Platina Resources Limited (ASX: PGM), a company into the exploration and development of platinum group metals and the strategic metal scandium announced that it received a refund of $1.1 million under the Government’s R&D tax incentive scheme for FY2018. As per the R&D tax incentive scheme, those companies whose turnover is less than $20 million are eligible for the tax refund. Based on this scheme and its eligible research and development in Australia, the company was able to receive a cash refund of 43.5 cents per dollar spent.
In the case of PGM, the primary aim of the company was towards the development of commercial extraction technologies. Through the development of commercial extraction technologies, the company would be able to produce scandium oxide, nickel, and cobalt from lateritic ore in Platina Scandium Project which is in New South Wales. The previous studies from the extraction process state that the discovery of scandium was in the form of a by-product. Further, the company also cleared that there was no previous dedicated exploration for the large-scale production of scandium. Neither the prior processes were capable of producing scandium from primary ores.
The earlier announcement of the outcome of the definitive feasibility study on 13 December 2018, proved the technical and financial possibility for producing the high purity scandium oxide. The study proved that the scandium production is possible through the construction of a simple, open-cut mining operation, low-strip ratio, and processing facility.
The official listing of PGM on ASX was 29 May 2006 where the overall performance of the company remains negative. However, the five years performance of the company is 45.97%. The previous year’s performance of the company was -62%.
By the end of the financial year 2018 on 30 June 2018, the company made a net loss of $393,453. The balance sheet of PGM appears healthy with a strong net asset base of $29,181,570 and a debt to equity ratio of 0.09. It indicates that the company is financially sound to meet its long-term obligations and it prefers to fund any financial requirements from within the resources and assets of the company. Also, the total current asset of the company is much ahead of its total current liabilities which indicates that the company can efficiently handle its working capital requirements and its short-term obligations. However, there is a slight upward movement in the accumulated losses which shows a weak operating performance of the company and might also adversely impact the shareholders.
By the end of the period, the net cash available with the company was $4,170,012.
Through the balance sheet and the announcement on the R&D tax refund, there is a positive influence on the shareholders of the company. With the R&D tax refund, the balance sheet also strengthened. Further, the R&D refund amount will also support in the further explorations and also build value for the shareholders.
As a result, the share price PGM by the end of the trading on 7 January 2019 was A$0.06 which increased by 0.003 points from its previous trading day’s closing price with the market capitalization of A$15.06 million.