Highlights

  • Latrobe Magnesium signed a non-binding letter of intent to acquire about 250 acres of industrial land in Walterboro, South Carolina for US$5 million.
  • A fully underwritten entitlement offer raised about A$3.4 million, with the shortfall covered by underwriter Shaw and Partners.
  • The Demonstration Plant in Victoria's Latrobe Valley is at 95% installation and 35% commissioning, with first magnesium crown production targeted by year-end.
  • A separate US$30 million feasibility study funding package is still under negotiation to advance the South Carolina project.

Latrobe Magnesium Limited (ASX:LMG) placed two announcements in front of investors within a week — a letter of intent to buy land for a proposed 50,000-tonne-a-year primary magnesium plant in South Carolina, and the result of a small entitlement offer to fund its much closer-to-completion Demonstration Plant in Victoria's Latrobe Valley.

The South Carolina Letter of Intent

The counterparty is the Colleton County Economic Development Corporation, and the site is about 250 acres of vacant heavy-industrial-zoned land at the Colleton Megasite on Bells Highway, Walterboro. The price is US$5.0 million in cash at closing, with a US$0.5 million deposit to be held in escrow and fully refundable during due diligence. The letter is non-binding aside from certain provisions, notably exclusivity. A definitive agreement is targeted within 60 business days, followed by a 120-day due diligence period that can be extended once by up to 60 days. Closing is expected within 60 days of satisfactory due diligence. Chief executive Robert Stein said the site "gives us rail, interstate and port connectivity and the room to expand."

The company expects to fund the deposit and early due diligence from Australian land-based assets, while the balance of the purchase price would come from US$30 million of project-level feasibility study funding still under negotiation. Closing also depends on approvals, permits, incentives and third-party commitments, and the company says there is no guarantee an agreement will be signed.

Entitlement Offer and Demonstration Plant

The fully underwritten, non-renounceable entitlement offer closed on 26 October and raised about A$3.4 million before costs. Eligible shareholder take-up was limited, with 20,335,590 shares accepted and a shortfall of 207,324,271 shares falling to Shaw and Partners and its sub-underwriters. Stein said the result reflected difficult equity market conditions but that the company is now "fully funded through to first magnesium crown production at our Demonstration Plant." He personally invested A$300,000 across the placement and entitlement offer.

The Demonstration Plant stands at 95% installation and 35% commissioning. Full commissioning is expected in the second half of 2026, and first magnesium crown production is targeted by year-end. The company says all of the plant's magnesium metal output is allocated to the US market through Metal Exchange LLC. A separate 10,000-tonne-a-year commercial plant in the Latrobe Valley remains on hold.

Next Steps

New entitlement shares are due for issuance on 2 November and are expected to begin trading on 3 November. In South Carolina, early due diligence and negotiation of the definitive agreement are the immediate tasks, alongside port, utility, offtake and feasibility-funding workstreams. First crown production at the Demonstration Plant is the milestone now fully funded.