Artillery Peak Manganese Project Review and Update

July 5, 2012 - Vancouver, British Columbia

Larry W. Reaugh, President and Chief Executive Officer of American Manganese Inc. (“American Manganese” or the “Company”), (TSX.V:  AMY; Pink Sheets:  AMYZF; Frankfurt:  2AM), is pleased to report and review the Artillery Peak Manganese Project over the past 16 months. 

The Company has been in discussions with three new companies in the steel, manganese and battery production fields regarding potential strategic partnerships and off-takes in the past 4 to-5 weeks.

The Company has optioned 82 patented and fee simple mineral claims (2779 acres) and increased its unpatented holdings to 396 mineral claims entailing 7920 acres.

Kemetco Research Inc. (Kemetco) is currently developing EMD and CMD production and testing.

Significant milestones achieved by the Company include:

June 29, 2012:  The Company filed the NI 43-101 Preliminary Feasibility Technical Report on SEDAR.

May 25, 2012:  Company receives 5th Canadian NRC grant for Artillery Peak.  This grant was to advance research on CMD, EMD and lithiated manganese powder.

May 18, 2012:  Jan Eigenhuis joined the Board of Directors replacing Anthony Santelli who later resigned (May 24, 2012).  Jan is a former senior executive at Manganese Metal Company of South Africa the only producer of manganese metal, with the exception of China.  Jan has over 30 years of experience in the electrolytic manganese industry.

May 17, 2012:  Tetra Tech Wardrop delivered positive NI 43-101 preliminary feasibility study.  Utilizing the CPM expected price forecast the IRR is 19.95%; NPV at 8% discount is $402.9 million and a payback of 4.6 years.  Capital costs are $477 million and operating costs over the first 6 years are $0.956/lb at a grade of 3.13% Mn and average cost of $1.015/lb over the life of the mine (represents 16% of the total resources) at a grade of 2.46% Mn.  Production of metal over the first 20 years is 999,449 tonnes (2.19 billion lbs)

March 14, 2012:  The International Bureau at the World Intellectual Property Organization based in Geneva, Switzerland published the Company’s Advanced Hydrometallurgical Process Application Patent.

February 15, 2012:  Kachan & Co reports that American Manganese’s hydrometallurgical process to be a promising means of recovering low-grade manganese.

December 21, 2011:  The pilot plant testing program performed by Kemetco was successfully completed.  The work confirmed the technical viability of the Company’s patent pending hydrometallurgical manganese extraction and electro-winning circuit on a semi-continuous operation basis of the overall flow sheet.  The process is designed to recover manganese from lower grade manganese resources in an energy efficient and economically viable manner with low water use, thus providing significant environmental benefits compared to the conventional recovery process which is energy intensive and more costly although based on high grade resources.

December 6, 2011:  Strong Electrolytic Manganese Market Forecast by CPM Group.  Between 2012 and 2021 real EMM prices are forecast to average $1.92 per pound, which will support project development activities and provide incentive pricing for bringing new projects online to meet continued growth in demand.

November 4, 2011:  Indicated and Inferred Resources Restated.  NI 43-101 resources were reinterpreted by N. Tribe & Associates from the Sept 8, 2011 release as follows:

September 27, 2011:  The Company announced successful operation of the pilot plant by Kemetco resulting in 92.7% recoveries from coarse particle sizes in two hours.  Expected rates of liquid/solid separation averaged 20.8 kg per hour a 4 times greater result than the estimated 3 to 5 kg per hour.

August 18, 2011:  Kemetco begins pilot plant testing of Artillery Peak manganese ores.

June 24, 2011:  American Manganese receives fourth National Research (NRC) of Canada Industrial Research Assistance Program to continue the successful development of their hydrometallurgical process.

June 17, 2011:  American Manganese completed 10,607 meters (34,800 ft.) of reverse circulation drilling for definitive prefeasibility study on the Artillery Peak Manganese Project.  To date the Company had completed 18,160 meters (59,580 ft.) of reverse circulation Diamond drilling in 154 drill holes during 2008, 2010 and 2011.  In addition previous operators completed 58 Diamond drill holes in the 1940’s and 1950’s.

May 24, 2011:  American Manganese awards environmental and permitting contract to the Tucson, Arizona office of Tetra Tech Inc.

April 7, 2011:  American Manganese engages Kemetco for research on lithium manganese oxide battery technology.  [Kemetco had been unable to devote the necessary time to advance this contract until all of the technical work had recently been completed on the prefeasibility study.  Kemetco is now focusing on the production of EMD and CMD.]

March 8, 2011:  American Manganese closed $5,040,000 bought deal financing at $0.70 with Laurentian Bank Securities Inc.

February 11, 2011:  American Manganese closed a non-brokered private placement at $0.30 for $4,193,088.30.

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

Information Contacts:

Larry W. Reaugh
President and Chief Executive Officer
604-531-9639

Connie Fischer
Investor Relations
604-531-9639 ext. 110
Email:  connieir@amymn.com or info@amymn.com
 

www.americanmanganeseinc.com

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