Not sure what to make of this monthly report. It has a bit of...

Not sure what to make of this monthly report. It has a bit of everything.

The Good:

• Ore commissioning begins tomorrow which means we may see production end of next week or week after. If any commissioning issues - hopefully resolved by end of month or first week of May for MgO bagging at the latest.
• Appointment of Societe Generale(SG) to secure finances for stage 2 - thank Christ for that!! It would be nice if they can get a bit of international investment. They should be able to secure some money from the critcal minerals fund.
• Getting GHD to develop a JORC seems to be a priority which is great because once they have the efficiency figures from the demo plant they can use the JORC to calculate financials/profitbility for stage 2 which is essential to attract investors.
• Looks like they have leaned some hard lessons from tendering in stage 1, and planning their suppliers for stage 2 with hopefully tighter contract conditions - particularly on the labour side.

The Bad

• They are finalising the scope for GHD to work on the Yallourn deposit however it's not clear if they have the finances to begin. There is going to be quite a bit of drilling so it will be a significant cost which I assume is all in the stage 2 budget which is not finalised(hopefully SG will get onto it)
• LMG intends to target debt funding from a variety of sources, which implies to me we will have a capital raise because the Minerals Fund like the ATO is in the machinery of government(MOG) and the cogs move slowly. LMG will need early cash to get GHD cracking for a JORC. Capital raise is likely to be after production and efficiency metrics to demonstrate that the Hydroment process works at commercial scale - that's when we will likely have the most significant surge in share price.

The Ugly

• In every monthly report since they started (September '23) the first item in all repiorts has been about Health and Safety.. In this report it doesn't even get a mention. That's not a good look. I remember when working with the mining and oil/gas industry, that was the highest priority item and to avoid it is a mortal sin. If they did have an incident and lost days, they should be reporting it.
• Still don't know how they are funding the operation of the demo plant.
• Still no word on the tax rebate and at what stage negotiations have reached. (Perhaps this should be in the "Bad" group but it would be beyond "Ugly" if we don't get it.)

A good reason to be optimistic for MgO bagging end of month or first week of May. Hopefully have lab analysis by mid May so we have an idea how well the hydromet process works - that announcement should give the upward push and tie in with a capital raise. If there is going to be a takeover that would be the most likley time.A capital raise will probabaly take us close to 2B shares on issue, however I don't think there will be a consolidation before stage 2 is financed and under construction.

There is a risk that after stage 1 is opertaional that it will fall into a lull period while stasge 2 is being planned and constructed over the next 2-3 years. This may be countered with results of extraction efficiency on Ni slags and gradual news on the progress of stage 3. It's highly desirable that they try and test Ni Slags in the demo plant soon because that will raise the interests of international investment for stage 3 - that's where the big money will be and we wnat a plant operating by 2030 when the patents expire. In fact it is possible if management gets their act together that a stage 3 could be completed before stage 2 with the right investors and give the subsiduary some independence.
Meanwhile I'll pray for a new CEO.