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Latrobe Magnesium’s team. Source: Latrobe Magnesium / LinkedIn
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  • Shares in Latrobe Magnesium (LMG) spike after the company announces it has more-than-tripled planned production from its Victorian demonstration plant
  • The company is looking into increasing the size of the initial plant from 3000 tonnes per annum (tpa) to 10,000 tpa of magnesium
  • According to Latrobe, magnesium production restrictions in China and a pending worldwide shortage of the material drove the decision
  • The company expects the increased plant lo bring about some $110 million in revenue and EBITDA of $42 million
  • Latrobe Magnesium shares are up 10 per cent and trading at 6.6 cents each at 11:10 am AEDT.

Shares in Latrobe Magnesium (LMG) have spiked today after the company announced it had more-than-tripled planned production from its Victorian demonstration plant.

The company said in light of Chinese magnesium production restrictions and a pending worldwide shortage of the material, it has decided to look into increasing the size of the initial plant from 3000 tonnes per annum (tpa) to 10,000 tpa of magnesium.

According to Latrobe, this increase will bring about some $110 million in revenue and estimated earnings before interest, tax, depreciation and amortisation (EBITDA) of $42 million from the plant.

What’s more, Latrobe said though it had already allocated 8000 tpa from the plant in offtake deals, it had received enquiries from potential buyers for another 2000 tpa.

The company expects the new 10,000-tpa plant to cost roughly $123 million to build, up from expected costs of between $40 million and $45 million for the initially-planned 1000-tpa plant.

“It is expected that the funding for this expansion of some $75 million will be financed through 100 per cent magnesium offtake agreements,” Latrobe said in a statement to investors.

The company has plans to eventually scale production up to 40,000 tpa from the plant.

Latrobe’s demonstration plant is designed to harvest magnesium from a fly ash resource — a waste treat from brown coal power generation — using the company’s patented extraction process.

The company has already completed a feasibility study that commercially justifies developing the project, and it’s from this feasibility study that Latrobe extrapolated its revenue and EBITDA estimates for the expanded production plant. The expanded plant plans will be subject to a separate study over the next 9 months.

As it stands, Latrobe is expecting to produce its first magnesium from the demonstration plant during the first half of 2023.

Latrobe Magnesium shares were up 10 per cent and trading at 6.6 cents each at 11:10 am AEDT. The company has a $99 million market cap.

LMG by the numbers
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