CORRESP 1 filename1.txt MPM TECHNOLOGIES, INC. 199 POMEROY ROAD PARSIPPANY, NJ 07054 December 31, 2008 Ms. Tracie Towner United States Securities and Exchange Commission Division of Corporate Finance Washington, D.C. 20549-0405 Re: MPM Technologies, Inc. Form 10-KSB for Fiscal Year Ended December 31, 2007 File No. 0-14910 Dear Ms. Towner, Thank you for your assistance in our conference telephone call last week. This letter will again be in response to your July 31, 2008 comment letter. We propose to make the following changes to our December 31, 2007 Form 10-KSB for the fiscal year ended December 31, 2007: Under the caption "MPM MINING, INC.", we would change the wording regarding management's intention to hold the properties as an investment. We would also remove the wording regarding the joint venture partner. Instead we would write the following for the first and second paragraph under the referenced caption: "The company owns 7.5 patented claims and 2 unpatented claims, and leases 7 patented claims with options to purchase on approximately 300 acres in Montana's historical Emery Mining District. It also owns a 200-ton per day onsite floatation mill. Companies such as Exxon Corporation, Freeport McMoran Gold Company and Hecla Mining Company in addition to MPM Mining have conducted extensive exploration in the area. MPM management believes that resuming mining operations is a way to generate positive cash flows and mitigate the continuing losses from other operations given the current market prices and conditions for precious metals. Accordingly, management will investigate its needs to make this happen." Under the caption "Item 2. Properties", we would remove the last two sentences in the fourth paragraph. On the Consolidated Balance Sheet for December 31, 2007, we would change the caption "Mineral property held for investment (Note 10)" to "Mineral property (Note 10)". At December 31, 2007, mineral properties with a carrying amount of $1,070,368 were tested for recoverability. A cash flow table was prepared to illustrate the expected returns assuming that mining operations would be starting in started in mid-2010. F.or the years 2008 and 2009, MPM management will be actively seeking a joint-venture partner for its mining operations. Failing that, MPM will restart mining operations on its own. It was also assumed that the properties could be mined nine to ten months out of the year (or 200 working days) except for 2010 for which four to five months was considered (100 days). The following table illustrates the calculation of the weighted average for gold and silver based on the testing that had previously been done on the mining properties Location Estimated Gold Ounces Estimated Silver Ounces -------- --------------------- ----------------------- Emery Mine 21,554 891,712 Emery Stockpile 4,663 166,317 Bonanza 28,852 450,273 Hidden Hand 25,660 -- ---------- ---------- Total estimated ounces 80,729 1,508,302 Total estimate tonnage 523,998 315,379 Weighted average estimated yield per ton 0.154 4.783 The following table shows by year the range and probability of possible cash flows expected to result from mining the properties over the next ten years beginning in 2008. It also shows by year the computation of expected cash flows.The significant assumptions in preparing this table are that the estimated costs involved with restarting the mining operations of $300,000. The market price of gold was assumed to be $600 per ounce, and $12 per ounce for silver. The costs of extraction are expected to be $400 per ounce of gold and $8 per ounce of silver (67% of market price). The table also shows three production levels. The probability that production will be 150 tons per day is 50%. The probability that production will be 175 tons per day is 30%, and for 200 tons per day is 20%. Total Cash Flow Probability Expected Year Estimate (Market) Assessment Cash Flows ---- ----------------- ---------- ---------- 2008 (4,000) 50% (2,000) (4,000) 30% (1,2000) (4,000) 20% (800) ---------- (4,000) 2009 (4,000) 50% (2,000) (4,000) 30% (1,200) (4,000) 20% (800) ---------- (4,000) 2010 448,800 50% 224,400 573,600 30% 172,080 698,400 20% 139,680 ---------- 536,160 2011 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 2012 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 2013 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 2014 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 2015 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 2016 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 2017 1,497,600 50% 748,800 1,747,200 30% 524,160 1,996,800 20% 399,360 ---------- 1,672,320 The following table shows the computation of the present value of the expected flows; that is, the sum of the present values of the expected cash flows by year, which are calculated by discountiing those cash flows at a risk-free rate. Risk-Free Expected Expected Rate of Present YEAR Cash Flows Interest Value ---- ---------- -------- ----- 2008 (4,000) 5.0% $ (3,628) 2009 (4,000) 5.1 (3,446) 2010 536,160 5.2 437,755 2011 1,672,320 5.4 1,285,631 2012 1,672,320 5.6 1,204,526 2013 1,672,320 5.8 1,125,641 2014 1,672,320 6.0 1,047,979 2015 1,672,320 6.2 972,029 2016 1,672,320 6.4 898,221 2017 1,672,320 6.6 826,933 Total $7,791,643 We have therefore concluded that there is no impairment of this asset from its recorded amount. Sincerely, Glen Hjort Chief Financial Officer cc: Michael J. Luciano President & Chief Executive Officer