Storm Copper Project PEA Shows US$149M NPV and 46% IRR with Low Capex
American West Metals has unveiled a positive Preliminary Economic Analysis for its Storm Copper Project in Canada, outlining a low-cost, 10-year production plan with strong financial returns. The company also secured a strategic funding and offtake partnership with Ocean Partners, while advancing its critical minerals projects in the US.
- Storm Copper Project PEA shows post-tax NPV of US$149 million and IRR of 46%
- Low capital expenditure of US$47.4 million initial and operating costs at US$2.63/lb Cu
- Strategic US$2 million placement and up to 80% project debt financing secured with Ocean Partners
- Exploration drilling planned to expand copper resources at Storm and regional targets
- Progress on West Desert indium project with potential US government funding and resource growth
Storm Copper Project: A Low-Cost Pathway to Production
American West Metals Limited (ASX: AW1) has delivered a significant milestone with the release of a positive Preliminary Economic Analysis (PEA) for its Storm Copper Project, located on Somerset Island in Nunavut, Canada. The PEA outlines a starter operation based on mining 10.3 million tonnes at 1.3% copper and 3.7 grams per tonne silver, producing 487,000 tonnes of copper concentrate over an initial 10-year mine life.
The study highlights robust economics, including an estimated post-tax net present value (NPV8) of approximately US$149 million and an internal rate of return (IRR) of 46%, assuming 100% equity funding. Notably, the project benefits from a low initial capital expenditure of US$47.4 million and operating costs of US$2.63 per pound of copper, positioning Storm as a potentially very competitive copper producer.
Innovative Processing and ESG Credentials
The project’s processing strategy employs innovative ore-sorting and beneficiation techniques that produce a high-quality copper-silver product free of deleterious elements, chemicals, and tailings. This simple, low-footprint approach aligns with strong environmental, social, and governance (ESG) principles, a growing priority for investors and regulators alike.
Mining is planned as an open-pit operation with year-round activity, ramping up production from approximately 850,000 tonnes per annum to 1.25 million tonnes by year three. The processing plant will initially use ore sorters, with a dense media separation circuit introduced later to handle finer mineralisation, maintaining consistent product quality.
Strategic Partnership and Funding Secured
In a major corporate development, American West Metals has entered into a strategic partnership and funding agreement with Ocean Partners Holdings Ltd, a global metals trading and financing company. Ocean Partners will subscribe to a US$2 million private placement and provide up to 80% of the initial capital for project development through a senior secured loan facility, subject to a bankable feasibility study and shareholder approval.
The agreement also includes a binding offtake arrangement securing Ocean Partners 100% of the copper and silver products forecast under the PEA. This partnership not only strengthens the project’s financial foundation but also leverages Ocean Partners’ expertise in ore-sorting and direct shipping ore markets, potentially accelerating development timelines.
Exploration Upside and Regional Potential
Beyond the base case, American West Metals is aggressively pursuing resource growth through exploration drilling in 2025. High-priority targets such as The Gap, Cyclone Deeps, and Cirrus Deeps offer promising high-grade copper mineralisation that could extend mine life and scale.
The broader 110-kilometre copper belt hosts multiple large-scale targets including Tornado and Blizzard, with geophysical surveys planned to refine these prospects. The company’s recent sealift operation has streamlined logistics, reducing costs and enabling a rapid start to the upcoming drilling season.
Advancing US Critical Minerals Projects
American West Metals is also progressing its West Desert Project in Utah, home to the only JORC-compliant indium resource in the United States. With 33.7 million tonnes at 20 grams per tonne indium, the project is one of the world’s largest undeveloped indium deposits. The company is exploring funding options including US government grants aimed at critical minerals development.
Additionally, the Copper Warrior Project option has been extended for a fourth year, allowing further exploration near the Lisbon Valley Copper Mine, which benefits from fast-tracked permitting under the US FAST-41 program.
Corporate and Financial Position
During the quarter, American West Metals received a US$2.8 million royalty payment tranche from Taurus Mining, reflecting confidence in the Storm Project’s development potential. The company reported a cash balance of A$701,000 at quarter-end, with ongoing efforts to secure additional funding through the Ocean Partners placement and royalty advances.
Managing Director Dave O’Neill emphasized the low-risk, high-quality nature of the Storm Project and the strategic value of the Ocean Partners alliance, which together underpin the company’s dual strategy of exploration growth and streamlined development in 2025.
Bottom Line?
With a robust economic foundation and strategic funding in place, American West Metals is poised to transform Storm into a leading Arctic copper producer while advancing critical minerals projects in the US.
Questions in the middle?
- How will upcoming drilling results impact the Storm Mineral Resource Estimate and project economics?
- What are the timelines and key milestones for permitting and feasibility studies at Storm?
- How might US government policies and grants influence the development of the West Desert indium project?