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By Shane Lasley
Mining News 

Resolved to help build the Ambler Road

Northern boroughs support evaluation, potential ownership


Last updated 8/23/2018 at 9:10am

Ambler Mining District, copper zinc cobalt gold silver exploration Alaska

Shane Lasley

A rainbow touches down near the Bornite camp at the Upper Kobuk Mineral Projects, where South32 and Trilogy Metals are investing some US$16.7 million to advance Arctic and Bornite, the two most advanced mine projects at the western end of the proposed Ambler Mining District Industrial Access Road.

UPPER KOBUK MINERAL PROJECTS: A two-hour flight northwest of Fairbanks, Alaska lies one of the richest known undeveloped mining districts on Earth. This claim is evidenced by the rich deposits of copper, zinc, lead, cobalt, gold and silver outcropping from the Brooks Range mountains where this district is found; the copper-rich ore extracted from an exploration shaft dug by Kennecott in the 1960s; and the copper and cobalt mineralization that is easy for a journalist to observe in the core being helicoptered to camp from Trilogy Metals Inc.'s ongoing drill program at Bornite.

Why does such a rich mineral district in a mining state like Alaska remain undeveloped? The short answer is infrastructure or, more precisely, lack thereof.

A proposed 211-mile industrial access road from the Ambler Mining District to the Dalton Highway, and by extension the rails and ports to deliver metals-laden concentrates to market, would be the infrastructure needed to begin realizing the vast potential of this minerals-rich region of Northwest Alaska.

The Ambler Road, which is currently in the permitting stage, has received a vote of confidence from two of the largest stakeholders in northern Alaska – the Northwest Arctic and North Slope boroughs. These neighboring municipalities that blanket an enormous oil- and mineral-rich area of Alaska have signed a resolution in support of evaluating and potentially investing in the proposed transportation corridor.

"(B)oth boroughs will examine ways to maximize community benefit and economic development opportunities while undertaking an analysis of impacts and ways to minimize or mitigate any adverse effects," neighboring boroughs penned in a resolution signed on July 9.

Connecting UKMP to markets

The Ambler Mining District Industrial Access Road (AMDIAR), the official name of the proposed transportation corridor, will connect the Upper Kobuk Mineral Projects – a large land package being developed by Trilogy Metals Inc., South32 Ltd. and NANA Corp. – to world markets.

Arctic and Bornite, the two most advanced deposits at UKMP, host roughly 8.9 billion pounds of copper, 3.6 billion lb of zinc, 626 million lb of lead, 77 million lb of cobalt, 770,000 ounces of gold and 58.3 million oz of silver.

A prefeasibility study published for Arctic earlier this year details plans for a financially robust mine that is expected to produce 1.9 billion lb 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 US$6.7 million work program being carried out this year includes drilling at the proposed waste and tailings sites for the Arctic Mine project to collect the geotechnical and hydrological data needed to advance the engineering design for these facilities to a feasibility level of study.

Crews are also collecting environmental and other data needed to submit a mine permit application for Arctic, which is expected to be submitted in 2019.

Once permitted and built, the mill at Arctic will likely produce three separate concentrates – copper with gold and silver; zinc; and lead with gold and silver – that will need to be shipped to refineries for further processing. Getting these concentrates to world markets is what drives the need for a road to the Ambler district.

Long road to milepost 211

With a reasonable expectation that the rich mineral resources at Arctic would pay for the road and developing the larger Ambler district could bolster the local and state economies for decades to come, Alaska began studies on the potential of developing access to the region in 2009.

Alaska Industrial Development and Export Authority, a quasi-state-owned entity established by the Alaska Legislature in 1967 to expand the economy of the state and provide jobs for Alaska, took the lead on the potential development of a road to the Ambler district in 2013.

Trilogy and AIDEA entered into a memorandum of understanding in 2015 that paves the way for the development authority to investigate various ways to fund the construction and maintenance of the Ambler Road and create the framework by which this investment would be paid back from mines developed at the road's terminus.

Though the exact cost of building the Ambler Road has not been finalized, early estimates are in the US$300 million range.

Ideally, the Ambler road and Arctic Mine would be completed at about the same time. To keep the road side of this development on schedule, AIDEA submitted applications in 2016 for rights-of-way, permits and related authorizations needed.

Much like the proposed transportation corridor, the road to beginning development of AMDIAR is a long one and several milestones must be passed before construction equipment break ground on the project.

With the public scoping phase for the Ambler Road wrapped up in January, the U.S. Bureau of Land Management is working on the draft environmental impact statement for the industrial access. This will be followed up with another opportunity for the public to weigh in and for the BLM to consider this input prior to issuing a final EIS and then a record of decision on the road.

After all that, AIDEA must secure legal agreements with the Native corporation with a stake in the road – Doyon Ltd. on the east end and NANA at the terminus – as well as the Northwest Arctic Borough, a municipality that blankets 40,750 square miles of Northwest Alaska, a minerals-rich expanse about the size of Kentucky.

AIDEA will then need to sit down with Trilogy Metals and others planning to develop mines in the Ambler district to pen agreements for the operations to pay back the funds needed to build and operate the Ambler Road.

Only after a decade of putting engineering, permitting and deal-making milestones in its rearview mirror, will the development authority finalize the road designs, secure development funds and hire the contractors to begin building the road into Northwest Alaska.

Developing the Ambler Road to milepost 211 would open up the potential of this extremely metals enriched district.

Next up: Bornite

Bornite, a copper-cobalt deposit roughly 16 miles south of Arctic, would likely be the second mine to be developed at the end of the proposed Ambler Road.

The most recent resource calculations estimate that Bornite hosts roughly 6.36 billion lb of copper and 77 million lb of cobalt, part of which is currently considered amenable to open-pit mining and the balance better suited for an underground operation.

According to a 2016 calculation, the open-pit deposit at Bornite contains 40.5 million metric tons of indicated resource averaging 1.02 percent (913 million lb) copper; and 84.1 million metric tons of inferred resource averaging 0.95 percent (1.77 billion lb) copper.

The underground portion hosts 57.8 million metric tons of inferred resource averaging 2.89 percent (3.68 billion lb) copper.

A cobalt resource calculated for Bornite was also divided into the areas proposed for open-pit and underground mining.

The Bornite open-pit is estimated to contain 124.6 million metric tons of inferred resource grading 0.017 percent (45 million lb) cobalt.

The underground section is estimated to host another 57.8 million metric tons grading 0.025 percent (32 million lb) cobalt.

"Demonstrating the economic viability of the cobalt resources at Bornite could become a game changer for the company given our current 77 million pound inferred cobalt resource," said Trilogy Metals President and CEO Rick Van Nieuwenhuyse.

Robust drill programs being carried out to the north of Bornite indicates there will be a significant increase in the game changing cobalt and high-grade copper when a new resource is calculated for Bornite.

Australia-based South32 Ltd. funded US$10 million for resource expansion drilling at Bornite last year and is investing the same amount again this year.

Looking to find out just how far the higher grade underground resource 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 starting at 935.28 meters – 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 the 2017 drilling clearly demonstrated the underground portion of Bornite covers a 1,500- by 2,500-meter area beyond the previously defined underground deposit, the holes are too widely spaced to calculate the copper-cobalt resource for this area.

An infill drill program currently underway is helping to fill in the spaces. The minerals indicative of the high-grade copper being sought ribbon the core from this drilling. How much copper, however, will not be known until assay results start rolling in, probably later this month.

From Sun to Smucker

With Arctic near permitting and Bornite closing in on the pre-feasibility stage, Van Nieuwenhuyse is looking ahead at drilling some of the dozens of other targets found across the wider Ambler district.

One target the Trilogy Metals CEO would like to drill next year is Sunshine, a VMS deposit within UKMP and about 7.5 miles west of Arctic.

Previous drilling at Sunshine, including four holes completed in 2012, has identified substantial widths of massive sulfide mineralization in the same stratigraphic horizon as Arctic. In addition to Sunshine, there are roughly a dozen similar VMS deposits along the same belt of rocks.

Bookending each end of the UKMP property are two more advanced staged deposits, Smucker to the west and Sun to the east.

Smucker, about 22 miles northwest of Arctic, has been historically estimated to host a deposit with more than 8 million metric tons grading 0.8 percent copper, 6.8 percent zinc, 2.3 percent lead and 200 g/t silver.

Sun, about 35 miles southeast of Arctic hosts 2.17 metric tons of indicated resource averaging 1.42 percent copper, 4.11 percent zinc, 1.06 percent lead, 57.6 g/t silver and 0.21 g/t gold; plus 11.65 million metric tons of inferred resource averaging 1.14 percent copper, 3.91 percent zinc, 1.37 percent lead, 76.8 g/t silver and 0.24 g/t gold, according to a resource calculated in 2013.

With road access, AIDEA sees the potential of at least four mines being developed in the Ambler District – Arctic, Bornite, Smucker and Sun.

It is estimated that the construction of these mines would provide 5,933 jobs and pay more than US$457 million in wages; and once built 3,186 direct, indirect and induced jobs paying some US$325 million in annual wages.

This does not take into consideration the roughly two dozen VMS targets, such as Sunshine, and Bornite-like carbonate-hosted copper prospects found within UKMP that may be developed as satellite mines.

Boroughs to explore ownership

NANA, Northwest Arctic Borough and state coffers would all benefit greatly from the royalties, taxes and other payments flowing from mines developed at the western terminus of the proposed Ambler Road.

Beyond tax-flow and jobs, the road stands to help ensure lower cost food, fuel and other benefits to the residents of Northwest Alaska.

Due to this upside, Northwest Alaska Borough and its northern neighbor, North Slope Borough, have declared their support for AIDEA's continued evaluation of an industrial road to the Ambler district

One way to ensure the road meets the boroughs' standards of maximizing benefits while minimizing impacts is for the municipalities to gain a greater vested interest in the road, an investment idea they are looking into.

VMS copper zinc gold silver prospect Trilogy Metals Ambler Mining District

Shane Lasley

Sunshine, a VMS target about 7.5 miles west of Arctic, outcrops from the prominent mountain in this photo.

"(B)oth boroughs shall explore opportunities for co-investment and ownership," according to the Ambler Road resolution signed by mayors and assembly presidents of both boroughs.

Any such investment would need to be worked out with AIDEA, which would likely want a return on its and the state's investments into the industrial road.

While it is unclear whether such a deal can be struck, this potential co-ownership would help alleviate worries about future public access on the road and bring added economic benefits to the Northwest Alaska region, one of AIDEA's primary missions.

Either way, the local support for further evaluation of the road bodes well for development of the access needed to upgrade Ambler from one of the richest known undeveloped mining districts to among the highest grade copper producing regions on the planet.

Author Bio

Shane Lasley, Publisher

Over his more than 11 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

Email: [email protected]
Phone: (907) 726-1095


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