Jan. 14, 2020 9:01 AM ET
2 of the 4 Tier-One lithium-ion battery manufacturers have submitted samples to American Manganese for testing.
Company fits the acquisition target well because of their IP and small size.
Management has done a poor job of communicating to a wider audience.
The management team at British Columbia based American Manganese (OTCPK:OTCPK:AMYZF) [TSXV: AMY] [GR:2AM] confirms in this story that testing of the companies lithium-ion hydrometallurgical battery recycling process by two of the four Tier-One battery manufacturing companies as defined by industry leader, Benchmark Mineral Intelligence was completed in Q4 2019
The four Tier-One battery manufacturers on Benchmark’s list are as follows:
Tesla, Inc. (TSLA)
Panasonic Corporation (OTCPK:PCRFY)
Samsung Electronics Co., Ltd. (OTC:SSNLF)
LG Chem LTD (LGCHEM)
Tesla, Panasonic and Samsung are the most likely submitters of the “tier-one NCA cathode scrap…” as detailed in the October, 25th 2019 press release from American Manganese, Inc. NCA is one of many variants of Lithium Ion batteries, this specific type contains Lithium, Nickel, Cobalt and Aluminum in the battery cathode. NCA batteries are produced by all three of those Tier-One companies. LG Chem, the only remaining Tier-One company on the list, primarily produces NMC batteries where Manganese substitutes for the Aluminum in the battery.
Sophisticated companies want IP and they want to lock up talent with employment contracts. First and foremost major companies want protected technology but they also negotiate three to five year commitments with the scientists who understand the nuances inherent to any new technology.
With less than ten employees, the company has managed to generate two U.S. patents for recycling lithium-ion batteries amongst a host of competitors who collectively hold very little Intellectual Property. Via its wholly owned U.S. subsidiary, Rocher Manganese, American Manganese holds U.S. patent No. 10,246,343 for its lithium-ion battery cathode material recycling technology. It also holds U.S. patent No.10,308,523 U.S. patent No.10,308,523 for the recycling of cathode materials into precursor cathode materials for new lithium-ion batteries.
The other thing that industrial powerhouses want nailed down are costs. To that end, American Manganese has engaged their independent research partner Kemetco Research to complete a preliminary engineering design and economic analysis study for a commercial demonstration recycling plant. Putting aside those mining terms, what can be assumed they need is a cost estimate for scaling up from the demonstration plant to actual production numbers. That signals to me that $AMY is sharpening their pencils at the request of their Tier-1 suitors.
For all the companies recent achievements, including their ongoing work with the U.S. Department of Energy, the trading volume on the stock indicates just how few people have ever heard about the company. The only buzz their outdated communication strategy has been generating, is similar to the noise that must have been coming from the engine on Sully Sullenberger’s plane before ditching it in the Hudson a few years back. Their technology is advanced, but to this point, their message hasn’t reached much beyond the Canadian mining community where the company has its roots. A year of blockbuster news releases has only been broadcast to a spattering of less than a thousand followers on Twitter as I write this.
American Manganese has taken in over $700k CAD via warrant exercises recently. Because of those funds, it should have an adequate cash runway to ink a deal through the first half of this year given how fiscally disciplined the management team operates. Deals seldom get done in less than three months, but that clock looks like it’s already ticking with two different Tier-One companies.
Time will tell if the chemistry for this miner turned research and development company is capable of making the stock explode, or if it simply ends with a fizzle.
Disclosure: I am/we are long AMYZF.
Additional disclosure: I/we have no postions in any other stocks mentioned other than AMYZF, and no plans to initiate any positions within the next 72 hours.