Stock: MHMBusiness: Aluminium, Silica, Gold and Base...

Stock: MHM

Business: Aluminium, Silica, Gold and Base Metals

Shares: 87.5M shares, 27.5M 20c options (approx 115M total)

Share Price: 29c (Fully Diluted cap $33m).

Current share price driver: Aluminium Plant upgrade and US Expansion.

Brief Overview of AL: MHM have a 60% share of a Victorian AL recyling plant that treats the waste from all the Aluminium produced in Australia. Contracts with SIMs and Alcoa. MHM have the rights to buy the other 40%. MHM treat the waste at $300 a tonne. MHM own 100% of the outside Australia rights.

The plant is currently being upgraded to include the MHM technology, and expected to generate $8m profit per annum with completion for Oct 2010. US Plants with 20 - 40 times the volume (20 - 40 times the profit).

Projected profit: $8m when Australian plant is completed ($2.5m before completion).

Fair Value of Australian Plant at PE of 10 = $80m market cap (70c a share).

Fair Value of US Plants (based on 20x volume and $160m profit) at PE of 10 = $1,600 market cap ($14 a share).

Additional Upside: Plants in additional countries. Silica Offtake.

Price Target: $3.50 (70c + 20% of US Fair Value).

Timeframe: 3 - 12 months.

Rerating Factors: Completion of Aus Plant. Deal on US Plants. Silica Offtake.

#Note# The above is purely MY musings, and what I based MY holdings on. Do your own research.