Latrobe Magnesium (LMG) Q4 2024 TU earnings summary

Executive summary

• Demonstration Plant successfully produced magnesium oxide (MgO) meeting quality specs; continuous operation targeted for September/October with near-term revenue expected.

• No reportable health, safety, or environmental incidents to date during commissioning.

• Construction and commissioning punch list is nearly complete, with 164 of 180 items finished; remaining items include equipment upgrades and process optimizations.

• Construction of magnesium metal production plant paused to update strategy and focus on MgO production.

• Stage 2 and Stage 3 commercial plant projects advancing, with site selection, feasibility, and funding activities underway.

Financial highlights

• $12M raised via share placement and $6M from a fully underwritten rights issue, totaling $18M for capital, R&D, operating, and working capital needs.

• $12.9M ATO R&D tax rebate received in May 2024; 2024 rebate expected to exceed $16M.

• Net cash used in operating activities for the quarter was $(280)k; year-to-date $(2.4)M.

• Net cash used in investing activities for the quarter was $(9.4)M; year-to-date $(15.9)M.

• Net cash from financing activities for the quarter was $10.2M; year-to-date $12.0M.

• Cash and cash equivalents at quarter end were $565k.

Outlook and guidance

• Continuous MgO production expected to commence by mid-September to October, with revenue from sales anticipated soon after.

• Stage 2, 10,000tpa Commercial Plant feasibility study to begin after completion of Stage 3 pre-feasibility; completion targeted for first half of 2026.

• Stage 3, 100,000tpa International Mega-Plant in Malaysia progressing, with land secured and manufacturing license applications lodged.

• Long-term offtake agreements and third-party equity participation expected to support project financing.