LATROBE MAGNESIUM LIMITED — Capital/Financing Update 2021

Nov 11, 2021

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LATROBE MAGNESIUM COMPLETES OVERSUBSCRIBED $11.5M PLACEMENT

Funds allows fast-tracking the construction of its initial 1,000tpa magnesium plant in Latrobe Valley

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Highlights:

• LMG accepts $11.5M with large interest from professional, sophisticated and overseas institutional investors.

• LMG’s capital cost estimate has been reduced by $6M from $45M to $39M, further increasing initial EBITDA returns.

• As an ESG-credentialled clean metals producer & the only ASX listed company with exposure to magnesium, LMG is extremely well positioned to become a low-cost CO2 producer and supplier of magnesium.

• Funds raised will be sufficient to construct its initial 1,000tpa magnesium plant in the Latrobe Valley moving to 10,000tpa in 2023.

12 November 2021, Sydney Australia: Latrobe Magnesium Limited (ASX: LMG) is pleased to announce that it has raised $11.5M through an oversubscribed placement to sophisticated, professional and institutional investors. On 18 November 2021, the company will issue a total of 115 million ordinary shares to investors at an issue price 10 cents and 28.75 million attaching options exercisable at 4 cents within the next two years. These shares and options are issued within the company’s existing capacity under the ASX Listing Rule 7.1 and 7.1A.

The Placement was led by leading Melbourne boutique firm, Peak Asset Management.

Update on Funding Plan

Following the completion of a number of value engineering studies, LMG estimates that the current cost of its initial 1,000tpa plant will be reduced to $39M. Further capital cost savings may result from the completion of the design and engineering activities together with additional test work results. To date there has been some $2.5M has been spent on the initial plant. The remaining cost of $36.5M will be funded as follows:

Item	Item	$M’s
Existing Cash		3.6
Current equity raising (net of raising costs)		10.8
Victorian State Governmentgrant		4.0
Project Debt Funding(being Research & Development Rebates & project finance)		20.0
Total		38.4

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Suite 307, 20 Barrack St, Sydney NSW 2000 | Postal Address: GPO Box 4729, Sydney NSW 2001 | (02) 8097 0250 | lmg@latrobemagnesium.com | Latrobe Magnesium Limited | ABN 52 009 173 611 | www.latrobemagnesium.com

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The surplus $1.9M will be used for working capital purposes and further optimisation test work.

The company is excited as it will now be able to make the decision to effect financial closure once the debt funding is secured. LMG is in discussion with three debt providers who have presented term sheets to provide the $20M project debt facilities.

This successful placement provides LMG with the opportunity to bring forward its financial closure decision by some 3 months. Construction on site will start in January 2021 and LMG now does not have to rely on finalising investments from its two potential cornerstone investors.

LMG has been discussing the funding of the capital cost for its expanded 10,000tpa plant and it believes that it will secure the $75M estimated cost through offtake project funding.

Should you have any queries in relation to this announcement please do not hesitate to contact the CEO on 042 1234 688.

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David Paterson

About Latrobe Magnesium

Latrobe Magnesium is developing a magnesium production plant in Victoria's Latrobe Valley using its worldfirst patented extraction process. LMG intends to extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste stream from the Yallourn brown coal power generation.

LMG has completed a feasibility study validating its combined hydromet / thermal reduction process that extracts the metal. Construction is estimated to start on site on its initial 1,000 tonne per annum magnesium plant in first quarter of 2022 with production commencing up to 12 months later in fourth quarter of 2022. The plant will then be expanded to 10,000 tonne per annum magnesium shortly thereafter. Further plant capacity expansion will be considered once the 10,000tpa is operating successfully. The plant will be in the heart of Victoria’s coal power generation precinct, providing immediate access to feedstock, infrastructure and labour.

LMG plans to sell the refined magnesium under long-term contracts to Australian, USA and Japanese customers. Currently, Australia imports 100% of the 8,000 tonnes annually consumed.

Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of car parts, laptop computers, mobile phones and power tools.

The LMG project is at the forefront of environmental benefit – by recycling power plant waste, avoiding landfill and is a low CO2 emitter. LMG adopts the principles of an industrial ecology system.

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Suite 307, 20 Barrack St, Sydney NSW 2000 | Postal Address: GPO Box 4729, Sydney NSW 2001 | (02) 8097 0250 | lmg@latrobemagnesium.com | Latrobe Magnesium Limited | ABN 52 009 173 611 | www.latrobemagnesium.com