Latrobe Magnesium Limited (ASX: LMG) has announced a significant funding package of up to $16,000,000 from strategic global investor Long State Investment Limited. The initial phase of this agreement will see Long State provide up to $6,000,000 to LMG prior to 30 September 2026. Latrobe Magnesium is developing a magnesium metal Demonstration Plant in Victoria’s Latrobe Valley, utilising a patented extraction process to derive magnesium metal and other products from industrial ash, a waste resource from brown coal power generation. The company has completed the first half of its Demonstration Plant, which is producing magnesium oxide and other saleable by-products, with full commissioning targeted for the second half of 2026.
The initial $6,000,000 funding is earmarked for completing the installation and commissioning of the magnesium metal section of the plant, including furnaces, enhancing elements of the hydromet process, and providing essential working capital. The broader $16,000,000 facility, available through share swaps and further placements at LMG’s discretion, is intended to expand the plant to a 1,200 tonnes per annum (tpa) capacity using vertical retorts and to complete the refinery. This funding will be accessed via a share placement agreement structured across four equal tranches. The first placement of $4,000,000 will involve the issue of 285,714,286 shares at an issue price of 1.4 cents per share, calculated at the volume-weighted average price (VWAP) of the preceding five trading days.
Latrobe Magnesium will maintain significant flexibility and control over drawing on the remaining funding tranches, which can be aligned with development milestones over the next 36 months. As part of the agreement, Long State will also receive 5-year options to purchase 30,000,000 shares. LMG Chief Executive Officer, David Paterson, highlighted the importance of securing both immediate and longer-term funding at a key juncture for the Demonstration Plant. He noted the agreement’s terms provide the company with maximum control regarding fund utilisation, thereby de-risking the successful delivery of magnesium metal production.
