American West nails $18.8m royalty deal for Canadian copper

American West Metals has secured $18.8 million in non-dilutive funding to accelerate its Storm copper project in Canada after signing a royalty package deal with Australian-based Taurus Mining Royalty Fund.

The funding package is designed to underpin the exploration and drilling activities that are already underway at the potentially district-scale project, along with fast-tracking project development amid a surging global thirst for copper production. The deal is structured to be staged into three phases, with $7.5 million to be  delivered upfront by Taurus and the following $11.3 million connected to development and resource expansion milestones.

Funding under the royalty package will be distributed to Storm’s joint venture (JV) partners American West, which has an 80 per cent hold in the operation, and Canadian-listed Aston Bay Holdings (20 per cent).

Taurus will receive a gross override royalty (GOR), effectively netting it 0.95 per cent on the sale of any products from Storm. The company had already secured an historical 0.825 per cent GOR over Storm from a third party earlier this year, giving it a total 1.825 per cent royalty over the project and its in-demand copper resource.

The funding package deal comes off the back of American West’s early exploration success with 20,000m of drilling at Storm and the recent validation of its moving-loop electromagnetic (MLEM) geophysical targeting techniques. The company says it has shown a close correlation between MLEM and its latest bevy of visually thick copper sulphide intercepts, pointing to the project’s potential to rapidly convert targets to resources.

Assays are expected imminently for several holes that remain outside of the 17.5 million tonnes at 1.2 per cent copper and 3.4 grams per tonne silver mineral resource at Storm. It points to multiple further deposits being uncovered at the operation in the Canadian province of Nunavut that already holds 205,000 tonnes of copper.

American West Metals managing director David O'Neill said: “We are very pleased to have secured royalty funding to support the advancement of the Storm copper project. The royalty financing provides American West with a substantial quantum of funds on terms that are considerably more attractive and less dilutionary than alternative equity funding.”

Management says the shallow copper mineralisation within the Storm deposits is open in all directions and does not include several recent high-grade discoveries including the Cyclone North, Lightning Ridge, Gap and Thunder prospects where drilling delivered up to 48.6m at 3 per cent copper.

Taurus chief investment officer Michael Davies believes Storm is emerging as a “high-grade, district-scale copper project” – the likes of which are becoming harder to find in quality mining jurisdictions such as Canada.

Less than five per cent of the 100km-long prospective copper-bearing horizon has been drill-tested to date within the more than 2200-square-kilometre Storm project. That means it could present as a potentially long-term, regionally-significant copper play should American West succeed in its ambition to fast-track copper production with the support of its significant new funding package.

Management believes the Storm deposit’s shallow nature, favourable geometry and high grade sets the foundation for a large-scale, open-pit copper mining camp. The funding commitment would suggest American West is not alone in that opinion.

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