Ann: Appendix 4D and Half Yearly Report and Accounts, page-15

As far as I understand (with all disclaimers possible) discussing this back in 2022 the $156M amount is a net tax number, not a gross number, and most of it pertains to 'Alacer losses transferred in in 2014'. Those of you with more knowledge of history of MLX probably can shed some light of the background of Alacer in connection to MLX.

As I understand it, these losses will be available for offset, but as you state at a restricted rate (assume fraction of approx. 0.11 ). So they way I tend to think about it is that once regular losses are used up, they have a discount on corporate tax rate of 11%- so 27% corporate income tax vs. 30%. The pool of these losses are so big that for NPV purposes this reduction may be deemed semi permanent.

We'll probably know more once they have run through the losses they have recognized on the balance sheet - which as you state could be somewhere in 2025, I would expect them to recognize part of the $156M losses on the balance sheet at year end 2024 - as by that time it will be clear whether the unrecognzied part will start lowering current taxes the next year. In howfar they will recognize them depends on said fraction, how many years out they want to estimate probable taxable profits - and also how they use tin prizes projections going forward for estimating taxable profits. They have considerable bandwith to recognize an additonal deferred tax asset for these losses on the low or the high side, but given they have shown a preference to undervalue deferred tax assets rather than overvalue them, I would expect them to value them on the low side. They may also not recognize anything until they start utalizing them, altough this in breach with GAAP anything seems to go with Australian reporting (sorry )

If they do recognize an initial deferred tax asset I don't think you are talking huge amounts, assume they estimate three years out, we would be talking $6M they would recognize as an additional deferred tax asset (assuming full year current tax approx. 20M [based upon H1 2024], thus the _net_ loss utilization per year would be 11% of 20M, mulitplied by a three year period would be said $6M).

Note at that rate, it would take them 50 years to burn through these losses, if I understand both the math and the law right (and they are indefinte available for utilization indeed). That is why I tend to think about these unrecognized losses as a permanent lowering of the corporate income tax rate by 11%, hence 27% rather than 30%.

At least that is how I understand it, happy for others more involved to chime in. To me it is not changing the investment thesis, it is just a nice hidden asset that could add some extra gravy on top.

Disclaimer: I know a fair bit about international corporate income tax, just not a specialist in the weird stuff Australians do So please do not rely on it, and DYOR Also I looked into this in detail in 2022, I have not checked if any changed in math or tax law.