American West secures $18.8 million royalty funding package for Storm

American West Metals (ASX:AW1) has signed an agreement with Taurus Mining Royalty Find for a US$12.5 million ($18.8 million) royalty package to support the development of the Storm Copper Project in Nunavut, Canada. 

According to the staged deal, Taurus will provide US$5 million upon signing formal documentation, US$3.5 million upon delivering a Pre-Feasibility Study for Storm and submitting development permitting documents, and US$4 million upon announcing an increase in the resource to at least 400,000 tonnes of copper at an average grade of at least 1%. 

In exchange, American West, which has a market capitalisation of $75 million, will grant Taurus a 0.95% gross override royalty (GOR) on all production at Storm, and a 0.5% GOR over any additional mineral rights acquired by the company within 5km of the current extents of the project.

That royalty is in addition to a 0.875% GOR over the Storm Project acquired earlier this year, giving Taurus a total 1.825% GOR over Storm.

American West Managing Director Dave O’Neill says the royalty financing provides the company with substantial funds on terms that are less dilutionary than alternative equity funding. 

“The investment from Taurus is a strong endorsement of the potential at Storm, and recognises the strong foundations for growth by the exploration and resource delineation work conducted by American West to date,” he says. 

“The company is now well positioned to accelerate the 2024 and 2025 work programs at Storm, with the 2024 summer drilling program now in full swing.”

American West plans to use the funds to accelerate its resource expansion and exploration programs, with a 20,000m drilling program already underway. 

The company is focused on expanding existing — and defining new — copper resources, alongside exploration to generate and test new targets within the Storm area. 

Taurus Chief Investment Officer Michael Davies says it is further involving itself in the Storm Project, which is emerging as a “high-grade, district-scale copper project.”

“We look forward to working with the American West Metals team as they continue to grow Storm’s copper endowment and advance the project to production in the coming years,” he says. 

The Storm Project lies on Somerset Island, Canada, and covers 2,200km2 within the Polaris mineral district. 

American West owns 80% of the project, while Aston Bay Holdings (TSX-V:BAY) holds the remaining 20%. 

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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.