https://tsxgold.com/view-top-interview-larry-w-reaugh-president-ceo-american-manganese-inc
Why is manganese so important for the world today & its future?
I’d like to quote Brian Gilbertson, President and CEO of Pallinghurstand past CEO of BHP “You can’t make steel without manganese and withoutsteel the world stops.” There is no substitution for manganese in themaking of steel. There is no production of manganese in the UnitedStates or Canada, even though it is the most critical of metals.
Which countries & companies are the biggest players (miners& consumers) in the manganese supply-demand market & how is themarket outlook as this commodity is also referred to be one of the“Critical Metals”?
The countries which are the largest suppliers of manganese are, China,South Africa, Gabon , Australia and parts of South America . Thelargest players are, BHP and Consolidated Minerals out of Australia andPallinghurst out of South Africa.
As you watch the steel industry you’ll see the growth in manganese.
China controls 60% of total manganese production and 98% of theelectrolytic manganese metal (EMM) production, which is AmericanManganese Inc’s product coming out of Arizona.
Is it possible that certain market players could corner this market & why could they have an interest in doing so?
Most of the total manganese market is controlled by China and 5 or 6Western countries. China virtually controls the electrolytic manganesemarket at 98% of production and 70% of consumption. There have beenseveral reports out of China of dwindling carbonate manganese oredeposits and the likelihood of severe restriction in future productionis imminent.
What is so special about your manganese deposit “ArtilleryPeak” in Arizona (USA) & why did your share-price rise soconfidently from
.25 to
.80 in the last 5 months? Kindly as wellcompare your deposit to similar active & historic manganese minesworldwide & explain if you are confident that a current marketcapitalization of a mere $55 million can be seen as a highly undervaluedbargain right now – especially for the next months ahead.
Our manganese deposit contains four valent manganese ore from which themetal is rapidly released at high rates of greater than 90% recovery ina short period of time. In the production of manganese metal , theChinese use sulfuric acid on domestic carbonate resources (rapidlydepleting) at a cost recently reported as $1.30/lb. The South Africansuse a roasting process in order to prepare the ore for sulfuric acidleaching at a cost of about $1.15/lb. Our 43-101 Preliminary EconomicEvaluation gives us a target price of
.44/lb. to produce the metalutilizing sulfurous acid solution
The share price rose this year as focus is now shifting to criticalmetals and American Manganese Inc’s product is at the top of thiscritical metal list. The market cap at $55M is far below the projectspotential as reported by Laurentian Bank Securities in their coverage ofAmerican Manganese Inc., dated May 6, 2011.
For what kind of a patent did AMY apply for & what are thefuture expectations once granted? What kinds of manganese metal productsmay AMY be able to produce with what kind of ore processingtechnologies & facilities on-site? What are the capital costs tostart producing a saleable product & who are the buyers of such aproduct?
The patent application by American Manganese Inc. covers the treatmentof the concentrate solution after the metal is liberated by thesulfurous acid process (developed by the USGS in 1940) and before theelectroplating process begins.
Production at the site could produce electrolytic manganese metal (EMM)on the cathode or electrolytic manganese dioxide (EMD) on the anode.EMD is used in the battery industry.
CAPEX is estimated at $90M for the production of 50,000 tons of manganese metal per annum.
Both the aluminum and steel industries would buy EMM and the battery industry would buy the EMD.
What is the timeline to advance “Artillery Peak” intoproduction or would management consider other exit-strategies? Kindlyalso inform us briefly about neighboring projects & companies &if take-overs occurred or may occur soon.
Our timeline calls for our production to begin in mid-2014. There areno producers of stand-alone manganese projects that we are aware of inthe Untied States at this time.
The company has the ability and the management to take the project intoproduction. We believe there is also the potential for initiation of atake-over of the company given the robust returns as indicated by thePEA.
How much cash does AMY has in the bank now & what are the investment plans for these funds?
AMY is well-financed, with approximately $9M in the bank. Funds arecurrently being invested in further drilling, pre-feasibility leading tofeasibility studies, pilot plant testing and extensive environmentalstudies for the environmental permit.
Kindly explain us the composition of AMYs share structure. Whoare the underwriters of your last equity financings & what kind ofshareholders do you target to acquire in the years ahead?
The company currently has 87,192,639 shares outstanding, of whichmanagement and friends of management control about 25%, institutionalfunds control about 20% and the balance is held by individual investors.We expect future financings will entail more institutional investment,as in the case of our last financing by Laurentian Bank Securities.
Please inform us on your professional background & if youhave brought any resource deposits into production in the past? What canyou tell us about your geologists? Do you think AMY already has thesuitable management & exploration team in place to bring thegigantic Artillery Peak manganese deposit into production within thenext 3-4 years?
I have been 48 years in the mining industry, having worked inexploration, development, construction and operating mines. I have beenthe CEO of a past producing mine which developed a high-grade silvermassive sulfide deposit here in BC. Several of my discoveries andacquisitions have since gone into production and I have developed a muchlarger project than Artillery Peak to shovel ready in the past decade.We have a great deal of confidence in our geologists, mining engineers,metallurgists and our broader team’s ability to raise money to bringthis into production under the company's banner.
Kindly summarize the 5 major reasons from your point of view,why investors should look at & follow closely the development ofAMYs manganese deposits. Please also inform us how to be able to stayinformed about the worldwide manganese industry & its stunningdevelopments.
The five major regions are as follows:
1) Our 43-101 Preliminary Economic Assessment indicates robust returnsand the potential to be the lowest cost producer in the world, theproject is not price sensitive.
2) Resources indicate a long mine life with the potential tosignificantly increase the size of the operation severalfold for severaldecades.
3) The investment is the only near-term producer of this critical metal in the United States.
4) Provides the investor with an opportunity to invest in the emerging electric vehicle battery industry.
5) Investment in a politically stable mining environment (Arizona) in the U.S.
You may stay informed about the manganese industry through articles we post at www.americanmanganeseinc.com.