AW1 starts drilling at the USA's biggest indium project

Our US critical minerals Investment American West Metals (ASX: AW1) just started drilling at its West Desert project - the largest undeveloped JORC-compliant indium resource in the United States…

AW1 has a 5,000m diamond drill program running 24/7 looking to grow that resource even further AND at the same time testing the project's gallium and polymetallic potential…

So far only ~35% of the project’s prior drilling has been assayed for indium and there are some old hits that show the project could also host a gallium/germanium resource.

(Core resampling at West Desert has already confirmed gallium grades up to 77.3g/t) (source)

All three of those are listed as critical minerals in the US for the following reasons:

• Indium - used in infrared detectors, night vision systems, missile guidance systems, Radar systems and F-35 fighter jets
• Gallium - in high-performance semiconductors essential for AI because of its superior thermal and electrical properties compared to traditional silicon.
• Germanium - in fibre optics, high efficiency solar panels and high speed electronics

China controls ~70% of global indium production and ~98% of global gallium production.

The US produces neither, that is zero domestic production of both of these critical minerals.

Both indium and gallium were explicitly named in the Section 232 Proclamation, which was invoked by Trump on January 14 this year and resulted in a push to create domestic supply, quickly. (source)

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We Invested in AW1 because we think the project could become strategically important to the US as a domestic source of indium first and foremost.

But with the drill program happening now, the deposit could also contain gallium and germanium (which we should learn more about over the coming weeks).

AW1 has in the past mentioned the potential analogues between its project and the Apex Mine which is ~300km south of AW1’s asset.

That Apex Mine was the highest-grade gallium-germanium mine ever operated in the US. (source)

With the current round of drilling we should get a fairly good idea of whether or not that analogue is true.

AND IF proven - AW1 could be sitting on both the biggest indium resource AND potentially a significant gallium resource inside the US.

More on the drill program:

At the moment, AW1's project has a defined resource of 33.7Mt at 20g/t indium (for a total of 23.8 million ounces of indium), plus includes zinc, copper, gold and silver.

The drill program is testing three separate ideas, all outside the existing resource estimate:

1 - Following up high-grade indium with copper, silver, and gold - The idea here is that IF AW1 can expand this zone that the project becomes a polymetallic story, not just indium but with copper, silver, and gold credits that could improve the potential economics.

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JP Morgan talked about how financing critical minerals projects is much easier when there are more predictable revenue streams like copper and gold to go with the strategic metals.

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2 - First-ever gallium-focused drilling along the Juab Fault - as mentioned earlier, this will be the first time AW1 drills specifically targeting Apex style mineralisation (gallium/germanium).

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3 - Drilling for "look-alike" geophysical targets - The existing deposit sits on just one part of a 5.6km magnetic trend that runs through the project area. AW1 will test more of that trend outside of the current resource.

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What's next for AW1?

🔄 5,000m drill program (now underway)

Here AW1 is testing resource expansion targets, the Goldilocks Zone polymetallic skarn, gallium targets along the Juab Fault, and look-alike geophysical anomalies that are similar to the Apex Mine.

AW1 has flagged the potential to upsize this drill program, so if this happens it could be an early sign that management are liking what they see from the drilling. (source)

Here are the milestones we are tracking for the US indium project

• ✅ Resampling of historical core for indium and gallium (completed - confirmed high grades) (source)
• 🔄 Drilling underway - running 24/7 with Major Drilling Group (today - source)
• 🔲 Resampling assays - expected in 3-5 weeks
• 🔲 Drill results - expected over the coming months
• 🔲 Updated resource estimate (post drilling)

🔄 Pre-Feasibility Study for Canadian copper project

AW1 also has its Storm Copper Project in Canada where a PFS is in progress, which in the quarterly was expected to deliver in Q1, so might not be far away.

With copper prices having run the past year or so, we want to see this delivered, along with the environmental studies and key permits needed to advance the project. (source)

🔄 Strategic and government engagement

AW1 appointed Ervin Graves (Washington DC firm) earlier this year to lead government engagement. (source)

With drilling now underway, and the Section 232 Proclamation on the books, this is something we could see some movement and momentum on.

Especially for potential US government funding that would position AW1 as a domestic critical minerals supplier.