Latrobe Magnesium Ltd (ASX:LMG, OTC:LTRBF) has boosted its bank balance to $12.8 million after receiving a research and development tax rebate from the Australian Taxation Office (ATO) covering the 2023 financial year.
This rebate for the company’s R&D expenditure in FY23 includes interest of $300,000.
The company has also recently estimated that its research and development tax rebate for the year ending June 30, 2024, will be in the vicinity of $16 million.
The 2023 and 2024 rebates are expected to allow Latrobe Magnesium to clear all remaining debt.
Developing production plant
Latrobe Magnesium is developing a magnesium production plant in Victoria's Latrobe Valley using its world-first patented extraction process.
LMG intends to extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste resource from Yallourn brown coal power generation.
Magnesium oxide has this month been produced at a demonstration plant with the plant being commissioned next quarter.
A commercial plant will then be developed, with an annual capacity of 10,000 tonnes magnesium with completion targeted in the first quarter of 2026.
The LMG project is at the forefront of environmental benefit – by recycling power plant waste, avoiding landfill and promises to be a low CO2 emitter. LMG adopts the principles of an industrial ecology system.
Demonstration plant rebate
LMG’s demonstration plant received two advance rulings from AusIndustry, confirming eligibility for a research and development tax rebate.
The second advance ruling, for LMG’s acid hydromet system, expired in 2022. The first was for LMG’s alkali approach.
In 2023, AusIndustry verified that LMG’s ongoing activities aligned with the original advance finding, supporting the registration of LMG’s rebate claim.
By June 30, 2023, LMG expended $22.8 million on the demonstration plant, expected to reach $50 million by June 30, 2024, with a rebate rate of 48.5%. Additional activities are estimated to earn a $1.2 million rebate, and equipment leasing in November 2023 is expected to add $2 million, totalling an estimated $16 million rebate for 2024.