Lest we let the pendulum swing too far the other way in our future-projections for the sake of "balance," let me repeat a few things here from prior posts:
1) on the possibility that the pilot plant tests turn out to be a "dud"-- NoHype (from Stockhouse.com) had specifically asked Larry several months ago about the pilot plant as part of his Q&A with Larry at a conference.... This is what NoHype posted at Stockhouse on 2/25/11 about this part of their exchange:
Q) How confident are you that the pilot project [contracted to Wardrop] will be successful? A) I am very confident because Kemetco has developed a very unique process that allows us to extract about 80% of the manganese in only 8 minutes. And if we allow 30 minutes of time, we can extract more than 90% of the manganese from the ore. These are absolutely phenomenal numbers... and the best part is that we can achieve these results with a "green" process that requires minimal water and electricity from the grid. Furthermore, once we're done processing the ore (called tailings), we can restock the material right back where we found it because the tailings are inert. All of this adds up to huge cost savings. That's why we estimate the cost of production to be around .44 cents/pound. When you compare that with the Chinese cost of around .98 cents/pound, you can see why our company is attracting so much attention from the investment world.
2) Further on the enviro-permitting, this is from a 24 minute long video interview with Larry and Stirling Faux for The Money & Wealth Show on 3/26/11 (
). Larry, commenting on junior miners, and the country-problems of trying to operate in Africa, Latin America or even China (“it’s difficult for a junior miner to keep moving a project ahead in China”), went on to say the obvious, but added an encouraging note: “If you’re located in the U.S. or Canada, those are good jurisdictions. Maybe you have a little tougher environmental permitting laws, but if you’ve got a good project, and if you’re a good citizen, and you put up a good environmental plan, you’ll get your permits.” And, as has been noted, this should be especially true in Arizona, far more mining-friendly than, for example, California or Montana. The Arizona office of TetraTech is right now working on this permit, so they should know a few things about how to push this through...
3) On the financial front, AMY has 100% ownership of the Artillery Peak property that WAS ALREADY in successful manganese production under the auspices of the US Bureau of Mines in the WWII era, using the old "tried-n-true" leaching process but now with vast improvements by Kemetco for AMY. The Arizona Geological Survey (AZGS, a branch of the USGS) says Artillery Peak is the largest manganese deposit in the USA and the AZGS Director has on his blog that it is a top priority for mapping b/c of its potential economic benefits to the region.
Do we need to run through the litany again about manganese?? --fourth most traded metal in the world; --essential ("no substitutes") for the steel and aluminum industries; --right up there on the "criticality matrix" as most critical mineral along with rhodium according to that National Academies of Science publication i've cited before; --according to Duracell, et al., manganese is essential for the lithium-manganese battery industry as well; --no domestic USA production of this mineral which the DoD in its National Defense Stockpile report says is an absolutely critical/strategic mineral; --Congress has two bills moving forward (in Senate and House) on promoting domestic production/supply of critical minerals in USA.
So it's not like AMY is working on some unproven Latin American or African site in Marxist guerilla-held jungle territory, pulling up some unproven, hyped substance like "anti-gravity crystals".
This is a straightforward domestic play on an absolutely essential mineral for the free-world's economy and growing demand from industrializing nations-- not just China, but also India, Brazil, Indonesia, Vietnam, Thailand, et al..
And no domestic competitors on the horizon for producing EMM or EMD...
Even with all the above, for the sake of an ultra-cautious low-end projection, i'll reproduce here my most dismal financial scenario (first posted on this board back on 5/15/11):
[Here's] an even more "pessimistic" scenario for my "Debbie Downer" devil's advocate view of AMY: namely, let's say getting to an expanded full production of 10k tonnes/day [not 20k or 30k] throughput costs fully $160M, not my earlier estimate of $140M, and let's say AMY had to do it ALL via dilutive share-offerings (most unlikely), and let's further say that they do it at a lowly $0.40/share (not 0.60/share in my previous pessimistic model).... We'd have as a result a whopping 530.5M shares fully diluted (400M new shares + present 130.3M f.d.) and an EPS of 0.27 based on that $144M in net income i estimated in a low-end profit scenario based on VERY LOW EMM price, much higher mining/processing COSTS ($0.78/lb) [not LBS analyst's projected costs of $0.48/lb] and NO LMD SALES. A P/E of just 12 on such a lowly EPS of 0.27 would still make a shareprice of $3.24, a 5-bagger from current $0.64 shareprice.
Dan, i don't think you'll need to burn up those 300k shares....
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