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American Manganese Inc.: THE INVESTMENT CASE
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American Manganese is leading the field in the recovery of metal from lithium-ion batteries

American Manganese is blazing a trail in the recovery of metals from scrap cathode material rejected by battery manufacturers
American Manganese is leading the field in the recovery of metal from lithium-ion batteries
INVESTMENT OVERVIEW: AMY The Big Picture
The lithium ion battery market continues to grow

The latest test results from American Manganese Inc (CVE:AMY) provide plenty of grounds for confidence that the company’s plans to become a pioneer recycler of lithium ion batteries are well on track.

Recent laboratory tests undertaken by Kemetco, a privately-owned contractor that provides analysis and testing for American Manganese, recovered 97.5% cobalt, 97.23% nickel, 97.61% manganese and 68.75% lithium after a single recovery cycle. Increase in recovery is expected in a locked cycle.

The key process involves separating the active material, which contains the desired metals, from the aluminum foil. The process currently utilizes scrap cathode material which have been rejected by battery manufacturers.

“This material can amount to several tonnes per manufacturing run,” explains American Manganese chief Larry Reaugh.

“Around 5%-10% of cathode material ends up as ‘scraps’ or sheets on aluminum. We have developed a method of treating cathode scraps, and getting the aluminum foil off and dissolving the glues that are involved.”

So positive..

It’s no surprise to Reaugh that the latest testwork has come in so positive. In proof-of-concept testing American Manganese was able to recover 100% of the required material.

“Currently we’re building a pilot plant,” he adds. “And if not 100% the recoveries should be very close to that.”

So far, all the tests are proving him right.

“To say we’re excited would be an understatement,” he says.

“We’re probably the leading company out there in this space, and it looks like we should have our patents in place within the next few months.”

That will give the company a commanding position in an industry that could end up being huge.

“There’s a lot of lithium ion batteries that have reached the end of their life, so there’s a ready market out there,” says Reaugh.

His optimism is supported by some fairly robust industry forecasts that show that the value of the lithium ion battery market is not far off hitting US$46bn.

At this stage, American Manganese is building up slowly to address this market.

“We have a business plan that outlines a three tonnes per day operation,” says Reaugh.

“There’s around US$3,000 of cathode material in a battery, and the profit coming to us could be two thirds of that. Depending on how we vary the chemistry our costs can be paid back in anything from three to 12 months.”

Scale up potential

But scale the operation up, and the potential starts to become significant.

“If we went to 30 tonnes per day that would equate to revenues of between US$100mln and US$300mln.”

For a company that’s currently capitalised at just over C$23mln on the Venture Exchange, the potential for transformation is extraordinary, something that Reaugh himself is only too aware of.

A seasoned entrepreneur, hitherto primarily in the mining space, he characterises American Manganese’s current opportunity as “the best deal I’ve ever had.”

“We don’t have to go drilling for resources, we don’t have to drill off tonnages.”

Indeed, all American Manganese has to do is source the material and go to work.

As it stands, a recent C$2.3mln raise will take the company through to the end of the year, by which time the pilot plant will be complete.

But by then it’s quite possible the ongoing results that American Manganese is able to put into the market will have attracted a partner in some shape or form.

“When the battery manufacturers understand what we can do and what we can get back, hopefully someone will step up to the plate,” says Reaugh.

“We have the most advanced process out there – I don’t know what’s happening behind closed doors, but I haven’t seen anything else patented for some time.”

So, with first mover advantage in an industry that’s on a rapid growth trajectory, the future is shaping up well for American Manganese.

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