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”) is pleased to announce the Company has received the report titled: “A Study of Electrolytic Manganese Metal (EMM) Industry and China’s Dominating Effects to the Global Market”, prepared by JF Zhang Associates of Vancouver, BC Canada.
Highlights of the Report Include:
- China electrolytic manganese metal (EMM) production is to be consolidated;
- China to find balance of EMM production, protect environment and depleting resources;
- China leading in steel and EMM production;
- EMM production costs are rising in China;
- Necessity of EMM production in western countries;
Mr. Reaugh states that “The report confirms that Chinese EMM production capacity will likely decline to between 1.3 and 1.5 million tonnes as a direct result of imposed industry consolidation; while the demand for EMM metal could increase from about 1.3 million tonnes today to over 2.6 million tonnes by 2015. The increased demand appears to be driven by the rapidly growing domestic use of high quality specialty steels and 200 Series stainless steel products. The report also highlights that the era of low cost Chinese production is over due to: Depleting resources and declining head grades; rapidly rising labour and energy costs; and increased capital intensity for new Chinese projects to meet much higher regulatory compliance thresholds for increased energy efficiency, safety and environmental protection.”
Mr. Reaugh goes on to say: “The Artillery Peak Project is well positioned with its large resource, and potentially much lower EMM production cost, to capitalize on this emerging opportunity. The Company is financially strong with $5 million in the bank, more than enough to complete the ongoing pilot plant test, pre-feasibility study and environmental and regulatory permitting as well as begin the final feasibility report.”
Pilot Plant and Pre-feasibility Update
The Company expects to receive an update shortly from Kemetco regarding the results of the final three tests of the nano-filtration, chilling unit, and electroplating and metal production unit operations.
These results will be incorporated into the pre-feasibility study being conducted by Wardrop Engineering (A Tetra Tech Company) which is not expected until mid-February, 2012.
The current NI 43-101 compliant resource estimate of the Artillery Peak Manganese deposit includes an Indicated resource of about 220.9 million tonnes grading 2.84% Mn (13.83 billion lbs contained Mn), and an Inferred resource of about 56.3 million tonnes grading 2.84 % Mn (3.53 billion lbs contained Mn).
About JF ZHANG ASSOCIATES INC.
JF ZHANG ASSOCIATES INC. is a Vancouver-based research and advisory firm with particular focus on energy, mining, and agricultural business markets in China. Managed by a group of highly qualified and experienced professionals with diversified backgrounds and track records, it conducts research for their clients and helps them resolve the most important strategic issues faced in understanding China’s markets. With its broad network, on-the-ground and well-connected affiliates, and more than 50-years accumulated transactional experiences in these sectors, we provide investment insight to foreign clients regarding Chinese dominated markets and help Chinese companies to access opportunities outside of China.
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.
The current world price for Electrolytic Manganese Metal is about $1.45/lb, while the US price is about $1.84/lb.
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 John W. Fisher, 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