Trilogy keeps refining Arctic project as it awaits road permit
Trilogy Metals is in the midst of advancing two mineral prospects in Northwest Alaska but it’s still on the lookout for additional opportunities in the region.
The Vancouver-based mining company is preparing its most advanced Arctic copper, zinc and precious metal deposit for permitting.
CEO Rick Van Nieuwenhuyse wrote via email that Trilogy is specifically developing an environmental evaluation document to ostensibly organize and vet all of the information about the prospect and planned open-pit mining operations before it is submitted in formal state and federal permit applications.
The environmental evaluation goes hand-in-hand with a feasibility-level study of the mine and its forecasted economics, according to Van Nieuwenhuyse.
Trilogy has $7 million budgeted for the feasibility and environmental work this year with a goal of having the feasibility study done in early 2020.
He expects to formally start the permitting process once the Ambler Mining District Industrial Access Project is “substantially permitted” through its own environmental impact statement process, he wrote.
Generally referred to as the Ambler road, the access project is a state-led plan for a 211-mile unimproved industrial road off of the Dalton Highway to reach the large Ambler mining district, which holds Trilogy’s Arctic and Bornite prospects, among others, on the southern flank of the Brooks Range.
The road project has drawn opposition from residents of the area and environmental groups who are worried the project will disrupt caribou migrations, which Van Nieuwenhuyse acknowledges is the most significant subsistence food source in the region.
The proposed mines have also drawn scrutiny for potential impacts to salmon and whitefish runs in the Kobuk River drainage.
The Alaska Industrial Development and Export Authority is leading development of the road, which has an estimated cost of between $305 million and $346 million for a basic, single-lane gravel road.
It would be financed by the authority with bonds that would be paid back through tolls paid by Trilogy Metals and any other companies that would develop one of the other prospects in the Ambler mining district.
The Bureau of Land Management is writing the road EIS and the first draft of the environmental review is expected in late summer or early fall with a final EIS published towards the end of 2019, according to BLM’s project website.
At its core, the Arctic prospect is about as good as undeveloped metal deposits come these days, according to Van Nieuwenhuyse.
With just more than 43 million metric tons of probable reserves averaging 2.3 percent copper, 3.2 percent zinc and smaller amounts of lead, gold and silver, it’s roughly 10 times the average grade being mined in many other open pit copper mines today, he has said previously.
Trilogy’s prefeasibility study of Arctic estimates the relatively small but high-grade prospect would cost $911 million to develop and operate over a short 12-year life but with roughly $450 million in annual free cash flow it would have just a 2-year payback.
The mill and other facilities at Arctic could also be used for the company’s other, larger, but less explored Bornite copper and cobalt prospect about 20 miles to the southwest.
While most of the exploration drilling at Arctic is done, Trilogy has a $9.2 million drilling program planned for the upcoming summer at Bornite. That work will be a combination of infill and expansion drilling for the existing known deposit, according to a company presentation.
The Bornite prospect is on NANA Regional Corp. lands and under a partnership with Trilogy, the Alaska Native corporation can receive up to a 2.5 percent royalty on the ore concentrates produced from the prospect if it is developed into a working mine.
Trilogy drilled 12 boreholes at Bornite in 2018. The prospect holds about 900 million pounds of indicated copper and 77 million pounds of indicated cobalt with another nearly 5.5 billion pounds of copper inferred, according to Trilogy’s resource analysis.
Finally, Trilogy is also spending $2 million this year in a joint venture with South 32 Ltd. to conduct an electromagnetic geophysical survey of the entire roughly 75-mile long Ambler district belt.
The airborne survey is being done as a new way to hunt for metal deposits in the area where dozens of prospects have been identified over the years.
Targets identified by the survey will be examined more closely with follow-up drilling, Van Nieuwenhuyse said in a February company release.
“It is exciting to be drilling new exploration targets again,” he said. “We are confident that we can find additional high-grade polymetallic resources along this prolific mineral belt.”
Elwood Brehmer can be reached at [email protected].