The tax rebate will allow LMG to stick its head out of the water and breath rather than having to breath through a straw.
Looking at some rough financials.
Based on the last quarterly, we have a $26M loan facility with about $4m remaining to be able to draw down. I would expect that due to the delays in tax rebate and production that we have already drawn down some of that remaining $4M, as it was earmaked for demo plant operation so I expect it will be drawn down by the time we get the 2024 rebate.
The 2022/23 rebate is $12.6M.
We can pay off part of the $26M loan which leaves $13.4M loan.
The cash and cash equivalent at end of last quarter was $2.4M which is being spent this quarter but let's assume we will have at least $1.5M of that at end of quarter.
Looking at the 2024/25 year outgoings:
- Admin and corporate costs for a year are about $2M
- Cost of operating the demo plant for a year, let's budget ~$4M
- Costs for progressing stage 2 and 3 are unknown but let's say $2M
- Costs to finish the demo plant (to produce ingots) unknown but let's say $5M
That's a total of $13M outgoings.
Income for 2024/25 :
- Not sure what the revenue will be for the MgO/Mg for the year let's allow $1500/ton and assuming we produce 1000ton = $1.5M
(the $1500/ton is based on 94% puruty MgO(food grade) peaks at that price in US$. Our MgO is no where near that pure so allow $1500 $AUS/ton)
- residual cash carried forward from 2023/24 = $1.5M
- Tax rebate estimated at $16M, of which $13.4M will be used to pay off remainder of loan, leaves $2.6M
So outgoings will be ~$13M
Revneue after paying off loan will be $5.6M
We are about $7M short. Where will that come from??
Options are:
1. Capital Raise
2. Critical minerals fund(loan)
3. Assume the $26M loan facility remains available(bold assumption), it can be drawn down.
We need some sort of stand-by loan facility in place. I don't think we can raise $7M via Capital Raises.
Happy to be critiqued and others to suggest alternate outgoings/reveue estimates.
