The Australian explorer American West Metals (ASX: AW1; FRA: coming soon) plans to aggressively advance its flagship project Storm on Somerset Island in the Arctic archipelago of Nunavut, Canada, this season with up to 10,000 meters of reverse circulation drilling. The project has grown significantly in 2022 through new high-grade copper discoveries.
American West has an option for an 80% stake in the Storm project. In the past season, the company discovered a potentially large sedimentary copper system on the more than 3,000 km² license area. The footprint of the near-surface, high-grade copper mineralization at Storm has been defined to date over an area of about 40 ha with an average thickness of mineralization of 24 m @ 2.15% Cu (weighted average grade from 32 drill holes). Four main zones of mineralization have been identified so far. The Storm project has numerous unexplored targets within a 120 km long mineralized trend, including the Tempest copper project, where 10 grab samples >1% Cu and up to 32% Cu were found in gossans. Tempest is located 40 km south of Storm. Its location and distance from Storm illustrate the extent of the prospective copper horizon in the project area.
The near-surface mineralization around Storm offers the potential for a cost-effective open-pit scenario and direct shipping of copper ore as so-called Direct Shipping Ore (DSO) due to the high grades and shallow depth. American West plans to conduct initial studies this season for the operation of a DSO mining with a copper concentrate of >50 percent.
Source: Arne Lutsch
Figure 1: The Storm project is located north of the Arctic Circle on the 75th parallel in the Arctic archipelago west of Greenland.
The additional reverse circulation (RC) drill rig serves as a complement to the two diamond drill rigs currently on site. It can drill up to 200 meters deep and is ideal for defining resources at shallow depths. The drilling is intended to further define and expand the near-surface, high-grade copper mineralization found at multiple locations during the 2022 drilling season.
Dave O’Neill, Managing Director of American West Metals, commented: “Logistical preparations for a significantly expanded program, which will build on American West Metals’ highly successful first drilling campaign in 2022, are already underway. Geophysical surface surveys will begin in March, closely followed by an extensive drilling program. Permitting planning for the potential development of a DSO mine is ongoing; a basic environmental study is scheduled to begin in the second quarter of 2023.”
Geophysical surface surveys are set to begin in March at Storm and in the as-yet unexplored Blizzard, Tornado, and Tempest areas.
Figure 2: American West considers Storm as an emerging copper district.
Figure 3: Map showing planned geophysical surface surveys for 2023, highlighting the expansion of activities to the Tornado, Blizzard, and Tempest properties.
Potential for Large Sedimentary Copper System
The recent discovery in drill hole ST22-10 (see ASX announcement dated September 28, 2022: New copper system confirmed at the Storm Project, Canada) suggests that the known copper occurrences at Storm may be related to a large, sedimentary copper system below the near-surface deposits (Figure 3). The other near-surface copper occurrences at Storm (Zones 2750N, 2200N, and 3500N) are also associated with large geophysical anomalies, suggesting the potential connection between the two types of mineralization.
Figure 4: Conceptual geological and exploration target model for the Storm project, showing the depth of current drilling and the conceptual location of discovery drill hole ST22-10.
Expansion of Exploration to New Areas
In March, new high-resolution geophysical surveys will begin. These surveys will also extend to new, previously untested areas. These new areas include the Blizzard, Tornado, and Tempest properties. The Tempest prospect is located about 40 kilometers south of the Storm deposits and contains a large (over 250 m long) copper gossan that has been exposed at the surface and yielded up to 32% Cu.
Figure 5: Tests with ore samples from the Storm project immediately achieved a DSO-suitable copper concentrate of 53 percent.
Conclusion: Through the groundbreaking exploration success last year, American West has fundamentally redefined the Storm project. The project possesses world-class status due to the newly discovered sedimentary copper deposits. The copper discoveries at the Storm and Tempest targets are geologically connected but are 40 kilometers apart! At the same time, the targets around Storm offer the potential for direct shipping of copper concentrate due to the near-surface and high-grade copper mineralization. Last year, successful tests already achieved a concentrate of >53%. Few junior companies have projects suitable for DSO production. Unlike many competitors, American West therefore has the opportunity to become a producer with consistently high margins in a short time, with low investment costs. American West is working with Australian specialists who have already been successful in a comparable starting position. The copper concentrate could be shipped particularly to Europe thanks to the expected good ESG rating. We are eager to see the upcoming DSO study. In addition to the flagship Storm project, American West owns two other promising projects at strategic locations in the state of Utah in the USA: For the zinc-copper skarn West Desert (59 million tons historical resource), American West plans to publish a new resource estimate this spring. The Copper Warrior project, with surface samples of >3% copper, is located between two copper mines, 15 kilometers from the second largest copper mine in Utah. The current valuation of American West is around 26 million AUD at a price of 0.125 AUD. There will be many catalysts for American West in 2023 that could significantly drive up the share price and valuation.
