Mr. Larry W. Reaugh, President and Chief Executive Officer of American Manganese Inc. (TSX.V: AMY; OTC US: AMYZF; FSE: 2AM) (“American Manganese” or the “Company”), reports that subsequent to the announcement of resource estimates for its Artillery Peak Project in a news release dated September 8, 2011, N. Tribe & Associates Ltd. has re-interpreted the resources on the outlying portions of the mineralized zones and has adjusted the resource estimates in those areas accordingly. The affected resources in the Loves, Hurley, and Planche zones are located between 1 and 3 miles south of the zone of immediate economic interest situated along the northeast slope of Manganese Mesa. The adjusted resource estimates are reported in the Company’s National Instrument 43-101 compliant report entitled “Mineral Resource Evaluation Report on the Artillery Mountain Manganese Property, Mojave County, Arizona, USA”, (the “Technical Report”) which was filed on SEDAR on October 19, 2011.
The adjusted resource estimates contained in the Technical Report and the now-outdated resource estimates in the September 8, 2011 news release are compared below:
|As reported in 43-101 Report
filed on SEDAR
|As reported in September 8, 2011
|0.90% Mn Cut-off Grade||0.90% Mn Cut-off Grade|
|LOVE’S, HURLEY, PLANCHE||3,616,579||5.16||0.411||11,971,949||5.76||1.522|
|SOUTH CHAPIN, BURRO, PRICE, PRICELESS||24,788,169||2.87||1.571||23,788,479||2.95||1.546|
|LOVE’S, HURLEY, PLANCHE||4,110,834||4.00||0.363||4,110,834||4.00||0.363|
BURRO, PRICE, PRICELESS
The 2011 drilling program included 84 reverse circulation drill holes totaling 10,607 meters (34,800 feet) on Manganese Mesa, Burro, and Shannon patented claims of the property. Samples were prepared by ALS Chemex in Sparks Nevada and the assaying was performed by ALS Chemex in North Vancouver, B.C.
This has resulted in an upgrading of a large proportion of the resource from inferred to indicated. The step-out drilling has resulted in a 39% increase of the overall tonnage and a 12% increase in the contained pounds of manganese.
Mr. Reaugh states: “While I am naturally disappointed with having to reinterpret the geology and deal with the confusion this can generate; it is more important to get things right. The reduction of about 1.086 billion lbs. of manganese resource from these outlying areas does not impact the development plans for the project. I would reiterate that the resources in the primary zone of economic interest, located within patented claims along the northeast slope of Manganese Mesa, have not changed. Moreover, these results still support our belief in the character and quality of the Artillery Peak Deposit, and the need to explore the balance of the Company’s extensive land position in a systematic professional manner to further expand the resources.”
Final results from the pilot plant testing are expected within the next three weeks.
China controls electrolytic manganese production (EMM) supplying and producing 98.44% of the world’s needs (3.0 billion pounds per year).
There is no substitute for manganese in steel (total manganese market greater than 31 billion pounds per year, fourth largest traded metal).
Manganese is the most critical metal at risk to supply and restriction in the United States as there is no US production. EMM’s greatest uses are the upgrading of specialty steel (47%), and the manufacture of aluminum alloys (32%) and electronics (14%).
Electrolytic manganese dioxide (EMD) for the battery industry is expected to be the fastest growing segment of the manganese market.
China has a 20% export duty on EMM and the US has a 14% import duty; (US Price $1.81/lb) the current world price for Electrolytic Manganese Metal is about $1.54/lb. Manganese resources are declining in China especially carbonate ores for production of EMM, forcing Chinese companies to seek production offshore.
China is currently shutting down production of EMM in several provinces for environmental reasons.
China production of EMM predicted to fall 500 – 700,000 T’s out of 1.4 million T’s in next 3 – 5 years.
About American Manganese Inc.:
American Manganese Inc. is a diversified specialty and critical metal Company focusing on potentially becoming the lowest cost producer of electrolytic manganese from its Arizona Manganese Project. The Company is well financed to execute its contemplated work programs.
This release has been reviewed by Norman L. Tribe, P. Eng., a qualified person pursuant to National Instrument 43-101.
On behalf of Management
AMERICAN MANGANESE INC.
Larry W. Reaugh
President and Chief Executive Officer