VYSARN LIMITED — AGM Information 2013

Nov 21, 2013

MHM Metals Limited

CEO presentation for 2013 AGM

Nov 2013

Presenter: Matthew Keen, Chief Executive Officer

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Disclaimer

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Company Profile

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MHM Metals is a
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Company Snapshot

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Exchange: ASX
Share Price: $0.10
Shares on issue: 130,xxx,xxx
Market Capitalisation: $10.xx
Cash at bank: $
Debt: $
Shareholder Profile
Top 20 shareholders x%
Brazil Farming y%
Golding z%
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Directors
Iain Kirkwood (Chairman)
Franklyn Brazil (Non-exec)
Phil Thick (Non-exec)
Management
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Achievements for the year

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Cash fow
In the last 12 months the business has moved from a position of monthly cash burn to a position of [positive
monthly operating level cash flow]. Increased revenue lines negotiated for the toll treating of incoming salt slag
and significant cost savings have contributed to the change. Further work is continues on both the revenue and
cost sides of the business to move it towards a positive NPAT position.
Chemistry
In [Nov] of 2012 the business employed an industrial chemist. This has greatly assisted in MHM understanding
the chemical reactions that occur in the process of treating the salt slag and the impacts of this on the NMP
product that is produced. We also have a much improved understanding of the components of the NMP which
has greatly assisted in our ability to obtain repeat orders for our Standard NMP product.
This combined understanding has us to a point where we are selling all of the Standard NMP we are
producing.
Design
Over the last [3] years there have been many design variations for the Moolap plant, none of which
successfully dealt with the reactivity of the material that we are processing or the fines handling during the
removal of the chlorides (salt).
The new design incorporating the filter press has significantly reduced the fines in the feed to the clarifier
whilst maintaining the ability to keep the chlorides below 1% in the NMP (critical for sale of NMP).
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Positives for the business

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Favorable Process
MHM has a process that is desirable for its customers (Alcoa and Sims) and for the regulators (EPA) in that it
removes the need to landfill a hazardous byproduct. This gives MHM vital support from two very important
groups of stakeholders.
Favorable Partner
Having Alcoa as an important stakeholder is very positive for their knowledgeable of the aluminium industry
right through to support in strategic direction changes.
Understanding our business and process
After several years of trial and error MHM is arriving at a point where it understands its process and the
products it produces.
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capital raising to survive.

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Challenges for the business

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Stockpiles
The time that it has taken the business to come to create a stable reliable process has meant that significant
stockpiles of partly process and unprocessed material have built up. This material has to be processed with
minimal revenue streams available to the company. This holds back the company in term of revenue and
ultimately profits. It is expected that the majority of these stockpiles will be worked through during calendar
year 2014
Harsh environment
The NMP in the process is very hard and abrasive and the salt is very corrosive. These two components
combine to form a very harsh environment for the equipment in the process creating many breakdowns and
equipment failure. Work needs to be done on the preventative maintenance regimes that the company
undertakes
Complex product to treat
The incoming product can have high variability but the out going NMP needs to be produced within tight
tolerances to allow it to be sold. This creates a situation where the process needs to be able to be flexible
enough to treat a wide variation of product and produce a focused outgoing product. The company believes
with the addition of the filter press that we now have a process that can fulfill this complexity.
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Keys to the business turnaround

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Consistency
Critical to the business is to be able to create consistent output products (Al, NMP and Salt) from inconsistent
salt slag. This requires the process that is robust and repeatable. MHM has a process now that is showing good
reliability, the next step is to introduce more monitoring and some further automation to help us to further
monitor and finesse the process.
The company is also looking at ways to create more [room for error] in the production of its NMP. One of
these is to create two NMP products, one that meets the requirements of the client and another requires less
stringent tolerances. The key here is to have a use for the lower quality to NMP and the company is working
through using NMP as a compost accelerant for this use.
Reliability
Having a reliable plant is important, especially when downtime stops the process and therefore costs money.
Creating a reliable process that has limited unplanned downtime is crucial as we have very little redundancy in
the process.
Throughput
The two above items (being Consistency and Reliability) are critical to getting good rates of throughput. This is
essential to MHM’s business due to the high level of fixed costs in the business. Therefore high throughput will
reduce unit costs and make the business more profitable. This is especially important when we consider
moving to the USA where this is limited subsidy compared with the Australian business.
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Short term plan

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Targets
Successfully install filter press and remove bottlenecks associated with the fines in the process.
Improve throughput to 800T per week on a consistent basis.
Reduce stockpiles of partly processed and unprocessed material from site.
Ship and sell all of the NMP that is produced, no more stockpiling of NMP.
Identify basic cost savings in the business.
Improve monitoring and ‘fine tuning’ of the process to understand where further improvements can be made.
Outcomes
This will allow the stockpiles to be reduced and see the business to operate in a cash flow positive manner
and allow the business to stabilise.
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Long term plan

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Targets
Determine if plant throughput towards 1,000T is feasible
Identify and if applicable implement value add to the NMP
Determine the economics of an expansion into the USA and if feasible implement that expansion
Outcomes
Ability to leverage knowledge from the Australian operations into a new purpose built operation in the USA
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Questions?

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