EMD production by Kemetco was delayed due to scheduling and the fact that to our surprise, AMY isn't Kemetco's only client, lol.
IMO, there shouldn't be concern over this. EMD will get done and should eventually add to AMY's bottom line in a positive way IMO, but in no way should this short delay take away from the extraordinary potential that EMM will bring.
The EMM market is a very large, proven market, and AMY is on its way to possibly becoming the lowest cost, "green" producer of EMM in the world.
When Jim Powell first issued an analyst report for AMY back in May of 2011, his target was $2.90 and that was on the EMM potential alone. Even if Jim Powell's target is cut in half, we still have a target of $1.45. That's 3 1/2 times where AMY is trading today, and on the EMM potential alone.
The following is from that analysis back in May 2011. I'm sure it's been posted before:
Buy (S) – Target Price: $2.90
We rate American Manganese a Speculative Buy with a oneyear
share price target of $2.90, implying a total return of
392%. This target is based on our DCF analysis of the
company’s flagship Artillery Peak manganese project. We
have a share risk rating of High. We highlight the following:
? Increasing Demand for EMM: Electrolytic manganese
is a small portion of the overall manganese metal
market. Its use in aluminum processing and the strong
growth in 200 series stainless steels has increased
demand for EMM, even during the recession of 2009.
? China is the Dominant Supplier of EMM: China
dominates production of EMM and currently produces
approximately 97% of all the EMM used globally. China
consumes the largest amount of EMM though countries
which import significant quantities include Japan,
Netherlands, Korea and Russia.
? American Manganese to Potentially be the Lowest
Cost Producer in the Industry: Due to the access to
lower cost power than producers in other regions and
the company’s proprietary process, we estimate
American Manganese could have production costs at
half that of its competitors. This cost advantage
combined with being the only US based producer
provides a significant advantage in the US market where
there is a 14% import duty on all electrolytic manganese
metal.
? Reasonable Capital Costs: The Artillery Peak deposit
has been known for some time as being a potentially
significant supply of manganese. Infrastructure local to
the site is good with power lines, water on site and easy
access. We estimate capital costs to be in the range of
US$95 million.
? Pending Catalysts for American Manganese’s Share
Price Include: 1) results from a new drill program which
recently commenced should increase indicated
resources and expand the total size of the deposit; 2) a
pre-feasibility study due this fall; 3) the announcement
for potential off-take agreement partners from the US,
Europe or Japan.
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