Latrobe Magnesium (ASX:LMG) receives $8.79M R&D tax refund

• Latrobe Magnesium (LMG) has received a research and development (R&D) tax rebate of more than $8.79 million for FY20
• These funds will allow the company to pay off its liabilities, complete major equipment selection, and fund design and engineering work
• Latrobe is working to develop a magnesium production plant in Latrobe Valley Victoria, using a world-first process of hydromet and thermal reduction
• These processes use either chemical or heat to reduce sulphur, iron and silicon so the original material can be used as a feedstock
• Latrobe is up 4.35 per cent on the market and shares are trading at 2.4 cents

Latrobe Magnesium (LMG) has received a research and development (R&D) tax rebate of $8,793,842 for FY20.

These funds will allow the company to pay off its liabilities, complete major equipment selection, and fund design and engineering work.

In July, Latrobe received a new Advance Finding under Section 28A of the Industry Research and Development Act 1986 for its acid hydromet process plant.

Under the Act, Latrobe is entitled to receive a cash rebate for 43.5 per cent of all eligible spending on seven registered activities throughout 2020, 2021 and 2022.

The company is projected to receive $23 million over the next three years from the federal government, however, the exact amount will be based upon the activities and any costs incurred.

“Latrobe Magnesium benefits from the government’s financial support for its R&D activities in developing its novel hydromet process to convert spent brown coal fly ash from power stations and turn it into valuable commodities,” CEO David Paterson commented.

Latrobe is working to develop a magnesium production plant in Latrobe Valley Victoria, using a world-first process of hydromet and thermal reduction.

Hydromet reduction is the treatment of fly ash — waste stream obtained from brown coal power — by chemicals to reduce sulphur, iron and silicon so the original material can be used as a feedstock in the thermal reduction process.

Thermal reduction is the same process but uses heat instead of chemicals.

Latrobe is up 4.35 per cent on the market and shares are trading at 2.4 cents at 2:08 pm AEDT.