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Oops I meant sophisticated investors, not "institutional" investors. Raising money from sophisticated investors is often faster and has less overheads than raising money from retail investors.

I agree with you that the company has liabilities in the form of stockpiled and partly processed material. But I don't see the stockpiled material as a significant issue in the short term. I accept that the Environmental Protection Agency has the power to take action against MHM for failing to process this material in the expected time frame. However, the EPA is not bound by statute to take any action against a company for every breach. The extent of action (if any) against a company is a discretionary power. The EPA can take a range of actions, from "no action", to a warning, to extending the time frame, to enforceable undertakings, all the way to seeking financial penalties.

The nature of a regulator's response often depends on the manner in which a company addressses a breach and how cooperative the company is in its dealings with the regulator. In my opinion, following dialogue with MHM, the EPA is unlikely to punish MHM financially, because MHM will be able to demonstrate that it is acting in good faith. In my opinion, the EPA is likely to agree to an enforceable undertaking by MHM under an amended timetable for processing the material. So under my risk assessment, there is a low probability of the stockpiled material becoming a cash flow issue in the short term. Rather, I see the stockpiled material as more of a medium to long term issue, which can be separated from the more immediate issue of the Alcoa lifeline ending later this year.


The end of Alcoa's financial support is the single most pressing issue facing the company, and so substituting is obviously the company's key objective.

The concern I have is that MHM is still too focussed on the US market. With land already acquired in Kentucky and with established contacts in the US, its natural to expect management will pursue the US option. However, my fear is that MHM is under resourced for looking at opportunities in other countries, such as China.


I agree it takes more than speaking the national language to be the type of contact required to be successful in a foreign market-- there's no doubt about that. The challenge is to find contacts with substantial and relevant knowledge and connections. And the time for that is now.

MHM's technology may not yet be fully mature, but I disagree that the process is not ready to be presented to potential Chinese partnerships. In recent times the technology reached a crucial milestone following the installation of the Dieme filter press. For the first time, MHM has the capacity to process ALL of the salt slag it receives without the need to stockpile material. I mean WOW! For those following MHM for a long time, there must have been many moments in which there was genuine doubt whether this breakthrough would ever happen. And now it has.

The significance of this technological achievement in the context of the company's current crisis cannot be overstated. The technology is at a stage in which it can be 'cloned' overseas.

Yes, the company needs to make the technology more profitable. But the fact is the technology WORKS. It completely prevents salt slag waste from aluminium recycling.

So this technology is ripe for a new partner. MHM is fortunate that Alcoa has not acquired part-ownership of the IP. The only IP conflict could easily be resolved by MHM waiving its action against the former management in exchange for the IP. Maybe MHM shareholders should be given an opportunity on voting for this. Are we going to pursue the former management whilst the company is run into the ground? Or are we going to take ownership of the IP and move on?

Ideally we'd pursue both, but with Alcoa pulling the plug we may not have our cake and eat it to. Some tough decisions ahead. And there is a need for clear, rational thinking. And outcome-oriented action.

Management's words do not instil confidence in me that they are going about this in a methodical way. Maybe they will wake up before its too late.

Present management may feel compelled to save company cash and feel that they can do the job themselves without the need to pay for additional staff. But what if conserving cash is the wrong decision and merely leads to a slow and painful death for MHM. What if the better option is to hire new staff to be able to fully explore the opportunities that are out there, in China, in Europe, everywhere there is alumuminum recycling.

I don't know why MHM bought the property in the US rather than lease it. Perhaps MHM could sell it at heavily discounted price (maybe even half price?) under a long-term "lease back" arrangement. That way MHM improves its cash position whilst keeping a potential foothold in the US. Just an idea. Ultimately, the future of MHM doesn't hinge on selling the property in the US. It is about finding a new lifeline- a new partner.

Its up to management to come up with a plan and to sell it to existing and prospective investors and partners. I don't see a plan. I see a potential for a plan. But without any change to MHM's human capital I just see business as usual-- which ends this year. And so yes, on MHM's present heading, Firsova's receives are on the horizon.

To summarise my fears, I feel that management is reactive. That was a good management approach for dealing with the technological issues they inherited when they took over from the previous management team. A reactive approach is essential for the type of prototype research and development activity that has led to the technological breakthrough mentioned earlier.

But a reactive management approach is not going to solve MHM's current problems. Call it "big picture" thinking, abstract thinking, "out of the box" thinking. And most of all, at the end of it, I want to see a method, a plan, a timeline.

I once heard that a plan doesn't win a war, but a war was never won without planning.

So who feels that management needs to think things through a little more. Who feels that management needs to focus less on what is wrong with the company, and instead give investors a vision for the company? Who else is not satisfied with management taking action without a clearly expressed underlying methodology?