American West Metals Bags $10M In Placement At Premium For Storm Copper Project

American West Metals Ltd (ASX: AW1) has received firm commitments to raise A$10 million through a placement of Canadian Flow-Through Shares and to institutional investors at a significant premium to its share price.

The FTS shares will be placed at A$0.1471 per share (C$0.1264), representing a 22.5% premium to American West’s closing price of A$0.12 per share on 16 February 2024 and a 40% premium to a concurrent institutional placement of shares at A$0.105.

The funds raised will enable an expanded exploration program to commence at the Storm Copper project in Canada next month with a focus on resource growth and the testing of large-scale copper targets.

The Storm Copper Project is located on Somerset Island, Nunavut, Canada.

Dave O’Neill, American West Managing Director said: “Major milestones are planned for 2024 including an upgrade of the Storm Resource and the completion of metallurgical processing and economic studies – which we believe will add significant value to American West.”

Flow-Through Shares

The FTS portion is via Canadian flow-through share dealer, PearTree Securities Inc. and will not receive any fees or commissions for the FTS placement.

Flow-through shares are a financing tool available to a company that allows it to issue new equity (shares) to investors at a higher price than it would receive for “normal” shares. This assists in raising money for exploration and development and offers tax benefits for FTS.

However, in this case, the FTS will not attract those benefits.

Brokers RM Capital, Ord Minnett, and Bell Potter Securities have offered to acquire all of the New FTS Shares from clients of PearTree under a block-trade arrangement at A$0.105 per share.

The joint brokers will facilitate the secondary sale of the New FTS Shares to institutional and sophisticated investors at the Block Trade Price.

The FTS Shares will cease to be ‘flow-through shares’ on completion of the FTS Placement and investors acquiring any New FTS Shares as part of the secondary sale will not have rights to tax benefits under the FTS regime.

A management fee of 2% and a placement fee of 4% are payable to the joint brokers for the amount raised under the Institutional Placement and on the value of the secondary sale of New FTS Shares.

Directors Dave O’Neill and Daniel Lougher (or their nominees) also intend to participate in the Placement. The issue of Shares to the Directors will be subject to the receipt of shareholder approval at the Company’s upcoming general meeting.

Copper Bounty

The reported resource at the Storm Project boasts 17.5 million tonnes of ore, averaging 1.2% copper and 3.4g/t silver, representing a total metal content of 205,000 tonnes of copper and 1.9 million ounces of silver.

A high-grade core of 11.2Mt stands out with 1.5% copper and 4.3g/t silver, holding 173,000 tonnes of copper and 1.5 million ounces of silver.

Untapped Potential

The resource remains open in all directions, hinting at significant mineral resource growth potential through 2024 and beyond.





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