Latrobe Magnesium Limited (LMG) has announced a $3 million project financing facility increase to provide funds for the demonstration plant once operational.
According to LMG, the project is currently 30 per cent complete overall, with engineering nearing 80 per cent completion.
It noted that engineering’s full efforts are focused on managing and supporting vendors during detailed design engineering and fabrication of equipment purchased.
Additionally, a total of 25 purchase orders have been issued for the project, representing over 80 per cent of the total equipment packages.
LMG expects that the contracts for manual valves, instrumentation, compressed air systems, magnesium crown handling, and condenser equipment will be completed in the coming weeks.
The only package that remains to be tendered to the market is the control and actuated valves, which are currently undergoing further value engineering analysis.
LMG also negotiated a more flexible drawdown profile under the facility to meet projected cashflow requirements, noting that the increased flexibility is expected to result in significant interest savings under the facility.
In line with negotiations, LMG will issue 15 million ordinary shares under the facility as consideration for the lender agreeing to hold the interest rate under the facility constant and agreeing not to charge commitment fees on the undrawn amount of the facility.
The lender advanced $10 million of the project facility on 24 June 2022, which was initially due to be drawn by 1 September 2022, but by deferring that drawdown to match project expenditure, the company saved interest in the order of $750,000.
The company claims the capital and certain operating costs of all eligible demonstrate plant costs for research and development rebate purposes.
It estimates that the rebates to be claimed for 2023 and 2024 will be valued at $17 million and $5 million, respectively.
The funds will be used to repay the principal of the $26 million facility.
