AW1: Biggest indium resource in the USA - this week USA announces indium shortages for the first time.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 16,500,000 AW1 Shares and 11,148,990 AW1 Options at the time of publishing this article. The Company has been engaged by AW1 to share our commentary on the progress of our Investment in AW1 over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

A few days ago the US government flagged indium shortages - for the first time ever.

(source)

Indium is a critical mineral as it is used in AI chips, night vision systems, missile guidance radars and F-35 fighter jets.

Our Investment American West Metals (ASX:AW1) holds 100% of the largest indium JORC resource estimate in the USA.

The project might also contain critical minerals gallium and germanium too (historic core samples showed a 518m continuous gallium intersection with peak grade of ~77.3 g/t).

AW1 is drilling its project right now.

The first hole from the program has already hit a ~430m extension (based on visuals) to the already giant resource - assay results are pending.

AND for the first time ever, all of the drilling will systematically test for gallium and germanium (as well as other minerals like copper, gold and silver too)

(source)

AW1’s co-founder and Non-Executive Director, John Prineas is in Washington DC right now. (source)

Wonder who he is talking to...

Indium was one of the first critical minerals China placed export controls on, which began back in 2023.

Even in November 2025, when the export restrictions on gallium, germanium, and antimony were put on hold until November 2026, indium was explicitly excluded.

Indium is now the only one of the four export-controlled critical minerals still under full restriction.

(and China produces ~70% of the world’s refined indium product)

And remember the USA has just flagged indium shortages for the first time...

This setup has prompted the US Defense Logistics Agency to put out tender requests for indium supply contracts worth up to US$125M in February this year.

This is the second time a US defence agency came into the public market looking for indium over the last 12 months.

(The first was in August last year).

(source)

Our Investment AW1 owns 100% of the largest undeveloped JORC-compliant indium resource in the United States.

AW1's project is already fully permitted for an open-pit mine and exploration shaft construction.

A few weeks ago, AW1 raised $10M, at 4.5c per share, with 1:2 6c listed options.

AW1 is currently trading at 3.9c/share (below the cap raise price)

We participated in this raise - It was a one tranche placement and the shares have been issued.

Following the funding injection, AW1 has committed to upsizing the drill program that's ongoing at its US indium asset.

At the moment, only ~25% of the project has been assayed for indium.

The project has never been assayed for other critical minerals like gallium or germanium - despite a historic core sample confirming a 518m continuous gallium intersection with peak grade of ~77.3 g/t.

(Yes... over half a kilometre. A 518m continuous gallium hit. Out of a single legacy drill core.)

So over the next few months, AW1 could define a gallium/germanium angle to what is already a strategically important asset (for the indium).

(China produces 70% of the world's indium, 98% of the world's gallium, and 60% of the world's germanium.)

The US is 100% reliant on imports for all three of those critical minerals.

We covered the use cases for indium earlier.

Gallium is used in defence radars and high-performance semiconductors, germanium is used in fibre optics.

(source)(source)(source)

The Department of War and the US Department of Energy have put cash behind companies trying to bring domestic supply online for these three minerals.

AW1 is currently working with Washington DC firm Ervin Graves Strategy Group on potential US government funding pathways - including the Defence Production Act Title III program.

AW1's MD Dave O'Neill talked about the US funding discussions in a webinar on Tuesday.

Skip to 18:43 where he says:

“I can't talk to what is going on behind the scenes. Obviously, there's confidentiality around the US discussions and things like that. John's (Prineas, co founder of AW1 and Non-Executive Director) in Washington DC as we speak... he’s attending the defense and aerospace conference at the moment for critical metals”

We think that the current round of AW1 drilling, if it helps define a gallium/germanium resource to go with the indium, could be a trigger for those discussions to move forward.

Check out the full webinar here: American West Metals (ASX: AW1) Webinar | West Desert Discovery, Storm PFS & Critical Metals Growth

(source)

AW1’s USA critical minerals project could be a lot bigger than we first thought

As mentioned earlier, AW1 is drilling its US asset RIGHT NOW in an upsized 24/7 drill program.

As it stands the project is the only primary indium JORC resource on US soil, AND:

• ~35% of historical drill cores have ever been assayed for indium.
  Only
• ~10% of historical drill cores have been assayed for gallium and germanium. Only

This is the first drill campaign in the project's history where AW1 is systematically assaying all of indium, gallium, germanium, zinc, copper, silver, tellurium AND gold.

And a few weeks ago the first hole of that program hit 77.65m of structure along a previously untested 4km magnetic anomaly that sits to the east of AW1's giant indium resource.

So the first hole may have already hit a ~430m extension to the giant resource - pending assay results.

(source)

It's just visual mineralisation at this stage - assays are pending (expected in ~3-5 weeks), which is the point we will get a much better understanding of grade and width.

But two things got confirmed:

1. The 4km magnetic anomaly could be mineralised - The geological model AW1 used to define the target area could well be mineralised based on visual observations.
   
2. The deposit footprint may be a lot bigger than the current resource implies - the first hole is ~430m to the east of the known resource, that hole alone (if assays confirm mineralisation) would be a big step-out from the current resource.

If assays confirm an extension, then a 430m step out could imply a much bigger system, and that’s before the 5.6km total magnetic trend tested:

(source)

That’s where the recent capital raise comes into play - as we noted above, AW1 just closed a $10M "heavily oversubscribed" capital raise to upsize the drill program, which we went into.

With that extra cash, AW1 can be more liberal with its drill program and drill out as many targets as they need to - especially if they are hitting big extensions along that magnetic trend.

AW1 - The Apex Mine comparable - and the deal that just happened

One of AW1’s exploration theories is that its project shares geological similarities to the Apex Mine, ~300km away.

The Apex is the only primary gallium mine that has EVER operated in the United States.

At its peak, the Apex was producing germanium at grades of up to 7,000 g/t and gallium at up to 20,000 g/t.

Since that mine was shut down, the US has produced no gallium domestically.

Interestingly, the mine wasn’t just producing gallium-germanium but also copper in the 1980s and 1990s.

(AW1’s asset also has some copper - an estimated 49,000 tonnes (JORC indicated and inferred) - source)

We already know AW1’s got gallium in an old core that's been resampled (up to 77.3g/t).

Now, with the current drill program, we get to see those Apex-style targets tested properly for the first time.

Why does that APEX mine comparison matter right now?

Because earlier in the year, the old Apex mine was purchased by NASDAQ-listed ~US$1BN Blue Moon Metals in a deal worth ~US$32M.

(source)

We think that the deal shows there is demand for assets like AW1’s in the US and the groups behind the Blue Moon deal, could also show interest in AW1.

Especially if drilling confirms the gallium/germanium potential is real on AW1’s project.

Blue Moon has Hartree Partners (a key partner with the US government on the recently announced US$12BN critical metals stockpile "Project Vault"), Wheaton Precious Metals, and Oaktree Capital on its register.

(source)(source)

IF a partner to the US critical minerals stockpiles is backing the Apex mine - then some solid drill hits from AW1 could put its project on their radar too.

(only this time, they will get indium to go with the gallium/germanium too)

Of course, there is no guarantee that AW1's drilling will return economic grades. That's the risk with exploration - what AW1 has shown so far is encouraging, but there are no guarantees with exploration drilling and lab assay results.

Here is where AW1’s project sits relative to that Apex Mine:

(source)

Next big AW1 catalysts:

Here are the three big catalysts we are hoping to drop from the US asset over the next few months:

1. Assays from Hole 1 (3-5 weeks away).
   
2. Hole 2 (testing the gallium potential and APEX style mineralisation).
   
3. US Government engagement (this is the one that could really get the market going).

Ultimately, success on the US asset is a big part of our AW1 Big Bet:

Our AW1 Big Bet:

“AW1 receives capital from either the US government, a strategic partner or the capital markets to progress its Indium project in the USA, re-rating AW1 to a valuation that is multiples of our Initial Entry Price”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and commodity price risk - just some of which we list in our AW1 Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

AW1 also has an advanced-stage Canadian copper project

Another reason we like AW1 is for its advanced-stage copper project in Canada.

We think this asset alone underpins a big chunk of AW1's current $48M market cap.

The project is an advanced-stage copper-silver asset in Northern Canada with a current JORC resource of 28.2 million tonnes at 1.0% copper and 3.3 g/t silver.

(276,000 tonnes of contained copper + 3.0 million ounces of contained silver)

The current 28.2Mt resource sits on less than 5% of the project's prospects.

The full horizon is 110km long - so it could get a whole lot bigger with more drilling.

(source)

The project has had a Preliminary Economic Assessment completed on it which returned:

• Post-tax NPV: US$149M
• Initial CAPEX: US$47.4M
• Mine life: ~6 years (with 10 years of processing)

And those numbers were based on copper at US$4.60/lb and silver at US$25/oz.

Today's spot is ~US$6.25/lb copper and ~US$76/oz silver.

(source)(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

So the current economics of the project could be a lot stronger. AW1 is currently working on a Pre Feasibility Study (PFS) for the project.

The reason we like the project is because it once had both $291BN BHP and $71BN Antofagasta have previously farmed-in to this exact asset.

In 2016, $291BN BHP signed an earn-in deal that would have seen them spend US$50M on the project.

(Mining supermajors don't farm into projects that don't meet their size/scale criteria - probably because of the 110km exploration upside)

$70BN Antofagasta also JV'd into the project around the same time.

Both walked away in 2018.

Probably more to do with the copper price tanking and both companies refocusing their efforts on the giant porphyry deposits they were developing in South America.

(Copper was also trading around US$2.80/lb at the time of the BHP walkaway)

We also like that AW1 already has options in place to fund the CAPEX for the project including:

1. A binding offtake agreement with Ocean Partners - Ocean owned 9.4% of AW1 when this was finalised in mid 2025. The offtake deal could also provide debt finance for up to 80% of initial capital for development and receive 100% of the offtake rights for 8 years. (source)
   
2. An A$18.8M royalty deal for non-dilutive funding - This deal would see AW1 receive US$3.5M once a PFS is completed and permitting documents submitted for development + US$4M if a resource that contains at least 400kt of copper averaging at least 1.00% is shown (AW1’s resource is currently 276Kt copper at 1.0%). (source)

IF copper really goes parabolic and all of the calls for a structural supply shortage plays out then this asset could be the big dark horse for AW1.

We actually saw (a video of) a presentation from Robert Friedland - titled "Dawn of the Copper Age" at the Saudi Arabia Future Minerals Forum.

PRESENTATION: The dawn of the copper age

His central point:

Humans will need to mine more copper in the next 18 years than we have mined in all of recorded history combined - just to meet forecast demand from AI data centres, grid upgrades, chips, weapons systems and electrification.

If even half of that demand materialises, then an asset like AW1’s could become very interesting.

(especially because a big chunk of the exploration upside on the asset is untouched still).

For now though we are still primarily in AW1 to see what happens with the largest indium resource in the US (plus the gallium/germanium upside).

What's next for AW1?

US indium project (West Desert, Utah)

Here we want to see AW1 run its upsized drill program, grow its resource and hopefully define a gallium & germanium resource to go with it.

Here are the milestones we are tracking:

• ✅Drilling commenced
• ✅First hole hits 77.65m of structure 430m east of resource, along the 4km magnetic anomaly
• 🔄 Historical core resampling for gallium & germanium.
• 🔲 Assays from drilling
• 🔲 Resampling assay results

Strategic / Government Engagement

• 🔄 Defence Production Act Title III funding
• 🔲 Formal US government funding deal / offtake / stockpile inclusion
• 🔲 Potential US listing

Canadian copper project

The next major catalyst for this project will be the PFS that is currently underway.

Here are the milestones we are tracking for the copper:

• 🔄 Pre-Feasibility Study
• 🔲 Environmental studies and permitting milestones

What could go wrong?

The biggest risk for AW1 right now is "Exploration risk".

AW1 hit 77.65m of structure from its first hole. At the moment it's just visual mineralisation - until lab assays come back and prove economic grades, there is a risk that exploration results will disappoint.

IF hole 1 assays are underwhelming, the market could re-rate AW1’s share price lower.

Another risk is “Critical Minerals Macro risk”

Critical Minerals Macro risk

A big part of our Investment is related to critical minerals macro sentiment strengthening and resulting in a funding deal for AW1’s US indium project. IF macro sentiment was to turn, then the chances of that asset being funded/brought online would reduce significantly. This could mean a re-rate lower in AW1’s share price.

Source: “What could go wrong” - AW1 Investment Memo 16 October 2025.

Other risks

Like any early-stage exploration company, AW1 carries significant risk, here we aim to identify a few more risks.

The underlying economics of both the Canadian copper asset and the US indium project rely heavily on global spot prices holding steady or increasing. If copper, silver, or critical mineral prices crash, the commercial viability of these projects could evaporate entirely.

While AW1 has secured some initial funding options, bringing any mine into production ultimately costs hundreds of millions of dollars. There is a very real risk that the company will face difficulties securing the necessary capital to move its Canadian project through feasibility studies and into construction without heavy shareholder dilution.

A core part of the AW1 investment thesis relies on securing US government support under initiatives like the Defense Production Act. Government policies and defense priorities can shift rapidly, and there is absolutely no guarantee these strategic grants or stockpile purchases will ever materialise for the company.

Running an aggressive 24/7 drill program in Utah while simultaneously trying to advance a copper asset in Northern Canada is logistically complex. This dual focus across two completely separate international jurisdictions could severely stretch management's time, budget, and operational bandwidth.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our AW1 Investment Memo

You can read our AW1 Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our AW1 Investment Memo covers:

• What does AW1 do?
• The macro theme for AW1
• Our AW1 Big Bet
• What we want to see AW1 achieve
• Why we are Invested in AW1
• The key risks to our Investment Thesis
• Our Investment Plan