Development of Superior Lithium Ion Batteries for Electric Vehicles

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.

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.

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.

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.

www.americanmanganeseinc.com