American Manganese Inc. [AMY-TSXV, AMYZF-OTCPINK] said Thursday it plans to raise $20 million from a private placement offering with institutional investors.
Under the terms of the financing, the company will issue up to 20 million common shares and warrants to purchase up to 20 million common shares for $1 per share and associated warrant.
Each warrant will entitle the older to purchase once common share at an exercise price of $1.25 at any time prior tot the third anniversary of closing, likely around October 4, 2021.
Net proceeds are earmarked for working capital and general corporate purposes. Details about the specific allocation of the proceeds will be disclosed in the prospectus supplement, the company said in a press release.
American Manganese shares were active on the news, falling 23% or 28 cents to 94 cents on volume of 2.17 million. The shares are currently trading in a 52-week range of $2.86 and 17.5 cents.
American Manganese is moving to establish itself as a pioneer in the advanced lithium-ion battery recycling market. With the aid of its RecycLiCo Patented Process, the company aims to promote a circular economy for the lithium-ion battery supply chain and set the standard for high recovery and purity of cathode materials from spent lithium-ion batteries.
A key aim is to become an industry-leading miner of cathode metals from spent lithium-ion batteries.
Like other companies in the battery metals sector, American Manganese is betting that global warming will result in sharply increased production and sale of electric vehicles.
The company said it recognized early on that significant growth in the electric vehicle market will eventually lead to supply strains in materials used to make lithium-ion batteries.
It hopes to capitalize on the expected electric vehicle revolution through being able to take EV batteries, convert them into cathode materials of high purity that can go directly back into a battery.
The suite of cathode materials includes lithium, cobalt, nickel and manganese and aluminum.
American Manganese recently signed a memorandum of understanding (MOU) with Italvolt SpA, Italy’s first battery Gigafactory and one of the largest in Europe to develop a commercial recycling plant.
The plant will utilize American Manganese’s RecycLico Patented Process.
The companies said the plant will be built alongside Italvolt’s planned Gigafactory in Scarmagno, Italy. The two companies have agreed to work collaboratively to recycle waste lithium-ion battery cathode material using the patented RecycLiCo process.
American Manganese is receiving advisory services and funding form the National Research Council of Canada Industrial Research Assistance Program to support the pilot project.
American Manganese and Italvolt believe the MOU is a strategic response to the European Commission’s proposed Batteries Regulation on December 10, 2020. The Batteries Regulation initiative is part of the new Circular Economy Action Plan which aims to ensure that batteries placed in the EU market are sustainable and safe throughout the entire life cycle.