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Northern Minerals receives $1.3 million balance of R&D refund from ATO

As a part of the settlement with the Australian Taxation Office, the company has received a refund of $9,921,638 in two tranches.

Northern Minerals Ltd - Northern Minerals receives $1.3 million balance of R&D refund from ATO
The company plans to use the refund to reduce debt

Northern Minerals Ltd (ASX:NTU) has received the $1.3 million balance of the R&D refund statement from the Australian Tax Office (ATO).

Through a settlement agreement, the ATO has settled all matters relating to the company’s refundable research and development (R&D) tax offset claims for the financial years ended June 30, 2017, 2018 and 2019.

This agreement also provides a framework for reviewing the company’s refundable R&D tax offset claim for the financial year ended June 30, 2020, which will be lodged shortly.

Northern Minerals was eligible for a net refund of $9,921,638 payable on or about September 18, 2020, and last week received a payment of $8.64 million from ATO.

With the balance refund of $1.3 million, the net cash flow effect of the settlement agreement between the company and the ATO relating to refundable R&D tax offset claims has been completed.

Reducing debt

On receipt of funds from the ATO, Northern Minerals has moved to immediately reduce debt with the early repayment of $2 million to JHY Investments Pty Ltd.

The company entered into a $4 million convertible note subscription and option agreement with JHY in December 2018 with an original maturity date of December 31, 2019, and an interest rate of 16% per annum.

Northern Minerals subsequently negotiated an extension of the maturity date for a further year to December 31, 2020, and at a lower interest rate of 10%.

Heavy REE producer

NTU is one of a few producers of heavy rare earth element (REE) dysprosium outside of China via production from the Browns Range Heavy Rare Earth Project in northern Western Australia.

Dysprosium is an essential ingredient in the production of dysprosium neodymium-iron-boron magnets used in clean energy, military and high technology solutions.

Through the development of Browns Range, the company aims to build the operation into a significant world producer of dysprosium outside of China.

Northern Minerals 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.

The company has allocated a budget of up $5 million for the program in the 2021 financial year and anticipates drill rigs being mobilised to site in October to test greenfields targets across the tenement as well as follow-up on the previous drilling at Dazzler and Banshee deposits.

Quick facts: Northern Minerals Ltd

Price: 0.031 AUD

ASX:NTU
Market: ASX
Market Cap: $137.52 m
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on 21/9/19

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