Latrobe Magnesium has locked in $10 million through a placement and entitlement offer to complete its demonstration plant and push towards commercial-scale magnesium production.
- Secured $6 million via institutional placement and $4 million through entitlement offer
- Funds allocated to complete 500 tpa magnesium demonstration plant and initial operations
- Plans underway for 10,000 tpa commercial plant with feasibility study pending further funding
- Placement shares priced at $0.023, a discount to recent trading prices
- Equity raise aims to diversify shareholder base and support growth in critical mineral production
Funding the Future of Magnesium Production
Latrobe Magnesium Limited (ASX, LMG) has successfully secured firm commitments for a $10 million equity raising, combining a $6 million institutional placement with a fully underwritten $4 million entitlement offer. This capital injection is a critical step towards completing its 500 tonnes per annum (tpa) magnesium demonstration plant located in Victoria's Latrobe Valley.
The funds will be used to procure and install essential piping and electrical components, commission the plant, and support two months of steady-state magnesium production. Additionally, the raise provides working capital and covers the costs associated with the offer itself.
Strategic Growth and Shareholder Diversification
CEO David Paterson highlighted the strong market demand for magnesium, a critical mineral with applications across automotive, aerospace, and electronics industries. He emphasized the unique position of Latrobe Magnesium as the world’s first producer of magnesium extracted from brown coal fly ash, a waste product from coal power generation.
The equity raise not only funds immediate operational needs but also sets the stage for the company’s next major milestone, advancing plans for a 10,000 tpa commercial plant. A bankable feasibility study for this larger facility is slated to begin once additional funding is secured. The placement also serves to diversify the shareholder register, bringing in new institutional investors ahead of a significant growth phase.
Offer Details and Market Implications
The placement shares are priced at $0.023 each, representing a 14.8% discount to the last traded price and nearly 20% below the 15-day volume-weighted average price. Approximately 261 million new shares will be issued under the placement, with an additional 175 million shares available through the entitlement offer, which is fully underwritten by Shaw and Partners.
Eligible shareholders can participate in the entitlement offer on a one-for-fifteen basis, with the option to apply for additional shares beyond their entitlement. This approach ensures existing retail investors have the opportunity to maintain or increase their holdings on the same terms as institutional participants.
Looking Ahead, Commercial Scale and ESG Leadership
Latrobe Magnesium’s projects are notable for their environmental credentials, recycling industrial ash waste and supporting a circular economy with low CO2 emissions. Beyond the demonstration plant, the company is also exploring a large-scale international project in Sarawak, Malaysia, targeting 100,000 tpa magnesium production.
As the demonstration plant moves toward commissioning in early 2026, investors will be watching closely for operational updates and progress on the commercial plant feasibility study. The successful execution of these plans could position Latrobe Magnesium as a key player in the global magnesium market, leveraging innovative technology and sustainable practices.
Bottom Line?
This $10 million raise is a pivotal step for Latrobe Magnesium, setting the stage for commercial expansion and market leadership in sustainable magnesium production.
Questions in the middle?
- Will Latrobe Magnesium secure the additional funding needed to commence the 10,000 tpa commercial plant feasibility study?
- How will the company manage operational risks as it transitions from demonstration to commercial-scale production?
- What impact will the shareholder diversification have on Latrobe Magnesium’s strategic direction and governance?