Expansion of Existing and Definition of New Resources Planned
The Australian copper company American West Metals (WKN A3DE4Y / ASX AW1) sees the opportunity to develop its Storm project in Canada’s Nunavut into a “globally significant copper district”. The company further states that there is a possibility to establish a potentially cost-effective mining operation with high profit margins relatively quickly. To progress along this path as rapidly as possible, American West has now secured a total of 10 million AUD in fresh capital.
The financing consists of 6.977 million AUD from so-called flow-through shares from Canada. (Flow-through shares provide tax benefits to subscribers in Canada.) These shares are being placed at a converted price of 0.1471 AUD per share. American West emphasizes that this represents a premium of 22.5% to the company’s closing price of 0.12 AUD last Friday.
American West Directors Invest Their Own Money
Compared to the parallel capital increase with institutional and major shareholders at 0.105 AUD per share, this results in a premium of 40%. In total, an additional 3.024 million AUD is being raised from institutional investors. Dave O’Neill (Managing Director) and Dan Lougher (Director) from American West plan to participate in the financing round, pending shareholder approval.
American West plans to invest the fresh capital from the flow-through financing in exploration and work to define additional copper resources, given the enormous opportunities offered at Storm. This includes expanding the existing resource, which according to the Australian JORC Code 2012 already shows 17.5 million tonnes at an average of 1.2% copper and 3.4 g/t silver in the indicated and inferred categories.
Expansion of Existing and Definition of New Resources Planned
Additionally, resources for other high-grade mineralization zones such as Thunder, Lightning Ridge, The Gap, and others are to be defined, while simultaneously exploring regional target areas within Storm (Blizzard, Tornado, and Tempest) and generating targets there.
The funds raised from institutional investors will further strengthen the company’s balance sheet and will also be used to finance activities on its projects in Utah (studies, development work, exploration), among other things. With this money, American West aims to advance the development and permitting work for Storm as well as the studies necessary for the permitting process of the West Desert project. Furthermore, exploration activities following last year’s work are planned for the Copper Warrior project.
Dave O’Neill is pleased that this “significant” capital increase could be successfully implemented. As he explains, the financing was heavily oversubscribed in Australia and worldwide, which American West Metals’ Managing Director sees as a “recognition of the high quality of the Storm project” – and the enormous valuation potential it offers.
O’Neill further stated, “The proceeds from the capital raise further strengthen the company’s balance sheet and allow us to expand the work program at Storm, which will commence in March. Key milestones are planned for 2024, including an upgrade to the Storm resource and completion of metallurgical processing and economic studies, which we believe will add significant value to American West.”
