American West copper hits point to monster Canadian upside

American West Metals has put some serious meat on the bones of its 80 per cent-owned Storm copper project in Nunavut, Canada, unveiling a monster maiden exploration target that could contain multi-million tonnes of copper beneath the Arctic tundra.

The company has tabled a conceptual target ranging from 110 million to 214Mt at a grade of between 0.59 and 1.02 per cent copper. The contained metal in the estimate ranges from a hefty 646,000 tonnes to a whopping 2.2Mt of copper.

The new numbers dramatically overshadow the project’s existing mineral resource of 28.2Mt at one per cent copper and 3.3 grams per tonne (g/t) silver and its recently defined maiden ore reserve of 12.58Mt grading 1.2 per cent copper and 3.71g/t silver, backed by a recently received positive pre-feasibility study.

That reserve underpins an already robust prefeasibility study. The appraisal lays out an 11-year mine life, with a straightforward open-pit operation set to churn out up to 14,000 tonnes of copper annually. The numbers point to a post-tax net present value of US$119 million (A$173M) and a healthy internal rate of return (IRR) of 32.8 per cent, a payback period of just 3.6 years, based on a conservative copper price assumption of US$5.30 (A$7.70) per pound. The project is forecast to generate US$1.2 billion (A$1.74B) in life-of-mine revenue against an initial capital outlay of just US$81M (A$117.6M)

Notably, the numbers improve significantly when plugging in the current copper spot price. The study notes that at a spot price of US$6.53 (A$9.48) per pound, the NPV nearly doubles to US$233M (A$338.3M) and the IRR soars to an impressive 55.1 per cent, with a total of US$1.5B (A$2.18B) in total revenues.

American West’s exploration target is spread across seven high-priority areas - Resource Expansion, Deeps Zone, Central Graben, SE Stratabound, Structure Related, Tornado and Chevron - offering plenty of scope to beef up existing resources and potentially unearth entirely new copper deposits. Notably, the new exploration target only covers a fraction of the 110-kilometre copper belt at Storm.

The Central Graben target, which spans roughly 4.4 square kilometres, is considered a direct analogue to the project’s high-grade Cyclone deposit. Based on its size and early drilling results, the company believes it could potentially host two Cyclone-scale deposits. A recent drill hole in the area hit 10m assaying 1.2 per cent copper and 1.6g/t silver from 311m.

Highlighting the project’s blue-sky potential, the Chevron target is a 2.4km-long, 400m-wide copper-in-soil anomaly that has never seen a drill bit. The anomaly has a peak value of 934 parts per million copper, which is more than 90 times the normal background level. The company also plans to conduct a ground electromagnetic survey to generate future drill targets.

On the back of the positive pre-feasibility study results for the Storm copper project, we are excited to announce an exploration target which outlines the growth potential of the project. The exploration target is a key element of the company’s strategy to develop the Storm copper project to fund organic growth through resource expansion and by making new discoveries.

Storm isn’t the only significant North American critical minerals play in American West’s stable. The company also holds the West Desert project in Utah, widely touted as the biggest undeveloped indium resource in the US, with an impressive 33.7Mt resource containing zinc, copper, silver, gold and 670,000 kilograms of indium.

The release of Storm’s huge target has coincided with plans from both the Canadian and Nunavut governments to support critical minerals development by injecting fresh funds into the region. The two governments recently announced C$2.45M (A$2.52M) for foundational geoscience research in Nunavut, which is known to host at least 23 of Canada’s 34 listed critical minerals.

Furthermore, in a push to improve Arctic transport infrastructure, Ottawa has conditionally approved up to C$50M (A$51.5M) in funding for planning and pre-construction of the proposed Grays Bay Road and Port project, a 230km all-season road and deepwater port designed to improve access to northern zinc and copper projects.

The work at Storm is set against a solid long-term outlook for copper. The International Energy Agency says the red metal is expected to see the biggest volume growth among critical minerals through to 2040, driven by the global push for electrification and next-generation technologies.

With a positive prefeasibility study already proving a profitable starter mine is possible on a fraction of its ground, American West has now opened the window on what the ultimate scale of its Canadian copper play might be. And given this new target covers just a small piece of the project’s sprawling 110km-long prospective copper belt, the drill rods could be spinning at Storm for a long time to come.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au