Lithium-ion Recycling Technology

Ticker : TSX-V: AMY | OTC US: AMYZF | FSE: 2AM

BUSINESS MODEL

The RecycLiCo™ Patented Process offers a closed-loop and environmentally friendly hydrometallurgical solution for the recycling of cathode materials from cathode manufacturing waste (pre-consumer) and end-of-life lithium-ion batteries (post-consumer).

The process achieves near 100% recovery and battery grade purity of materials such as lithium, cobalt, nickel, manganese, and aluminum from cathode chemistries such as:

With growing demand of electric vehicles and portable electronics, lithium-ion battery recycling is a certainty. Fortunately, the RecycLiCo™ process eliminates waste by diverting end-of-life lithium-ion batteries from landfills; reduces mined raw materials by providing recycled materials for the lithium-ion battery supply chain; improves manufacturing cost by recycling cathode scrap for re-manufacturing, and eliminates carbon and water emissions with its closed-loop hydrometallurgical process.

Recycled Lithium-ion Battery Cycle

Figure 1 – Circular Battery Recycling Strategy

CATHODE MANUFACTURING WASTE (PRE-CONSUMER)

During the lithium-ion battery manufacturing process, it is common for waste material to be generated due to off-spec parameters that do not meet the manufacturer’s high-quality standards. Although the off-spec material still contains high-value battery metals, it is disposed of as waste. This manufacturing waste (cathode scrap) is considered as the low-hanging fruit for American Manganese because it is an immediate source for recycling high-value battery metals back into the lithium-ion supply chain.

American Manganese has received cathode scrap material, from multiple sources, and has reported test results up to 99.99% purity. The Company is considering potential joint venture agreements with battery manufacturers and waste collectors, in addition to licensing agreements for the patented process. The location of the first plant is planned in a strategic location within North America that favors a location in close proximity to a consistent supply of cathode scrap and potential government incentives.

High Purity Recycled Li-ion Cathode Material

Figure 2 – Itemized Progression of Cathode Scrap to Recycled Nickel-Cobalt Hydroxide and Lithium Carbonate

While the commercial demonstration plant in itself could be a profit-making option, American Manganese foresees a significant upside for strategic partners to join hands now, where the Company has achieved several significant milestones in the last several years to offer an opportunity that is perfect balance between risk and reward.

END-OF-LIFE LITHIUM-ION BATTERIES (POST-CONSUMER)

American Manganese has developed the RecycLiCo™ Patented Process to recover the cathode materials used in lithium-ion batteries, which is estimated to be 50% of the lithium-ion battery material cost. However, the valuable cathode material in a spent lithium-ion battery is enclosed by bolts, wires, and casing that needs to be disassembled and separated.

In an effort to provide a complete life-cycle solution that compliments the RecycLiCo™ Patented Process, American Manganese has signed a Memorandum of Understanding with Battery Safety Solutions (BSS) and aims to develop a commercial co-innovation process. The BSS proprietary process efficiently discharges and disassembles lithium-ion batteries into various material streams. The cathode stream, known as the black mass, is packaged by BSS and shipped to AMY for testing of recovery and purification of cathode materials.

Separated Li-ion Battery Cathode

Figure 3 – Disassembled Components of a Lithium-ion Battery Using Battery Safety Solution’s Proprietary Technology

American Manganese has also partnered with a U.S. Department of Energy project, as the first private sector company, to advance the economic recovery of lithium-ion battery materials from electric vehicles and other consumer electronics. The project is formally titled, “Lithium Ion Battery Disassembly, Remanufacturing, and Lithium & Cobalt Recovery Project” and consists of two U.S. National Labs and leading Universities that are developing leading innovations that address the recovery of critical metals in lithium-ion batteries.

American Manganese recognizes the immediate value of recycling cathode scrap (pre-consumer) but remains aware of future recycling opportunities for end-of-life batteries (post-consumer), with the help of discharging and disassembly co-innovation projects mentioned above. In an effort to secure a potential source of end-of-life batteries, American Manganese Inc. has signed a Memorandum of Understanding with Voltabox of Texas, outlining a proposed business relationship between American Manganese and Voltabox to provide end-of-life lithium-ion batteries for commercial-scale recycling of cathode materials using the RecycLiCo™ process. With the projected growth of the recycled lithium-ion battery market, American Manganese expects many other lithium-ion battery organizations to follow the lead of Voltabox and determine responsible disposal for their end-of-life batteries.

RECYCLED PRODUCTS

The RecycLiCo™ process was designed with the goal to produce recycled battery products that could be seamlessly integrated into the re-manufacturing of battery cathodes using minimal processing steps. American Manganese is tailoring its recycling products for suitable integration into the newest generation cathodes, which are proprietary formulas developed by battery manufacturers for superior lithium-ion battery performance and cost.

99% Pure NCA Recycled Scrap

Figure 4 – 99.99% Pure Nickel-Cobalt Sulfate from NCA Cathode Scrap

The RecycLiCo™ process treats cathode material containing a combination of lithium, cobalt, nickel, and manganese. The cathode materials are treated in the five-stage process that consists of a novel combination of reagents and unit operations to produce a cathode precursor, with high recovery and purity potential. Figure 5 and Figure 6 show a high purity NCA (99.94% purity) and NMC (99.93% purity) hydroxide cathode precursor that was produced from the Company’s pilot plant project. American Manganese has also demonstrated the potential of producing a high purity (99.99%) sulfate cathode precursor as seen in Figure 4.

Nickel and Cobalt Hydroxide powder

Figure 5 – 99.94% Pure Nickel-Cobalt Hydroxide from NCA Cathode Scrap

High purity NMC filter cake

Figure 6 – 99.93% Pure Nickel-Manganese-Cobalt Hydroxide from NMC Cathode Scrap

COMPANY TIMELINE

The Company’s contractor, Kemetco Research Inc, developed AMY’s patented cathode-to-cathode hydrometallurgical process in their well-equipped extractive metallurgy laboratory. With their experienced staff, Kemetco has contributed their expertise on scientific aspects, engineering aspects, and plant design. Kemetco is capable of carrying out testing, plant design and construction of both the pilot plant and commercial demonstration plant. Kemetco’s labs are in close proximity to AMY’s office and a strong communications line is maintained between the two companies.

The five-stage pilot plant was designed by Kemetco to replicate real world closed-circuit conditions in a continuous operation to simulate and de-risk production of the commercial demonstration plant. The Company expects to continue pilot plant tests for optimization research and the testing of third party cathode material that will enhance the detailed engineering design of a commercial demonstration plant. The projected Company timeline can be seen below.

Pilot to Commercial Demonstration Plant Progression

FINANCIAL PLAN

Following the conceptual commercial demonstration plant layout seen below, American Manganese intends to complete detailed engineering design and cost estimation of a commercial demonstration plant with a cathode scrap processing capacity of 3 metric tons per day. AMY plans to locate and construct the recycling plant in a strategic location within North America that favors a location in close proximity to a consistent supply of cathode scrap. The current in-house estimate provided by Kemetco for the plant’s capital investment is estimated to be US$12 million, accounting for the design and construction of specialized equipment.

Figure 7 – 3 TPD conceptual commercial demonstration plant layout

The pro-forma financial model seen below, refers to the recycling of NMC-622 cathode scrap in a 3 TPD commercial demonstration plant.

Commercial Demonstration Plant Cost Analysis

OPERATING EXPENSES

The following is the data and assumptions used for the financial modelling of operating expenses for the commercial demonstration plant.

Reagents
Reagents are the primary direct cost in the RecycLiCo™ process. The cost was derived from the quantity and cost of each reagent required to treat scrap cathode material. A similar combination of reagents is used for all tested battery chemistries.

Labour
The commercial demonstration plant is estimated to operate 24 hours/day and require three shifts of four plant operators working 8-hour shifts at a rate of US$ 45/hour. Additional staff — such as shipping and receiving, an assistant manager, and manager — have each been accounted for in an 8-hour shift at the same rate of US$ 45/hour. The total labour cost per day is estimated to be US$ 5,400.

General and Administrative
General and Administrative expense is calculated as 55% of the total labour cost. Therefore, the General and Administrative cost is an additional US$ 2,970 per day.

Utilities
Utility costs are scaled up from current rates used in lab testing. Estimates may change slightly as more data is collected from Pilot Plant testing but overall the process does not have high energy demands, relative to recycling via high-heat smelters.

Cost of Product
The cost and delivery of cathode scrap feedstock is assumed to be 25% of the total intrinsic value of the cathode material.

SALE OF PRODUCT

American Manganese is in discussion with several end users, from cathode producers to precursor manufacturers, to discuss the sale of the Company’s recycled output material. Due to high demand for AMY’s end product, The Company does not foresee a challenge in selling recycled precursor cathode material to market. American Manganese will negotiate with strategic players, who understand the value of the Company’s cathode precursor output, in order to avoid going through several additional processes before looping back into the supply chain.

CUMULATIVE REVENUE

The calculated revenue in the pro-forma financial model, is in reference to the recycling of NMC-622 cathode. However. the remaining cathode chemistries such as NCA, NMC-811, and NMC-111 have similar revenue profiles to NMC-622 as seen in Figure 8.

3 ton per day plant cumulative revenue

Figure 8 – Cumulative Revenue from a 3 TPD Pro-Forma Commercial Demonstration Plant