Copper explorer American West Metals (WKN A3DE4Y / ASX AW1) aims to demonstrate this drilling and exploration season that there is outstanding potential to expand the already proven copper deposits both within and outside the known resource area on its Storm project in Nunavut, Canada.
So far, only 5% of the 110-kilometer-long copper belt within the project area has been tested with targeted geophysical surveys and drilling. The company, led by Managing Director Dave O’Neill, has already discovered numerous copper-rich outcrops in the regional target areas of Tornado, Blizzard, and Tempest – exciting and promising targets for new discoveries!
American West will initially focus on generating new exploration targets using regional-scale geophysical and geochemical surveys. The exploration activities will be conducted primarily along the highly prospective Midway-Storm-Tornado corridor. Additionally, the company will strive to expand existing discoveries in the Storm target area both at the surface and at depth, as well as make new discoveries within this area.
The goal of this strategy is to continue organic resource growth and delineate new high-grade copper discoveries – thereby demonstrating the global significance of the Storm project.
Feasibility Study Work and Preparatory Development Activities
In March of this year, American West commissioned a Preliminary Economic Assessment study for the Storm project. This, according to the company, provides the baseline for a low-capital pathway to mine development. At the same time, the PEA shows significant potential to expand both production and the operational life of the planned mine as ongoing exploration identifies new copper resources.
Ongoing preparatory development work includes advancing key studies to a Pre-Feasibility Study level and closing gaps in the project’s ongoing environmental assessment. Activities for the Preliminary Feasibility Study include resource delineation and expansion drilling, geotechnical studies, processing optimization, project elaboration, cost review, and the permitting process.
Oversubscribed Financing Provides Necessary Capital
This is an ambitious, two-pronged work program that naturally comes at a cost – but if successful, could significantly increase the value of the Storm project and theoretically the company itself. American West recently announced that partners Taurus Royalty Fund and Ocean Partners will provide US$2.8 million and US$2.0 million respectively under existing agreements.
As this is not sufficient, American West is raising an additional AUD 5.9 million from institutional, sophisticated, and professional investors by issuing approximately 148,935,631 new shares at 4 cents per share. These shares also come with half an option to purchase another AW1 share at 6 cents per share, valid for a period of two years from the share issue date.
To ensure existing shareholders don’t miss out, at least those residing in Australia and New Zealand, they can subscribe to additional new shares worth AUD 1 million through a Share Purchase Plan (SPP) under the same conditions as participants in the aforementioned placement. However, unlike this financing, it is not guaranteed that the entire AUD 1 million will be exercised. Individual shareholders can acquire shares worth up to AUD 30,000 through this plan.
American West’s Managing Director Dave O’Neill commented:
“We are very pleased with the successful completion of a capital raise as part of a A$14.1 million financing package (excluding SPP funds) for the Storm Copper Project. The capital raise was strongly oversubscribed by investors in Australia and globally – in recognition of the high quality of the Storm project and the enormous valuation potential it offers.
The 2024 exploration delivered multiple new discoveries and a series of targets that we will pursue in 2025. There are several large-scale exploration targets that offer excellent potential for new discovery – walkup drill targets supported by strong EM plates, gravity anomalies, surface copper gossans, or high-grade copper confirmed by scout drilling.
The PEA has outlined a technically robust project and demonstrated that Storm has the potential to become a profitable, long-lived mine with attractive economic returns for the company. There is very significant potential to rapidly expand the existing mineral resource estimate by additional tonnage, and any expansion of the existing resource is likely to further improve the potential economics of this mining operation.
The financing package will enable American West to implement the dual strategy of aggressive exploration and focused development in 2025. We look forward to keeping investors updated as work programs are completed and undertaken.
