announcement, page-44

Fair Value:

Including options which are likely to be exercised, I calculate MHM will have 135 million shares on issue.

To fund construction of the new plant - $25 million
$5 million current cash reserves
$3 million from operating cash flow
$1 million from government grant
$5 million from option exercise
$5 million through debt funding
$6 million through capital raising @ $0.80 - 7.5 million new shares

Total shares on issue forecast to be 142.5 million shares


Forecasting Profit:

Geelong - EBITDA of $8.5 million
No interest expense
Depreciation estimate - $1.5 million (currently $500,000 - but some extra equipment has been installed)
Therefore, EBIT = $7 mil, tax at 30%, NPAT = $4.9 million

USA Plant 1 - EBITDA of $25 million
Interest expense - $500,000
Depreciation - $3,500,000
EBIT = $21 million, tax at 30%, NPAT = $14.7 million

Combined NPAT = $19.6 million


Rough 'Fair Value' calculation
PE range 5 - 10 (depending on general investor sentiment)

Price range = $0.69 - $1.38

Note - This is my opinion only regarding an appropriate PE range, taking into account the business risk factors (unproven profitability etc.) and timeframe until full profitability (say 2 year till full commissioning, then 12 additional months until full capacity - 3 years).