American Tungsten Corp. (TUNG:CSE; DEMRG:OTCQB; RK9:FSE) gained additional coverage when Stonegate Capital Partners initiated on it, reported Analyst Dave Storms in an Aug. 20 research note. Stonegate did not rate or assign the junior mining company a price target, though, because its flagship earn-in asset is in an early stage and lacks a technical analysis.
American Tungsten acquires, explores and evaluates mineral properties in the U.S. and Canada, targeting deposits of tungsten, molybdenum and iron. Formerly Demesne Resources Ltd., the company was rebranded earlier this year with the name change to better reflect its focus on tungsten and other critical minerals. Recently, American Tungsten was approved conditionally to list on the TSX Venture Exchange.
"Amid tightening tungsten supply and China's 2024 export ban, American Tungsten is strategically positioned to become a domestic supplier of a metal essential for defense, semiconductors and electric vehicles," Storms wrote.
Stock Specifics
The mineral exploration company, based in British Columbia, was trading at about US$0.98 per share at the time of his initiation report, Storms noted.
The company has 40.3 million shares outstanding. Its market cap is US$39.5 million (US$39.5M). Its 52-week range is US$0.03–2.37 per share.
About the Flagship Asset
Storms discussed the key elements of the American Tungsten story, highlighting its current focus on advancing the IMA Mine project that it has an option to fully acquire over eight years. Historically, IMA produced tungsten, molybdenum, silver and other metals. Records indicate that about 198,000 standard units of tungsten trioxide (WO3) equivalent and more than 2,000,000 pounds of copper were produced at IMA in the past. Comprised of 21 patented claims, the IMA Mine project historically had extensive development and investment by about a handful of companies, and therefore is significantly derisked already.
IMA is in Idaho's well-established mining district in the eastern-central region, boasting a material amount of existing infrastructure, including roads, water and grid power. The state is mining friendly, is motivated to see projects advance from a regulatory standpoint quickly and efficiently and offers a skilled, experienced mining workforce.
Assays and intercepts encountered in the past at and more recently at IMA indicate the mineralized system there "remains both extensive and economically attractive," Storms wrote. Notable intercepts encountered include 0.82% WO3 over 30 feet (30 ft) and 0.247% molybdenum disulfide (MoS2) over 475 ft. Exploration work including drilling in 2008 by a previous operator showed MoS2 intersections up to 0.269% and WO3 intervals above 1%.
Plus, noted the analyst, the project offers significant exploration upside, particularly with respect to the molybdenum mineralization beneath the established tungsten deposits. Potentially the resource could be expanded and further value created.
Plans for IMA Project
American Tungsten's plan for the modern tungsten-molybdenum IMA Mine project is to publish a new NI 43-101 technical report on it, begin targeted drilling there and do metallurgical sampling to assess possible near-term production scenarios. More than 6,000 feet of underground drilling are planned to support a maiden resource estimate and test the molybdenum porphyry system. Toward these aims, the company started rehabilitation work and engaged Rockhead Consulting to re-establish underground access and drill stations, at the project.
To fund exploration and development of IMA, the explorer completed a CA$7M upsized private placement. It also is looking into nondilutive funding opportunities through the U.S. Department of Defense and Department of Energy.
Significance of Tungsten
Storms pointed out that American Tungsten's intention for the IMA Mine project aligns with the U.S. Administration's focus on and work toward beefing up secure, domestic supply chains of critical minerals. Tungsten is especially critical given that little of it is produced outside of China and the metal is used in military hardware, such as missile technology, ammunition, hypersonic weaponry and tank armor. Projected global demand for tungsten is forecasted to "expand substantially," the analyst noted, supporting market growth to US$9.51 billion (US$9.51B) in value from US$5.55B, between 2023 and 2030.
"With a robust infrastructure, historical mining data, supportive regulatory environment, and strategic partnerships, American Tungsten Corp. is uniquely positioned to rapidly advance its exploration projects into production" to help mitigate supply chain vulnerabilities," Storms wrote.
Second Project in B.C.
American Tungsten holds an option to acquire the 4,616-hectare Star project, containing a large, skarn-hosted iron target with possible critical mineral byproducts, in British Columbia's Skeena Division. Prospective mineralization is suggested by a recent airborne magnetic survey showing a significant 1.2-kilometer-long anomaly and up to 63.3% ferric oxide (Fe2O3) shown in early-stage surface samples.
"Although not yet a focus for production, the Star project enhances American Tungsten's critical mineral portfolio and offers future optionality within a favorable jurisdiction," Storms wrote.
Management is an Asset
Led by Chief Executive Officer Ali Haji and President Murray Nye, American Tungsten's management has extensive experience and expertise in exploration, advancing mines to production, capital markets, mergers and acquisitions and junior mining, wrote Storms. Haji, for instance, has more than 20 years in the industry, leading public companies, raising capital and advancing critical mineral assets. Vice President of Exploration Austin Zinsser is a professional geologist who successfully has managed exploration projects in North America, including those of Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ) and Midas Gold Corp. (MAX:TSX). Recently, American Tungsten's board appointed Dennis Logan as chief financial officer and appointed CEO Haji to the board, to enhance its leadership and governance.
The caliber of the company's team has enabled it to secure strategic partnerships and access nondilutive financing. Further, American Tungsten's advisors worked on or provided expertise to most North American tungsten producers and explorers in the past, before China dominated the market in 2015.
"Together, this leadership team provides a balanced mix of operational, technical and financial expertise that positions American Tungsten for successful development of its IMA Mine and broader growth as a U.S. supplier of defense critical metals," Storms wrote.
Q1/25 Financials in Brief
The company reported a net loss in Q1/25 of CA$1.87M, a much larger net loss than a year earlier when the net loss was CA$63,700 (CA$63.7K) but reflective of increased expenses after the rebranding. The primary first quarter expenses were CA$663.6K for investor relations, CA$191.3K for exploration and evaluation and CA$461.8K for professional fees.
Total assets in Q1/25 were CA$2.36M, up from CA$1.46M in Q4/24, thanks to a CA$1.25M cash injection from the private placement. Shareholders' equity more than doubled during Q1/25 to CA$2.04M. American Tungsten remained debt free.
What to Watch For
The next major catalyst for American Tungsten is completion of a technical analysis of the IMA Mine project, which, if positive, could lead to a company rerating, noted Storms.
"American Tungsten stands out with compelling upside driven by a combination of technical merit, historical production and macro tailwinds," the analyst added.
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