VYS - Vysarn Limited

[basilio]

Very significant announcement today. MHM has signed the first deal in US for taking aluminum waste.

They can't mention names or amounts but perhaps the US market is about to crack wide open.

I believe they are also starting to work around the clock at their site which will boost revenue and profits with little extra costs. At some stage this will have to be properly reflected in the SP.

http://newsstore.fairfax.com.au/app...rkets.theage.com.au/apps/qt/quote.ac?code=mhm

http://newsstore.fairfax.com.au/app...e.com.au/apps/qt/quote.ac?code=MHM&section=ca

 

[erichmj]

This is probably how much our AL80 worth per tonne.

==========================================================

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

p.s. no idea how much are salt/potassium worth.
-------------------------------------------------------

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 in MHM's valuation they have assume that they can sell AL80 at around $246.43 per tonne.

--------------------------------------------------------

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

========================================================
ALL IMO

 

[erichmj]

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.

 

[Logique]

Not a current holder, have been in the past. An interesting one technically, some buy interest developing. Back on the watchlist for sure.

 

[erichmj]

195ema (88c) broken this morning, can't stay under $1 for too long.

"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."

 

[investorpaul]

Hi erichmj

Things are certainly lining up nicely for MHM

- processing contracts
- forth coming press conference on gov incentives and site acquisition
- positive techical signals

over a $1 in a week or two IMO

 

[erichmj]

maybe we don't need to wait 1-2 weeks, imo

 

[basilio]

Third US contract signed for process of dross and aluminum slag. Another good jump in SP to over a $1.

Lets remember that the most recent analysis of MHM (April 2011) projected a SP of $4.27 based on the progress of US salt slag negotiations. And now the contacts are signed and moving.

http://www.mhmmetals.com/_content/documents/743.pdf

 

[erichmj]

 

[basilio]

MHM announced the site for its US aluminum slag recycling development. Some good financial support from the local county and a very upbeat assessment of how this technology will reframe the issues of waste in the industry. And of course this should be a very profitable project..

And then the shares drop by 10% !!

Anyone have any thoughts on the markets initial dismissal of the deal ?

http://newsstore.fairfax.com.au/app...rkets.theage.com.au/apps/qt/quote.ac?code=mhm
http://newsstore.fairfax.com.au/app...rkets.theage.com.au/apps/qt/quote.ac?code=mhm

 

[YELNATS]

A very favourable market reaction to MHM's company update and roadshow released yesterday and today. Made an entry at 75 cents on Tuesday and currently trading at 90 cents.

Wasn't expecting such good gains so early, but prepared to wait long term for all the benefits.

 

[investorpaul]

A very favourable market reaction to MHM's company update and roadshow released yesterday and today. Made an entry at 75 cents on Tuesday and currently trading at 90 cents.

Wasn't expecting such good gains so early, but prepared to wait long term for all the benefits.

I agree, I am a long term holder (paid more than current price) but believe in the long term potential of the company.

If they can deliver on their stated objectives the fundamentals of the co. will eventually be reflected in the SP.

On the presentation itself, it is perhaps the most detailed presentation I have ever seen from a company. It clearly lays out where MHM are and where we want to go.

The IPO for the silica division is also very exciting and has the potential to deliver some strong returns IMO.

If anyone is new to the stock the presentation is well worth a read.

 

[basilio]

MHM has been massacred in the past few months. Fell to 41c on Thursday.
Given there has been no material change in their operations it seems like a self perpetuating funk with stop losses being repeatedly hit.

They released a progress report on Friday which reiterated the positive progress of their Australian and American operations. They also mentioned the many nervous investors who were ringing the company and wanting more information and reassurance (quite rightly IMO).

Anyway they have decided to do a monthly progress report and keep their website updated as to main questions and answers. Great idea and perhaps this might be taken up by a few other companies watching the bottom fall out of their SP for no particular reason.

The SP jumped over 10% after the release

http://newsstore.fairfax.com.au/app...theage.com.au/apps/qt/quote.ac?code=mhm&f=pdf

 

[imperator]

Agreed. Massacred, and it certainly doesn't appear that anything has changed at the fundamental level to cause such a significant pull back...

Sure, the company has slightly over promised and under delivered, and there have been a few hiccups, but that's to be expected for projects and techniques that are new and in some ways ground breaking.

Good to see management's focus on transparency, however, let's hope they are focussing first and foremost on getting their Aussie operations up to scratch, and pushing through the US developments on time, on budget, with minimum dilution.

Please note: the author has a holding in this company.

 

[basilio]

MHM in trading halt pending completion of a major US contract. Looks good.

Worth remembering that when they were roughly half way into their aluminum recovery project the analysis of the company offered a $4.27 SP based on the projected incomes from treatment of waste and recovery of raw materials.

Current SP is 39c and the only significant material change to their processes have been improvements in treatment operations and reduced capex costs for the North American operations. Will be interesting to see the size/nature of the contract and how quickly MHM gets revalued. With a major contact in place and the technology seemingly well sorted out it does look very good.

http://newsstore.fairfax.com.au/app...theage.com.au/apps/qt/quote.ac?code=mhm&f=pdf

http://www.mhmmetals.com/_content/documents/743.pdf

( I do have an interest in MHM..)

 

[basilio]

Announcement is out and it looks like a slow burn.

No names and it is clear that the aluminum producer is controlling the rate of information flow. I suppose that is hardly surprising given the huge difference in size between MHM and the multi billion dollar industry it is working with.

Apparently there will be a co-ordinated PR campaign to launch the initiative under the name of the client company. MHM also points out that the MHM story will be introduced to many new investors.

I think the current entry point is exceptionally low and when the announcement is made in US MHM will be revalued strongly.

http://newsstore.fairfax.com.au/app...theage.com.au/apps/qt/quote.ac?code=mhm&f=pdf
(I hold)

 

[basilio]

So much for the slow burn theory...! MHM up 47% to .57.5. I think a lot of other punters have joined the dots and realized that this is rediculously underpriced.

A couple of years ago MHM jumped to $1.20 plus on the initial announcements of the aluminum waste recycling technology they had developed which in their view would revolutionize the whole industry. Two years later they have sorted out the technology in Australia, written up 4 US contracts and are proceeding with manufacture of the first US processing plant. (And not forgetting the small matter of a very lucrative silicia mine it is preparing for sale in Tasmania.)

And yet the SP is still less that half it's initial surge. !! This will fly... (And I'm on the trip..!)

 

[skc]

So much for the slow burn theory...! MHM up 47% to .57.5. I think a lot of other punters have joined the dots and realized that this is rediculously underpriced.

A couple of years ago MHM jumped to $1.20 plus on the initial announcements of the aluminum waste recycling technology they had developed which in their view would revolutionize the whole industry. Two years later they have sorted out the technology in Australia, written up 4 US contracts and are proceeding with manufacture of the first US processing plant. (And not forgetting the small matter of a very lucrative silicia mine it is preparing for sale in Tasmania.)

And yet the SP is still less that half it's initial surge. !! This will fly... (And I'm on the trip..!)

Very decent action today with very little weakness through out. The volume while high for MHM, is only ~1.25m so far which means ~$0.5m in value. They didn't give away any of the financial figures of the contract which makes any attempts to quantify today's announcement impossible.

I can see the potential but I can't determine the value - using $1.20 as a guide from a couple of years ago may or may not be meaningful (may be it was just too high). The industry seems large enough for a quick punt, but it will be great if they are able to release some hard figures for proper analysis. And if those numbers stack up I am sure the share price would benefit as well.

 

[basilio]

I agree there are no figures from todays announcement. And it was fairly blurred. Thats why I think it will take a bit of time for all the dots to be joined.

The original basis for MHM's $4 plus valuation were done in 2011. One would assume that these processing plants were not going to be set up as charities so I think they would be useful.

At the moment the operational Geelong plant is returning $8-11m a year on a $60m company. Excellent value.

http://www.mhmmetals.com/_content/documents/743.pdf

 

[erichmj]

the "major contract" should be with one of Alcoa US's subcontractor who recycles aluminium for Alcoa US.
For those people have follow this company closely should know who that US company is.

once the PR campaign starts, where will MHM's share price be? are people still going to "wait and see" or?

Announcement is out and it looks like a slow burn.

No names and it is clear that the aluminum producer is controlling the rate of information flow. I suppose that is hardly surprising given the huge difference in size between MHM and the multi billion dollar industry it is working with.

Apparently there will be a co-ordinated PR campaign to launch the initiative under the name of the client company. MHM also points out that the MHM story will be introduced to many new investors.

I think the current entry point is exceptionally low and when the announcement is made in US MHM will be revalued strongly.

http://newsstore.fairfax.com.au/app...theage.com.au/apps/qt/quote.ac?code=mhm&f=pdf
(I hold)