn and Rosedale.
● 8km upgrade of the Strzelecki Highway. David Paterson Chief Executive Officer 21 October 2021 Suite 307, 20 Barrack St, Sydney NSW 2000 | Postal Address: GPO Box 4729, Sydney NSW 2001 | (02) 8097 0250 |
lmg@latrobemagnesium.com | Latrobe Magnesium Limited | ABN 52 009 173 611 | www.latrobemagnesium.com
About Latrobe Magnesium Latrobe Magnesium is developing a magnesium production plant in Victoria's Latrobe Valley using its world-first patented extraction process. LMG intends to extract and sell magnesium metal and cementitious material from Yallourn ash, which is currently a waste stream from brown coal power generation. LMG has completed a feasibility study validating its combined hydromet / thermal reduction process that extracts the metal. Construction is estimated to start on site for its initial 3,000 tonne per annum magnesium plant at the end of June with production commencing 18 months later. The plant will then be expanded up to 40,000 tonne per annum of magnesium 12 months later. 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 the refined magnesium under long-term contracts to USA and Japanese customers. Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of aluminium sheet in cars, laptop computers, mobile phones and power tools. The LMG project is at the forefront of environmental benefit – by recycling power plant waste, avoiding la
 
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QUARTERLY ACTIVITIES REPORT 30 September 2021
LATROBE MAGNESIUM PROJECT Highlights
$3M over-subscribed placement backed by leading Melbourne Boutique Peak Asset Management together with Fresh Equities settled to fast-track completion of design and engineering services for initial magnesium plant in Latrobe Valley
$814,000 funding received in October from R&D rebate The company is confident of securing two Cornerstone investors, together with Government funding over the coming months
Initial plant 3,000tpa plant expected to generate $28M in revenue.
Entered into an agreement with RTL Mining and Earthworks Pty Ltd to sublease a portion of their 3,000tpa Demonstration Plant Site

Released Today

Regards

A
 

Dona Ferentes

I'm moderate
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OMG, LMG.

Latrobe Magnesium, which is building a magnesium production plant in Victoria’s La Trobe Valley, wants to raise up to $10 million.

The offer was priced at 10¢ a share with one-for-four options.

The 10¢ is a 30 per cent discount to the last close.

The raise follows La Trobe’s November 3 ASX announcement to expand its demonstration plant’s capacity from 3000 tonnes a year to 10,000. The plant expansion would cost $123 million, of which 75 per cent would come from magnesium offtake agreements, the company said at the time.

It told investors to expect $110 million revenue and $42 million EBITDA, after the increased capacity. The plant aims to extract magesium from Yallourn ash, a waste material out of brown coal power generation.
 
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Getting a bit frisky, without me.

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