Latrobe Magnesium Ltd (ASX:LMG, OTC:LTRBF) has secured an increase in its project finance facility by A$3 million, raising the total limit to A$28 million.
In addition, the maturity date of the facility has been extended from March 31, 2027 to December 31, 2027. This adjustment follows an increase in the expected research and development (R&D) refundable offsets that the company anticipates receiving.
There is a further $3 million of the facility available to be drawn by LMG in the second half of the 2025 financial year.
The additional funding will provide crucial working capital for LMG’s magnesium oxide (MgO) production, which is set to ramp up in October 2024. In consideration for the revised terms of the facility, LMG will issue options under the agreement.
LMG is currently completing its 2024 tax return, including a significant R&D refundable tax offset claim of around $16 million. It is expected to receive this refund in October or November.
These funds will be used by LMG to pay a current tax liability of circa $3 million, with the remainder to be used to reduce secured moneys owed to the lender, leaving an amount outstanding to the lender of around $5 million after that repayment.
The company received a refundable offset of A$12.9 million for the 2023 financial year in May 2024, and those funds were used to reduce the amount owed under the facility.