Base Case Amended to 3 Year Trailing Average After Review by BC Securities Commission

Added August 27th, 2012 – Vancouver, British Columbia


Mr. Larry W. Reaugh, President and Chief Executive Officer of American Manganese Inc. (TSX.V: AMY; Pink Sheets: AMYZF; Frankfurt: 2AM) (“American Manganese” or the “Company”) reports that the Company will be amending its report entitled “Technical Report and Prefeasibility Study, Artillery Peak Project, Mohave County, Arizona” dated June 28, 2012 (the “Report”) to change, among other things, the Base Case for the evaluation of the economic feasibility of its Artillery Peak Project. 

Due to a lack of publicly available information on the electrolytic manganese metal market, the Report was prepared using a price forecast developed by The CPM Group, an industry leader in metal price forecasting. However, due to concerns raised by the British Columbia Securities Commission, the Company has agreed to change the Base Case to the more conservative 3 Year Trailing Average from the CPM Expected Case.

A summary from the amended of the pre-tax financial model results is presented below:

Case IRR
(%)
NPV @ 0%
($US million)
NPV @ 5%
($US million)
NPV@8%
($US million)
NPV @ 10%
($US million)
Pay Back
(Years)
Base Case:  3 Year Trailing Average Price 7.28 458.4 91.2 (22.9) (74.4) 10.3
Alternate 1:  CPM Expected Price Forecast 19.95 1360.0 641.5 402.9 289.4 4.6
Alternate 2:  CPM Up-side Price Forecast 25.03 1895.3 940.0 623.2 472.3 3.9
Alternate 3:  CPM Down-side Price Forecast 12.90 785.4 311.0 153.6 79.0 5.9

As a result of the amended Base Case having a negative NPV at an 8% discount rate, the project is deemed to be not economic.  Accordingly, the Report will be amended to show there are no mineral reserves for the Project that meet the CIM definition and consequently the mineral reserves for the Project are retracted.  The public is cautioned not to rely on the Company’s previously filed Report wherein mineral reserves are disclosed.

About Manganese

China controls electrolytic manganese production supplying and producing 98% of the world’s needs (3 billion pounds per year).

There is no substitute for manganese in steel (total manganese market greater than 33 billion pounds per year, fourth largest traded metal).

Manganese is a critical metal at risk for supply disruptions in the United States as there is no U.S. production. EMM’s greatest uses are the upgrading of specialty steel (74%), and the manufacture of aluminum alloys (12%), electronics (2%), and other applications (12%).

Electrolytic manganese dioxide (EMD) for the battery industry is expected to be the fastest-growing segment of the manganese market.  Ford Motors predicts production of hybrid electric vehicles will account for 25% of its entire vehicle line-up by 2020, and Hyundai has committed a lifetime guarantee to their hybrid electric vehicles that use lithium ion batteries with manganese spinel.

China has a 20% export duty on EMM and the U.S. has a 14% import duty.

About American Manganese Inc.

American Manganese Inc. is a diversified specialty and critical metal Company focusing on potentially becoming a producer of electrolytic manganese metal, electrolytic manganese dioxide and chemical manganese dioxide from its Arizona Manganese Project.

This release has been reviewed by Michael MacLeod, 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

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The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This news release may contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the Toronto Stock Exchange, the British Columbia Securities Commission and the US Securities and Exchange Commission.