further to my post 9296303. i spoke to RM to get clarification...

further to my post 9296303. i spoke to RM to get clarification on some issues. Obviously he was very guarded but these are my interpretations;

- my marginal cost assumption way too optimistic. new interpretation is 70% would be a safer fig. to use. this reduces my projected annual cash flow to $4.1m before capex and r&d tax incentives. it also excludes landfill mining, sales of nmp and increased efficiencies that will flow once partly processed slag is out of the way - which will take about 12 months.
- alcoa contract. the new receipts started from april which is the reason for the increased receipts projection for the june qtr. a new contract will be negotiated in 12 mths to take account of landfill mining. SIMS also got hit with a price increase.
- prev. contract prices did not reflect commercial reality. our customers are not being charitable in helping us out with new prices rather their honeymoon period has ended. we have stopped subsidising their businesses.
- US expansion is a matter of 'when' not 'if'. feels once we are there then US govt will legislate to ban landfill. this will give us a massive first mover advantage.
- john pugh rejoins us when US kicks off
- frank's release of tech. absolutely adamant that the jv has no claim and mgt don't care whether he signs or not. sees zero risk.
- nmp sales. this is highly interpretative on my part but the original thoughts that many posted here about its high value add i.e. it will sell for a couple of hundred dollars a ton with high margins seems to be on the money - and the volumes will take whatever we produce.

interestingly he praised prev. mgt's vision and the concept of what they were doing but that they grossly underestimated the manufacturing difficulty and consequently could not execute. my view - if frank had have recruited a proper mfg mgr as opposed to using his son we would be in the US now.

i also cheekily asked him why he had no options and why he had bought no shares. Options - did not want his judgement or comms. to the mkt clouded by one eye on the SP. wants to focus on the business not the sp. Buying - feels that with everything going on in the business it is impossible for him to buy and be at zero risk of an insider trading charge. very old school - come in on a low salary, get the runs on the board and then get the rewards. basically loves the engineering challenge.

i think warren buffett would employ this guy.