Trilogy Metals kicks off US$16.7M program

Trilogy Metals Inc. May 28 said it is gearing up for another busy field season at its Upper Kobuk Mineral Projects in the Ambler Mining District of Northwest Alaska.

The US$16.7 million of work programs budgeted for UKMP in 2018 will focus on gathering the data to advance the Arctic project towards feasibility and permitting, as well as drilling to expand and upgrade the large copper resource at Bornite.

As crews continue to advance these large and high-grade metals deposits, federal agencies will be working toward finalizing environmental assessments for the Ambler Mining District Industrial Access Project, a roughly 200-mile road that would connect this rich and yet-to-be mined district to world markets.

Trilogy has also strengthened its management team with the addition of Bob Jacko as vice president, projects; and Pat Donnelly as vice president, corporate communications.

Donnelly had previously served in a similar role for Trilogy where he developed and organized marketing strategies for the company and worked with the management team on community relations with the local communities in Northwest Alaska.

"It's great to have Pat back on the team. He knows our projects, understands our company, and knows the minerals sector well," said Trilogy Metals President and CEO Rick Van Nieuwenhuyse.

Jacko – who has held management positions at several northern mining operations, including general manager at the Pogo and Red Dog mines in Alaska – is transitioning into the management position from contracting for the company.

"Bob has a tremendous amount of arctic experience as mine manager at Red Dog and Pogo. His knowledge of Alaska and working with NANA specifically at Red Dog will be a huge benefit to the company as we advance our high-grade Arctic project towards permitting and feasibility," Nieuwenhuyse added.

Arctic feasibility, permitting

Arctic, the most advanced project at the end of the proposed Ambler Road, hosts 43.04 million metric tons of probable reserves averaging 2.32 percent copper, 3.24 percent zinc, 0.57 percent lead, 0.49 grams per metric ton gold and 36 g/t silver.

A prefeasibility study published earlier this year details plans for an open-pit mine to extract the volcanogenic massive sulfide mineralization at Arctic and a 10,000-metric-ton-per-day mill to produce metals-rich concentrates to deliver to markets.

This operation is expected to produce 1.9 billion pounds of copper, 2.4 billion lb of zinc, 405 million lb of lead, 367,531 ounces of gold and 40.2 million oz of silver over an initial 12-year mine life.

A large part of a US$6.7 million work program slated for this year will focus on geotechnical and hydrological engineering studies at the proposed waste and tailings sites for the Arctic Mine project with the objective to advance the engineering design for these facilities to a feasibility level of study. A number of geotechnical and hydrological drill holes are to be completed in support this effort.

Trilogy also plans to gather extensive environmental data for a variety of studies in preparation of its plan to submit a mine permit application for Arctic in 2019.

Expanding Bornite

As engineering and environmental studies are being carried out at Arctic, drills will be expanding upon the high-grade copper deposit 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.

To gain a better understanding of how far the copper mineralization at Bornite extends, the 2017 program included nine holes drilled at 300- and 400-meter step-outs to the north of the Bornite resource.

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.

While last year's drilling demonstrated that the high-grade copper covers a 1,500- by 2,500-meter area beyond the previously defined underground portion of Bornite, the holes were too widely spaced to calculate a resource for this expansion area.

The wide spacing of the holes was largely due to the fact that South32 Ltd., a coal and base metals miner spun out of BHP Billiton, was more interested in gaining an understanding of the extent of copper mineralization at Bornite than calculating the resource there.

Early last year, South32 cut a US$150 million deal with Trilogy to earn up to a 50 percent joint venture interest in the Upper Kobuk Mineral Projects.

To keep this option open on UKMP, South32 agreed to invest US$10 million a year on the project, funds that have been spent on expanding Bornite.

This year's US$10 million program is expected to include roughly 8,000 meters of drilling to in-fill and expand upon the area outlined during 2017.

The first two drill rigs for the 2018 program have been delivered to the Bornite camp and drilling is expected to begin in early June. A third rig is expected to arrive during the second week of June and begin drilling shortly thereafter.

A 12-line-kilometer 2D seismic survey that began in early May is being carried out to track the massive sulfide zones at Bornite, as well as basement and other structures to assist with exploration.

The seismic program is expected to be completed in mid-June with data processing and evaluation taking place in July and August.

In addition to expanding the copper, Trilogy is working toward finding out how much cobalt there is at Bornite.

The company said preliminary results from on-going metallurgical studies have demonstrated consistent and well distributed cobalt mineralization. Based on the results, the company has decided to have a resource estimate calculated for the cobalt. Results are expected to be released shortly.

Permitting Ambler Road

Arctic is expected to produce three separate concentrates – copper, zinc and precious metals-rich lead – and Bornite could potentially produce two – copper and cobalt – all of which will need to be delivered to refineries for further processing.

The Ambler Mining District Industrial Access Road, the official name of a proposed 211-mile transportation corridor that would run west from the Dalton Highway along the southern foothills of the Brooks Range to the Ambler Mining District, would provide the vital link needed to deliver the concentrates.

Alaska Industrial Development and Export Authority, a public corporation created by the Alaska Legislature in 1967 to advance economic development in the state, submitted applications in 2016 for rights-of-way, permits and related authorizations needed to build the Ambler Road.

The U.S. Bureau of Land Management is on pace to publish a draft environmental impact statement for the access road next March.

Roughly 20 miles of the proposed Ambler road crosses the Gates of the Arctic National Preserve, which is managed by the National Park Service.

U.S. lawmakers included special provisions for access across the preserve when they passed the Alaska National Interest Lands Conservation Act in 1980.

Section 2011(4) of ANILCA reads, "Congress finds that there is a need for access for surface transportation purposes across the Western (Kobuk River) unit of the Gates of the Arctic National Preserve (from the Ambler Mining District to the Alaska Pipeline Haul Road) and the Secretary shall permit such access in accordance with the provisions of this subsection."

ANILCA directs that an environmental and economic analysis be prepared for the right-of-way across NPS lands to: determine a preferred road alignment; and develop appropriate terms and conditions for the right-of-way permit.

A project schedule published by National Park Service indicates the final environmental and economic analysis for the section of the proposed Ambler Road running through the preserve will be released this winter.

"We are pleased with the progress being made by the Park Service and BLM towards advancing the AMDIAP through the Federal permitting (NEPA EIS) process," said Van Nieuwenhuyse. "We look forward to continuing to work with AIDEA and the stakeholders in the region to ensure that this private industrial road meets and exceeds everyone's expectations to minimize potential impacts, and bring long-term jobs and other benefits to the region and to the state of Alaska."

–SHANE LASLEY