American West Metals Limited reported that initial assay results from drill hole ST22-10 have confirmed a significant discovery at the Storm Copper Project (Storm or the Project) on Somerset Island, Nunavut, Canada. Drill hole ST22-10 intersected a thick sequence of sulphide mineralisation hosted within carbonate sediments. The drill hole was targeting a large EM anomaly to the west, and deeper than the near surface high-grade 4100N Zone.

Approximately 68.8m of chalcopyrite, pyrite and sphalerite mineralisation was intersected from 277m downhole in drill hole ST22-10 (approx. 230m vertical depth). The mineralisation is interpreted to be stratabound and is hosted within a vuggy, bituminous and fossiliferous carbonate unit.

Visual observations of chalcopyrite and sphalerite in the drill core have now been confirmed by assays within the sampled intervals from ST22-10. Of the sulphide mineralised zones, only portions containing clear and abundant chalcopyrite and sphalerite were sampled with the aim of confirming sediment hosted copper and zinc. Most of the pyrite-dominant zones were excluded from samples submitted for assay - see Table 1 for assay results and Figure 3 for a geological cross section of the drill hole. The results received confirm the presence of sediment hosted copper and zinc sulphide mineralisation, and have verified the discovery of this new style of mineralisation at Storm.

Geophysical properties logging of sections of the core as well as further sampling will be conducted on ST22-10 to refine the targeting model for follow-up drilling. ST22-10 is the deepest drill hole completed at the Storm Project this season and highlights the outstanding exploration potential of the project area. Compilation of historical induced polarization (IP), gravity and electromagnetic (EM) data reveals a series of large anomalies that sit under, and adjacent to the known high-grade copper mineralisation and graben fault system.

The metal associations, zonation and geophysics suggest that the drill hole is potentially on the edge of a stronger mineral system. ST22-10 targeted the margin of a large (300m x 800m), previously untested EM anomaly. The hole was drilled to a downhole depth of 382.6m and intersected both a shallow zone and deep zone of visual copper and zinc mineralisation.

The drill hole was terminated prematurely due to a mechanical failure, with the deeper mineralised zone still open at depth. The shallow mineralised zone within ST22-10 consists of 34m of very weak vein style, fracture hosted and blebby chalcocite over a number of intervals from 17m downhole. The assays also indicate the presence of strong sphalerite (zinc sulphide) up to 1.05% Zn in places, and minor galena (lead sulphide).

The deeper zone of mineralisation is over 68m thick and remains open at depth. The mineralisation consists of vug, open pore space and breccia filling as well as replacement style chalcopyrite superimposed on pre-existing hydrocarbon flooding that is interpreted to be of the sediment hosted style, and distinctly different than the fault zone breccia hosted copper mineralisation intersected at the 2750N and 2200N Zones at Storm. Assays up to 0.44% Cu confirm the presence of chalcopyrite within the mineralised sequence.

Due to the broad sample intervals of the initial sampling (1-2m in width), the grade of the stronger mineralisation within discrete bands and breccia zones is interpreted to fall into the 1-4% Cu range with more selective sampling. Zinc mineralisation has also been confirmed in the lower part of the sequence with sphalerite accompanied by calcite and pyrite within bituminous vugs. Mineralisation at the nearby 4100N Zone and elsewhere at Storm is clearly zoned, with a core of chalcocite mineralisation grading into zones bornite±covellite, then chalcopyrite, pyrite and on to an outer sphalerite±galena zone, reflecting progressive reduction of the metal-bearing fluids by interaction with hydrocarbons in the permeable zones of the rock.

The mineralisation encountered in ST22-10 suggests this drill hole intercepted the outer chalcopyrite/pyrite/sphalerite zone of the ore system. Follow-up detailed EM is expected to improve targeting for the higher-grade chalcocite and bornite zones predicted by the deposit and mineralisation models. Initial observations suggest that the style of mineralisation, host rocks and geological setting of the ST22-10 area are evidence of a reduced facies type of sediment hosted copper system.

Global examples of these are the Kupferschiefer (Germany) and Central African copper deposits. The geology intersected within ST22-10 has all the elements required for sediment hosted ore forming processes including permeable carbonate rocks, hydrocarbons for reducing fluids, sulphur source and a favourable structural setting. The central graben of the Storm area is an ideal trap for ore forming fluids and will be a key focus for further exploration.

The mineralisation encountered to date shows clear zonation which will be used to determine vectors to the stronger part of the mineral system. The presence of zinc and lead within a number of stratigraphic horizons suggests that ST22-10 has intersected the distal parts of a copper dominant sedimentary ore system. Investors can expect further news on the 2750N Zone drilling in the coming days.

Beneficiation test work is expected to commencement shortly with a focus on further optimisation of the process to produce a direct shipping ore (DSO) product. All of the remaining drill core (half core) from drill hole ST22-02 will be used in the test work. Further diamond drilling and surface electromagnetics are planned to follow-up the new deeper discovery as well as the shallow mineralisation at the 2750N Zone.

The drilling will also aim to define initial resources at the 4100N and 2200N Zones, where thick zones of high-grade copper mineralisation have been intersected at shallow depths in historical drilling. A detailed review of the existing induced polarization (IP) and gravity anomalies is underway. The current datasets show a number of large anomalies that are focused around the central graben faults and sit beneath high-grade surface mineralisation, and therefore present as compelling targets for further exploration.

The Nunavut property consists of 117 contiguous mining claims and 6 prospecting permits covering an area of approximately 302,725 hectares on Somerset Island, Nunavut, Canada. The Storm Project comprises both the Storm Copper Project, a high-grade copper discovery as well as the Seal Zinc-Silver Deposit. There are numerous underexplored targets within the 120km strike length of the mineralized trend, including the Tornado copper prospect where 10 grab samples yielded >1% Cu up to 32% Cu in gossans.

American West Metals Limited has an option to earn an 80% interest in the Storm Project.