Latrobe Magnesium Limited has raised AUD 402,500 in a placement to sophisticated investors on November 15th 2011 at an issue price of AUD 0.023 per share. LMG will raise an additional AUD 1million via a Share Purchase Plan for shareholders holding fully paid ordinary shares in LMG at the record date of 5 PM EST on November 15th 2011.

The offer price will be at the same issue price as the placement, AUD 0.023 per share, a 17% discount to the volume weighted average closing price of LMG securities over the past five days when sales were recorded. Under the SPP shareholders are able to apply for the purchase of share parcels for a minimum of AUD 2,000 and any amount up to AUD 15,000.

The SPP is fully underwritten to the amount of AUD 1 million by Calatos Pty Limited.

Mr David Paterson chairman of Latrobe Magnesium said that "The SPP conducted at AUD 0.015 in October 2010 was heavily oversubscribed and shareholders quickly realized in excess of 50% returns on this investment. We believe this offer will be just as appealing to shareholders with a steady stream of news expected leading up to the construction of the LMG plant over the next 18 months."

Funds raised from the SPP will be used for working capital including the bankable feasibility study for the Latrobe Magnesium project and commencement of exploratory work at LMG's Errida Creek rare earths project.

The offer comes after important progress in recent weeks including:

Extension of LMG’s fly ash agreement with Yallourn Power Station

Signing of fly ash agreement with large German electricity supplier RWE Power AG

Completion of pre-feasibility study and initiation of bankable feasibility study

Granting of exploration license for Errida Creek rare earths project, for which LMG has an option agreement to acquire a 100% interest

Shares will be allocated under the offer as soon as practical after the closing date of 5 PM EST on December 7th 2011 and in any case no later than December 14th 2011.