mhm america figures

Just wanted to clear up a couple of things regarding the American Aluminum side of the business and was hoping some of the more experienced posters might help to clarify this.

My understanding is that the plant being set up in the US is initially for processing salt slag for others with the revnue stream being TOL initially.

There are 5-6 companies which tender on 1-2 year contracts to process the secondary product created by Alcoas Aluminimu production. SSC being one of the bigger of these companies. MHM is setting up a plant to process the salt slag from SSC and any other of these companies.

From what ben said MHM still needs to be competitve in pricing so that these companies can still make what they would normally achieve when they landfill.

Prices estimates are as follows:

SSC Landfill cost $75 / T

What MHM is offering is a process where the companies can sell the materials rather than landfill. To make this competitive we must still compete with landfill prices.

My understanding of the figures was:

Value of retrieved materials approx $125-$150/T which SSC can then sell.

This means that SSC can afford to pay MHM between $200 and $250 per T to proces the salt slag and still be competitive with landfilling.

The suggestion was that it would cost MHM approx $100-125 per ton to process.

A worst case scenario of $75/ton profit.

A TOL of $300/T has been suggested previously on HC but Ben was clear that this was the price in Aus and not likely to be replicated in US at this stage.

Alcoa produces 400,000T per year of salt cake from there Aluminium production of the 1,000,000 T created eadch year in US. (Someone correct me if I'm wrong but this is what i have in my notes.)

If one of the 5-6 secondary processing companies can make the process work with at similar cost with no landfilling then they would have a massive advantage in the tender process with alcoa.

Digging up landfill and processing seems a way off in my opinion. MHM will be concentrating on getting the plant running smooth with standard feed.

My worst case figures for end of next year :

250,000T being processed at $75/T = $18 million profit

Company profit of $27 million.

I know this isn't as big as some of the figures being discussed but it still supports a share price of around $2.50 in my opinion. and there is a huge upside from there.

The upside being:
More feed through initial plant. Up to $350,000T
Additional plants supported by digging landfills and other aluminum producers.
Possibility of becoming secondary producer of alumium rather than working for SSC etc????
Europe.
Silica (not even factored in to share price.)