downturn consequencies ( blogger thoughts ), page-8

As I see it there is 4 manageable risks that need attention to reduce risk of maintaining a market cap of $80 m.

1. In my opinion Geelong contracts need to be signed and secured beyond the current undefined time frames .
As far as I understand it there is no need to convince any other bodies the technology works in Australia , so it is time to sign a 10 year contract with these parties . Until this occurs there is no security for shareholders on the revenue and profit forecasts that were promised , it is also some concern they are yet to be validated on a month to month basis because of delays . Once a long dated contract was granted and the profit can be seen you could bank the Geelong plant as having a value of at least $40m , at Present there is a definate value but without contracts many risks .

2.In my view the board needs 1 maybe 2 indepndent non exec directors , someone ex alcoa or a major succesful buisness person from industry , not necessarily the aluminium industry . In my view a replacement chair is required , just as ADO did with Mark Bouris , instant recognition and credibility . Nothing against Basil Conti , but he is Franks long term accountant and partner, this is not a private company , and to attract instos should not look like one .

3. The market recognises that to move forward a deal in the USA is vital , it also knows this will require funding of some kind , and outsiders may share my view that a CR is likely , to eleveate that thought , a funder could be announced , if there is a site and client in the loop, surely the funding must also have been discussed , and negotiated , if this is so , the company could shut people with my thought by announcing they have secured fuinding for up; to XXX for any site and infrastructure purchase .

4. The last area of ST importance to protect the share price forom ST drop is to let the market know exactly what business they are in for the next 5 years . Is is salt slag landfill solutions, is it black dross, is it landfill re cycling, is it diversified mining ie silica /gold , etc .


All easily solved in my view , and very important to protecting the share value against ST and MT market downturn consuquences .

In the LT it really shouldnt matter , if MHM achieve all it has stated it intends to do , and the revenues and profits roll in , it wouldnt matter if Mickey mouse was the chairman the market will reward its price on international industry PE ratios similar to that of Befesa .