The Latrobe Magnesium Limited (ASX: LMG) share price is climbing today following a mining update from the company.
After surging to an intraday high of 11.5 cents in early trade, the Latrobe Magnesium share price dropped back to its previous closing price of 10.5 cents apiece. It has since reignited and is now trading 4.76% higher at 11 cents.
The company is developing a magnesium production plant in the Latrobe Valley, Victoria.
What did Latrobe tell investors today?
Latrobe Magnesium has purchased a property that includes several buildings from DG & J Di Fabrizio Steel Fabrications Pty Ltd.
The company said the buildings would be used to house its magnesium production plant.
The deal, worth $4.5 million, will include a combination of a $2.25 million cash payment and the issue of shares to the family.
The Di Fabrizzio family will receive $2.25 million worth of shares at a price of 10 cents. This is a 0.5 cent discount on the last closing price of 10.5 cents.
Latrobe Magnesium said the timing for this share release would be "subject to LMG refreshing its issuing capacity" at its AGM in January next year.
The company is using a patented extraction process to collect magnesium from a fly ash resource.
As previously reported, the company plans to sell refined magnesium to customers based in the United States and Japan.
Management commentary
In a statement signed off by Latrobe Magnesium CEO David Paterson, the company said:
The purchase of the site allows the company to plan its future expansions, obtain appropriate business insurance, save rent through the construction phase and benefit from its own site improvements.
LMG thanks the Di Fabrizio family for their patience and support during the last nine years required to develop the Latrobe Magnesium project.
Latrobe Magnesium share price snapshot
The Latrobe Magnesium share price has gained more than 511% in the past 12 months after rallying 378% this year to date.
The share has dropped 31% in the last month of trading but is up around 26% in the last week.
The company has a market capitalisation of about $171 million, based on the current share price.
