During early afternoon trade, Latrobe Magnesium shares are swapping hands for 9.4 cents, down 5.05%. It's worth noting that the Latrobe Magnesium share price has lost more than 20% in value over the past month.

Latrobe Magnesium renegotiates contract terms

Investors are selling Latrobe Magnesium shares despite the company successfully renegotiating more favourable contract terms.

In its release, Latrobe Magnesium advised that the interest rate on its $23 million project finance facility has been amended. The reduced 12% interest payable follows close discussions with RnD Funding, which has agreed to the new terms.

Latrobe Magnesium noted that the lower interest rate is a function of the additional security available to RnD Funding. This follows Latrobe Magnesium's purchase this week of the property at 20 Tramway Road, Hazelwood North for $4.5 million.

In addition, the company is expecting to receive between $12 million to $15 million of R&D tax refunds until 23 October 2023. Depending on the amount and time that the incentivised payment is collected, Latrobe Magnesium stated that the effective interest rate could be closer to 10%.

When the loan is first drawn down, the term is 5 years. However, the company intends to refinance the balance to make it as cost-effective as possible. Latrobe Magnesium estimates that this will occur in or about October 2023 at an interest rate of about 6% per annum.

About the Latrobe Magnesium share price

Over the past 12 months, Latrobe Magnesium shares have accelerated by 370%.

Based on today's price, Latrobe Magnesium presides a market capitalisation of $147.28 million. It has approximately 1.57 billion shares outstanding.

The post Why is the Latrobe Magnesium (ASX:LMG) share price on the slide today? appeared first on The Motley Fool Australia.

Shares in the magnesium company fell as low as 9.6 cents today after opening at 11 cents. At the time of writing, they've clawed back some ground to 9.9 cents, down 5.71%

The company is developing a magnesium production plant with a patented extraction process in the Latrobe Valley, Victoria.

What did Latrobe announce today?

Latrobe has signed off on a $23 million loan to construct the magnesium production plant. The total cost of the build is $39 million.

The company revealed it now has the funds available to completely pay for the construction of the plant.

Interest on the company's loan will be charged at 14% per annum up to October 2023 before increasing to 16% to December 2024, with a final capped rate of 24% from January 2025. The term of the loan is five years.

Latrobe hopes to showcase how its hydromet technology can extract high-quality magnesium and other by-products.

The company intends to conduct a pre-feasibility study during 2022 using ferro nickel slag feedstock.

As reported by Motley Fool Australia, the Latrobe share price surged in early trade yesterday after the company secured a property with several buildings to house the 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 property's former owner, the Di Fabrizzio family.

Latrobe share price snapshot

The Latrobe Magnesium share price has gained more than 438% in the past 12 months, rallying 321% this year to date.

Although the company's shares dived 39% in the last month of trading, they've gained 26% this past week.

The company has a market capitalisation of about $151 million, based on the current share price.

The post Here's why the Latrobe Magnesium (ASX:LMG) share price is tumbling 7% today appeared first on The Motley Fool Australia.

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.

The post What's happening to the Latrobe Magnesium (ASX:LMG) share price today? appeared first on The Motley Fool Australia.

The company updated the market on the ongoing build of its Latrobe Valley Demonstration Plant this morning.

Unfortunately, the market is bidding the Latrobe Magnesium share price down following the company's announcement. Right now, its shares are swapping hands for 9.3 cents, 7% lower than their previous closing price.

Let's take a closer look at the news the up-and-coming magnesium producer provided the market today with.

Latrobe Magnesium share price slumps

The Latrobe Magnesium share price is struggling today despite the company posting news of significant progress made on early stage works at its demonstration plant.

The plant is expected to use Latrobe Magnesium's patented process to extract and sell magnesium metal and cementitious material from industrial fly ash, a waste product from the Yallourn coal-fired power station.

The company plans to sell the refined magnesium to customers based in the United States and Japan.

At this point in time, more than 72 suppliers have registered their interest in the Latrobe Valley Demonstration Plant project.

In today's update, the company announced that work to repair fencing around the plant's site has finished.

The preliminary architectural drawings for the administration building refurbishment have also been finalised.

The company is now working to submit an application for a building permit. Additionally, it will be awarding a contract for the site's clean-up works to a local contractor shortly.

A contract for the electrical restoration work has already been issued. Mincore will be working alongside local contractors over the coming weeks to restore power to the site.

Finally, engineering is kicking off.

Process engineers are working to finalise the plant's flowsheet, heat, and mass balance, as well as to commence its piping and instrumentation diagrams.

Structural engineering is commencing steelwork for the briquette trolley support structure as well as bunker designs for char and silica products.

Meanwhile, mechanical engineering is undertaking plant layout planning and optimisation has begun.

Right now, the Latrobe Magnesium share price is 365% higher than it was at the start of 2021. It has also gained 86% over the last 30 days.

The post Here's why the Latrobe Magnesium (ASX:LMG) share price is sinking 7% today appeared first on The Motley Fool Australia.

It was a generous start to the month for Latrobe Magnesium investors. Shares in the magnesium specialist climbed over 380% from a low of 3.3 cents last month to a closing high of 16 cents by mid-November.

A series of positive catalysts have weighed in well for the company's project development, which had investors piling in to secure a spot.

However, in the past five days of trading, it has reversed course and pulled back almost 22% to its current levels.

What's up with the Latrobe Magnesium share price lately?

There's no market-sensitive information for the company which correlates to its share price declining today.

However, Latrobe Magnesium shares took off in early November after it announced the expansion of its demonstration plant.

Latrobe managed to increase its plant from 3,000 tonnes per annum (tpa) to 10,000 tpa in order to meet world demand – a substantial 230% jump in capacity.

This comes as it has secured and locked in offtake agreements of 8,000 tpa and has received enquiries for another 2,000 tpa.

Latrobe says the increased production will result in revenues of around $110 million and an estimated EBITDA of $42 million.

The news sent the Latrobe Magnesium share price soaring northwards in rapid succession to a high of 16 cents in the following days. Soon afterwards, Latrobe completed an oversubscribed placement, where it raised a net $10.8 million from a mix of institutional and sophisticated investors.

It issued the shares at 10 cents apiece, which was a 30% discount to its last closing price of 13 cents on 9 November.

The issue included an embedded option that investors can exercise at a share price of 4 cents, and expires in 2 years time.

As my colleague Aaron reported at the time, Latrobe intends to use the funds to fast-track the construction of its initial 1,000 tonnes per annum magnesium plant in Latrobe Valley. It has reduced the capital cost of the project from $45 million to $39 million.

It will finance the remaining costs of the project with a blend of $3.6 million in cash on its balance sheet and $20 million in debt facilities. It will also receive a $4 million grant from the Victorian Government for project finance.

The market responded poorly to the announcement, immediately selling off positions and sending the Latrobe Magnesium share price south.

It has since come off a closing high of 16 cents and reverted back towards its current levels. However, the volume of Latrobe Magnesium shares traded today is paltry compared to the last month.

For instance, total volume is just 15% of the average 44,226,258 Latrobe shares changing hands in the past 4 weeks.

Latrobe Magnesium share price snapshot

The Latrobe Magnesium share price has soared 495% in the past 12 months on the back of its recent gains in November.

In the past month, it has gained 346%, ahead of all major and benchmark indices.

The post Why is the Latrobe Magnesium (ASX:LMG) share price down again today? appeared first on The Motley Fool Australia.

The magnesium producer informed the market this morning that it has completed an oversubscribed placement.

In early afternoon trade, Latrobe Magnesium shares are swapping hands at 15 cents, up 15.4%.

At one point, the share price reached 18 cents, up 38.5%, before treading lower likely due to profit-taking. This is its highest price since 2000.

Latrobe Magnesium completes placement

Investors are excited about how the company is tracking and are buying up Latrobe Magnesium shares in the process.

According to its latest release, Latrobe Magnesium raised $11.5 million (before costs) through the placement.

The offer was significantly oversubscribed with support from professional, sophisticated and overseas institutional investors.

Latrobe Magnesium will issue roughly 115 million shares at 10 cents apiece. This represents a 30% discount to the last closing price of 13 cents on 9 November.

In addition, investors will acquire 28.75 million attaching options exercisable at 4 cents within the next 2 years.

Latrobe Magnesium will use the funds to fast-track the construction of the initial 1,000 tonne per annum magnesium plant in Latrobe Valley. The project's capital cost estimate has been reduced to $39 million, down from $45 million.

So far, $2.5 million has been spent on the initial phase, with the remaining costs about $36.5 million.

Latrobe Magnesium will draw upon $3.6 million in existing cash, $10.8 million from the net proceeds of the placement, $4 million from a Victorian Government grant, and $20 million via debt facilities.

Latrobe will allocate a $1.9 million surplus for working capital purposes and further optimisation test work.

Construction of the plant is scheduled to commence in January 2022.

About the Latrobe Magnesium share price

Over the past 12 months, the Latrobe Magnesium share price has accelerated by more than 600%, with year-to-date gains of 540%.

Based on today's price, Latrobe Magnesium presides a market capitalisation of $211.66 million. It has approximately 1.43 billion shares outstanding.

The post Why the Latrobe Magnesium (ASX:LMG) share price bolted 38% today appeared first on The Motley Fool Australia.

It appears both macro and micro events are aiding in the ascension of the relatively little-known resource company. Ongoing concerns of a magnesium shortage have placed company's exposed to the alloy element on many watchlists. At the same time, Latrobe released some news of its own last week that might have investors excited.

Here's a look at the current landscape for Latrobe Magnesium on the ASX.

What's going on with ASX-listed Latrobe Magnesium?

Investors pushed the Latrobe Magnesium share price to new heights on Tuesday, despite no announcements released by the company. As such, we're forced to take notice of what could be influencing this move more broadly.

Despite European automakers assuring investors that magnesium shortages are not of immediate concern, car part suppliers say otherwise. According to an article published by Reuters, suppliers of components to big auto are wary that if China does not increase its magnesium supply soon, issues will likely arise.

Furthermore, on its earnings call, Volkswagen's head of purchasing, Murat Aksel stated:

We cannot forecast right now if the shortage on magnesium, which will happen definitely according to planning, will be bigger than the semiconductor shortage.

The concerns of an imminent shortage continue irrespective of China's partial resumption of production. Reports indicate that the number of magnesium producers that have spun back up is not enough to significantly ease the shortage.

In turn, investors are speculating on ASX-listed Latrobe Magnesium benefitting from a potential lift in magnesium prices.

What else?

Closer to home, last week Latrobe announced the expansion of its demonstration plant. According to the release, the demonstration plant will increase from 3,000 tonnes per annum to 10,000 tonnes per annum (tpa) in response to world demand.

The company expects that the increased production will result in revenue of roughly $110 million and estimated earnings before interest, tax, depreciation, and amortisation (EBITDA) of $42 million.

Positively, Latrobe noted it already has a buyer for 8,000 tpa under its current offtake agreements. Meanwhile, another 2,000 tpa worth is being sought after by enquiries received.

These catalysts have helped Latrobe Magnesium return 575% on the ASX since the beginning of 2021.

The post Why the Latrobe Magnesium (ASX:LMG) share price rocketed 23% on Tuesday appeared first on The Motley Fool Australia.

Following on from a strong showing yesterday, these companies are rocketing again in early trade. This follows a joint call from multiple industries across Europe to address what could become a 'catastrophic' shortage of magnesium.

Let's take a look at the latest development.

No plans for China to ramp up production

As we previously covered, the sudden boom in interest for magnesium miners follows the fall in output of the alloy element from China. Unfortunately, the world has a substantial reliance on China's production of magnesium which accounts for 87% of the world's annual magnesium production.

With China's efforts to curb domestic power consumption, magnesium supply has dwindled. The side-effect is that Europe is believed to only have enough supply to last a few weeks.

The resulting ramifications could be extensive given that magnesium is a commonly used alloy in car parts, building products, and food packaging.

Despite the impending crunch, an article from China's Global Times, published last night, isn't promising for Europe's magnesium prospects.

According to the publication, China is inclined to rollout restrictions on magnesium operations in the future — regardless of whether there is an energy shortage or not. It seems that's sending ASX magnesium miners higher today.

Furthermore, many Chinese companies have resumed operations as normal since early October. However, magnesium miners have been instructed to operate at 40% of their normal capacity.

This is likely due to the material's extremely high energy intensity needed for production. It is estimated that it takes 35-40 megawatt-hours to produce one tonne of magnesium.

ASX magnesium miners today

It seems the shortfall in supply is unlikely to be filled by China following its remarks on magnesium production. As a result, investors are speculating that ASX magnesium miners could be set to benefit from an imbalance in supply and demand.

Here are today's big movers in the magnesium market:

• Magontec Ltd (ASX: MGL) up 20.83% to 58 cents per share
• Latrobe Magnesium Ltd (ASX: LMG) up 28.3% to 6.8 cents per share
• Korab Resources Ltd (ASX: KOR) is in a trading halt pending an announcement regarding a capital raising

Korab Resources appears to be making use of the heightened interest in the sector. The $9 million company has touted a "shovel-ready" magnesium deposit near Darwin.

All eyes are on the ASX magnesium miners as to what the next move is from here.

The post Why are ASX magnesium miners getting so much love this week? appeared first on The Motley Fool Australia.

This follows reports of mere weeks' worth of magnesium available across Europe. In turn, the unmet demand has sent the price of magnesium figuratively to the moon, taking just about any publicly traded company with magnesium exposure along with it.

What is causing the magnesium shortage?

Investors of ASX-listed magnesium shares are rejoicing while the price of the element takes flight. Though, many might be wondering, what is setting this into motion? Well, the "catastrophic" shortage across Europe appears to be the byproduct of China's efforts to curb domestic power consumption.

China accounts for 87% of the world's magnesium production. This puts immense importance on the upkeep in output from the country. Unfortunately, with the reduction in industrial energy usage, China's magnesium production has been relatively non-existent recently.

In response, a joint call to action has been made across Europe's industry associations. In this online publication, it is reported that Europe is at imminent risk of production shutdowns. This is due to magnesium's essential role in being an alloy material, improving the workability of aluminium and reducing density.

In addition, Europe relies on China's magnesium exports almost entirely, typically being 95% of its supply. As a result, the entire European continent is expected to run out of magnesium stockpiles by the end of November.

If this were to occur, industry associations fear the consequences would be far-reaching. Overall, it could result in the degradation of entire European Union value chains, including end-use sectors such as automotive, construction, and packaging.

Inevitably, if unresolved, the shortage could lead to business closures and job losses.

ASX magnesium shares riding the price hike

Though the shortage is bleak, investors were today looking for companies that might rise to prominence because of the shortage.

By the end of the session on Tuesday a handful of ASX shares had caught the magnesium hype bug, these included:

• Korab Resources Limited (ASX: KOR) up 178% to 7.5 cents per share;
• Latrobe Magnesium Ltd (ASX: LMG) up 61% to 5.3 cents per share; and
• Magontec Ltd (ASX: MGL) up 50% to 48 cents per share.

Additionally, the letter pointed out that magnesium prices had reached a mind-boggling $10,000 to $14,000 per tonne. For comparison, only a year ago the price was roughly $2,000 per tonne.

The post ASX magnesium shares are going gangbusters. What's happening? appeared first on The Motley Fool Australia.