Macquarie Harbour Mining acquires aluminium project from Sims

As announced on 19 October 2009, Macquarie Harbour Mining Limited has been negotiating the acquisition of an Aluminium Salt Slag Project. The Company has now entered into a conditional agreement to acquire the Aluminium Salt Slag business, associated plant and equipment and underlying land and buildings from Sims Aluminium Pty Ltd, a wholly-owned subsidiary of Sims Metal Management Limited. The purchase agreement is conditional on the execution of supply contracts with Sims and another global aluminium company Party A that are in the final stages of drafting, the key terms having been agreed. Party A wishes to remain unnamed until execution of the final contract. MHM has also negotiated to acquire from a third party the exclusive global rights to a proprietary technology critical to the process. This is an exciting development for the Company, with settlement expected by 15 January 2010. MHM has incorporated a wholly-owned subsidiary Alreco Pty Ltd, which will operate the aluminium division of the Company. Aluminium Salt Slag is a waste stream that results from the recycling of aluminium, a by-product from recyclers that has traditionally been placed in landfill. Due to regulatory changes by the EPA, this material can no longer be disposed in landfill and this has presented a major problem for the industry. Without a viable solution the secondary aluminium industry cannot continue to operate using the existing highly-efficient yet waste-generating processes. Prior to the incorporation of MHM, two of the Company’s Directors Frank Rogers and Peter Robertson (the Technology Providers) developed a proprietary technology that provides a “closed-loop” solution to the Salt Slag waste issue. This technology removes the need for any of the waste to be consigned to landfill. The waste is processed and converted into its primary components being aluminium metal, salt and non-metallic product (aluminium oxide), which is a by-product that can be sold into a variety of other uses. MHM has now acquired exclusive global rights to this technology from the Technology Providers. Sims owns a Salt Slag processing facility in Moolap, Victoria which has been used to process material from its own smelting operations, together with that of Alcoa. The Sims process, however, still requires a significant portion of the material to be consigned to landfill at considerable expense. Since late 2008, MHM has been negotiating with Sims for the purchase of the facility in Moolap, Victoria while concurrently negotiating with the Technology Providers for the exclusive rights to the proprietary Salt Slag Processing Technology that dramatically increases the viability of the process. The Company is pleased to announce that it has successfully negotiated agreements for both. Grant Thornton Corporate Finance acted as financial advisor to the Company. There is significant opportunity to expand the business overseas, particularly in the United States where in excess of 40-times the volume of Aluminium Salt Slag is produced compared to Australia. MHM has commenced discussions with Party A for the construction of two processing plants in the United States, for which there is strong interest. The transaction has four components the completion of each being conditions precedent to the finalisation of the transaction. R Basil Conti chairman stated “This is an extremely exciting development for Macquarie Harbour Mining. The acquisition of the Sims facility and agreement with the owners of the rights to technology and Alcoa landfill affords MHM significant profit and cashflow potential. We anticipate the processing contracts with Sims and Party A to be completed by the end of December 2009, again increasing the revenue potential for the project. Profits will be reinvested in the growth of the aluminium division, and also to fund our ongoing exploration programs for silica, gold, nickel, copper, polymetallics and iron ore. With significant potential to grow the aluminium division overseas, and immense potential to develop significant mineral projects I am excited to continue to grow this Company and deliver robust returns to our Shareholders.”