Below is a short summary (which is still long) of some of the...

Below is a short summary (which is still long) of some of the information that was brought up at the AGM. It was good put some faces to the names of people on hotcopper, and I am sure they will be able to add some information that I miss out, remember incorrectly (my memory is terrible) or perhaps interpreted incorrectly. At times there was a lot of information talked about, and Phil was clear that some of the situations we face are complicated and not ideal.

Firstly, the 21000 tonnes of slag previously negotiated and payed for seems on face value to not be our problem. We have never signed an agreement with Alcoa, we are subcontractors to PDC (the 3 party JV) and thus our contract is with PDC.

From the discussion it seems like that PDC was paid was every tonne of slag dropped off to the MHM site. When MHM gets round to processing the slag, PDC will then reimburse our direct operational costs (which I believe to actually be less than our actual REAL cost of processing, due to specifics of contract,. We also get 10% of any remaining operating profit (on a monthly basis) as a management fee, plus 50% of any remaining profit, but this is basically a side note.

Now, the good news is that as of the 31st of December this contract is over. We will be renegotiating the contract directly with Alcoa, thus essentially cutting the PDC out of the loop, which is good because it was a ridiculous arrangement imo. We will therefore be receiving 100% of the profits from processing the Alcoa slag that is in the landfill. As of Jan 1st we have no contractual obligation to do anything with the slag that has already been paid for (to PDC, not us) and it will essentially become a liability of PDC and not MHM.

Conversely, the PDC will have no contractual obligation to pay us our operational costs of processing the slag dumped on our property. Why is this important? if it's their problem not ours. Well it appears that we will indeed end up processing the slag anyway, whether or not we are contractually obliged to. Why? because we want a good relationship with Alcoa, and it is important for them to get rid of the slag.

Why is it important for Alcoa to get rid of the slag? The have an EPA order (not sure of the correct legal terms) to have it cleared up They will be fined approximately 4 million dollars if they fail to do this. Thus to have a good relations with Alcoa, we are going to clean it up. Now, it was said that Alcoa have a 4 million dollar mortgage on our property (not sure how this is possible, did I understand this correctly?), if they end up getting the fine, we pay the bill some how (can anyone explain?).

So, the 21000 tonnes of slag is not our liability technically, but we will likely have to deal with it anyway. However, it is not our liability (it is PDCs liability), we will be in a very good negotiating position when dealing with Frank Rodgers, i.e. gaining full ownership of the tech, perhaps paying no royalty fees etc (can anyone else think of what else they mentioned they would be trying to achieve).

Management were quite clear in that the next 6 months (3 months especially) is crucial for us, it is make or break time and there are clearly challenges that the market is starting to recognise. One could say the market has fully recognised, or at least made us pay for the potential problems even.

There were lots of other things brought up which I will try and remember over the next few days. Hopefully I haven't got things too confused, if I have please feel free to correct me, I would appreciate it.

scaine