Mr. Larry Reaugh reports

AMERICAN MANGANESE INC. EXAMINES LITHIUM ION BATTERY RECYCLING OPPORTUNITIES

American Manganese Inc. has successfully completed the recycling of 100 per cent of cathode materials (cobalt, nickel, manganese, aluminum) and 92 per cent of lithium from its U.S. patent-pending recycling application. Also, the company produced rechargeable lithium-ion cobalt and lithium nickel manganese button cell batteries from its recycled cathode material.

On Jan. 19, 2017, the company posted the monetary values (per 500 kilograms) of the metals recovered from electric vehicle lithium-ion batteries (LIBs). The company has updated the values, as presented in the attached table.

Battery chemistry                          Date     Value/battery

Lithium cobalt (LCO)                    Jan. 19         $3,745.00       
                                        July 25         $5,947.00       
                                                               
Nickel manganese cobalt (NMC)           Jan. 19         $1,702.00       
                                        July 25         $2,347.00       
                                                               
Nickel cobalt aluminum (NCA)            Jan. 19         $1,327.00       
                                        July 25         $1,585.00

The significant increase in spent electric vehicle battery value is due to the increase in the price of cobalt from $35.02 to $58.50 per kilogram over the past six months. "Cobalt is currently under severe supply-side pressure and is expected to remain undersupplied," said Larry W. Reaugh, president and chief executive officer. "According to the Cobalt Development Institute, the battery industry consumes 41 per cent of global cobalt supply (2015). Over the next 10 years, that usage is expected to increase to above 65 per cent. With such a significant increase in anticipated demand, recycling is poised to be an important part of the supply solution to the emerging cobalt shortage."

Management has been studying ways to capitalize on the company's technologies working toward developing positive cash flow. One such opportunity may exist in recycling unused cathodes. Industry sources have shown that up to 10 per cent of manufactured lithium-ion battery cathodes are rejected for use. The rejected cathodes, termed scrap, consist of the aluminum foil backing and the cathode metal powder which the company believes can be recycled into usable cathode material using its patent-pending process. The company has been offered these scraps (at a cost) by recyclers.

Additionally, and as part of this effort, in early 2018, the company intends to build and begin operating a pilot plant to prove continuous recovery of cathode material, with the ability to scale up and design a full-scale recycling plant. Construction of a hydrometallurgical plant capable of recycling scraps would have the following advantages over recycling spent lithium-ion batteries.

1. Up to 4,000 tonnes per year of cobalt, with a current market value of over $230-million (U.S.), could be recycled annually.
2. Other valuable cathode metals such as nickel, aluminum, lithium and manganese will also be recycled from the various cathode chemistries.
3. Capital and labour required for the initial plant would be lower as no disassembly of batteries is required.
4. Recycling cathode metals leaves a much smaller footprint than a traditional mining plant for recovering metals from ores.
5. The company's closed-loop process conserves water and does not release toxic waste streams into the environment.
6. The process would be demonstrated on a commercial scale, so that full-scale industrial facilities can be engineered and costed out.

The company has yet to determine the location of the process plant, as it could be sited anywhere in the world where EV battery manufacturing is occurring.

About American Manganese Inc.

American Manganese is a diversified specialty and critical metal company focused on capitalizing on its patented intellectual property through low-cost production or recovery of electrolytic manganese products throughout the world and recycling of spent electric vehicle lithium-ion rechargeable batteries.

We seek Safe Harbor.