Northern Minerals Ltd (ASX:NTU) has lodged a tax return and refundable Research and Development (R&D) tax offset claim for $8.7 million with the Australia Taxation Office (ATO) for the 2020 financial year.
This claim, which will further strengthen the balance sheet, comes after the company in August settled previously disputed tax offset claims with the ATO for the financial years ended June 30, 2017, and 2018.
That settlement also agreed on a refundable R&D tax offset for the financial year ended June 30, 2019, and provided a framework for calculating the refundable R&D tax offset claim for FY2020.
Adopted ATO recommendation
Northern Minerals CEO Mark Tory said: “We adopted the ATO’s recommendations for improving our internal R&D procedures to streamline future claims, including for FY2020.
“We believe the R&D work now continuing at Browns Range, post COVID-19 disruptions, is providing valuable processing data that could underpin larger scale heavy rare earth developments in Western Australia.”
Browns Range Pilot Plant
Northern Minerals’ R&D activities are focused on the processing of heavy rare earth elements from hardrock xenotime ore at its Browns Range Pilot Plant in the Kimberley Region of Western Australia.
Through the development of Browns Range, the company aims to build the operation into a significant world producer of dysprosium outside of China.
The company is also finalising plans for an aggressive exploration program to drill around 16,500 metres across its Browns Range tenements before the end of June 2021.
Northern Minerals is one of a few producers of heavy rare earth element (REE) dysprosium outside of China via production from Browns Range.
Dysprosium is an essential ingredient in the production of dysprosium neodymium-iron-boron magnets used in clean energy, military and high technology solutions.
R&D tax dispute settled
On August 24, 2020, Northern Minerals entered into a settlement agreement with the ATO that settles all matters relating to the company’s refundable R&D tax offset claims for the financial years ended June 30, 2017, and 2018 which concluded the ATO’s review of those claims.
This settlement agreement also documents an agreed refundable R&D tax offset for the financial year ended June 30, 2019, and a framework for reviewing the company’s refundable R&D tax offset claim for the financial year ended June 30 2020.
The company submitted its June 30, 2020, R&D claim and tax return after market close on October 2, 2020.
Reduction of debt
Last month, the company received a refund payment of around $9.9 million from the ATO as a part of the settlement agreement.
On receipt of funds from the ATO, Northern Minerals moved to immediately reduce debt with the early repayment of $2 million to JHY Investments Pty Ltd.