NEW YORK American Manganese Inc. is looking to keep its Artillery Peak project in Arizona "intact and alive" amid a lull in both manganese prices and investors interest in junior miners.
The company is negotiating lease payments for the Artillery Peak site but it is struggling to attract serious financial interest in the project, American Manganese president and chief executive officer Larry Reaugh told AMM.
Low base metal prices have deterred many investors from the mining sector, he said. "Like all of our peers, the market is not coming forth with any money for us. If you look at the TSX (Toronto Stock Exchange), shares of all these companies are trading for pennies. Our objective over the next year is to keep our project intact and alive. I expect were at the bottom of the market now and will see some improvements by fall."
Reaugh said he expects it will be another two years before electrolytic manganese metal (EMM) prices improve, which is partially why the company is now focusing on the electrolytic manganese dioxide (EMD) market.
He said EMD prices are currently higher than EMM prices, but the process of producing EMD is cheaper and would require less infrastructure development at Artillery Peak.
"We dont need to make metal; we can make dioxide for the battery industry," Reaugh said. "It only takes a small amount of energy to produce EMD, so that would save a lot of costs in prefeasibility on supply installation, and we would have a reduction in free agents used, a reduction in mining size, a reduction in overall plant size. We see a good future for the project on the EMD side, and maybe sometime when we see EMM reaching a point where we could make money on it, we can bring in the extra resources.
"The EMD market is one of the fastest-growing segments," he added. "Cars like the Tesla are spotlighting electric vehicles and showing that maybe these things can be competitive in the market."
American Manganese announced in August that it would focus on the production of EMD for the lithium-ion battery market following a downgrade in the economic feasibility of its Artillery Peak development project (amm.com, Aug. 30). The Vancouver, British Columbia-based company has subsequently identified "various battery producers, certain car companies that use the batteries, mining companies and financial institutions" for potential investment in Artillery Peak.
"We havent had anybody biting yet, but theres interest there," Reaugh said. "We almost completed a deal about eight months ago with an auto company that was building its own battery facility. At the last minute, I guess the board of directors went in a different direction with the type of battery they wanted."