Latrobe Magnesium Secures $16 Million Funding to Advance Magnesium Metal Production

Strategic Funding Deal Secures Demonstration Plant Completion

Latrobe Magnesium Limited (ASX:LMG) has locked in a significant funding package of up to $16 million through a binding agreement with Long State Investment Limited, a global investor focused on critical minerals. The initial tranche of $6 million is slated for deployment by 30 September 2026 to complete installation and commissioning of the magnesium metal section of LMG's Demonstration Plant in Victoria's Latrobe Valley.

This injection comes at a pivotal moment as LMG progresses towards producing magnesium metal, following successful milestones including sustained magnesium oxide output and ongoing construction of its Phase 1B Demonstration Plant. The funding is earmarked to install furnaces for magnesium metal production in crown form, enhance hydromet process components, and provide working capital, de-risking the plant’s transition from oxide to metal production.

Flexible Capital Structure with Milestone-Linked Share Placements

The $16 million facility is structured through a share placement agreement allowing LMG to access capital across four equal tranches, each worth $4 million, via share swaps and placements at a fixed issue price of 1.4 cents per share, calculated as the VWAP over the five trading days preceding the agreement. The initial placement will issue approximately 285.7 million shares to Long State, with 50% of proceeds paid upfront and the balance deferred under a swap arrangement that adjusts based on share price performance over a 180-day period.

LMG retains sole discretion over drawing the remaining $10 million, intended to fund expansion of the Demonstration Plant to a 1,200 tonne per annum capacity using vertical retorts and to complete the refinery. The placement schedule is designed to align with development milestones, and LMG can accelerate or consolidate placements with Long State’s consent, maintaining control over dilution and timing.

Options and Strategic Partnership Signal Confidence

In addition to the share placements, Long State will receive options to purchase 30 million shares at an exercise price set at 150% of the daily VWAP prior to closing, exercisable over five years. This element further aligns Long State’s interests with LMG’s growth trajectory.

CEO David Paterson highlighted the agreement as a key enabler for magnesium metal production, noting Long State’s track record in backing growth companies in critical minerals. Long State’s Managing Director Philip Ho described the Demonstration Plant as a strategically significant asset with strong fundamentals and expressed confidence in delivering value through the project’s completion.

Implications for LMG’s Growth and Market Position

This funding milestone supports LMG’s roadmap towards commercial magnesium metal production, complementing prior achievements such as continuous high-grade magnesium oxide output and a US$2 million prepayment from its US distribution partner. The capital injection reduces execution risk during a critical phase, potentially smoothing the path to the planned 10,000 tonne per annum commercial plant and international expansion in Sarawak, Malaysia.

LMG’s patented low-carbon hydromet process positions it at the forefront of sustainable magnesium production, recycling industrial ash waste and targeting markets in automotive and aerospace sectors where magnesium’s strength-to-weight ratio is prized. The strategic partnership with Long State embeds a long-term investor aligned with these ambitions.