Earlier this year, when Alloy Steel CEO Gene Kostecki complained to me via e-mail about short sellers shorting his company's stock, I noted in a post ("Run Silent, Run Deep") that the best way for a company to foil short sellers would be to release positive news. Alloy Steel International (AYSI.OB) did just that today when it issued this press release about an hour ago, announcing it landed a huge long-term contract to supply its proprietary product to BHP Billiton, "Alloy Steel International Signs Supply Agreement With BHP Billiton". From the release:
PERTH, AUSTRALIA--(Marketwire - 09/08/09) - Mr. Gene Kostecki, Chairman and CEO of Alloy Steel International (OTC.BB:AYSI - News), today announced that Alloy Steel Australia (Int) Pty Ltd a wholly owned subsidiary of Alloy Steel International Inc. has signed a long term strategic supply agreement with BHP Billiton to supply Arcoplate Wear Resistant Super Alloy Wearplate for iron ore mining operations in Western Australia.
The initial product taken will be for the multi-million dollar expansion of their operations in the Pilbara area of Western Australia. The first product releases issued by BHP have been for value in excess of $5 million in the past 7 weeks. It is anticipated that over the next five years the value of Wearplate could be in excess of $50 million.
Since the announcement in August 2009 of Alloy Steel's successful commissioning, the increased level of interest in the new production mill shown in Arcoplate has been outstanding, according to Mr. Kostecki. Most of the major iron ore miners in Western Australia have enquired about booking production time for their own expansion programs and maintenance programs and are expected to order the full range of Arcoplate thicknesses.
Since commissioning the new Arcoplate mill, it has been working at full capacity satisfying the demand for the new 3/4 inch or 20mm material whilst the other Arcoplate mill has been fully utilized with the ongoing demand for the thinner overlay materials.
As a result of the increased level of interest in Alloy Steel's Arcoplate product by local and international mining companies, the Directors of Alloy Steel are planning for a further two production mills with substantially increased capacity to come on line in early 2010.
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9 comments:
Money in the bank!
Nice.
Can we get one more pullback? Please?
Yeah, this is nice. A pullback based on general market conditions would be a nice opportunity to add as well. That contract with BHP validates the investment thesis and takes a lot of the downside uncertainty off of the table. Imagine hearing that a similar contract was sighed with Rio Tinto or Vale?
I hear VBDG is worth a look these days too. ;)
AYSI versus VBDG is an analogous to our discussion about quality versus crap on the previous thread.
LOL. I think VBDG was probably quite profitable for a select few, however. (Just not the retail investors!) Not everyone can invent a better mousetrap. Otherwise we'd have reached Singularity already!
I mentioned this to J.K. (who may be the only reader who also owns this stock) via e-mail, but I e-mailed Alloy Steel CEO Gene Kostecki yesterday to congratulate him on the BHP deal and thank him for his stewardship during a rough year. In his response he spoke of "much more excitement to come".
hi dave
can u pls simply ask gene why his companys website is so pathetic ?
for a few thousand dollars, he can get a basic, professional website up
the stock will hav natural limits on how high it can go if every institutional or professional investor goes to their site in basic dd and sees the amateurish spread- furthermore, it makes the company potentially look like a scam, esp considering where theyre located and the fact they never appear at conferences or go on investor roadshows or anything like that- all basics - w the cap now at 35mm or so, and the potential for this number to increase manifold based on the new composition of demand product capacity etc, there is a need to appear legitimate to the investment community in order to generate and sustain a meaningful market cap
Anon,
I brought the website issue up with the CFO Alan Winduss last year, but I can try to revisit it with Gene. I'm sure my web developers wouldn't mind helping him out with this.
I wouldn't worry about Alloy Steel's location though -- that's an entirely logical place for a vendor to the mining industry to be headquartered. Western Australia is a huge mining area, and a key source of raw materials for the Chinese economy, among others.
dave thanks
im not worried abt geography location- but in order to get any institutional support, they need to hav a website that looks remotely professional to say the lease --
if u guys would help, u could even assemble on your own, just using the existing stuff and supplying the basic data ?
i think we r ready to launch here- could double by yrs end as annualized eps look to be north of 25c starting RIGHT NOW and then increases exponentially for the next few qtrs sequentially- by big tunes- as in 25c running turns into 50c running turns into 60c running and so on- this happening within 9mos ... w one mill, one product we were 285- now 2 mills 2 products and 2 more mills in the pipe w corresponding demand, seems to easily exceed ... ul;timate eps power here looks to be north of a buck, suggesting a multibagger if they can execute- but to do this we need bigger buyers than just penny investors- and the first thing theyll do is go online- meaning they need at least the skeleton of a normal site ... also, getting themselves to any type of conference wouldnt hurt tho i appreciate they r thin at the top and really just focused onbuilding and moving plate
do u hav an email address so there is a better medium to communicate ?
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