From thread "mhm top 40's - seems loved by the big guys" thread:...

From thread "mhm top 40's - seems loved by the big guys" thread: "We need something decent soon instead of powder puff pieces that we've been getting these last couple of months."

You can't please some people!!

In terms of the US Plant (the main game really).... Do you seriously think that it is possible to finish a rail spur and 20 million dollar factory without a longwinded permit process, lots and lots of regulatory approvals, and a truckload of design work to actually source the factory machinery and componenets and fit it into the buildings (and plan for any extensions, alterations, demolitions etc to same)? Financiers will want to see all this progressing before they will put pen to paper. Imagine the PILES AND PILES of design specs, contracts, environmental reports, lcal government updates and reporting, submissions, legal opinions etc etc that is going on in the background with a fairly slim staff. Add to that the ongoing negotiations in stitching up supply and offtake contracts (travelling to site meetings, preparing correcting dispatching and reviwing and responding to queries and due diligence requests on each potential contract, including the ones that aren't finanlised).

This is not like building a house or buying a bit of machinery! This is a seriously large industrial enterprise with brand new technology- you can't just buy it off the shelf. (AND the learnings of the Geelong are still emerging even now (well we hope they are improvements don't we....) so I expect tweaking of all the above is happening.

It has only been a few short months since the land and buildings were acquired. Seriously, have some patience!!

As for Al80 we have been informned about customs issues- If you read the latest info at face value- the initial shipment has not even got through customs yet- why would yo expect shiploads to go off until the process is 'proved'?

As for Geelong- all right, there is still some serious tweaking going on it would seem. I reiterate- if it was so easy to crack the salt slag breakup problem EVERYONE would be doing it. Management still maintain confidence that the process will / is working. You have to decide whether you believe them or not.

*****************************************************

I got an interesting slant on the valuation process when I saw a broker estimate of the value of GGG. GGG has potentially the largest Rare Earths deposit in the world in Greenland BUT with potentially one of the largest uranium resources comingled with it. Greenland has a 'zero tolerance' policy on uranium extraction so the key to GGG unlocking the rare earths is to crack the uranium ban. The broker concluded that this was a 'BINARY SITUATION'. If they win it's worth $4.50 a share if they lose its worth zero. the broker decided to split the valuation in half (hence binary)!! -to $2.25.

This is a useful way of looking at things I feel!!! The GGG estimate has, it seems, arbitrarily discounted the GGG valuation by 50% (precisely). I don't think there is any rationale for why 50% was picked rather than 40% or 60% or any other amount. (We can think of this percentage as the chance of the process winning.) Nevertheless this is an interesting way of thinking about the MHM valuation problem. We need three variables to estimate what MHM share price is worth: (a) if it fails, what MHM is worth; (b) if it is significantly successful what MHM share price is worth,and (c) the probability of success, of (b) happening.

It is assessments of the third element that are more likely to sway the day to day share price. (Gloom will reduce the percentage and thus the share price, excessive optimism will do the reverse.) Given that the company story has not really changed, although the timeframe has, I think the second element is less influential than the third. And of course the first element is fixed.

I think most of us can agree that basically if the MHM process DOESN'T work than MHM is worth approximately zero.-

Others will disagee but I guess MHM is worth upwards of $4 (ignoring dilutionary raisings, including the options to come, to simplify). I remain confident that the chances of success are MUCH greater than the 10-15% that results if we accept the zero to $4 binary outcome- hence MHM is considerably undervalued. I personally think it is more likely to happen than not- so I plump for upwards of 50%, maybe 60% giving a price vlaue (a la GGG) of $2.40.

I'm interested in what assumptions and resultant values others hold within this framework.