VYSARN LIMITED — Investor Presentation 2012

Nov 28, 2012

MHM Metals Limited ASX : MHM

DISCLAIMER

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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.
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DISCLAIMER

Company Profile

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3

COMPANY PROFILE

Company Snapshot

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At 31 October , 2012
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Phil Thick Managing Director & CEO

Cash $5.9m

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Shareholder profile
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Top 20 38%
Other 62%
Top Shareholders
Brazil Farming PL 8.3%
Rogers Southern PL 8.1%
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COMPANY PROFILE

MHM Strategic Objectives

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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
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ALUMINUM OPERATIONS

Australian Operations

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Alreco Pty Ltd is 100% owned Australian operating subsidiary of MHM.
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ALUMINUM OPERATIONS

Immediate Focus

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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, 2013
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ALUMINUM OPERATIONS

Current Agreements

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• 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,
2012.
• 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.
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ALUMINUM OPERATIONS

Plant Operations

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• 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.
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ALUMINUM OPERATIONS

Plant Upgrade

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• 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.
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ALUMINUM OPERATIONS

NMP/AL80 and Salt

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• 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 2013.
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ALUMINUM OPERATIONS

US Plans

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• 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.
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ALUMINUM OPERATIONS

Silica Business

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• 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.
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SILICA BUSINESS