American West on track to becoming Canada’s next copper producer

It would take just three years to recoup the initial CAPEX of US$47.4 million. This is the conclusion of the first preliminary economic analysis (PEA) the company has just released for the Storm Copper Project in Canada. The study demonstrates a rapid, highly cost-effective path to start up a 10-yr modelled opencast, direct shipping DSO copper concentrate production from 10.3 million t at 1.3 % Cu, 3.7 g/t Ag for 454 000 t of high-grade copper-silver concentrate with 18.3 % Cu and 52 g/t Ag.

Direct shipping of copper concentrate is highly compatible with ESG criteria because it does not require chemical processing and does not produce environmentally harmful tailings. Above all, however, the simple optical-mechanical separation of the copper ore minimises the high initial capital expenditures that are otherwise typical of mining projects. Even over the entire modelled life of 10 yr, the calculated CAPEX is only US$80.3 million. The low operating costs make the project extremely competitive. The huge exploration potential in the more than 2000 km² license area on Somerset Island remains as an upside for shareholders.

According to the study, the project shows a strong financial return with an after-tax net present value of US$149 million and an IRR of 46%. A 100% debt financing could drastically increase the return even further. In this case, the pre-tax IRR would rise to 135%. Assuming that the mine life can very likely be significantly extended by expanding the resource, the calculated financial return on the investment increases again. As AW1 management has indicated, the company is already in discussions with several parties regarding options for offtake financing or debt financing.

2025 is expected to be a big year for the expansion of the deposit. American West plans extensive drilling to expand the copper resource at Storm, which already contains 20.6 million t at 1.1% Cu and 3.8 g/t Ag. The program includes several high-value exploration targets along a 110 km copper belt. Management sees great potential for a significant extension of the mine life and an expansion of operations.

On the basis of the available scoping study, the company is now in a position to begin the approval process for the proposed mine. The submission of the approval process will unlock US$3.5 million under the existing royalty agreement, which would mean a non-dilutive form of financing.

Read the article online at: https://www.globalminingreview.com/mining/04032025/american-west-on-track-to-becoming-canadas-next-copper-producer/