LMG Raises $6.3M, Advances Demonstration Plant and Secures 250MW Hydropower for Sarawak
Latrobe Magnesium Limited is poised to commence operations at its Demonstration Plant by late May 2025, backed by a $6.3 million funding boost and strategic advances in its international and commercial projects.
- Demonstration Plant operations targeted from late May 2025
- Secured $6.3 million funding including $3.5 million capital raise
- Sale of surplus land expected to generate up to $5 million by June 2025
- 250MW hydropower allocation secured for Stage 3 international plant in Sarawak
- Legal mediation with Mincore over $19.39 million counterclaim set for June 2025
Demonstration Plant Nears Operational Phase
Latrobe Magnesium Limited (ASX: LMG) is advancing steadily towards operational status for its Stage 1 Demonstration Plant, targeting a start date from late May 2025. The company has completed engineering and procurement phases for magnesium oxide production and is finalising commissioning activities, pending receipt of the Environmental Protection Authority (EPA) operating permit, which remains under positive review.
With most major equipment installed, Latrobe Magnesium is focusing on securing the necessary workforce, replenishing reagents, and completing ash stockpiles to support steady-state operations. The company anticipates no delays in EPA approval following constructive site visits and ongoing dialogue.
Funding and Financial Position Strengthened
LMG has bolstered its financial position through a $6.3 million funding package, comprising a $3.5 million capital raising strongly supported by directors subscribing $550,000, alongside approval to draw $2.3 million in debt under existing facilities. This capital injection is critical to commencing operations and underpinning the next phases of development.
Additionally, the company is progressing the sale of approximately 4.3 hectares of surplus land at its Tramway Road site, expected to generate up to $5 million by the end of June 2025. This sale will provide further working capital to support resource development, mine planning, and economic studies for the Stage 2 Commercial Plant.
Commercial and International Project Developments
Feasibility studies for the Stage 2 Commercial Plant, designed for 10,000 tonnes per annum magnesium metal production, are advancing in collaboration with Bechtel Australia. However, the current Tramway Road site has been deemed unsuitable for this scale due to spatial and utility constraints, prompting confidential evaluations of alternative locations.
On the international front, Latrobe Magnesium’s subsidiary in Sarawak, Malaysia, has secured a significant 250MW hydropower allocation from Sarawak Energy, a critical milestone for the Stage 3 mega plant targeting 100,000 tonnes per annum. This allocation, subject to a Power Purchase Agreement and government approvals, enables the company to engage potential joint venture partners and progress environmental management planning.
Government Support and Legal Proceedings
The Australian Government’s Department of Foreign Affairs and Trade has awarded Latrobe Magnesium Project Development Support funding to assist with advisory work for the Sarawak project, reflecting strategic support for expanding Australian trade and investment in Southeast Asia.
Meanwhile, legal proceedings continue with Mincore Pty Ltd over a $19.39 million counterclaim related to breach of contract and negligence. Mediation has been ordered by the Supreme Court of Victoria, with a deadline set for 27 June 2025, marking a pivotal moment for resolving this dispute.
Financial Health and Outlook
Latrobe Magnesium reported a net operating cash inflow of $414,000 for the quarter, ending with $713,000 in cash and $3 million in unused financing facilities, providing an estimated nine quarters of funding runway. The company’s strategic capital management and operational progress position it well to meet upcoming milestones.
Bottom Line?
As Latrobe Magnesium approaches key operational and legal milestones, the market will watch closely for EPA approvals, land sale completion, and mediation outcomes shaping its growth trajectory.
Questions in the middle?
- Will the EPA grant the final operating permit on schedule to enable the May start?
- Which alternative sites are under consideration for the Stage 2 Commercial Plant, and what are their strategic advantages?
- What impact will the outcome of the Mincore mediation have on Latrobe Magnesium’s financial and operational plans?
