American West locks in offtake and $2M for emerging Canadian copper play

American West Metals has cemented an off-take partner for its flagship Storm copper project in Nunavut, Canada, finalising key milestones in a transformative partnership with United Kingdom-based global metals trader Ocean Partners. 

American West says its binding off-take agreement and funding commitments will de-risk the project’s path to development and position Storm as a low-capex, high-return copper operation with significant resource upside across its sprawling 2200-square-kilometre tenure. 

The company has completed a US$2 million (A$3.1 million) private placement with Ocean Partners to move the metal trading savants to a 9.4 per cent shareholding in American West. 

The capital injection is paired with a binding off-take agreement securing all the project’s copper, silver and gold production for a minimum of eight years. 

Being well and truly invested in the outcome and outputs of Storm’s development, Ocean Partners will also tin up a considerable 80 per cent of the initial capital - potentially US$40 million (A$61 million) - via a senior secured loan facility, contingent on bankable feasibility study results for Storm.

American West says the critical alliance is already bearing fruit for both parties, as Ocean Partners’ technical advisors optimise processing workflows that will save plenty of legwork for the ongoing pre-feasibility study. 

American West Metals managing director Dave O’Neill said: “Both the private placement and off-take agreement have now been completed, significantly de-risking the short- and long-term funding strategy for the project. The funding package will allow American West to complete the dual strategy of exploration and streamlined development during 2025.”

Located on Somerset Island, 120 kilometres south of Resolute Bay in Nunavut’s Polaris mineral district, the Storm project is close to the Northwest Passage, a seasonal ice-free waterway historically used to ship concentrates from world-class zinc-lead mines such as Polaris and Nanisivik. 

The company has established a 50-person camp to support its continuing ambitious exploration activities at the project, which has yielded an impressive mineral resource of 20.6 million tonnes grading 1.1 per cent copper and 3.8 grams per tonne (g/t) silver, equating to 229,000t of contained copper and 2.2 million ounces of silver. 

With less than 5 per cent of the 110km prospective copper belt tested by the drill bit, American West is gearing up for a major 2025 drilling program targeting high-priority prospects to expand the resource base.

Storm’s economic potential in a rising copper environment is plain to see. It is projecting a US$149 million (A$228 million) net present value and a 46 per cent internal rate of return (IRR) for a 10-year open-pit operation with a low initial capital cost of US$47.4 million (A$72.5 million). 

By leveraging all its debt financing, the pre-tax IRR could soar to an impressive 135 per cent, with a three-year payback period and post-tax revenue of US$839 million (A$1.28 billion) at conservative copper prices well below today’s Trump-imposed tariff market. 

Adding to the momentum, American West’s recent drilling campaigns have confirmed multiple high-grade discoveries, including a 47-metre copper sulphide intercept at its Cyclone Deeps deposit, reinforcing the potential for a stacked copper horizon beneath its flagship Cyclone deposit. 

With a pipeline of prospects, including Blizzard and Tornado, waiting for drill testing, the company is poised to unlock further value along the 110km belt. 

Partners Ocean Partners are already involved in metal trading operations in global copper centres such as Canada, Chile and China and have seen Storm’s upside. 

The finalised off-take deal and funding commitments align with rising global copper demand, driven by clean energy and electrification trends. Copper prices recently surpassed US$10,000 (A$15,300) per tonne.

As American West charges into the back half of its 2025 exploration and development season, Storm is shaping up as a low-risk, high-reward copper play. With robust economics, a de-risked funding strategy and a vast, underexplored copper belt in its portfolio, the company looks like it could be Canada’s next copper player in a surging red metal price environment.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au