Less than three weeks after completing the oversubscribed placement of 3 million AUD (at 0.095 AUD), the Australian copper explorer American West Metals Ltd (ASX: AW1; FRA: R84) secures an additional 7.8 million AUD from the capital market on significantly improved terms.
The company is utilizing the fact that the Storm Copper Project is located in Canada, which allows certain investors to benefit from a tax-advantaged flow-through financing. In this specific case, American West is placing shares at a price of 0.1918 AUD, representing a 20% premium to American West’s closing price of 0.16 AUD per share on July 10, 2023. This way, the company will receive 6.755 million AUD. Simultaneously, American West is placing an additional 1.05 million AUD at 0.14 AUD with institutional investors. This price represents a 12.5% discount to the closing price of 0.16 AUD per share on July 10, 2023, and a 15.2% discount to the 10-day VWAP of 0.165 AUD per share.
Dave O’Neill, Managing Director of American West, said: “We are pleased with the strong interest in this capital raising from quality investors in Australia and around the world. The ability to raise funds at a significant premium to the current share price provides the company with additional working capital while minimizing dilution for existing shareholders.”
Conclusion: The fact that American West can raise more than 10 million AUD in fresh capital in quick succession with steadily improving terms in a weak market environment speaks to the extraordinary quality of the Storm copper discovery. It is beginning to crystallize as a significant copper deposit. It’s no coincidence that prominent names from the mining industry have recently been added to the list of top 20 shareholders. The most exciting phase of exploration at Storm is beginning right now: The company is testing the large geophysical targets recently identified below the near-surface copper occurrences. With drilling success, the Storm project could definitively ascend into the exclusive group of world-class copper deposits.
