Shares in Latrobe Magnesium Limited (ASX: LMG) are sliding again today and are trading 10.71% down at 12.5 cents at the last check.
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.
Image source: Getty Images
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.
