American West Metals (AW1) is on the cusp of a transformative...

American West Metals (AW1) is on the cusp of a transformative phase, with a series of exciting financial and strategic developments paving the way for substantial growth. As the company gears up for key milestones in Q1 2025, including, AUD$4.2 million PFS royalty payment and a C$908,249 GST refund, cash reserves are set to expand, positioning AW1 for a potentially lucrative future. The company’s under-rated West Desert Project, a vast resource rich in critical minerals like indium, gold, copper, zinc, and silver, could be a game-changer, with a possible sale or spin-off unlocking significant value.

IMHO, a guesstimate sale price could range from AUD$27 million to AUD$162 million, with further drilling and rising demand for indium potentially pushing it even higher. The growing need for domestic sources of critical minerals in the U.S. makes the project even more valuable, opening doors to government incentives, joint ventures, and strategic partnerships. However, with the high capital demands of exploration and market uncertainties, AW1’s success hinges on careful cost management, funding strategies, and continued positive drill results. The path forward holds incredible potential—if AW1 can navigate the challenges, the rewards could be substantial as it reviews the North American assets and publishes the Storm Copper Project PFS by end of Q1 2025.

Money coming in:

• Taurus payments for PFS study release, ~Q1 2025, AUD$4.2 million royalty payment
• Canadian Revenue Authority (CRA) - AW1 expects a C$908,249 GST refund from the Canadian Revenue Authority (CRA) in Q1 2025, boosting available cash reserves.
• Capital raise in coming months to fund Storm copper exploration in 2025-2026
• Commercial Transaction for West Desert or a spin-out of the Indium-gold-copper-zinc-silver resource,
• A guesstimate sale price for West Desert could be 0.5% (low end ~ AUD$27million), 1.5% (mid-range ~ AUD$81 million), or 3% (high-end ~ AUD$162 million) of its $5.4 billion overall resource valuation (see below, Dec 2023 calc), excluding Mo, Ge & Ga valuation. But could a sale price be higher?? If further drilling improves confidence and strategic demand increases, it could push toward AUD$200M+ in a competitive sale or joint venture scenario.
• A spin-off would allow investors to better recognize its standalone potential, particularly as a strategic critical minerals asset in the U.S.
• A dedicated West Desert entity would be more attractive to investors and industry players focused on critical minerals, strategic metals, and U.S. domestic supply chains.
• It could also draw government funding or incentives given U.S. efforts to secure critical minerals independent of China.
• A separate entity could secure financing without diluting the parent company's interest in other assets.This could include grants, joint ventures, or direct investments from companies seeking secure indium, gallium, and germanium supply.
• A spin-out creates a focused investment vehicle.
• With the U.S. 100% dependent on imported indium, a domestic supply source is strategically significant.This could open doors to federal backing, fast-tracked permitting, and potential offtake agreements with industries needing indium for semiconductors, solar panels, and high-tech applications.
• With only 10% of the project explored, a spin-off could focus on expanding the resource, increasing indium, gallium, and germanium potential while leveraging the USGS-funded study.

Money going out:

• Stricter cost management for exploration activities - The company is actively reviewing third-party contracts, staff costs, overheads, and other operating expenditures to introduce further cost-saving measures.
• Sealift Savings – The 2024 sealift cargo delivery is expected to reduce 2025 field program costs by approximately A$4 million.

The business has excellent strategic potential, especially with the US’s increasing focus on securing critical minerals, which fits nicely with AW1’s portfolio. The West Desert Project offers promising returns if drilling results continue to improve, and a spin-off could unlock even more value.

However, the high risk and capital-intensive nature of exploration, along with potential market volatility, short-term capital raise, mean that the business is not without significant challenges. The company's ability to manage costs effectively and secure funding will be crucial for its ongoing success as it moves to focus on the Nunavut copper region.


Assumed West Desert valuation - 13th Dec 2023 metal pricing,




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