19 November 2011
Change of Director`s Interest Notice
Director Ben Mead sold 200,000 MHM shares on market at average price of $1.07, exercised 200,000 unlisted options at 20c each and off market transfer 176,000 MHM shares at price of $1.05
Link
Link
US press conference scheduling
MHM PRESS CONFERENCE SCHEDULING
ASX Release – 18 November 2011
MHM Metals Limited (ASX:MHM) is pleased to announce that a US press conference has been scheduled for
Monday 12 December at 1.00pm (CST). The location of the press conference will be announced approximately
48 hours prior to the scheduled event.
The press conference will be held together with senior state and local government officials and a representative
from the MHM Board of Directors. The event has been scheduled to outline government grants and incentives
that are expected to be formally approved prior to this time, together with information regarding MHM’s
property acquisition for construction of the first US salt slag and black dross recycling facility.
Details of the press conference will be released to the ASX prior to the commencement of trading on Tuesday 13
December, and an Australian press event is also scheduled in Melbourne later that day.
ASX Release – 18 November 2011
MHM Metals Limited (ASX:MHM) is pleased to announce that a US press conference has been scheduled for
Monday 12 December at 1.00pm (CST). The location of the press conference will be announced approximately
48 hours prior to the scheduled event.
The press conference will be held together with senior state and local government officials and a representative
from the MHM Board of Directors. The event has been scheduled to outline government grants and incentives
that are expected to be formally approved prior to this time, together with information regarding MHM’s
property acquisition for construction of the first US salt slag and black dross recycling facility.
Details of the press conference will be released to the ASX prior to the commencement of trading on Tuesday 13
December, and an Australian press event is also scheduled in Melbourne later that day.
14 November 2011
Third US Processing Contract
THIRD US PROCESSING CONTRACT
ASX Release – 14 November 2011
MHM Metals Limited (ASX:MHM) has secured a third processing contract for the supply of feedstock to the planned US salt slag and black dross processing facility. The twelve month contract has been structured as a ‘tipping’ arrangement, where MHM assumes ownership of recovered aluminium, salt flux and aluminium oxide. The contract provides a mechanism for the parties to explore a tolling arrangement where the customer retains ownership of recovered aluminium and salt flux, on the basis of demonstrated recoveries.
Following MHM’s announcement of the first and second supply contracts earlier this month, momentum continues to grow for MHM as the company rapidly progresses the global expansion of its aluminium waste recycling technology.
Due to the dynamics of the US aluminium industry, the details of this contract must remain confidential and
MHM must refrain from revealing the counterparty or contract terms. Subsequent companies that engage contractually with MHM may also require contract information and company names to remain confidential prior to commencement of MHM’s US operations. A number of US aluminium companies accepting the MHM solution may experience reduced or denied landfill access or large landfill cost increases if identified as contracting with MHM. This is particularly problematic in the period between contracting for waste recycling and commencement of MHM’s operations.
Due to contractual limitations MHM also cannot reveal tonnages to be processed. The anticipated processing capacity of the first US plant remains 200,000-250,000 tonnes per annum. MHM intends to later provide overall contracted supply volumes when it can be done so in a manner that provides no risk for identification of the underlying counterparties.
MHM continues to engage with a number of other companies with substantial salt slag and black dross volumes and management is working diligently to secure additional processing contracts in the near future. Site due diligence continues to progress extremely well. Once government financial support for the project has been confirmed over the coming weeks, management has identified no reason why the acquisition of the property would not proceed. MHM has commenced geotechnical analysis of the site, which is not expected to
identify any issues. The company has also engaged with a rail provider and commenced preliminary planning and engineering for construction of a rail spur. The availability of rail is an important consideration for MHM, providing flexibility of transportation and potentially increasing the radius for which salt slag and black dross can be economically recycled. MHM has also commenced planning adaption of existing structures on the propertythat show potential for reduced cost and expedited construction timeframes.
Link
ASX Release – 14 November 2011
MHM Metals Limited (ASX:MHM) has secured a third processing contract for the supply of feedstock to the planned US salt slag and black dross processing facility. The twelve month contract has been structured as a ‘tipping’ arrangement, where MHM assumes ownership of recovered aluminium, salt flux and aluminium oxide. The contract provides a mechanism for the parties to explore a tolling arrangement where the customer retains ownership of recovered aluminium and salt flux, on the basis of demonstrated recoveries.
Following MHM’s announcement of the first and second supply contracts earlier this month, momentum continues to grow for MHM as the company rapidly progresses the global expansion of its aluminium waste recycling technology.
Due to the dynamics of the US aluminium industry, the details of this contract must remain confidential and
MHM must refrain from revealing the counterparty or contract terms. Subsequent companies that engage contractually with MHM may also require contract information and company names to remain confidential prior to commencement of MHM’s US operations. A number of US aluminium companies accepting the MHM solution may experience reduced or denied landfill access or large landfill cost increases if identified as contracting with MHM. This is particularly problematic in the period between contracting for waste recycling and commencement of MHM’s operations.
Due to contractual limitations MHM also cannot reveal tonnages to be processed. The anticipated processing capacity of the first US plant remains 200,000-250,000 tonnes per annum. MHM intends to later provide overall contracted supply volumes when it can be done so in a manner that provides no risk for identification of the underlying counterparties.
MHM continues to engage with a number of other companies with substantial salt slag and black dross volumes and management is working diligently to secure additional processing contracts in the near future. Site due diligence continues to progress extremely well. Once government financial support for the project has been confirmed over the coming weeks, management has identified no reason why the acquisition of the property would not proceed. MHM has commenced geotechnical analysis of the site, which is not expected to
identify any issues. The company has also engaged with a rail provider and commenced preliminary planning and engineering for construction of a rail spur. The availability of rail is an important consideration for MHM, providing flexibility of transportation and potentially increasing the radius for which salt slag and black dross can be economically recycled. MHM has also commenced planning adaption of existing structures on the propertythat show potential for reduced cost and expedited construction timeframes.
Link
10 November 2011
Features - Legislation & Regulations WASTE REDEFINED
The U.S. Environmental Protection Agency (EPA) has developed a new definition of solid waste under the Resource Conservation and Recovery Act (RCRA) designed to encourage recycling and to streamline regulation of reclaimed hazardous secondary materials. The EPA says it believes the streamlined regulations, which will affect about 5,000 facilities, will make recycling safer, easier and more cost effective.
Rule DevelopmentTo develop the new rules, the EPA studied current industry best management practices for the recycling of hazardous secondary materials and the environmental problems associated with recycling. The EPA also conducted an economic study of incentives and disincentives for recycling before publishing the rule. The EPA initially proposed its new rules in 2007.
State environmental agencies were generally supportive, as was industry; however, certain environmental groups opposed it. The Sierra Club appealed the rulemaking, and the EPA published its revised rule July 6, 2011, committing to promulgate a final rule by Dec. 31, 2011. The EPA says it believes the revised rule will improve accountability and oversight of hazardous materials recycling while allowing for important flexibility that will promote its economic and environmental benefits.
Rule MechanicsThe rule encourages recycling by excluding or exempting certain hazardous secondary materials from the definition of solid waste under RCRA, which takes the materials out of the often burdensome RCRA regime of handling and disposal restrictions and recordkeeping requirements.
"Hazardous secondary materials" are eligible for treatment under the rule, which means secondary materials (e.g., any spent material, byproduct or sludge) that, when discarded, would be identified as hazardous waste under RCRA. A generator cannot use the rule for materials recycled by a use constituting disposal or burned for energy recovery, for inherently waste-like materials, for materials already excluded from the definition of solid waste under some other exemption or for spent lead acid batteries or spent petroleum catalysts.
The rule includes four separate exclusions or exemptions from the definition of solid waste:
- Under control of the generator;
- Transfer based;
- Nonwaste determination; and
- Legitimate recycling.
We will take a closer look at each of these exclusions.
...More
From the press
US first for MHM Metals’ aluminium technology
November 09, 2011 by Editorial Staff
November 09, 2011 by Editorial Staff
The company’s first overseas contract is for five years and has been structured as a tolling arrangement where a fixed price per tonne is charged to the customer, with MHM returning aluminium and flux to the client while retaining ownership of recovered aluminium oxide. The contract is subject to a satisfactory visit by the US aluminium company to MHM’s Australian operations.
Under the agreement, MHM is not allowed to reveal the name of the counterparty, the contract terms or the tonnages to be processed, but completion of this contract provides sufficient volume to begin with construction of the US plant, which will have a throughput of 200 000-250 000 tonnes per annum. The company is continuing to engage with a number of other firms with substantial salt slag and black dross volumes and aims to secure additional processing contracts in the near future.
Black dross is a by-product from reverberatory furnace operations and has a similar composition to salt slag - although often with a higher aluminium content. MHM recently appointed John Pugh as Director of Operations, North America, which subsequently led the company to investigate black dross recycling opportunities. The company says that black dross recycling could be a potentially substantial additional revenue generator, with minimal investment of extra resources as the recycling of salt slag and black dross go hand in hand.
MHM METALS LTD. LANDS FIRST CONTRACT IN U.S.
11/7/2011Australian company structures contract as tolling arrangement.
MHM Metals Ltd., based in Australia, has landed its first overseas processing contract for the supply of feedstock to MHM’s first U.S. salt slag and black dross processing facility. The five-year contract has been structured as a tolling arrangement, where a fixed price per metric ton is charged to the customer with MHM returning aluminum and flux to the customer while retaining ownership of recovered aluminum oxide.
MHM adds that details of the contract will remain confidential, and the company did not divulge either the counterparty or contract terms.
MHM's core business is associated with waste recycling technologies in the aluminum industry, with operations in both Australia and the United States.
According to MHM, the completion of the contract will provide enough volume for it to commence with U.S. plant construction. There will likely be a number of confidential contracts entered on these terms, and MHM intends to provide overall contracted supply volumes. The anticipated throughput of its first U.S. plant remains between 200,000-250,000 metric tons per year.
MHM continues to engage with a number of other companies with substantial salt slag and black dross volumes and management is working diligently to secure additional processing contracts in the near future.
MHM adds that details of the contract will remain confidential, and the company did not divulge either the counterparty or contract terms.
MHM's core business is associated with waste recycling technologies in the aluminum industry, with operations in both Australia and the United States.
According to MHM, the completion of the contract will provide enough volume for it to commence with U.S. plant construction. There will likely be a number of confidential contracts entered on these terms, and MHM intends to provide overall contracted supply volumes. The anticipated throughput of its first U.S. plant remains between 200,000-250,000 metric tons per year.
MHM continues to engage with a number of other companies with substantial salt slag and black dross volumes and management is working diligently to secure additional processing contracts in the near future.
ADDITIONAL US PROCESSING CONTRACT
ADDITIONAL US PROCESSING CONTRACT
ASX Release – 10 November 2011
MHM Metals Limited (ASX:MHM) has secured an additional processing contract for the supply of feedstock to the planned US salt slag and black dross processing facility. The twelve month contract has been structured as a ‘tipping’ arrangement, where MHM assumes ownership of recovered aluminium, salt flux and aluminium oxide. The contract provides a mechanism for the parties to explore a tolling arrangement where the customer retains ownership of recovered aluminium and salt flux, on the basis of demonstrated recoveries.
Following MHM’s announcement of the first supply contract on 4 November, this additional contract is an
immensely positive development for MHM, demonstrating continued progression in the global expansion of the company’s aluminium waste recycling technology.
Due to the dynamics of the US aluminium industry, the details of this contract must remain confidential and
MHM must refrain from revealing the counterparty or contract terms.
Subsequent companies that engage contractually with MHM may also require contract information and
company names to remain confidential prior to commencement of MHM’s US operations. A number of US
aluminium companies accepting the MHM solution may experience reduced or denied landfill access or large
landfill cost increases if identified as contracting with MHM. This is particularly problematic in the period
between contracting for waste recycling and commencement of MHM’s operations.
Due to contractual limitations MHM also cannot reveal tonnages to be processed. MHM intends to later provide overall contracted supply volumes when it can be done so in a manner that provides no risk for identification of the underlying counterparties. The anticipated processing capacity of the first US plant remains 200,000-250,000 tonnes per annum.
MHM continues to engage with a number of other companies with substantial salt slag and black dross volumes and management is working diligently to secure additional processing contracts in the near future.Site due diligence continues to progress well, and MHM remains on track to complete the land acquisition at the end of January subject to finalisation of government incentives and concluding environmental due diligence.
Phase one of the environmental study of the property has not identified any issues of concern, and the testing is being conducted as part of a standard approach applied with any US property acquisition.
MHM is working to finalise the date for a press conference, anticipated to be held together with senior government officials, during which details of the property purchase and availability of government incentives and support for the project will be released. Whilst the government incentives must be formally approved, MHM remains confident that the environmental and economic benefits of MHM’s business, and the positive impacts upon the sustainability of the aluminium industry, will herald significant support from government.
MHM hopes to conduct this press conference as soon as possible, in the coming weeks
Link
ASX Release – 10 November 2011
MHM Metals Limited (ASX:MHM) has secured an additional processing contract for the supply of feedstock to the planned US salt slag and black dross processing facility. The twelve month contract has been structured as a ‘tipping’ arrangement, where MHM assumes ownership of recovered aluminium, salt flux and aluminium oxide. The contract provides a mechanism for the parties to explore a tolling arrangement where the customer retains ownership of recovered aluminium and salt flux, on the basis of demonstrated recoveries.
Following MHM’s announcement of the first supply contract on 4 November, this additional contract is an
immensely positive development for MHM, demonstrating continued progression in the global expansion of the company’s aluminium waste recycling technology.
Due to the dynamics of the US aluminium industry, the details of this contract must remain confidential and
MHM must refrain from revealing the counterparty or contract terms.
Subsequent companies that engage contractually with MHM may also require contract information and
company names to remain confidential prior to commencement of MHM’s US operations. A number of US
aluminium companies accepting the MHM solution may experience reduced or denied landfill access or large
landfill cost increases if identified as contracting with MHM. This is particularly problematic in the period
between contracting for waste recycling and commencement of MHM’s operations.
Due to contractual limitations MHM also cannot reveal tonnages to be processed. MHM intends to later provide overall contracted supply volumes when it can be done so in a manner that provides no risk for identification of the underlying counterparties. The anticipated processing capacity of the first US plant remains 200,000-250,000 tonnes per annum.
MHM continues to engage with a number of other companies with substantial salt slag and black dross volumes and management is working diligently to secure additional processing contracts in the near future.Site due diligence continues to progress well, and MHM remains on track to complete the land acquisition at the end of January subject to finalisation of government incentives and concluding environmental due diligence.
Phase one of the environmental study of the property has not identified any issues of concern, and the testing is being conducted as part of a standard approach applied with any US property acquisition.
MHM is working to finalise the date for a press conference, anticipated to be held together with senior government officials, during which details of the property purchase and availability of government incentives and support for the project will be released. Whilst the government incentives must be formally approved, MHM remains confident that the environmental and economic benefits of MHM’s business, and the positive impacts upon the sustainability of the aluminium industry, will herald significant support from government.
MHM hopes to conduct this press conference as soon as possible, in the coming weeks
Link
06 November 2011
Aluminum Dross: a hazard to your health and the environment
Aluminum Dross: a hazard to your health and the environment What is aluminum dross? Aluminum dross is the “residual waste material produced during an aluminum melting process,” (Environmental Chemistry) and it poses a risk to people and the environment. Approximately “five millions tons of aluminum dross are produced per year in the United States.” (University of Kentucky Law) There are two primary types of aluminum dross: black and white. Black dross, also known as dry dross, has a granular texture. It tends to have a low metal content and a high concentration of salts and oxides. White dross, which is wet, has high concentrations of metal and a smaller amount of salts and oxides. What is aluminum dross used for? The reason why aluminum dross is produced in such high quantities in the United States is because aluminum is a material commonly utilized in the production of a number of products including “pistons, engine and body parts for cars, beverage cans, doors, siding and aluminum foil.” (University of Kentucky Law) The Environmental Protection Agency (EPA) is working closely with “the aluminum industry, waste industry, and the states of Ohio and Indiana on a research project focused on safe management of aluminum productions wastes.” (EPA) All have expressed varying degrees of concerns “about the management of secondary aluminum wastes,” which are the cause of “fires, odors, elevated operating temperatures, engineered component failures and leachate releases at some municipal solid waste landfills.” (EPA) What are the potential dangers of Aluminum dross? -Dross is highly flammable when in contact with water. -Dross is a skin and eye irritant. If a person gets the substance on their skin, it is strongly advised that they wash it off immediately. If they get dross in their eyes, they are advised to flush out the substance “for at least twenty minutes.” (Chemical Dictionary Online) -Dross emits toxic chemicals and gases into the atmosphere, such as ammonia. Workers handling the dross are usually provided with breathing apparatuses, which filter out the fumes, but people living or working near sites of aluminum dross production are especially vulnerable, especially if they already suffer from a respiratory condition such as asthma. -More serious medical conditions associated with aluminum dross exposure include “cancer, liver damage, skin rashes and reproductive disorders.” (University of Kentucky College of Law) -When deposited and stored in landfills, dross is hazardous to the environment. When dumped in landfills, aluminum dross emits foul, often toxic odors. -Every year “there are approximately 8,300 fires that occur in landfills, (University of Kentucky College of Law),” many of which contain highly flammable aluminum dross products. |
04 November 2011
FIRST US PROCESSING CONTRACT
FIRST US PROCESSING CONTRACT
ASX Release – 4 November 2011
MHM Metals Limited (ASX:MHM) has secured its first overseas processing contract for the supply of feedstock
to MHM’s first US salt slag and black dross processing facility. The five year contract has been structured as a
tolling arrangement, where a fixed price per tonne is charged to the customer with MHM returning aluminium
and flux to the customer while retaining ownership of recovered aluminium oxide.
This is a significant development for MHM, marking a milestone in the global expansion of the company’s
aluminium waste recycling technology.
Due to the dynamics of the US aluminium industry, the details of the contract must remain confidential and
MHM must refrain from revealing the counterparty or contract terms.
Further companies that engage contractually with MHM will likely also require contract information and
company names to remain confidential prior to commencement of operations at MHM’s first US plant. A
number of US aluminium companies accepting the MHM solution may experience reduced or denied landfill
access or large landfill cost increases if identified as contracting with MHM. This is particularly problematic in
the period between contracting for waste recycling and commencement of MHM’s operations.
Due to contractual limitations MHM also cannot reveal tonnages to be processed. However the completion of
this contract provides sufficient volume for MHM to commence with US plant construction. There will likely be a
number of confidential contracts entered on these terms and MHM intends to later provide overall contracted
supply volumes. The anticipated throughput of the first US plant remains 200,000-250,000 tonnes per annum.
This supply contract is subject to a satisfactory visit by the US aluminium company to MHM’s Australian
operations in the near future. The contract also contains clauses that permit the contract counterparty to
cancel the contract should information as to its identity become public prior to commencement of MHM’s US
operations.
MHM continues to engage with a number of other companies with substantial salt slag and black dross
volumes and management is working diligently to secure additional processing contracts in the near future.
My thoughts only
This is probably how much our AL80 worth per tonne. (Only guesswork)
==========================================================
From 2010 Annual report page 9
Gross Revenue: $2,735,528
Net profit: $1,008,021
Once off landfill cost: $545,829
Total plant throughput: 13,627 tonnes from Alcoa and Sims
So the actual net profit if landfill didn't happen is
$1,553,850 or ($114.03/t) and actual cost of production is $1,181,678 or ($86.72/t)
----------------------------------------------------------
From 2011 Annual report page 6
When Geelong plant operates at full capacity, it is expected to process 35,000t of landfill salt slag and 24,000t of salt slag and dross from Alcoa and Sims.
Recovered products
based on 35,000t of salt slag MHM can recover
3,500t of aluminium
14,000t of AL80
17,500t of salt&potassium
based on 24,000t of salt slag/dross MHM can recover
9,600t of AL80
Revenues/EBIT/Cost
Now assume MHM can sell aluminium at $2,000/t and AL80 at $P per tonne.
As we know that no revenue from AL80 in FY2010, so we can assume the net profit per tonne for processing the material for Alcoa and Sims is about $114.03.
1. Alcoa/Sims
Then based on 24,000t
24,000t x 114.03/t = $2,736,720 (pre-tax profit to MHM)
revenue or net profit from AL80
9,600t x $p/t x 60% = $5,760 x p
2. Landfill
Now, the salt slag from landfill.
cost of production on 35,000t of salt slag
35,000t x -$86.72/t = -$3,034,500
But Alreco only received 60% EBIT therefore the cost should be 60% of -$3,034,500 = -$1,820,700
revenue or net profit from aluminium and AL80
3,500t x $2,000/t x 60% = $4,200,000
14,000t x $p/t x 60% = $8,400p
salt/potash maybe worth $200/t
-------------------------------------------------------
Now, MHM has said Geelong plant expect to earn $8.6m pre-tax profit once operate in full capacity. If I sum up all the components above.
($2,736,720 + 5,760p) + ($4,200,000 + $8,400p) - $1,820,700 should equal to $8,600,000.
Then I guess in MHM's valuation they have assumed AL80 valued at $246.43ish /t
--------------------------------------------------------
Note: the cost of production per tonne may not be accurate, for example on September 2011 quarter total throughput is 5,540t but cost of production is $990,000 which works out to be $178.7/t
--------------------------------------------------------
In conclusion,
to value MHM's first US plant we can use these figures
tolling profit: ~1.33 x $100 = $133 (100% profit in oversea operation)
Al80 price per tonne: ~$246
========================================================
ASX Release – 4 November 2011
MHM Metals Limited (ASX:MHM) has secured its first overseas processing contract for the supply of feedstock
to MHM’s first US salt slag and black dross processing facility. The five year contract has been structured as a
tolling arrangement, where a fixed price per tonne is charged to the customer with MHM returning aluminium
and flux to the customer while retaining ownership of recovered aluminium oxide.
This is a significant development for MHM, marking a milestone in the global expansion of the company’s
aluminium waste recycling technology.
Due to the dynamics of the US aluminium industry, the details of the contract must remain confidential and
MHM must refrain from revealing the counterparty or contract terms.
Further companies that engage contractually with MHM will likely also require contract information and
company names to remain confidential prior to commencement of operations at MHM’s first US plant. A
number of US aluminium companies accepting the MHM solution may experience reduced or denied landfill
access or large landfill cost increases if identified as contracting with MHM. This is particularly problematic in
the period between contracting for waste recycling and commencement of MHM’s operations.
Due to contractual limitations MHM also cannot reveal tonnages to be processed. However the completion of
this contract provides sufficient volume for MHM to commence with US plant construction. There will likely be a
number of confidential contracts entered on these terms and MHM intends to later provide overall contracted
supply volumes. The anticipated throughput of the first US plant remains 200,000-250,000 tonnes per annum.
This supply contract is subject to a satisfactory visit by the US aluminium company to MHM’s Australian
operations in the near future. The contract also contains clauses that permit the contract counterparty to
cancel the contract should information as to its identity become public prior to commencement of MHM’s US
operations.
MHM continues to engage with a number of other companies with substantial salt slag and black dross
volumes and management is working diligently to secure additional processing contracts in the near future.
My thoughts only
This is probably how much our AL80 worth per tonne. (Only guesswork)
==========================================================
From 2010 Annual report page 9
Gross Revenue: $2,735,528
Net profit: $1,008,021
Once off landfill cost: $545,829
Total plant throughput: 13,627 tonnes from Alcoa and Sims
So the actual net profit if landfill didn't happen is
$1,553,850 or ($114.03/t) and actual cost of production is $1,181,678 or ($86.72/t)
----------------------------------------------------------
From 2011 Annual report page 6
When Geelong plant operates at full capacity, it is expected to process 35,000t of landfill salt slag and 24,000t of salt slag and dross from Alcoa and Sims.
Recovered products
based on 35,000t of salt slag MHM can recover
3,500t of aluminium
14,000t of AL80
17,500t of salt&potassium
based on 24,000t of salt slag/dross MHM can recover
9,600t of AL80
Revenues/EBIT/Cost
Now assume MHM can sell aluminium at $2,000/t and AL80 at $P per tonne.
As we know that no revenue from AL80 in FY2010, so we can assume the net profit per tonne for processing the material for Alcoa and Sims is about $114.03.
1. Alcoa/Sims
Then based on 24,000t
24,000t x 114.03/t = $2,736,720 (pre-tax profit to MHM)
revenue or net profit from AL80
9,600t x $p/t x 60% = $5,760 x p
2. Landfill
Now, the salt slag from landfill.
cost of production on 35,000t of salt slag
35,000t x -$86.72/t = -$3,034,500
But Alreco only received 60% EBIT therefore the cost should be 60% of -$3,034,500 = -$1,820,700
revenue or net profit from aluminium and AL80
3,500t x $2,000/t x 60% = $4,200,000
14,000t x $p/t x 60% = $8,400p
salt/potash maybe worth $200/t
-------------------------------------------------------
Now, MHM has said Geelong plant expect to earn $8.6m pre-tax profit once operate in full capacity. If I sum up all the components above.
($2,736,720 + 5,760p) + ($4,200,000 + $8,400p) - $1,820,700 should equal to $8,600,000.
Then I guess in MHM's valuation they have assumed AL80 valued at $246.43ish /t
--------------------------------------------------------
Note: the cost of production per tonne may not be accurate, for example on September 2011 quarter total throughput is 5,540t but cost of production is $990,000 which works out to be $178.7/t
--------------------------------------------------------
In conclusion,
to value MHM's first US plant we can use these figures
tolling profit: ~1.33 x $100 = $133 (100% profit in oversea operation)
Al80 price per tonne: ~$246
========================================================
Trading Halt
MHM announce a trading halt today pending on the US processing contracts.
The trading halt is expected to be lifted before market opens on 7/11/2011.
Link
My thoughts only
"The last RBMG report with target price A$4.27 assumed US$70m capex for three processing plants to be built in US with annual combined capacity of 520,000 tonnes.
Based on the figures quoted on the quarterly that the first plant is expected to have 200,000 to 250,000 tpa which is about 38.5%-48% of the assumed capacity in "one" plant. And what was the capex for one plant in US? US$70m/3 = US$23.3m
Now the future cash flow projection, it estimated that the EBITDA for 520,000tpa would be around A$100m, this is equivalent to A192.3/t.Then for 200k-250ktpa the estimated EBITDA would be A$38.46m to A$48.075m.
I know these are just estimated figures, reality might be different to it, but even the estimated EBIDTA reduce by 50% it still closed to A$20m so I don't see any reason that MHM can't secure debt finance for our US expansion."
The trading halt is expected to be lifted before market opens on 7/11/2011.
Link
My thoughts only
"The last RBMG report with target price A$4.27 assumed US$70m capex for three processing plants to be built in US with annual combined capacity of 520,000 tonnes.
Based on the figures quoted on the quarterly that the first plant is expected to have 200,000 to 250,000 tpa which is about 38.5%-48% of the assumed capacity in "one" plant. And what was the capex for one plant in US? US$70m/3 = US$23.3m
Now the future cash flow projection, it estimated that the EBITDA for 520,000tpa would be around A$100m, this is equivalent to A192.3/t.Then for 200k-250ktpa the estimated EBITDA would be A$38.46m to A$48.075m.
I know these are just estimated figures, reality might be different to it, but even the estimated EBIDTA reduce by 50% it still closed to A$20m so I don't see any reason that MHM can't secure debt finance for our US expansion."
02 November 2011
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