Latrobe Magnesium lifts magnesium plant value to $120M

THE BOURSE WHISPERER: Latrobe Magnesium (ASX: LMG) has completed further work on costings and processes of the company’s Latrobe Valley magnesium plant, located in the Latrobe Valley, Victoria.

The completed work has resulted in a rise of the net present value (NPV) of the plant from $83 million to $120 million.

Latrobe said the recent work was part of the company’s adjustment study, in which it has refined costings from a prefeasibility study it had conducted in 2011.

Additional test work over the past year has optimised Latrobe’s hydromet process resulting in greatly reduced capital costs.

“With significant design changes to the retort furnaces increasing reliance on robots and automation, the capital and labour costs of the thermal reduction process have also been reduced,” Latrobe Magnesium said in its ASX announcement.

“The result of these savings substantially improves the value of the project from $83 million to $120 million for the 40,000 tonnes per annum magnesium plant.

“LMG is endeavouring to further increase the value of the project with more detailed work on improving iron removal and the creation of an additional product.”

Latrobe Magnesium indicated it is now finalising a 500 kilogram bulk fly ash sample for shipment and testing in a commercial operation in China.

The company expects this work to take up to five months.

From this bulk sample 4kg of cementitious material will also be produced for the completion of both mortar and concrete tests covering strength, setting times and durability of this material.

This work is expected to take up to six months to complete.

When its fly ash and property agreements have been finalised, which are anticipated to be completed in the next quarter, Latrobe said it will then endeavour to commence a bankable feasibility study.