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.