MHM SECURES ALUMINIUM OXIDE
OFF TAKE AGREEMENT
ASX Release – 14 June 2011
MHM’s wholly-owned subsidiary, Alreco Pty Ltd, has signed a contract with Impex Minerals Pty Ltd for the off take of its aluminium oxide product, AL80. The minimum monthly volume under the contract is 1,500 tonnes and there is no upper limit to the amount MHM can sell to Impex.
While the details of the contract are commercial in confidence, the financial terms are consistent with MHM’s previously announced future annual earnings target of $8.5 million EBITDA for the Australian aluminium division. This target includes a provision for AL80 pricing, which is now confirmed. Alreco has commenced producing AL80 with a planned first shipment by the end of July 2011.
Alreco’s salt slag processing technology yields significant environmental and economic benefits including the elimination of salt slag landfill, which has traditionally been the practice for disposal of this waste product. The Alreco technology separates the salt slag into aluminium metal, aluminium oxide, and a salt and potassium chloride blend. The process results in no residues, no by-products and no landfill disposal. Finding viable applications for aluminium oxide has been a major hurdle for salt slag processing. The aluminium industry unsuccessfully tried for a number of years to source a high value, high volume application for aluminium oxide. AL80 is produced when aluminium oxide recovered from Alreco’s salt slag operations is valueadded using an additional proprietary process. Alreco’s off take agreement for AL80 is an event of significance for the global aluminium industry and its importance should not be underestimated.
MHM believes there is opportunity for additional value-adding of the AL80, to be addressed in due course. This is a major milestone for the company as it completes MHM’s closed-loop, landfill-free salt slag processing technology.
MHM is seeking additional aluminium oxide for treatment with the company’s proprietary process to produce AL80 to sell under this off take agreement
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COMMISSIONING OF NEW ALUMINIUM PLANT
& COMMENCEMENT OF SILICA DRILLING
ASX Release – 4 May 2011
• Commissioning of new plant for Australian closed-loop salt slag operations
• Throughput increasing to 60,000 tonnes per annum in next quarter
• Landfill test program well advanced for US operations
• Important steps in global expansion of MHM’s aluminium business
• Commencement of drilling program at Cape Sorell high purity silica projec
AUSTRALIAN ALUMINIUM OPERATIONS RAMP-UP
MHM’s is pleased to announce the commissioning at the Company’s salt slag processing facility, located near Geelong, Victoria.
Aluminium salt slag is a by-product from the secondary aluminium industry, which is produced when aluminium scrap is re-melted. The trend of western world regulators including the Australian EPA has been to cease providing permits for this practice due to the hazardous nature of the material.
MHM’s technology yields significant environmental and economic benefits including the elimination of salt slag landfill. The MHM technology separates the salt slag into its individual components of aluminium metal, aluminium oxide, and a salt and potassium chloride blend. All of these commodities have commercial values and the process results in no residues or by-products needing disposal.
MHM holds perpetual exclusive global rights to this technology.
MHM acquired the Geelong facility from Sims Aluminium in January 2010. Since that time MHM has built a new salt slag processing plant, an aluminium dross processing plant, and an aluminium oxide processing plant on this site. The dross plant has been operating since January this year and both the salt slag and aluminium oxide plants are now in the commissioning phase with production planned for June this year.
MHM processes 100 per cent of the salt slag produced in Australia under a contract with a subsidiary of Alcoa Inc. Additionally the Geelong facility processes aluminium dross and non-salt slags for Sims Metal Management Limited. The facility will ramp-up to processing 60,000 tonnes per annum early in the 3rd quarter 2011 processing material received from Alcoa and Sims, and through the reprocessing the Alcoa salt slag landfill. The salt slag landfill process will recover aluminium, aluminium oxide and salts, and upon completion will be returned to pasture.
MHM recently expanded its salt slag processing business to the United States where over 1,000,000 tonnes of salt slag is produced each year. Though landfill is still permitted under certain conditions, the US aluminium industry has unsuccessfully attempted for some time to cease salt slag landfill. MHM also plans to pursue its program of salt slag landfill reclamation into the United States, and is well advanced in testing a 350,000 tonne
salt slag landfill for reprocessing.
SILICA PROJ ECT DRILLING COMMENCES
MHM has commenced drilling one of the company’s high purity silica deposits, located at Cape Sorell on Tasmania’s west coast. The drilling program, initially seven holes, will test extensions of high purity silica at depth.
MHM has been engaged with a number of entities interested in establishing a silicon smelter in Tasmania. MHM is also in discussions with companies wishing to secure high purity silica off-take for existing smelters around the world.
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Share price $1.04 as at 24th June 2011
M/C $105.65m
MHM 101,590,410
MHMO expiry 31 August 2012 26,182,760
Unlisted Options $0.20 expiry 31 August 2012 2,131,225
$0.20 expiry 28 November 2013 1,100,000
$0.20 expiry 14 December 2013 1,000,000
$0.25 expiry 9 October 2014 370,000
$0.28 expiry 30 November 2014 1,900,000
$0.28 expiry 4 January 2015 100,000
$0.85 expiry 6 October 2015 300,000
$1.80 expiry 20 June 2016 300,000
Total 134,974,395
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