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

The project is most sensitive to the price of electrolytic manganese followed by operating costs and capital costs.

As shown in the Report, the total amount of EMM produced over the life of the mine is estimated to be 994,499 tonnes (about 2.19 billion pounds).  The average unit production cost of the EMM, after credits from by-product and on-site waste steam power generation, is shown below.  The plan incorporates a low waste strip ratio (2.20:1) and higher grade (3.13% Mn) in the first 6 years of operation; followed by the second phase of mining ending in year 10 that has an average grade of 2.68% MN and a waste strip ratio of 2.17:1.

The initial capital cost is estimated at $477 million, and would be mostly spent over the 2 year engineering, procurement and construction period.  The sustaining capital over the contemplated mine life is estimated at approximately $60 million.  Allowances for end of mine life expenditures for waste re-handling, site reclamation, and plant salvage have been made totaling about $47 million.

The Report is based on geological work and drilling performed by the Company under the supervision of N. Tribe & Associates Ltd.  Tetra Tech developed a geological block model for that portion of the deposit located along the northeast flank of Manganese Mesa that is most amenable to surface mining.  The geological block model contains Indicated and Inferred resources estimated as follows:

From this starting point, a mining plan was developed using waste haul back open pit mining techniques.  The open pit has been designed to achieve a mine life of 21 years, and is estimated to contain a Probable Reserve of 45 million tonnes grading 2.46 % Mn.  The average stripping ratio (waste tonnes: ore tonnes) is estimated at 2.46:1.  A unique feature of the design is that most of the waste rock is disposed of within the mined out areas of the open pit as they become safely available; which minimizes land surface disturbance and hauling costs, while facilitating progressive site reclamation.

The mine production schedule is designed to produce about 50,000 tonnes of electrolytic manganese metal (EMM) annually from a processing plant capable of treating 7,000 tonnes of feed per day.  Hydraulic front shovel and rubber-tire front end loading units are matched with 150 tonne mechanical drive haul trucks to provide the back bone of the mining fleet.  Drilling, ancillary and support equipment are allocated to meet the requirements of the production schedule.

Cleaner energy-efficient hydrometallurgical process

The EMM production process uses a reductive leach hydrometallurgical process developed and tested by Kemetco Research Inc. (patent pending by American Manganese Inc.), and manganese metal specific electro-winning technology.  The resulting tailing would be co-disposed with the waste rock within the mined out areas of the open pit mine. 

The Report is based on the results from continuous pilot plant testing program performed by Kemetco Research Inc., and its specialist subcontractors, during the last half of 2011 and the first quarter of 2012.  Using its experience and a proprietary in-house process simulation computer program, Tetra Tech scaled-up the test data to the desired commercial size plant for design and cost estimating purposes. 

Re-use of process water

Surface disturbances for the contemplated mining and processing operations are limited to a single drainage.  Surface water is diverted around the disturbed areas; while process water and water accumulated within disturbed areas is collected, re-used, and not allowed to enter the undisturbed watershed.

From the mine design, process design and layout, and site restoration philosophy Tetra Tech has prepared capital and operating cost estimates for the planned development.  These estimates were prepared in accordance with good engineering practice and accurately reflect the level of preliminary feasibility study.

CPM Group prepared a market study (follow this link to review CPM Summary), including an EMM price forecast which is being used in the Report.  Quoting from the CPM Group study:  “Over the next 10 years real electrolytic manganese metal prices are forecast to average $1.92 per pound, reaching an annual high of $2.30 in 2021.”  The study also provides up-side and down-side EMM price scenarios which have also been used in the Report.

“We believe that we have received excellent work from all of our consultants.  The project design capitalizes on a much better understanding of the character, controls and distribution of the mineralization, maximizing the overall utilization of the manganese resource within the contemplated mining area,” says Mr. Larry Reaugh.  “The combined work produced solid representation of the commercial opportunity offered by developing the manganese deposits at Artillery Peak in the current rapidly escalating capital and operating cost environment.  The Artillery Peak EMM production cost is estimated to be much lower than published Chinese production costs.  Under the CPM Group pricing scenarios used for the Report, the Artillery Peak Manganese Project is economically attractive.  The technical aspects for mining and processing for the contemplated project have been thoroughly addressed and significantly de-risked.  What risk remains is mostly attributable to the economic climate, or metal market, which is typical for any natural resource opportunity.  This risk would affect all competitive manganese producers and developers equally.  As such, American Manganese strives to become a low cost producer with a sustainable economic advantage over the competition.”

“Further metallurgical testing and engineering work necessary to advance the Project to the feasibility level will focus on process optimization opportunities that could significantly reduce the capital and operating costs, particularly in the liquid-solid separation, sodium sulfate production process areas, more efficient use of thermal steam from the sulfur burner, and construction materials for tanks and equipment.  These opportunities were identified during the course of the Preliminary Feasibility Study and provide a clear path for the next phase of work.  We will also explore and incorporate ideas and technologies that could lead to the production of products suitable for use in the emerging rechargeable electric battery market.”

“I am pleased with the overall results and look forward to advancing the Project to the feasibility level, leading eventually to a positive project development decision,” concludes Mr. Reaugh.

The following qualified persons have prepared the Report and reviewed this news release pursuant to National Instrument 43-101: 

• Dr. Jianhui (John) Huang, P.Eng. – QP, Process (Tetra Tech)
• Dr. Sabry Abdel Hafez, P.Eng. – QP, Economic Analysis (Tetra Tech)
• Dr. Anoush Ebrahimi, P.Eng. – QP, Mining (Tetra Tech)
• Norman Chow, P.Eng., (Kemetco);
• Norman Tribe, P.Eng., (N. Tribe & Associates Ltd.)

Investors and media are invited to join American Manganese in a press conference on Friday, May 18, 2012 at 10:00am PST to discuss the preliminary feasibility study.  The press conference will include a PowerPoint presentation.  Participants are welcome to join by phone, computer or both. To join the meeting from your computer or mobile device, enter this URL into your browser: https://www.fuzemeeting.com/fuze/d365cc20/16511697  Dial-in Number to join the audio portion of this meeting: +1 646-583-7415, Attendee Pin Number: 36844224

About Tetra Tech

Tetra Tech is a leading provider of consulting, engineering, program management, construction, and technical services.  The Company supports government and commercial clients by providing innovative solutions to complex problems focused on water, environment, energy, infrastructure, and natural resources.  The company has been servicing the mining industry for more than 40 years and has established a reputation for successfully executing NI 43-101 compliant feasibility studies that meet the scrutiny of the international financing community.  With more than 13,000 employees worldwide, Tetra Tech’s capabilities span the entire project life cycle.  In addition to offices in Canada, the company has more than 330 offices worldwide, including locations in Arizona and Nevada in close proximity to the Artillery Peak project.

About Kemetco Research Inc.

Kemetco Research is a privately owned contract Research and Development Company specializing in extractive metallurgy, chemical processing and specialty chemical analysis.  Kemetco was formed after the acquisition of the Industrial Process Division of BC Research.  BC Research had been in operation for over 60 years as an R&D contractor in British Columbia, Canada.

About CPM Group (www.cpmgroup.com)

CPM Group is the world’s premier commodities research and consulting company.  The firm’s primary focus is on precious, industrial, and specialty metals, in addition to undertaking research and analysis across all commodities markets.  In the ferroalloy industry CPM Group has developed a top-rated expertise in molybdenum, vanadium, manganese and chromium, as well as other minor metals.  CPM Group provides a suite of research and consulting services related to the financial management of commodities exposure, including fundamental market research and analysis, consulting and advisory services, commodities management and asset management services, and corporate finance advisory.  Founded in 1986, CPM Group is known for its research and analysis of the metals markets, its overall economic analysis of commodities markets, and its expertise in financial engineering, using derivatives to structure optimized positions for commercial hedgers and institutional and high net worth individual investors.

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.

The current world price for electrolytic manganese metal is about $1.46 per pound, while the U.S. price is about $1.66 per pound.

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 from its Arizona Manganese Project.

On behalf of Management

AMERICAN MANGANESE INC. 

Larry W. Reaugh
President and Chief Executive Officer

Earlier this week (April 16th) Global Industry Analysts Inc. released a new report outlining the future growth of manganese, electrolytic manganese metal (EMM) and electrolytic manganese dioxide (EMD). In this report GIA forecasted the manganese market to grow to 24.9 million metric tons by 2017 spurred by the growth in demand from China and the steel industry.

GIA was also quick to point out that the EMM and EMD market are also set to see a potential boost due to the rising demand in the green energy sector:
“Recent innovations in the green energy sector are boosting demand for electrolytic manganese metal (EMM) and electrolytic manganese dioxide (EMD), thereby representing a potential boon for the North American manganese industry… Given the rapidly expanding consumer base for electric cars, the United States is the leading global market for EMD and EMM. On a global scale, EMD and EMM, two highly-refined forms of manganese metal, are increasingly finding application in the production of lithium-ion batteries that power electric vehicles and other green energy applications. The demand for EMD…from Li-on secondary battery manufacturers is anticipated to soar in the near term.”

These predictions have been echoed over the last few months with analysts in the mining industry, the green energy sector and the automotive market. A report produced early in April predicted that the global market for rechargeable batteries is projected to reach US $21.4 Billion by 2017, coinciding with the growth in demand for manganese.

This growth is in part due to the innovations in lithium-ion battery technology. Research into improved energy density for lithium-ion has averaged a slow but steady rate of around 5% a year; however recent research projects, like those being conducted at Envia Systems have resulted in energy density of 400 wh/kg [watt-hour per kilogram] double the current energy density of commercially available lithium-ion technology.

In an effort to continue to improve lithium-ion technology, American Manganese recently announced a research partnership with Kemetco Research Inc. The anticipated result of this research will be a cleaner lithium manganese dioxide, free from potential impurities, which would reduce production costs and improve battery safety.

It has always been our belief that the manganese market has wide growth potential, particularly with EMM and EMD in the green energy sector. To continuously see that belief validated with research like we see in this report, predicting advanced market growth in these areas spurs us on to remain the only North American provider of electrolytic manganese.

About Tetra Tech Wardrop

Tetra Tech is a leading provider of consulting, engineering, program management, construction and technical services.  The company has more than 12,000 employees worldwide and capabilities that span the entire project life cycle.  The company has more than 330 offices worldwide, including locations in Arizona and Nevada in close proximity to the Artillery Peak project.

Wardrop is a multi-disciplined consulting and engineering firm that provides innovative solutions for the natural resource management, energy and infrastructure markets globally.  Wardrop has been servicing the mining industry for more than 40 years and has established a reputation for successfully executing NI 43-101 compliant feasibility studies that meet the scrutiny of the international financing community. 

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 the most critical metal at risk to supply and restriction 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%) and electronics (2%).

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 electric vehicles will account for 25% of its entire vehicle line-up by 2020, and Hyundai has committed a lifetime guarantee to their 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.

The current world price for electrolytic manganese metal is about $1.30 per pound, while the U.S. price is about $1.63 per pound.

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 metal from its Arizona Manganese Project.

On behalf of Management

AMERICAN MANGANESE INC.

Larry W. Reaugh
President and Chief Executive Officer

The Company has received the preliminary process flow sheets and mining plan of operations for review.  Tetra Tech estimates the delivery of final draft reports for the Company’s review on or before April 13^th at which time management will expedite a full review of the drafts and get back to Tetra Tech as soon as practical.

Mr. Reaugh states “I am very pleased with the progress of our contractors regarding the preliminary feasibility study.  Having been involved in commissioning five or six preliminary economic evaluations, pre-feasibility studies and bankable feasibility studies over the years I have to say that our current EMM study has presented challenges over and above the usual base and precious metals studies I have previously been involved in.”

About Tetra Tech Wardrop

Tetra Tech is a leading provider of consulting, engineering, program management, construction and technical services.  The company has more than 12,000 employees worldwide and capabilities that span the entire project life cycle.  The company has more than 330 offices worldwide, including locations in Arizona and Nevada in close proximity to the Artillery Peak project.

Wardrop is a multi-disciplined consulting and engineering firm that provides innovative solutions for the natural resource management, energy and infrastructure markets globally.  Wardrop has been servicing the mining industry for more than 40 years and has established a reputation for successfully executing NI 43-101 compliant feasibility studies that meet the scrutiny of the international financing community. 

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 the most critical metal at risk to supply and restriction 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%) and electronics (2%).

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 electric vehicles will account for 25% of its entire vehicle line-up by 2020, and Hyundai has committed a lifetime guarantee to their 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.

The current world price for electrolytic manganese metal is about $1.30 per pound, while the U.S. price is about $1.63 per pound.

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 metal from its Arizona Manganese Project.

This release has been reviewed by John W. Fisher, PEng, a qualified person pursuant to National Instrument 43-101.

On behalf of Management

AMERICAN MANGANESE INC.

Larry W. Reaugh
President and Chief Executive Officer

As a followup to the airborne magnetic survey conducted in March 2011, a comprehensive geochemical soil survey over the magnetic anomalies with a particular focus on magnetic highs and magnetic lows was completed.  The program was managed and conducted by Minconsult Exploration Services, of Vernon, BC.  The objective of this program was to identify near-surface exposure and trend of carbonatite bodies which are pervasive on the Lonnie property.  Samples were collected at 50m intervals along lines spaced at 100m for a total of 39.7 line kilometers. Grid control was by handheld GPS instruments.

A total of 876 soil samples were collected and analyzed.  The results are encouraging, especially for three strongly anomalous zones returning up to 8467 ppm total Rare Earth Elements + Yttrium (TREE+Y) being delineated along a consistent five kilometre long NW trend.  Additional anomalous zones have also been located, generally along the same strike trend, and could prove to be extensions of the known zones.  Where warranted, anomalies will be followed-up by trenching and drilling programs to begin later this year.

Highlights:

Zone 1 – Vergil – Strong Niobium (Nb) and TREE+Y anomalies occur in this approximately 800 x 400 m zone.  Niobium values up to 1003 ppm and TREE+Y values of up to 2225 ppm were obtained. These anomalies appear to be open to the north, west and south.

Zone 2 – Blue Dot – The highest value (TREE+Y =  8467 ppm) collected during the geochemical survey was taken on the western edge of a regional shear structure coincident with  two small, adjacent  magnetic lows that were specifically targetted for sampling on this survey.  The corresponding niobium value for this sample was 223 ppm.  Interestingly, there are a number of anomolous molybdenum showings (as high as 63 ppm) in Zone 2.

Zone 3 – Lonnie South – This anomaly (approximately 200 x 500 m) is east and southeast of the historic Lonnie 1 showing.  Peak values in these soils were 940 ppm for Nb and 6626 ppm for TREE+Y.

Zone 4 – Granite Creek West – An approximate 1000 x 300 m rare earth and niobium soil anomaly has been identified here.  Peak values for TREE+Y in soil include 2206 ppm and 1430 ppm, while Nb values include 1438 ppm and 868 ppm.  Anomalous values are coincident with magnetic highs.

Maps for reference:

1. Lonnie compilation map with zone names, total mag intensity and TREE+Y anomalies:

http://www.raraterra.com/documents/Lonnie_Geology.pdf

2. Geochemical Nb anomalies:

http://www.raraterra.com/documents/Lonnie_Geochemical_NB.pdf

3. Geochemical TREE+Y anomalies:

http://www.raraterra.com/documents/Lonnie_Geochemical_TREE+Y.pdf

Alex Helmel, CEO of Rara Terra, stated: “With soil samples approaching 1% total rare earths, plus additional Niobium credits, we are encouraged that higher grade mineralization exists in the bedrock beneath the overburden and are especially encouraged by the discovery of the Blue Dot anomaly [Zone 2] in an area of the Lonnie property previously untouched.”

The Lonnie Property

Located 220 km northwest of Prince George, BC, the Lonnie Property consists of ten mineral claims, totaling 2480 hectares, and is underlain by metasediments of the Upper Proterozoic Wolverine Complex.  The metasediments include quartz – hornblende gneiss, quartz gneiss, quartzite and garnet biotite muscovite schist which are intruded by a conformable medium grained carbonatite complex, that account for the Vergil and Lonnie showings.

The Lonnie property is under a 3-year option to Rara Terra Minerals Corp. (TSX.V: RTX). 

Sample Preparation and Analysis

All samples were collected from the “B” soil horizon at depths of up to 0.6 m, placed into tamperproof bags, labelled and then transferred to Acme Analytic Laboratories Ltd in Vancouver, BC, where they were treated according to the Acme procedure SS80 and then analyzed for 43 elements by ICP methods (Acme procedure 1T-MS).  Overlimit Ce and La samples were reanalyzed using Acme procedure 4B03.

TREE+Y is the addition of all parts per million (ppm) values for rare earth elements (lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, and lutetium) plus yttrium.

Qualified person

Rara Terra’s qualified person, Robert Friesen, PGeo, has read and approved the technical disclosure contained in this news release.

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 metal from its Arizona Manganese Project.

On behalf of Management

AMERICAN MANGANESE INC. 

Larry W. Reaugh
President and Chief Executive Officer

At American Manganese, we’re proud of the low energy and low water process we’ve designed for producing electrolytic manganese metal. As we described in February, our Artillery Peak property in Arizona’s process is to use a fraction of the power of today’s processes and dramatically less water. Our tailings are to be virtually dry and environmentally benign. We’re in the process of applying for a worldwide patent on our process.

Some have written that we might set a new standard in the production of critical metals.

We’re proud of what we’re doing in our way to help lower the environmental footprint of mining. And, as we saw at this year’s PDAC show in Toronto this month, others are starting to think the same way.

Here are a selection of other interesting companies we saw at PDAC that are trying to advance the mining sector by reducing waste, toxins and water use.

Energold Drilling (TSX-V: EGD) – A specialty driller that operates 230 rigs in 22 countries. Its drills are portable and can be moved with manpower, allowing projects to be completed without damaging trees or creating access roads. PDAC’s E3 program (“Environmental Excellence in Exploration”) highlights one of Energold’s case studies on how to conduct drilling programs.

Neomet Technologies – In the same way American Manganese aims to revolutionize electrolytic manganese production with a new process, Neomet Technologies aims to help the world rethink gold production. The company is developing a new cyanide-free process that it believes can still offer 95% gold recovery at 99.99% purity, with inert tailings and zero atmospheric emissions and zero chemical waste.

Newterra – A rebranding of three amalgamated companies: Filter Innovations, MLE Equipment, and Pacwill Environmental. Newterra targets the mining industry, among others, for its produced water filtration systems, using membranes and other approaches. The company aims to treat, recycle and reuse produced water, and offers pH adjustment, solids removal/filtration, and oil/water separation. The company claims 2,500 remediation projects across North America.

BacTech Environmental (CNSX: BAC) – A company using a biological process to remediate toxins at mining sites. The company’s BACOX process uses naturally occurring bacteria to oxidize sulphides in as little as 5-6 days, as opposed to the years it normally takes in nature. The process can also used to free gold and other metals like copper, nickel, zinc, cobalt and molybdenum, according to the company.

These are just a handful of companies that are finding commercial opportunities to make mining cleaner and less resource intensive.

Many of them, including American Manganese, are certainly motivated by the potential to use new technology to lower costs and improve margins. At the same time, they (and we) are gratified that cleaner approaches happen to be the right thing for the communities in which we have been given the privilege to operate … and for this planet we call home.

The publication can be viewed on WIPO’s website on the following link:

http://www.wipo.int/patentscope/search/en/WO2012024294

The patent application describes key details in which manganese can be recovered from a low grade resource with the following key advantages:

• Low energy requirement.
• Low water use.
• Robust process with a unique assembly of commercially available equipment.
• Suitable for production of high purity electrolytic manganese metal (EMM) without the use of selenium, a toxic concentration found in traditional Chinese EMM production. 
• Suitable for production of high purity electrolytic and chemical manganese dioxide for use in high tech lithium ion batteries.

With the trend of increasing metal prices, decreasing resource grades and environmental regulations becoming stricter, ownership of this intellectual property creates significant opportunity for American Manganese on a world scale. 

About Kemetco Research Inc.:

Kemetco Research is privately owned contract Research and Development Company specializing in extractive metallurgy, chemical processing and specialty chemical analysis.  Kemetco was formed after the acquisition of the Industrial Process Division of BC Research.  BC Research had been in operation for over 60 years as an R&D contractor in British Columbia, Canada.

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 the most critical metal at risk to supply and restriction 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%) and electronics (2%).

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 electric vehicles will account for 25% of its entire vehicle line-up by 2020, and Hyundai has committed a lifetime guarantee to their 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.

The current world price for electrolytic manganese metal is about $1.30 per pound, while the U.S. price is about $1.63 per pound.

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 metal from its Arizona Manganese Project.

This release has been reviewed by John W. Fisher, PEng, a qualified person pursuant to National Instrument 43-101.

On behalf of Management

AMERICAN MANGANESE INC. 

Larry W. Reaugh
President and Chief Executive Officer

Manganese dioxide is produced electrolytically (EMD, Electrolytic Manganese Dioxide) or chemically (CMD, Chemical Manganese Dioxide).  The addition of lithium to manganese dioxide forms material used in high tech rechargeable lithium ion batteries.  There are numerous high growth potential applications for advanced lithium ion batteries, including hybrid or full electric vehicles.  The challenge is to produce the material that is free from any potential impurities. 

While the Company’s main product is electrolytic manganese metal (EMM), the hydrometallurgical process developed by Kemetco provides an opportunity for the production of ultra-high purity manganese dioxide for use in lithium ion batteries.  The Kemetco process avoids traditional steps (grinding of the resource followed by roasting) that are known to introduce impurities to battery grade lithium ion battery material. 

Successful research will add a secondary source of revenue to the Company, which production can be integrated as an adjunct to the Kemetco hydrometallurgical process. 

This project will be initiated March 9, 2012.  In the first 3 months, the project will focus on the production of high-purity EMD and CMD from American Manganese’s Artillery Peak resource.  Research on lithiated materials will take place in months 3 to 6.  Months 6 to 12 will focus on producing test batteries and optimizing the final products. 

About Kemetco Research Inc.:

Kemetco Research is privately owned contract Research and Development Company specializing in extractive metallurgy, chemical processing and specialty chemical analysis.  Kemetco was formed after the acquisition of the Industrial Process Division of BC Research.  BC Research had been in operation for over 60 years as an R&D contractor in British Columbia, Canada.

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 the most critical metal at risk to supply and restriction 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%) and electronics (2%).

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 electric vehicles will account for 25% of its entire vehicle line-up by 2020, and Hyundai has committed a lifetime guarantee to their 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.

The current world price for electrolytic manganese metal is about $1.30 per pound, while the U.S. price is about $1.63 per pound.

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 metal from its Arizona Manganese Project.

This release has been reviewed by John W. Fisher, PEng, a qualified person pursuant to National Instrument 43-101.

On behalf of Management

AMERICAN MANGANESE INC.

Larry W. Reaugh
President and Chief Executive Officer

Last week, cleantech analysis and consulting firm Kachan & Co. published a report analyzing American Manganese, our unique hydrometallurgical process and the opportunities for the future development of the electrolytic manganese market.  This positive report validated that American Manganese has designed an extraction and refinement process of low grade manganese ore that not only could make our company the lowest cost producer of electrolytic manganese metal globally but also positions us as a mining company with minimal environmental impacts.

The Kachan report entitled “American Manganese’s Clean Extraction Process” was commissioned by American Manganese as an independent review of the company, our Artillery Peak property and our patent pending hydrometallurgical process.  The report was in-depth in its analysis of the company and the manganese market; Kachan & Co. conducted 38 interviews for this report, including speaking with eight battery companies, a top 5 global consulting firm, an industrial strategy consulting firm and two cleantech-specific consulting firms.  In addition, six investment bank/hedge fund mining analysts were interviewed, along with two cleantech fund managers, 10 mining firms or consultancies familiar with manganese, two mining companies in rare earths, two universities, two mining info databases, two independent battery research labs, the International Manganese Institute, the U.S. National Mining Association, Canadian Mining Association, World Steel Association and various government agencies.

The final analysis came to similar conclusions that we at the company have believed in since the purchase of the Artillery Peak property.  Namely, that the manganese market is set for a boom in demand, through increased demand from the cleantech sector and decreased supply from Chinese manufacturers and that American Manganese has the ability to capitalize on this demand by being the sole North American producer of electrolytic manganese at a production cost dramatically lower than the global standard.

“American Manganese will likely have no difficulty finding a market for its production if its Artillery Peak mine in Arizona becomes active. But its cleaner and more efficient approach could potentially make it a lowest cost producer, a “win-win” situation for the firm.” –Kachan report

It is our hope to further validate the strengths of our Artillery Peak project when our pre-feasibility study is released.  We will then be able to present a definitive production cost analysis, which we anticipate will position the company as the lowest cost producer of manganese worldwide.  Current manganese production costs average around $1.20 per pound.

We are also pleased to announce that American Manganese will be attending this year’s Prospectors and Developers Association of Canada’s (PDAC) annual convention.  Attendees at this year’s PDAC will be able to find American Manganese at booth #2600B. PDAC is the world’s largest mining convention and the largest convention in Canada.  We are excited to be presenting American Manganese to the public at this convention and will be available to answer any questions about the company, our properties and the manganese market.

A summary of the Kachan report can be found on our website.  The full report can be purchased here.

The report titled “American Manganese’s Clean Extraction Process” and authored by cleantech analysis firm Kachan & Co. outlines the hydrometallurgical process and assesses the probability of American Manganese becoming the lowest cost producer of electrolytic manganese metal worldwide.  “Kachan was commissioned to do an independent assessment of our hydrometallurgical process. Its findings illustrate how American Manganese has developed one of the most efficient models of mining low-grade manganese ore and producing low cost, high grade electrolytic manganese metal,” said Larry Reaugh, President and CEO of American Manganese.

“On paper and in pilot, American Manganese’s hydrometallurgical process is promising,” said Dallas Kachan, Managing Partner, Kachan & Co. “The near closed loop nature of the process appears to result in high grade electrolytic manganese metal with little environmental impact and at a low cost. Proving the process at scale in the field will be the company’s biggest challenge, but early indications are encouraging.”

American Manganese’s unique hydrometallurgical process, using commercially available equipment, maintains a low cost, low energy output while retaining a recovery rate of   92-93%% electrolytic manganese metal at a purity of over 99.7%.  Heat produced from the burning of sulphur to make sulphur dioxide essentially balances out the required amount of energy for the hydrometallurgical process excluding electrolysis. American Manganese Inc.’s process is based on treatment of low grade manganese, to produce 141 metric tonnes of electrolytic manganese metal and 366 metric tonnes of anhydrous sodium sulphate by-product, which is also a saleable resource.

“Traditional extraction methods, such as roasting, aren’t commercially viable for low-grade deposits, since they are very energy intensive, sometimes reaching temperatures of up to 1000°C,” said Reaugh. “Our refinement process eliminates the costs, and environmental impacts related to such methods.”

Highlights of the Kachan & Co. report include:

-        Detailed analysis of the patent pending hydrometallurgical process
-        Feedback from mining industry experts
-        Summary of the electrolytic manganese market
-        Analysis of American Manganese’s strengths and weaknesses and probability of success
-        Outline of environmental impacts

“To have a net positive report published by a leading cleantech analysis firm supporting our unique hydrometallurgical process is a huge success for American Manganese,” said Reaugh.  “We are encouraged to continue to work towards becoming the lowest cost producer of electrolytic manganese metal in the world.”

An abstract of the report is available for free download from the American Manganese website. A full copy of the Kachan report is available for purchase here.  Kachan & Co. was commissioned by American Manganese for the independent research and publication of the American Manganese’s Clean Extraction Process report.

About American Manganese

American Manganese (TSX-V: AMY, PINK SHEETS:  AMYZF, FRANKFURT: 2AM) is a publicly traded junior mining company located in White Rock, British Columbia.  In 2007 the company began work on the Artillery Peak project in Arizona, the largest known low grade deposit of manganese in the south western United States and the first new manganese producer in North America.  It has patented a new environmentally sound extraction process with reduced energy and water requirements intended to deliver low cost, high purity electrolytic manganese metal.

For further information, or to schedule an interview:

Ryan Tessier
1-415-390-2080 x8
604-613-6143
Rytessier@gmail.com
www.americanmanganese.com