Trilogy, South32 up Ambler Belt exploration
North of 60 Mining News – February 8, 2019
Last updated 9/25/2020 at 1:59pm
Trilogy Metals Inc. Jan. 6 announced a US$2 million increase to the exploration budget reported last week for the Upper Kobuk Mineral Projects in Northwest Alaska, swelling the total expenditures for 2019 to US$18.2 million.
Trilogy will contribute US$1 million for this expanded program and South32 Limited will contribute the balance.
This additional spending will be used for district-scale exploration across the Ambler Mining District with a focus on identifying and testing new drill targets within the Ambler Volcanogenic Massive Sulfide Belt that is covered by the UKMP property.
Trilogy Metals President and CEO Rick Van Nieuwenhuyse told Mining News he is eager to explore some of the nearly three dozen volcanogenic massive sulfide deposits, outcrops and prospects that have been identified so far across the wider UKMP property.
"As an exploration geologist, I am very excited that the technical committee and South32 have agreed to equally fund a US$2 million exploration program along the Ambler VMS belt," he said in a statement. "There are dozens of known VMS prospects along the 75-mile- (120 kilometers) long Ambler Belt including many with historic resources."
Last December, Trilogy's technical team flew to Perth, Australia to meet with representatives of South32, settling on the original US$16.2 million budget for UKMP during 2019. (See Major Arctic Bornite milestones in 2019, published in the Feb. 1 edition of North of 60 Mining News for further details on the original budget and program.)
With this increased budget, South32 will be spending more than the US$30 million required to maintain an option to form a 50-50 joint venture on the UKMP. If South32 does decide to exercise this option, it will pay US$150 million to Trilogy Metals to acquire half ownership of this 353,000-acre (142,800 hectares) property that encompasses the Arctic and Bornite deposits and dozens of base and precious metals prospects.
Together, Arctic and Bornite 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. And, the copper and cobalt contingents are expected to grow significantly when expansion areas of the Bornite project are brought into the resource.
Arctic, a VMS deposit in the Ambler Belt, 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 in 2018 details plans for an open-pit mine at Arctic and a 10,000-metric-ton-per-day mill to produce metals-rich concentrates to deliver to markets.
Typically, where one deposit is found within a VMS belt, other base- and precious-metals rich deposits are found. There is ample evidence a similar string of deposits dot the Ambler belt.
In addition to Arctic, numerous VMS-like occurrences have been identified across Trilogy Metals' land package. The most notable of these occurrences are the Dead Creek (also known as Shungnak), Sunshine, Cliff, Horse, and the Snow prospects to the west of the Arctic; and the Red, Nora, Tom-Tom and BT prospects to the east.
To help narrow down drill targets, the 2019 program will include a versatile time domain electromagnetic (VTEM) geophysical survey flown across the entire Ambler Belt. This may be followed up by z-axis tipper electromagnetic (ZTEM) surveys flown over certain target areas. High priority targets will be evaluated with follow-up drilling.
"It is exciting to be drilling new exploration targets again," said Van Nieuwenhuyse. "We are confident that we can find additional high-grade polymetallic resources along this prolific mineral belt."
With cash and cash equivalents at its fiscal year-end exceeding US$20 million, coupled with the US$10.2 of funding from South32, Trilogy Metals is well financed to continue advancing exploration, permitting and feasibility work at the Upper Kobuk Mineral Projects. In addition, the company has 6.5 million warrants held by large shareholders that are set to expire on July 2. With an exercise price of US$1.52, which is below Trilogy's current trading price, there is a good chance these warrants will be exercised. If so, Trilogy would receive an additional US$10 million with the full exercise of the warrants.