American Pacific Mining - Unlocking Value in US Copper & Gold Assets

• American Pacific Mining focuses on high-grade, western US mining assets that can attract major partners. Key projects are in Alaska, Montana and Nevada.
• The Palmer VMS project in Alaska is 32% owned by American Pacific, with Japanese smelter company Dowa Metals & Mining spending aggressively to explore and develop it further.
• The fully-owned Madison project in Montana, previously partnered with Rio Tinto, will see $2M of drilling in 2024 to expand the high-grade skarn and porphyry mineralization.
• American Pacific is well-funded with $6.5M cash to advance Palmer and Madison over the next few years. The company is considering JV/divestment options for non-core assets.
• The company believes rising copper and gold prices, along with growing demand for critical minerals, will boost the junior mining sector and the value of American Pacific's assets.

Company Overview

American Pacific Mining Corp. is a precious and base metals exploration and development company that focuses on opportunities in the Western United States. The company has two flagship assets: the Palmer Project and the Madison Project.

The Palmer Project is a Volcanic Massive Sulphide-Sulphate (VMS) project located in Alaska, which American Pacific Mining Corp. is developing under a joint-venture partnership with Dowa Metals & Mining, the owner of Japan's largest zinc smelter. This partnership highlights the project's potential and the expertise behind its development.

The Madison Project, located in Montana, is a past-producing copper-gold project that has garnered significant attention in the mining industry. American Pacific Mining Corp. was selected as a finalist for 'Deal of the Year' at the prestigious S&P Global Platts Global Metals Awards in both 2021 and 2022. This annual program recognizes exemplary accomplishments in 16 performance categories, underlining the company's success and the Madison Project's importance.

In addition to these flagship assets, American Pacific Mining Corp. has a portfolio of high-grade, precious metals projects located in key mining districts in Nevada, USA. These include the Ziggurat Gold project, which is being developed in partnership with Centerra Gold, and the Tuscarora Gold-Silver project.

The company's mission is to grow through both exploration drilling and strategic acquisitions, demonstrating its commitment to expanding its presence in the precious and base metals sector in the Western United States. With a strong portfolio of projects and partnerships with established players in the mining industry, American Pacific Mining Corp. is well-positioned for growth and success in the future.

Interview with CEO & Director, Warwick Smith

Palmer VMS Project (Alaska) Advancing with Japanese Partner

American Pacific's flagship Palmer copper-zinc-gold-silver volcanogenic massive sulfide (VMS) project in Alaska is shaping up as a potential company-maker. American Pacific owns 32% of the joint venture, with Japanese partner Dowa Metals & Mining spending aggressively to explore and develop the asset. Dowa is seeking to secure a long-term supply of zinc concentrate for its Japanese smelters as some of its existing mines wind down.

The Palmer project currently hosts 14 million tonnes of high-grade VMS mineralization in the South Wall zone. But there are 16 separate mineralized showings across the property, with the potential to significantly grow the resource base. As CEO Warwick Smith explained:

"The thing that we always liked about Alaska, about Palmer, was the fact that there was all these VMS showings that hadn't been drilled. There's four showings that are in the PEA, but there's 16 showings in total."

An additional 10 million tonne exploration target called North Wall, located just 300m from the South Wall resource, will be drilled for the first time in 2024. Success here could be a major catalyst for American Pacific and help attract a mid-tier or major mining company to acquire and develop the project.

"If you eventually want a mid-tier major running this project, which is something that we would both like, it needs to get bigger and you need to daylight some of these blue sky targets," said Smith. "That's something that they [Dowa] need to see and something that as operator we need to do."

DOWA is spending roughly C$17 million (US$12.8 million) at Palmer in 2024, following some exceptional 2023 drill results like 23 meters grading 11% copper equivalent (CuEq), including 8% copper. For its part, American Pacific is contributing $1 million to maintain an influential stake in the JV.

"The quick math essentially is for every $5 million US that they [Dowa] spend and if we don't contribute a dollar, we lose 1% at the project level," explained Smith. "That's how it works. We are going to contribute this year, so that number will be less, but it's an asset that's growing significantly."

Madison Copper-Gold Project (Montana) Returns to 100% American Pacific Ownership

American Pacific's second key asset is the Madison Copper-Gold project in Montana, which it now owns 100% after former partner Rio Tinto exited the project. Previously drilled high-grade skarn mineralization like 14m @ 12 g/t gold and 0.5m @ 146 g/t gold will be followed up, along with deeper porphyry targets.

Rio Tinto spent $6.8 million exploring Madison before the partnership was dissolved amicably due to a change in Rio's North American management. As Smith noted, Rio's feedback was positive despite the exit:

"From the time that we dealt with them, their comment from year two was that the skarn alone was a Rio Tinto-size target, which always got us excited - not just the porphyry alone."

American Pacific is allocating $2 million of its treasury to drilling Madison in mid-late 2023. While Madison is earlier-stage than Palmer, Smith believes it has the potential to become a flagship asset for the company if upcoming drilling is successful. The upcoming program will target expansion of both the near-surface skarn mineralization and the deeper porphyry potential.

Macro Tailwinds Supporting Higher Copper & Gold Prices

CEO Smith sees strong macro tailwinds supporting higher copper and gold prices in the coming years. The global transition towards renewable energy and electrification is expected to drive strong copper demand, with electric vehicles using 4x as much copper as internal combustion engines.

"The world's going to go green through copper," explained Smith. "If the world's going to go green, it's going green through copper."

Major US banks like Citi, Bank of America, Goldman Sachs and JP Morgan are also forecasting a robust copper market ahead, driven by undersupply. Current prices around $4/lb are expected to rise past $5/lb as demand outstrips supply.

For gold, Smith sees the persistent threat of inflation and geopolitical risks as supportive of higher prices after a strong start to 2024. The failure of Silicon Valley Bank, additional stresses in the US regional banking sector, and an eventual peak in interest rates could provide further impetus for gold to break out past $2000/oz.

These macro factors should provide a rising tide for the junior mining sector. American Pacific is well-positioned to capitalize with its prospective copper-gold projects in tier-one US jurisdictions. The company's tight share structure (just 180 million shares outstanding) and strong institutional backing, including from mining financier and major shareholder Michael Gentile, provide a solid foundation.

"We're a company that does know how to tell its story and shine a spotlight when times are good," said Smith. "Obviously, we want to get back to those points. This rising gold-copper environment is certainly going to help but I think it takes a more risk-on market to see all of the juniors lift."

Other Portfolio Assets Provide Additional Optionality

Beyond its two flagship projects, American Pacific also holds several earlier-stage assets in Nevada. The company is actively seeking joint venture partners to advance these projects and provide additional optionality for investors.

"The plan is to JV those assets out," explained Smith. "Or for the ones that we don't feel that we're going to get partners, we're going to drop."

This disciplined approach ensures American Pacific can focus its resources on Palmer and Madison, while maintaining a pipeline of projects for future development or monetization.

Conclusion

In summary, American Pacific Mining offers investors a compelling speculation on rising copper and gold prices. The company's two flagship assets – the Palmer project in Alaska and Madison project in Montana – provide exposure to high-grade copper and gold in safe, mining-friendly US jurisdictions.

With major partner Dowa funding exploration at Palmer and $2 million of drilling planned for Madison, American Pacific is well-positioned to deliver steady news flow and potential share price catalysts in the year ahead. The company's tight share structure, strong institutional backing and disciplined approach to non-core assets provide a solid foundation for growth.

As CEO Smith explained, American Pacific has positioned itself to "go and hit some banger holes" in a rising commodity price environment. If successful, the company appears well-positioned to attract a major partner to advance Palmer and/or Madison through development and into production.

The Investment Thesis for American Pacific Mining Corp

• Exposure to high-grade copper and gold assets in mining-friendly Alaska and Montana
• Palmer VMS project being aggressively advanced by major Japanese partner Dowa
• Madison skarn/porphyry project returning to 100% American Pacific ownership with $2M of planned drilling
• Additional portfolio projects in Nevada provide optionality for JV/divestment
• Well-funded ($6.5M cash) to deliver steady news flow and share price catalysts in a rising commodity price environment
• Tight share structure (180M shares) and strong institutional backing provide foundation for growth
• Potential to attract a major partner to acquire Palmer and/or Madison if drilling is successful

Key Takeaways

American Pacific Mining offers speculative exposure to rising copper and gold prices through prospective US assets in Alaska, Montana and Nevada. With two active drilling projects, a well-funded treasury and disciplined approach to corporate development, the company appears well-positioned to attract larger partners if upcoming exploration programs are successful. The combination of a tight share structure, strong institutional backing and quality projects in world-class jurisdictions makes American Pacific a compelling consideration for junior resource investors.

Macro Thematic Analysis

The global shift towards electrification and renewable energy is expected to drive strong demand for critical minerals like copper in the coming years. Electric vehicles require up to 4x as much copper as internal combustion engines, while renewable energy infrastructure like wind turbines and solar panels are also copper intensive. This demand growth is occurring against a backdrop of persistent supply challenges, with a lack of new copper mines being developed in recent years. As a result, major banks are forecasting a growing supply deficit and higher copper prices above $5/lb.

The gold market also looks well supported, driven by persistent inflation, geopolitical risks and a likely peak in the interest rate cycle. The recent failures of several US regional banks has reignited concerns about financial stability and the trajectory of monetary policy.