South32 funds $10 million for Bornite

Trilogy Metals Inc. Dec. 14 announced that South32 Ltd. has committed US$10 million to fund the 2018 exploration program at the Bornite copper project in Northwest Alaska. This second tranche of US$10 million keeps South32's option to acquire 50 percent of the Upper Kobuk Mineral Projects in good standing. The 2018 program, which was recently approved by the Trilogy-South32 technical committee, will include in-fill and off-set drilling to better define and expand the high-grade copper resources at Bornite.

Bornite hosts an open-pit resource with roughly 2.7 billion pounds of copper in roughly 124.6 million metric tons of material averaging nearly 1 percent copper; and an underground resource with roughly 3.7 billion lb of copper in 57.8 million tons of material averaging 2.89 percent copper, according to a resource calculated in 2016. Going into the 2017 field season, the high-grade underground portion of this deposit remained open along a 1,000-meter wide front to the north.

To gain a better understanding of how far the copper mineralization at Bornite extends, this year's program included nine holes drilled at 300- and 400-meter step-outs to the north of the Bornite resource. The last two holes did not reach the targeted depth and will be finished in 2018.

With all seven holes that did reach target depth cutting high-grade copper, the 2017 drill program did not find the edges of the Bornite deposit. Highlights from the 2017 drilling include: RC17-0234 cut three high-grade copper intervals – 21 meters of 1.29 percent copper, 26.8 meters of 1.44 percent copper, and 36 meters of 0.72 percent copper; RC17-0236 cut two high-grade copper intervals from a depth of 720.8 meters – 27.1 meters of 0.8 percent copper, and 89.3 meters of 1.13 percent copper; RC17-238 cut four zones of copper from a depth of 579.7 meters – 10 meters of 0.61 percent copper, 4.9 meters of 2.11 percent copper, 5 meters of 0.55 percent copper, and 12.5 meters of 1.14 percent copper; and RC17-239 cut three copper zones – 16.2 meters of 1.04 percent copper, 8.2 meters of 1.67 percent copper, and 26.1 meters of 1.46 percent copper.

The results of the 2017 drilling program doubled the size of the known mineralized footprint and demonstrate that the high-grade Bornite copper resource system is open to further expansion. "We have essentially doubled the size of the mineralized footprint with an overall Bornite system now measuring 1,500 meters by 2,500 meters," Trilogy Metals President and CEO Rick Van Nieuwenhuyse said on Dec. 4.

Additionally, Trilogy Metals Dec. 19 announced that a wholly-owned subsidiary of South32 has become a significant new shareholder by acquiring roughly 6.5 million Trilogy shares, which is approximately 6 percent of the outstanding common shares. CEO Van Nieuwenhuyse also increased his Trilogy Metals shareholdings by approximately 1.7 million shares, bringing his total ownership of the company to 2.8 million shares or approximately 2.6 percent. South32 and Van Nieuwenhuyse purchased these shares from a previous shareholder.

Trilogy Metals has granted South32 the right to participate between 20 percent and 40 percent in future financings, private or public, to a maximum ownership of 19.9 percent of Trilogy.

"We are excited to have South32 as a significant shareholder and joining our other large shareholders: Electrum, Paulson and Baupost. Together with our strong supportive shareholders the company expects to advance development of the Arctic and Bornite projects in the Ambler mining district. It is an exciting time to be a Trilogy shareholder and I am pleased to personally be all-in on Ambler!" said Van Nieuwenhuyse.