VANCOUVER, Jan. 31, 2019 /CNW/ - Trilogy Metals
Inc. (TSX/NYSE American: TMQ) ("Trilogy Metals",
"Trilogy" or the "Company") is pleased to announce its 2019 program
and budgets, and provide an update of its corporate activities,
including its current and future exploration and permitting
activities at the Company's Upper Kobuk Mineral Projects ("UKMP")
located in the Ambler Mining District of Northwest Alaska. All
amounts are in US dollars.
Highlights of the 2019 Program and Budgets
- Trilogy and South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY)
("South32") have recently approved budgets totaling $16.2 million to be spent at the UKMP for
2019.
- $9.2 million is approved for the
Bornite Project focused on additional exploration drilling for a
combination of infill and expansion drilling of the known
deposit;
- $7.0 million is approved for the
Arctic Project focused on feasibility level engineering and
environmental work to complete a feasibility study in 1H 2020 and
prepare the project for permitting later this year (2019);
and
- Strong cash position to execute the programs.
The Company is well financed to complete these programs.
With cash and cash equivalents at its fiscal year-end of
$20.0 million and the funding from
South32 of $9.2 million, the Company
has about $30.0 million to advance
the UKMP Projects. Trilogy also has 6.5 million warrants held
by large shareholders expiring on July 2,
2019, at an exercise price of $1.52 which is below the Company's current
trading price. Trilogy would receive an additional
$10 million with the full exercise of
the warrants.
Rick Van Nieuwenhuyse, President
and CEO of Trilogy Metals commented, "2018 was a busy and
successful year for Trilogy and we expect more of the same for
2019. This is the last year of the South32 Option Agreement
and we look forward to working with South32 to execute this year's
program. With the Bureau of Land Management ("BLM") plan to
complete a Draft Environmental Impact Statement ("EIS") on the
Ambler Access Road (AMDIAP) by the summer and a Final EIS by the
end of the year, investors can count on several very significant
catalysts in the year ahead. Trilogy is well financed to
advance our Arctic and Bornite projects and we look forward to
keeping investors informed of our progress."
South32
In mid-December Trilogy's President and CEO, Rick Van Nieuwenhuyse, and the Company's
technical team, attended meetings with representatives of South32
at their headquarters in Perth,
Australia. The purpose of the meetings was to review the
results from the 2018 field programs at the Company's UKMPs and to
formulate plans for the 2019 summer field season.
On April 10, 2017, Trilogy Metals
entered into an Option Agreement to form a Joint Venture with
South32 on the Company's Upper Kobuk Minerals Projects ("Option
Agreement"). Under the terms of the Option Agreement, Trilogy
Metals granted South32 the right to form a 50/50 joint venture.
South32 may exercise its option at any time to form the 50/50
joint venture ("JV") but must do so by January 31, 2020. To subscribe for 50% of the JV,
South32 must contribute $150 million,
plus allowances and amounts Trilogy has spent at the Arctic Project
during the option period to a maximum of $5
million per year less the amount of the Initial Funding
contributed by South32. The Company will transfer its assets into
the newly formed JV company. For more details on the agreement
please see the press release dated April 10,
2017.
To maintain its Option to form the 50/50 JV, South 32
contributed $10 million for the 2017
program, an additional $10.8 million
for the 2018 program (which included $800,000 of pre-funding credited for 2019) and
are now funding for the 2019 program of $9.2
million – bringing the total option payments to $30 million.
Ambler Mining District Industrial Access Project
On December 17, 2018, Company
management attended a meeting with Mr. Joe
Balash, who is the United States Department of the
Interior's Assistant Secretary for Land and Minerals
Management. In this role, Mr. Balash oversees the BLM which is
the lead agency in the permitting of the Ambler Mining District
Industrial Access Project ("AMDIAP"). During the meeting, Mr.
Balash informed the Company that the meetings between the BLM and
the Alaska Industrial Development Export Authority ("AIDEA") which
is the AMDIAP proponent, have already recommenced and that future
meetings are expected in the near term. Mr. Balash stated that the
final EIS is expected to be completed by the end of 2019 with the
Record of Decision to follow shortly thereafter. The recently
updated BLM website states that "the Draft EIS will be completed in
late Summer/early Fall 2019. The Final EIS will be completed
late Fall/early Winter 2019." We will continue to update
shareholders on the AMDIAP permitting as it moves through the EIS
process.
Arctic Project
Arctic Feasibility Study and Permitting
The Company will continue to advance engineering and
environmental work in 2019 in support of completing a feasibility
study and preparing the Arctic Project for permitting.
Specifically, the Company will undertake with additional
hydrological and geotechnical work at the site along with water
management, tailings facility and waste rock containment analysis
and design. Additional metallurgical test work to verify ore
hardness and grinding characteristics will be carried out on
material from the project. The Company expects to complete the
feasibility study in the first half of 2020.
Arctic Project Video
Based on the technical report titled "Arctic Project,
Northwest Alaska, USA, NI 43-101
Technical Report on Pre-Feasibility Study" with an effective date
of February 20, 2018 and a release
date of April 6, 2018, the Company
has prepared a video of the Arctic Project demonstrating mining,
milling and the transportation of concentrates within Alaska to year-round shipping ports near
Anchorage. The Arctic Project video is available on the
homepage of the Company's website at
http://www.trilogymetals.com.
Arctic Ore Sorting Program
Ore sorting test work at the Steinert Labs facility in
Kentucky, USA was completed last
summer. While early indications were that the application of ore
sorting technology could improve the head grades of material being
processed at the proposed Arctic grinding mill, by eliminating
waste rock, it was also found that the additional capital costs
required for the application of this technology more than offset
the benefits of increasing the head grades at the grinding
mill. However, the test work did demonstrate that the material
tested had lower-than-expected hardness which indicates that the
mineralized material from the Arctic Deposit may require less
grinding, and hence lower processing requirements, than previously
expected. This could have positive implications for the estimated
capital and operating costs at the Arctic processing facility. The
Company will continue to investigate the hardness characteristics
of the Arctic material as the Company progresses to a feasibility
study at the project.
Bornite Project
Bornite Drilling Results and Resource Estimate
During the 2018 field season at the Bornite Project, the Company
completed an additional 12 drill holes comprising 10,123 meters
which were designed as infill and extension holes to the 300 to 400
meter step-out holes drilled by the Company's previous round of
drilling completed in 2017 (please see the Company's press releases
dated December 13, 2018, November 19, 2018, October
9, 2018 and August 23, 2018
for more details on the drilling results).
Notable highlights from this program include (At a cutoff grade
of 0.5% copper):
- RC18-246 intersected three mineralized intervals of:
-
- 19.6 metres averaging 2.06% copper;
- 6.1 metres averaging 2.36% copper; and
- 7.6 metres averaging 1.04% copper.
- RC18-247 intersected two mineralized intervals of:
-
- 33.4 metres averaging 0.82% copper; and
- 20.1 metres averaging 4.55% copper, including 16.4 meters
grading 5.34% Copper and 0.21% Cobalt.
- RC18-0248 intersected five mineralized intervals of:
-
- 1.0 meter averaging 14.38% copper;
- 21.3 meters averaging 1.73% copper;
- 21.0 meters averaging 0.93% copper;
- 15.1 meters averaging 1.32% copper; and
- 4.9 meters averaging 2.97% copper.
- RC18-0249 intersected one mineralized interval of
-
- 38.3 meters averaging 1.12% copper.
- RC18-0252 intersected four mineralized intervals of:
-
- 2.9 meters averaging 1.95% copper;
- 3.6 meters averaging 2.63% copper;
- 12.5 meters averaging 1.49% copper; and
- 7.5 meters averaging 2.25% copper.
- RC18-0254 intersected six mineralized intervals of:
-
- 123.9 meters averaging 1.07% copper;
- 10.0 meters averaging 0.81% copper;
- 13.5 meters averaging 0.78% copper;
- 46.0 meters averaging 0.98% copper;
- 8.0 meters averaging 0.91% copper; and
- 29.0 meters averaging 1.68% copper.
The objective of the 2018 drill campaign was to infill and
expand the currently defined open pit and underground mineral
resources. This drilling campaign was highly successful in that 11
of the 12 drill holes contained intervals of copper-cobalt
mineralization. Figure 1 shows the grade-thickness distribution at
the Bornite Project prior to the 2017 and 2018 drilling campaigns
in which a total of 25 holes were drilled at the project. Figure 2
shows the current distribution of the grade-thickness copper
mineralization after incorporating the copper assay results from
the 25 drill holes completed during the 2017 and 2018 summer
drilling campaigns at the Bornite Project. As seen in Figure 2,
copper mineralization has been expanded to the north and northeast
and the high-grade core has been bifurcated into two lobes, each of
which has grown in size. Mineralization remains open down dip and
along strike with additional drilling planned for 2019. The
Company is currently working on a National Instrument 43-101
resource update for the Bornite Project which is expected to be
completed by the end of February
2019. Drilling during the 2019 field program for Bornite
will be a combination of infill and expansion drilling focused on
the extension of the known deposit.
Bornite Copper-Cobalt Metallurgy
On June 5, 2018, the Company
announced an initial cobalt resource estimate for the Bornite
Project of 77 million pounds of inferred cobalt resources (see
Tables 1 and 2 for details including grade). An updated technical
report entitled "NI 43-101 Technical Report on the Bornite Project,
Northwest Alaska, USA" including
the inferred cobalt resources was filed by the Company on
July 20, 2018 and is available on the
Company's website at www.trilogymetals.com and on the Company's
profile at www.sedar.com and www.sec.gov.
Upon the completion this resource estimate the Company embarked
on a metallurgical study expand on the existing copper recovery
results and to investigate various methods of recovering the cobalt
at Bornite. Initial results from the metallurgical program are
still expected to be made available to the Company in Q1 2019.
Table 1: Estimate of Copper Mineral Resources for the Bornite
Deposit
Type
|
Cut-off
(Cu%)
|
Tonnes
(million)
|
Average
Grade
Cu
(%)
|
Contained
Metal
Cu
(Mlbs)
|
In-Pit
|
0.5
|
40.5
|
1.02
|
913
|
Total
Indicated
|
|
40.5
|
1.02
|
913
|
In-Pit
|
0.5
|
84.1
|
0.95
|
1,768
|
Below-Pit
|
1.5
|
57.8
|
2.89
|
3,683
|
Total
Inferred
|
|
141.9
|
1.74
|
5,450
|
|
|
(1)
|
Resources stated as
contained within a pit shell developed using a metal price of
US$3.00/lb Cu, mining costs of US$2.00/tonne, milling costs of
US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical
recoveries and an average pit slope of 43 degrees.
|
(2)
|
Mineral Resources are
not Mineral Reserves and do not have demonstrated economic
viability. There is no certainty that all or any part of the
Mineral Resources will be converted into Mineral
Reserves.
|
(3)
|
It is reasonably
expected that the majority of Inferred mineral resources could be
upgraded to Indicated mineral resources with additional
exploration.
|
Table 2: Estimate of Inferred Cobalt Mineral Resources for
the Bornite Deposit
Type
|
Cut-off
(Cu%)
|
Tonnes
(million)
|
Average
Grade
Co
(%)
|
Contained
Metal
Co
(Mlbs)
|
In-Pit
|
0.5
|
124.6
|
0.017
|
45
|
Below-Pit
|
1.5
|
57.8
|
0.025
|
32
|
Total
Inferred
|
|
182.4
|
0.019
|
77
|
|
|
(1)
|
Resources stated as
contained within a pit shell developed using a metal price of
US$3.00/lb Cu, mining costs of US$2.00/tonne, milling costs of
US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical
recoveries and an average pit slope of 43 degrees.
|
(2)
|
Mineral Resources are
not Mineral Reserves and do not have demonstrated economic
viability. There is no certainty that all or any part of the
Mineral Resources will be converted into Mineral
Reserves.
|
(3)
|
It is reasonably
expected that the majority of Inferred mineral resources could be
upgraded to Indicated mineral resources with additional
exploration.
|
Qualified Persons
Andrew W. West, Certified
Professional Geologist, Exploration Manager for Trilogy Metals
Inc., is a Qualified Person as defined by National Instrument
43-101. Mr. West has reviewed the technical information in this
news release and approves the disclosure contained herein.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration and development
company focused on exploring and developing the Ambler mining
district located in northwestern Alaska. It is one of the richest and
most-prospective known copper-dominant districts located in one of
the safest geopolitical jurisdictions in the world. It hosts
world-class polymetallic volcanogenic massive sulphide ("VMS")
deposits that contain copper, zinc, lead, gold and silver, and
carbonate replacement deposits which have been found to host
high-grade copper and cobalt mineralization. Exploration efforts
have been focused on two deposits in the Ambler mining district -
the Arctic VMS deposit and the Bornite carbonate replacement
deposit. Both deposits are located within the Company's land
package that spans approximately 143,000 hectares. The Company has
an agreement with NANA Regional Corporation, Inc., a Regional
Alaska Native Corporation that provides a framework for the
exploration and potential development of the Ambler mining district
in cooperation with local communities. Our vision is to develop the
Ambler mining district into a premier North American copper
producer.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes certain "forward-looking
information" and "forward-looking statements" (collectively
"forward-looking statements") within the meaning of applicable
Canadian and United States
securities legislation including the United States Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical fact, included herein, including,
without limitation, further drilling activity, the potential
advancement of the AMDIAP, the UKMP and mining generally in
Alaska, the timing and the filing
of updated reports on the Company's projects, the future price of
copper, the estimation of mineral reserves and mineral resources,
the realization of mineral reserve and mineral resource estimates,
the timing and amount of estimated future production, costs of
production, capital expenditures, costs and timing of the
development of projects, the likelihood and timing of the AMDIAP,
the potential future development of Bornite, the future operating
or financial performance of the Company, planned expenditures and
the anticipated activity at the UKMP Projects, are forward-looking
statements. The assay results from the drill holes discussed in
this press release should not be considered representative of other
drilling results for the 2018 drilling campaign. Forward-looking
statements are frequently, but not always, identified by words such
as "expects", "anticipates", "believes", "intends", "estimates",
"potential", "possible", and similar expressions, or statements
that events, conditions, or results "will", "may", "could", or
"should" occur or be achieved. These forward-looking statements may
include statements regarding perceived merit of properties;
exploration plans and budgets; mineral reserves and resource
estimates; work programs; capital expenditures; timelines;
strategic plans; market prices for precious and base metals; or
other statements that are not statements of fact. Forward-looking
statements involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations
include the uncertainties involving success of exploration,
development and mining activities, permitting timelines,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation
expenses; mineral reserve and resource estimates and the
assumptions upon which they are based; assumptions and discount
rates being appropriately applied to the pre-feasibility study; our
assumptions with respect to the likelihood and timing of the
AMDIAP; capital estimates; prices for energy inputs, labour,
materials, supplies and services the interpretation of drill
results, the need for additional financing to explore and develop
properties and availability of financing in the debt and capital
markets; uncertainties involved in the interpretation of drilling
results and geological tests and the estimation of reserves and
resources; the need for cooperation of government agencies and
native groups in the development and operation of properties as
well as the construction of the access road; the need to obtain
permits and governmental approvals; risks of construction and
mining projects such as accidents, equipment breakdowns, bad
weather, non-compliance with environmental and permit requirements,
unanticipated variation in geological structures, metal grades or
recovery rates; unexpected cost increases, which could include
significant increases in estimated capital and operating costs;
fluctuations in metal prices and currency exchange rates; and other
risks and uncertainties disclosed in the Company's Annual Report on
Form 10-K for the year ended November 30,
2017 filed with Canadian securities regulatory authorities
and with the United States Securities and Exchange Commission and
in other Company reports and documents filed with applicable
securities regulatory authorities from time to time. The Company's
forward-looking statements reflect the beliefs, opinions and
projections on the date the statements are made. The Company
assumes no obligation to update the forward-looking statements or
beliefs, opinions, projections, or other factors, should they
change, except as required by law.
Cautionary Note to United States Investors
This press release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which differ from the requirements of
U.S. securities laws. Unless otherwise indicated, all resource and
reserve estimates included in this press release have been prepared
in accordance with Canadian National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM)—CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended ("CIM Definition Standards"). NI 43-101 is
a rule developed by the Canadian Securities Administrators which
establishes standards for all public disclosure an issuer makes of
scientific and technical information concerning mineral projects.
Canadian standards, including NI 43-101, differ significantly from
the requirements of the United States Securities and Exchange
Commission (SEC), and resource and reserve information contained
herein may not be comparable to similar information disclosed by
U.S. companies. In particular, and without limiting the generality
of the foregoing, the term "resource" does not equate to the term
"reserves". Under U.S. standards, mineralization may not be
classified as a "reserve" unless the determination has been made
that the mineralization could be economically and legally produced
or extracted at the time the reserve determination is made. The
SEC's disclosure standards normally do not permit the inclusion of
information concerning "measured mineral resources", "indicated
mineral resources" or "inferred mineral resources" or other
descriptions of the amount of mineralization in mineral deposits
that do not constitute "reserves" by U.S. standards in documents
filed with the SEC. Investors are cautioned not to assume that all
or any part of "measured" or "indicated resources" will ever be
converted into "reserves". Investors should also understand that
"inferred mineral resources" have a great amount of uncertainty as
to their existence and great uncertainty as to their economic and
legal feasibility. Under Canadian rules, estimated "inferred
mineral resources" may not form the basis of feasibility or
pre-feasibility studies except in rare cases. Disclosure of
"contained ounces" in a resource is permitted disclosure under
Canadian regulations; however, the SEC normally only permits
issuers to report mineralization that does not constitute
"reserves" by SEC standards as in-place tonnage and grade without
reference to unit measures. The requirements of NI 43-101 for
identification of "reserves" are also not the same as those of the
SEC, and reserves reported by Trilogy Metals in compliance with NI
43-101 may not qualify as "reserves" under SEC standards. Arctic
does not have known reserves, as defined under SEC Industry Guide
7. Accordingly, information concerning mineral deposits set
forth herein may not be comparable with information made public by
companies that report in accordance with U.S. standards.
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SOURCE Trilogy Metals Inc.