Latrobe Magnesium Limited · ASX:LMG
Latrobe Magnesium — Investor Presentation (May 2024)
41 slides from Latrobe Magnesium's investor presentation, May 30, 2024
Slide 1: Equity Raising Presentation
For personal use only Equity Raising Presentation ASX: LMG May 2024
Slide 2: Disclaimer
Disclaimer This Presentation has been prepared by Latrobe Magnesium Limited (ACN 009 173 611) (Company) in relation to an equity capital raising by the Company consisting of a placement of Company shares to certain ‘sophisticated’ and ‘professional’ investors (as defined by the Corporations Act 2001
Slide 3: Disclaimer
Disclaimer INVESTMENT RISK There are a number of risks specific to the Company and of a general nature which may affect the future operating and financial performance of the Company and the value of an investment in the Company, including and not limited to the Company's capital requirements, the po
Slide 4: Disclaimer: International Offer Restrictions
Disclaimer INTERNATIONAL OFFER RESTRICTIONS This Presentation does not constitute an offer of new Securities (New Securities) of the Company in any jurisdiction in which it would be unlawful. In particular, this Presentation may not be distributed to any person, and the New Securities may not be off
Slide 5: Disclaimer
Disclaimer Singapore This document and any other materials relating to the New Shares (as defined in this Presentation) have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or mat
Slide 6: Table of Contents
Table of Contents Section One Executive Summary 7 Section Two Equity Raising Overview 9 For personal use only Section Three Corporate and Operations Overview 13 Section Four Market Overview 21 Section Five Summary 27 Appendix A Key Risks 29 Appendix B Summary of Underwriting Agreement 37
Slide 7: Section One: Executive Summary
For personal use only Section One Executive Summary
Slide 8: Investment Highlights
Investment Highlights Latrobe Magnesium is developing a world-first, low-cost, low emission and environmentally sustainable hydromet / thermal reduction process to convert nearly 100% of waste resources into magnesium metal and other valuable commodities Magnesium is recognised as a Critical Mineral
Slide 9: Section Two: Equity Raising Overview
For personal use only Section Two Equity Raising Overview
Slide 10: Equity Raising Overview
Equity Raising Overview The equity raising will consist of an institutional placement (Placement) and a proposed underwritten, non-renounceable entitlement offer (NREO or Entitlement Offer) (together, the Offer) to raise up to A$18.0 million. The Placement is seeking to raise up to A$12.0 millio
Slide 11: Sources and Uses of Funds
Sources and Uses of Funds Funds from the equity raising will be used for the final structural works and commissioning of the Demonstration Plant, final engineering ahead of magnesium metal production, and R&D currently being undertaken alongside CSIRO to optimise vertical retorts creating a cheaper,
Slide 12: Equity Raising Timetable (Indicative)
Equity Raising Timetable (Indicative) Event Date (AEST) Trading halt Tuesday, 28 May 2024 Placement and Entitlement Offer sub-underwriting bookbuild opens 10:00am, Tuesday, 28 May 2024 Placement and Entitlement Offer sub-underwriting bookbuild closes 5:00pm, Tuesday, 28 May 2024 Trading halt lifted
Slide 13: Section Three: Corporate and Operations Overview
For personal use only Section Three Corporate and Operations Overview
Slide 14: Corporate Overview
Corporate Overview Latrobe Magnesium has recently received $12.5m from the ATO in R&D rebates, with up to $16m in further rebates expected to be received in CY24 intended to extinguish all remaining debt Capitalisation Summary and Top Shareholders1,2 Board and Management ASX Ticker LMG • Current deb
Slide 15: Operations Overview
Operations Overview LMG’s hydromet process, developed over decades, holds unique international patents for the recovery of magnesium from brown coal fly ash and ferro nickel slag Plant Feedstock Emissions Financials1 Assumptions Project Status Sydney • Demonstration Plant recently commissioned Head
Slide 16: Achievements and Near-Term Milestones
Achievements and Near-Term Milestones Following first MgO production in May 2024, LMG will shortly produce magnesium metal ahead of Commercial Plant FID, targeted for calendar year’s end 1 Demonstration Plant Near-Term Milestones • Magnesium Oxide strategy announced securing near-term revenue and va
Slide 17: Scalability of Operations
Scalability of Operations Latrobe Magnesium’s patented hydromet process will be scaled to a 10ktpa Commercial Plant, ten times the magnesium output of the Demonstration Plant using a similar flow sheet. Key engineering, manufacturing and labour has been procured ahead of FID in December 2024 Process
Slide 18: Hydromet Process and Product
Hydromet Process and Product The Demonstration Plant has proved the patented hydromet process, de-risking the technology ahead of Commercial Plant FID, targeted for December 2024 Patented Process and Product Overview Flow Sheet – Demonstration and Commercial Plant Fly ash is leached with acid soluti
Slide 19: Demonstration Plant
Demonstration Plant Construction of the Demonstration Plant has recently been completed, validating Latrobe’s patented MgO processing capabilities. LMG expects early revenue through the sale of magnesium products from the pilot testing Demonstration Plant Construction • LMG has recently produced the
Slide 20: Commercial and International Mega Plant
Commercial and International Mega Plant Latrobe Magnesium is in discussions with debt providers and strategic investors for both the Commercial Plant in Australia and the International Mega-Plant, anticipated to be located in Sarawak, Malaysia Debt Equity • Societe Generale has been appointed global
Slide 21: Section Four: Market Overview
For personal use only Section Four Market Overview
Slide 22: Magnesium: The Critical Green Mineral
Magnesium: The Critical Green Mineral Magnesium is a critical input to auto-vehicles to reduce vehicle weight and improve efficiency, especially in electric vehicles Global Magnesium Demand and Magnesium Consumption by Market Sector (2022)1 End-Use Overview Mt • Magnesium castings are used for weigh
Slide 23: Magnesium: Annotated Pricing
Magnesium: Annotated Pricing Current magnesium spot prices remain significantly higher than long-term averages, reflecting supply chain concentration risks US$/lb Price decrease in the US following Declining prices attributed to high inventory levels at aluminium decreasing demand and 9 smelters and
Slide 24: Magnesium: Pricing Environment
Magnesium: Pricing Environment Magnesium is generally traded under offtake agreements which are reviewed annually, with pricing often being within +/- 10% of the relevant spot price 1. Future prices are often volatile and frequently subject to geopolitical tensions Pricing Overview1 Anti-Dumping Tar
Slide 25: Magnesium: Demand Outlook
Magnesium: Demand Outlook Historically, aluminium alloying has been the largest single application for pure magnesium, with beverage cans the primary consumer. Over the medium to long- term, there is expected to be a significant growth in magnesium demand from the automotive sector, particularly fro
Slide 26: Magnesium: Supply Outlook
Magnesium: Supply Outlook Global critical minerals policies, higher policy-driven prices in response to China’s production cost base, and inherent risks associated with China’s dominance of the market are expected to result in the proliferation of new primary magnesium projects Supply Themes Global
Slide 27: Section Five: Summary
For personal use only Summary Section Five
Slide 28: Summary
Summary Latrobe Magnesium: A future globally significant Australian producer of sustainable magnesium metal Demand and regulatory support: Supportive macro-outlook and legislative support for magnesium, where global demand is expected to grow at 4.6% (CAGR) 1 between 2022 and 2032. Very little suppl
Slide 29: Appendix A: Key Risks
For personal use only Key Risks Appendix A
Slide 30: Key Risks
Key Risks Set out below are the principal risks and uncertainties associated with LMG and its subsidiaries, which are likely to have an effect on LMG’s future financial prospects. The risks do not constitute an exhaustive list of all risks involved with an investment in the Company. It is not possib
Slide 31: Key Risks
Key Risks (4) General Economic Climate General economic conditions, movements in interest rates and inflation rates, currency exchange rates and commodity prices may have an adverse effect on LMG's potential for future development and production activities, as well as the ability to fund those activ
Slide 32: Key Risks
Key Risks (8) Change of Production Risks The capacity of LMG to achieve production will depend on a wide range of factors including capital costs and operating costs that may be applicable to the individual projects and the capacity of the Group to fund those costs. If production is achieved, unanti
Slide 33: Key Risks
Key Risks Processing activities, including those carried out at the Demonstration Plant, carry risk and as such, activities may be curtailed, delayed or cancelled as a result of a number of factors outside LMG's control. These include technical difficulties, securing and maintaining inputs, weather
Slide 34: Key Risks
Key Risks (17) Laws and Authorisations LMG's operations will be subject to various laws and plans, including those in respect of development permit and licence requirements, industrial relations, environment, land use, water, occupational health and plants and animals (for example laws or permitting
Slide 35: Key Risks
Key Risks (22) Changes in Tax Rules or Their Interpretation Changes in tax law (including value added or indirect taxes and stamp duties), or changes in the way tax laws are interpreted, may impact LMG's tax liabilities or the tax treatment of a LMG shareholder’s investment. In particular, both the
Slide 36: Key Risks – Issue of Shares
Key Risks – Issue of Shares (1) General Risks Associated with an Investment in Shares There are general risks associated with investments in equity securities. No assurances can be given that the New Shares will trade at or above the price at which they are issued. None of LMG, its directors or any
Slide 37: Appendix B: Summary of Underwriting Agreement
For personal use only Appendix B Summary of Underwriting Agreement
Slide 38: Underwriting Agreement
Underwriting Agreement The Lead Manager has agreed to lead manage the Offer and underwrite the Entitlement Offer on the terms and conditions set out in the Underwriting Agreement. The Underwriting Agreement contains customary representations and warranties and indemnities in favour of the Lead Manag
Slide 39: Underwriting Agreement
Underwriting Agreement q) a Director or officer of the Company or the Company is charged in relation to fraudulent conduct, whether or not in connection with the Offer; r) there is a change to the Company’s CEO, COO, CFO or board of directors; s) the Company or a member of the Company group is or be
Slide 40: Underwriting Agreement
Underwriting Agreement ix. the introduction of legislation into the Parliament of the Commonwealth of Australia or any State or Territory of Australia, the public announcement of prospective legislation or policy by the Federal Government or State or Territory Government or the RBA, or adoption by A
Slide 41: Thank You!
Thank You! For personal use only Suite 4, Level 5, 80 Clarence Street Sydney NSW 2000 Phone: +61 (0)2 9279 2033 Email: enquire@latrobemagnesium.com