Latrobe Magnesium Ltd (ASX:LMG, OTC:LTRBF) has today received $13.24 million from the Australian Taxation Office in respect of the 2024 financial year R&D incentive payment, which includes interest of $17,000.
The research and development (R&D) rebate funds will be used by the company to repay debt, which would be circa $5 million after the repayment.
LMG expects the balance of the debt will be repaid from LMG’s FY25 estimated R&D tax rebate, when it estimates it would then be debt-free.
The company's R&D advisors have provided an estimate of up to $13 million for the 2025 rebate based upon LMG's projected cash flows but depending upon which activities are carried out.
Patented extraction process
LMG is developing a magnesium metal Demonstration Plant in Victoria's Latrobe Valley using its world-first patented extraction process.
It intends to extract and sell magnesium metal and cementitious material from industrial fly ash, which is currently a waste resource from brown coal power generation.
A feasibility study has been completed which validates the combined hydrometallurgical/thermal reduction process that extracts the metal.
The Demonstration Plant has produced magnesium oxide with the full plant being commissioned in the first half of 2025.
A Commercial Plant will be also be developed by LMG, with a capacity of 10,000 tonnes per annum of magnesium metal, with completion targeted for the first half of 2026.
Critical minerals programs
In its September quarterly report, LMG said it had submitted a $10 million application to the Australian Federal Government for its International Partnership Critical Minerals program and was also looking to make an application to the US Department of Defence’s (DoD) Critical Minerals Program.
This follows the company being advised that it qualifies for the DoD program because:
- Since December 2023, Australian suppliers are considered a domestic supplier in the US.
- LMG is using Bechtel for development of the Commercial Plant, which is a company headquartered in Reston, Virginia, in the US.
- LMG's offtake agreement is with Metal Exchange Corporation, from St Louis, Missouri, for 100% of the magnesium produced.
- LMG's low CO2 emissions profile, sustainability and circular economy approach.
Owing to an increase in the expected cost of the Demonstration Plant, the company’s R&D rebate has increased considerably.
Additional facility
In the quarterly, it was stated that RnD Funding Pty Ltd had provided LMG with an additional $3 million facility but advised that LMG could not draw on the last $1 million of the $3 million September draw until the ATO had paid the 2024 R&D tax rebate.
With the pending holidays and this funding restriction, it was decided to delay the start of the Demonstration plant until January/February 2025.
About magnesium
Magnesium has the best strength-to-weight ratio of all common structural metals and is increasingly used in the manufacture of car parts, laptop computers, mobile phones and power tools.
LMG’s projects are at the forefront of ESG best-practice by recycling power plant waste, avoiding landfill, encouraging a circular economy and by being a low CO2 emitter.