British Lithium Ltd said it could issue shares with tax incentives to raise up to £20 million to fund qualifying research and development expenditure for its operations in Cornwall.
TAX INCENTIVES
The potential fundraise was noted in the total exemption full accounts for the year ending July 2022 for the Australian company’s subsidiary, Research by British Lithium (RBL).
RBL said it had received “advanced assurance” from His Majesty’s Revenue & Customs that it qualified for the fundraise as a ‘knowledge-intensive company’ under the Government’s enterprise investment scheme.
“[The scheme] offers a range of tax incentives to investors in the company’s shares, which may include a 30% income tax rebate, capital gains tax exemption and exemption from inheritance tax, provided the company remains compliant for a period of three years from the date shares are issued,” said Andrew Smith, managing director of Roche-based RBL.
“One such requirement is that the company, which is conducting the group’s research and development, remains owned 90% or more by the parent [company].”
British Lithium’s ultimate controlling party is executive chairman Roderick Smith, father of Andrew Smith who is also the chief executive officer.
The third member of the board is non-executive director Peter Long.
OPERATIONS
For the year ending July 2022, RBL said its sole activity was drilling, exploration, research and development to develop patented technology to extract lithium from mica in granite.
The company’s pilot plant, built in 2021, is capable of treating one tonne of granite per day and producing battery-grade lithium carbonate.
RBL added that optimisation of the process continued with the aim of developing a full-scale quarry and refinery in Cornwall to produce 20,800 tonnes per annum of lithium carbonate equivalent.
The subsidiary has yet to make a profit and is dependent on further grants and its parent company which is backed by international high net worth investors.
FINANCES
RBL’s accounts show it received grants totalling £1,226,870 (2021: £1,546,732) while its administrative expenses rose to £134,879 (2021: £61,176).
The company’s total assets increased in value to £4,876,287 (2021: £3,590,008) with the loan from its parent of £1,982,430 (2021: £1,824,323) minus trade and other payables of £74,410 (2021: £167,230).
The resultant net assets and equity attributable to the owners of the company are £2,810,446 (2021: £1,598,455).
RBL employs 12 people of which seven transferred from the parent company in November 2020.