VYSARN LIMITED — Management Reports 2012

Jul 10, 2012

MHM Progress Report

ASX Release – 11 July 2012

• Plant upgrade completed at the Geelong salt cake and dross recycling facility

• MHM and Alcoa have agreed the procedure and timing to commence processing Alcoa’s 160,000 tonne salt cake landfill

• US plant capital cost being independently verified

• US site works are continuing including parking area, office upgrade, fencing and preparation for civil works

• Fourth US supply contract recently announced

• Continuing discussions with other suppliers of aluminium waste streams including salt cake and black dross

• Continuing investigations of debt, hybrid and equity financing mechanisms for the US plant

• Silica Division progresses with advanced contract negotiations for additional silica resources

• Advancing mechanisms to independently fund the Silica Division in a manner that is non-dilutionary to existing MHM shareholders

ASX Codes

MHM, MHMO

Issued Capital

105.9M Ordinary Shares 22.4M Listed Options

Substantial Shareholders Rogers Southern PL 10% Directors 13% Top Twenty 34%

Directors

Chairman - Basil Conti Managing Director - Frank Rogers Executive Director - Ben Mead Executive Director - Simon Wells Non-Exec Director – Phil Thick

Contact:

Australian Operations Update

MHM Metals Limited (ASX:MHM) confirms that the upgrade of its salt cake and dross recycling operations in Geelong has been successfully completed. The plant is performing well and is initially being operated on a two-shift basis to allow for fine-tuning and to establish accurate reagent consumption and operating procedures. A report will be provided when capacity 24-hour operations have run continuously for at least two weeks so that accurate continuous throughput data can be provided to the market. Daily operating tonnages already exceed incoming material and the blending of partly processed slag is being trialled to maximise the reduction of stockpiles. The

PO Box 21 KINGSTON TAS 7051

T: +61 (0)3 6229 9955 F: +61 (0)3 6229 8430 W: www.mhmmetals.com E: info@mhmmetals.com

ABN: 41 124 212 175

projected EBITDA for MHM’s Australian operations remains unchanged at $8.0 million per annum when landfill processing is underway.

MHM and Alcoa have agreed a program to commence processing Alcoa’s 160,000 tonne salt cake landfill as soon as Alreco’s raw material shed has been emptied and Alcoa’s current salt cake stockpile is processed. A conservative estimate is that landfill production will commence in the last quarter of this calendar year.

Under the recently announced supply contract, Banfield Australia is scheduled to ship 1500 tonnes of AL80 in July. Alreco is also evaluating additional requests to further value add this product for use in sandblasting and abrasives.

US Operations Update

The design and costing of MHM’s first US aluminium waste recycling facility is now being independently verified. MHM is investigating the suitability of a crystalliser technology to allow separation of salt from potash, which will increase the combined value of the salts recovered. The separation of these would enable the company to either sell each product as a separate commodity, or as a blend, which has commercial advantages. An initial capital budget for the US project has been prepared to more accurately estimate costs and assist with the project’s earnings calculations.

MHM ASX RELEASE - 11 JULY 2012 MHM Progress Report

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Site works that do not require permitting are continuing including the construction of parking areas, upgrade of the offices, removal of walls and hardware that are not required. Initial budget costs have been received for storage building works and concrete aprons for incoming raw material.

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Figure One – site works continuing at MHM’s Russellville, Kentucky facility

MHM recently announced the signing of a fourth, and most important, US supply agreement. MHM continues to engage with additional producers of salt cake and black dross to secure further supply contracts for what is expected to be the first of a number of processing facilities in the US. This fourth contract has been structured for an initial 12 month term. The parties will work on a cooperative and transparent basis to share the recoveries of aluminium, salt/potash flux and aluminium oxides from MHM’s recycling process. These recoveries during the initial 12 months are intended to form the basis of a longer-term agreement between the companies.

The parties are working on a coordinated public relations campaign and until the campaign begins the identity of the counterparty is confidential. The public relations campaign will begin with a joint announcement followed by a US-centric public relations campaign. Shareholders should be aware that the US customer is driving the timeframe. The public relations campaign is expected to elevate MHM’s profile within the industry and among US investors.

Silica Division Update

MHM’s Silica Division has seen substantial progress in June with Executive Director Simon Wells advancing key contractual negotiations. There has been considerable interest from a number of multinational companies for off-take agreements for silicon metal produced by a Tasmanian silicon smelter. MHM has received sufficient interest from large users of silicon metal to advance investigations in how to best capitalise on its current assets. Consequently further work is occurring assessing the viability of a silicon division spin off from MHM. Given the potential size of the projects under development, MHM is focussed on bringing the silicon division to the stage where it can be independently funded. MHM is exploring funding mechanisms that are non-dilutionary but enable shareholders to participate in the future earnings of these potentially large projects.

MHM acknowledges previous market guidance that the Company would provide a more detailed update of silica developments by mid 2012 but despite the continued progress no further information can be provided at this point in time. Further details will be provided in the next monthly update and MHM is very encouraged by the progress of its Silica Division.

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Shareholder Communications

There continues to be a large volume of shareholder enquiries to management. As stated in MHM’s previous progress updates, the business of treating aluminium waste is complex and technically difficult to explain. Contract negotiations with our customers, technology providers and government regulators also have to be kept confidential and there are trade secrets we must preserve. MHM appreciates the interest in the business but is conscious of the large amount of management time answering a wide variety of questions.

The company is seeking to remedy this, in part, by upgrading our website to be a more useful information resource for our shareholders and the investing public. To that end we have employed additional staff to ensure that this is done quickly and efficiently. A new format that better explains our business is being developed and new initiatives including answering some of the more common shareholder questions will form part of this new website. Your Board of Directors considers this issue a priority and the new site will soon be implemented.

Once again, we assure shareholders that profitable operations are our priority and the MHM management team is working extremely hard to deliver high performance. The directors of MHM are grateful for the continued support of our long-term shareholders and are hopeful that our monthly Progress Reports provide you and the broader market with sufficient information to better understand and encourage support for our business.

FURTHER INFORMATION:

Rudi Michelson Monsoon Communications +61 (0)3 9620 3333 rudim@monsoon.com.au

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Introduction

MHM has exclusive global rights to a technology for recycling aluminium industry wastes known as salt cake and black dross. The technology is being used at its Geelong facility to process 100% of Australia’s salt cake and black dross.

With increasing global consciousness of negative environmental impacts, the global aluminium industry is under legislative pressures to reduce aluminium wastes discarded into landfills. MHM is confident that its cost competitive alternative to landfilling and its ‘closed loop’ recycling process will become the global standard for salt cake and black dross recycling.

MHM is currently developing its second processing facility in Kentucky, USA as part of its foothold in the US market.

‘Secondary’ Aluminium Industry Overview

MHM’s propriety technology is utilized in the ‘secondary’ aluminium industry, which is the part of the industry that involves the re-melting of aluminium. This differs from the ‘primary’ aluminium industry that involves the production of aluminium from bauxite and in turn alumina. The ‘secondary’ aluminium industry continues to grow, as the recycling of scrap aluminium requires 95% less energy than production of primary aluminium.

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----- Start of picture text -----

Black Dross
$ Aluminium
Reverb. Furnace
Aluminium $ Salt / Potash Blend
MHM Process $
Aluminium Oxide
Scrap Aluminium, Salt / Potash Blend
Rotary Furnace
Salt Cake
----- End of picture text -----

Salt Cake And Black Dross

Australian Operations

Salt cake and black dross are by-products of the secondary aluminium industry. The long-standing industry practice has been to landfill these byproducts, though it is increasingly difficult to do so and the by-products have been deemed hazardous by legislators in a number of jurisdictions.

In Australia, MHM recycles 100% of the salt cake and back dross that is produced, for both Alcoa and Sims Metal Management. MHM also has a contract to recycle a 160,000 tonne salt cake landfill that is owned by Alcoa. Once landfill operations are underway, MHM expects the Australian operations to earn $8 million per annum EBITDA.

MHM Metals Closed Loop Solution

Global Outlook For MHM Metals

MHM Metals provides an alternative to landfill by recycling salt cake and black dross in a closed-loop manner, to recover aluminium, a salt and potash blend and aluminium oxide. In some cases, MHM is also able to recycle existing salt cake landfills, recovering valuable commodities and removing hazardous materials from the ground.

MHM recently acquired a 115-acre site in Russellville, Kentucky for construction of the first US closed-loop salt cake and black dross recycling facility. This facility is expected to recycle up to 25% of the total 1 million tonnes of salt cake and black dross produced in the USA each year.

A number of recent developments have created great opportunities for MHM Metals to grow and expand business operations both in the USA and elsewhere:

MHM’s technology processes salt cake and black dross into three commodities, with the proportion of each variable and determined by the feedstock:

aluminium metal (5-20%) salt and potash (30-50%) aluminium oxide/AL80 (balance)

• MHM has been advised that the US EPA considering the regulation of salt slag as a hazardous waste at a federal level. In excess of 1 million tpa dross and salt cake is produced annually in the US.

• In Canada, limited black dross and salt cake landfill allowed but increasingly difficult.

All recovered commodities have value and nothing goes to landfill. MHM’s solution does not raise costs for industry, presenting truly a win-winwin scenario for the environment, industry and MHM.

• Salt cake landfill is not permitted in Europe.

• Middle Eastern aluminium operators are seeking sustainable alternatives to landfill.

Australian Head Office:

Australian Recycling Operations:

52 Channel Highway, 80 Buckley Grove, Kingston TAS 7050 Moolap VIC 3221 Australia Australia

Kentucky Recycling Operations:

1500 W9th Street, Russellville KY 42276 USA

For further information please refer to www.mhmmetals.com