MHM Metals Limited ASX : MHM

Transcription

1 MHM Metals Limited ASX : MHM Presentation by Managing Director & CEO AGM 29 November 2012

2 DISCLAIMER This document has been prepared by MHM Metals Limited ( MHM or the Company ). It should not be considered as an offer or invitation to subscribe for, or purchase any, securities in the Company or an as inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation. This presentation contains forecasts, projections and forward looking information. Such forecasts, projections and information are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are out of MHM s control. Actual results and developments may differ materially from those expressed or implied. To the maximum extent permitted by applicable law, MHM makes no representation and can give no assurance, guarantee or warranty, express or implied, as to, and takes no responsibility and assumes no liability for (1) the authenticity, validity, accuracy, suitability or completeness of, or any errors or omissions from, and information, statement or opinion contained in this presentation and (2) without prejudice to the generality of the foregoing, the achievement or accuracy of any forecasts, projections or other forward looking information contained within thispresentation and disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence). Throughout this presentation all figures are quoted in A$ unless otherwise stated. You should not act in reliance on this presentation material. This overview of the Company does not purport to be inclusive or contain all information that recipients may require in order to make an informed assessment of MHM s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of this information, statements and opinions contained in this presentation before making any investment decision. DISCLAIMER 2

3 Company Profile MHM Metals Limited (ASX:MHM) is an industrial / green-tech company, focusing on innovative solutions for the aluminium industry, with long term global growth potential. MHM s primary focus is the implementation of a process to recycle waste from the secondary aluminum smelting industry and help to eliminate the current practice of sending this waste to landfill. MHM processes most of Australia s secondary aluminium waste at its plant at Moolap near Geelong, Victoria. MHM is planning a program of expansion into the United States. MHM retains some of its original silica assets in Tasmania and is continuing to look at opportunities for maximising the value of those assets. COMPANY PROFILE 3

4 Company Snapshot At 31 October, 2012 Directors & Management Exchange ASX Share Price $0.165 MHM 130m Fully Diluted Market Cap $22m Cash $5.9m No debt 12 Month High / Low $ $0.16 Paul Lappin Phil Thick Lyn Brazil Non-Executive Chairman Managing Director & CEO Non-Executive Director Shareholder profile Top 20 38% Other 62% Top Shareholders Brazil Farming PL 8.3% Rogers Southern PL 8.1% COMPANY PROFILE 4

5 MHM Strategic Objectives Immediate Focus Consistent, reliable operation of the Moolap plant Processing rates of around 1000t per week within the next 3 months New long term agreements directly with key customers Supply agreements for NMP/AL80 Cash-flow positive operation Removal of all stockpiled material from the Alcoa landfill area and the Moolap plant site Longer Term Access to the Alcoa landfill material for processing Finalise design for US plant Funding for US plant and move to project implementation 5

6 Australian Operations Alreco Pty Ltd is 100% owned Australian operating subsidiary of MHM. 6

7 Immediate Focus Consolidate the Company around the Core Business New Board New management centred around the plant Closure of Tasmanian office and move all operations to Moolap Defer US activity in short term Separate funding or divestment of silica business/assets Key Customer Relationships MHM to move to direct relationships with key customers based on shared objectives and a partnership model Alcoa has signed a letter of intent to enter into a new tolling agreement with MHM from 1 Jan,

8 Current Agreements Current Alcoa tolling agreement is between Alcoa and PDC, on behalf of a 3 party JV. Alcoa pays PDC directly for each tonne of material received at the plant. This agreement expires on 31 Dec, PDC has appointed Alreco (MHM) as a subcontractor to process the Alcoa material under a Processing and Sales Agreement. PDC pays Alreco the direct operating costs for the processing of the Alcoa material, plus 10% of any remaining operating profit (on a monthly basis) as a management fee, plus 50% of any remaining profit. This operation is currently unprofitable for Alreco and Alreco is considering all options to address this, including renegotiation of this agreement. PDC have been paid a tolling fee for approximately 21,000t of Alcoa material currently stockpiled at the Moolap plant and on Alcoa s landfill, and all of this material belongs to PDC. 8

9 Plant Operations The Moolap plant has performed at only a small percentage of its planned capacity over the past few years. This has been partly due to continuous testing, modifications, upgrades and process changes, but also due to poor planning, lack of preventative maintenance, continuous breakdowns and lack of spares, and some inappropriate equipment for the harsh operating environment. MHM has recently put in place a detailed OHS action plan to address the identified risks and hazards and the Board sees the delivery against this plan as being # 1 priority for all management and staff. Preventative maintenance plans and procurement of critical spares are also being implemented. Current target throughput tonnage is 600t per week. Current plant operating costs are higher than income and work is being done to address this. 9

10 Plant Upgrade Handling of fines remains the major bottleneck for the Moolap plant preventing achievement of the planned consistent throughput of 1000t per month or better. A new filter press has been ordered from Europe and this will arrive in Geelong in January and will be installed and operational by February. The plant will continue to run throughout the installation process. Cost is $450,000 plus installation costs. In parallel we are reviewing the drying circuit to ensure this is capable of the much higher throughputs, and we expect some upgrade will be required there. We expect these changes to move us towards our processing target of 1000t per week. 10

11 NMP/AL80 and Salt Sale of NMP (AL80) continues to be work in progress. It is critical to MHM s success to ensure no material needs to go to waste, and to receive revenue from sale of this material. Work continues with a number of potential customers both through our agreement with Bandfield and with other options. Recovery of salt is also important in the future as a further source of income. Two salt options are being considered evaporation ponds or installation of a crystalliser. The pond option is the lowest cost both to set up and to operate, as crystallisers are high energy consumers, but income is recovered via a crystalliser earlier. Timeline for this by end

12 US Plans MHM still believes it is imperative to focus on, and deliver, consistent, sustainable and cost efficient processing at the Moolap Plant prior to further discussions around the funding and construction of the new plant planned for Kentucky, US. Contracted customers, potential other customers and key stakeholders in the US are being kept fully informed of progress. Discussions with potential investors and funders have been put on hold at this time. It is planned to re-start that process before the middle of next year subject to delivery of the plan and targets for Moolap. MHM then expects to be in a position where the performance of the Moolap plant and the technology on which the US design is based will provide the necessary support for the funding of the new plant. 12

13 Silica Business Options for silica assets are still being progressed, including full divestment and independent financing for potential smelter projects. The Board wishes to focus the company s attention and available funding on the core aluminium waste business but will seek to recover any value from its previous mining activities. SILICA BUSINESS 13