nmp and spl addons... plant 1 upside., page-4

Hi Jay,

I'll give you a little rundown. Firstly, becareful using the words Revenue and Profit. These are not the same.

If I sell an Apple for $3 and it cost me $2 to buy from my supplier, then my Revenue is $3 but my Profit is $1. (Sorry if I am being a bit too basic).

The Vic Plant was to be completed at the end of Sept, and comissioned in October.

First before the plant was completed, Revenue was about $500K a momth, and profit was $230K a month (about $2.8m pa).

After the plant is completed, profit goes from $2.8m pa to $8.6m pa. Part of this profit, is that MHM gets to keep the NMP the plant creates which is worth about $200 a tonne.

NMP is a low value product (at $200 tonne), but NMP contains about 50% aluminium.

MHM have the rights to a technology that extracts the Aluminium from the NMP. This Aluminium is worth about $1000 a tonne. So for every 2 tonnes of NMP (worth $400), they extract 1 tonne of AL (worth $2000).

So, whilst MHM can generate $50m in Revenue from the NMP in Australia, the profit from this is probably going to be about $25m.

This would move the Australian operations profit from $8.6m a year to $33.6m a year. Fair value would move from about $1 a share, to about $3.50 a share once the NMP tech is implemented.

SPL is a different tech for a different waste product, and it is not as advanced as the NMP tech. Both the NMP tech and the SPL tech is different to the current tech of the Salt Slag (3 techs in total).

Given the above, and the opportunities in the US and globally, you can see why I am so bullish on MHM in the short, medium and long term.