American Uranium has increased its Lo Herma uranium resource by 16% and lifted the Indicated portion by 72%, while positive aquifer testing supports the technical case for in-situ recovery. The gains come with a pressing funding question, as AMU reported only 0.4 quarters of available cash at September end.
- Lo Herma resource rises 16% to 9.96Mlbs of U3O8
- Indicated Resources increase 72% to 4.79Mlbs
- Mine Units 1 to 3 contain 7.38Mlbs, 54% Indicated
- Mine Unit 1 pump test sustains 19.2 gallons per minute for 48 hours
- Quarter-end cash of A$590,000 leaves 0.4 quarters of funding
Lo Herma resource reaches 9.96 million pounds
American Uranium Limited (ASX:AMU; OTCQB: AMUIF) has strengthened the resource base for its flagship Lo Herma ISR uranium project in Wyoming, but the September quarter report also exposes the funding gap between technical progress and development. The updated Mineral Resource Estimate now stands at 9.96 million pounds of contained U3O8, up 16% from December 2024, while the Indicated component has climbed 72% to 4.79 million pounds.
The project contains 7.16 million tonnes at an average grade of 630 parts per million U3O8, split between 4.79 million pounds Indicated and 5.17 million pounds Inferred. Within the proposed Scoping Study footprint across Mine Units 1, 2 and 3, resources have increased to 7.38 million pounds, with 54% now classified as Indicated. Mine Unit 1 contains 3.23 million pounds, Mine Unit 2 contains 2.61 million pounds and Mine Unit 3 contributes 1.54 million pounds.
The upgrade follows completion of AMU’s 120-hole 2025/26 resource drilling campaign, which took the Lo Herma database to 1,077 drill holes. The company also expanded its Exploration Target Range to between 5.88 million and 7.90 million tonnes at 500 to 700 ppm U3O8, although those figures remain conceptual and are not JORC-compliant Mineral Resources. The resource improvement was previously previewed in the Lo Herma resource upgrade, which reported the same 16% total increase and 72% rise in Indicated Resources.
Aquifer testing supports the ISR development case
Hydrogeology supplied the other important piece of the quarter. At Mine Unit 1, the company completed a large-scale aquifer pump test centred on the Middle C Sand production aquifer, using four observation wells and additional monitoring wells in overlying and underlying formations.
Results released after quarter end showed the pumping well sustaining a pump-limited average rate of 19.2 gallons per minute for 48 hours, with drawdown stabilising at about 16.9 feet. The four production-aquifer observation wells recorded only 0.6 to 0.9 feet of drawdown, while estimated transmissivity ranged from approximately 510 to 605 square feet per day. AMU said the results were consistent with the roughly 20 gallons-per-minute-per-well assumption being evaluated for the Scoping Study and indicated confinement of the production aquifer supportive of ISR operations.
Those findings are encouraging for the project’s current technical work, but they are not a permitting decision. The observation-well estimates were based on small drawdowns affected by barometric pressure, and AMU said the final study footprint, production target and development sequence remain undetermined. The testing had been anticipated in the Mine Unit 1 aquifer program, which was launched to refine groundwater-flow and wellfield-design assumptions.
Scoping Study advances while funding remains tight
AMU is targeting completion of the Lo Herma Scoping Study in early Q4 2026. The work is expected to assess Mine Units 1 to 3, potential development phasing, ISR wellfield design, processing options, permitting strategy and the use of regional processing infrastructure. The company cautions that any regional processing concept is only a development framework and does not represent an agreement or assured access to third-party facilities.
Funding is the less comfortable part of the report. AMU completed an A$1.235 million unsecured convertible loan note facility during the quarter, with an 18-month term and a 12% annual coupon. Shareholders subsequently approved the issue of further Tranche 2 securities on substantially the same terms. The notes include conversion rights, options exercisable at A$0.16 until 30 June 2029 and other transaction-related rights, creating potential future dilution as well as a financing obligation.
At 30 September, AMU held A$590,000 in cash and had A$130,000 of unused finance facilities available. Quarterly operating and exploration outgoings totalled A$1.905 million, producing an estimated funding runway of just 0.4 quarters on the Appendix 5B calculation. The company said spending should fall after the completed drilling and pump-testing programs, while pointing to the convertible notes, refreshed share-issuance capacity, its ATM facility and further funding options as the basis for continuing operations.
Bottom Line?
The technical case for Lo Herma has improved materially, but the Scoping Study must now convert better resources and aquifer data into an investable development plan before the financing runway becomes the dominant issue.
Questions in the middle?
- Can the Scoping Study establish an economically credible production case from Mine Units 1 to 3?
- How much additional capital will AMU need after the convertible note funding, and on what dilutionary terms?
- Will further groundwater baseline work and permitting requirements validate the ISR pathway across the proposed study footprint?