The Upper Kobuk Mineral Projects (“UKMP”) consists of a 427,690-acre land package containing state, patented and native lands within an area of interest. The two most advanced projects are the feasibility-stage Arctic copper-zinc-lead-gold-silver volcanogenic massive sulphide (“VMS”) project and the Bornite copper-cobalt carbonate replacement project.
The Upper Kobuk Mineral Projects
In addition to Arctic and Bornite, the UKMP also hosts numerous other polymetallic mineral deposits and prospects such as Sunshine, South Cliff, Horse-Cliff, Snow, Nora, Tom Tom and BT. The formation of the joint venture with South32, in which South32 contributed $145 million into Ambler Metals, will enable additional exploration activities with the goal of increasing the mineral inventory of the district.
The strategy of Trilogy and our Partners is to advance both the Arctic and Bornite projects into production while carrying out additional exploration in the search for high-grade deposits within the UKMP.
The UKMP: Key Facts
- It is an extensive 427,690-acre (172,636-hectare) land package that is over 60 miles long (100 km).
- Mineralization in the UKMP area is characterized by two discrete mineralized belts: the Devonian Ambler Schist Belt and the Devonian Bornite carbonate sequence.
- The Ambler Schist Belt is host to a series of VMS deposits related to metamorphose and strongly deformed bimodal Devonian volcanic and sedimentary rocks. A series of notable VMS deposits, including the Arctic, Dead Creek (Shungnak), Sunshine, Horse-Cliff, Sun, and Smucker deposits, occur in this belt.
- At Bornite, mineralization is hosted in less-strongly deformed Devonian clastic and carbonate sedimentary rocks lying immediately south of the Ambler Schist Belt across the Ambler lowlands.
UKMP Drilling
Reserves and Resources
Copperbillion pounds |
Zincbillion pounds |
Goldmillion ounces |
Silvermillion ounces |
|
|---|---|---|---|---|
| Indicated | 3.35 | 3.36 | 0.73 | 55.0 |
| Inferred | 5.58 | 0.21 | 0.04 | 3.0 |
| Resource Category | Tonnes (million) | Grade (%) | Contained Metal (million pounds) | |
|---|---|---|---|---|
| Copper | ||||
| Arctic | Indicated | 36.0 | 3.07 | 2,441 |
| Inferred | 3.5 | 1.71 | 131 | |
| Bornite In-Pit | Indicated | 40.5 | 1.02 | 913 |
| Inferred | 84.1 | 0.95 | 1,768 | |
| Bornite Below-Pit | Inferred | 57.8 | 2.89 | 3,683 |
| Zinc | ||||
| Arctic | Indicated | 36.0 | 4.23 | 3,356 |
| Inferred | 3.5 | 2.72 | 210 | |
| Lead | ||||
| Arctic | Indicated | 36.0 | 0.73 | 541 |
| Inferred | 3.5 | 0.60 | 47.0 | |
| Resource Category | Tonnes (million) | Grade (%) | Contained Metal (million ounces) | |
|---|---|---|---|---|
| Gold | ||||
| Arctic | Indicated | 36.0 | 0.63 | 0.73 |
| Inferred | 3.5 | 0.36 | 0.04 | |
| Silver | ||||
| Arctic | Indicated | 36.0 | 47.6 | 55.0 |
| Inferred | 3.5 | 28.7 | 3.0 | |
| Deposit | Cut-off | Tonnes (million) | Cu% | Zn% | Pb% | Ag g/t | Au g/t | Cu (Mlbs) | Cu Eq4 (million pounds) | Tonnes Cu | Tonnes Cu Eq4 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| INDICATED | |||||||||||
| Arctic1 | 0.5% Cu | 36.0 | 3.07 | 4.23 | 0.73 | 47.6 | 0.63 | 2,441 | 4,376 | 1,107,200 | 1,984,900 |
| Bornite (In-Pit)2 | 0.5% Cu | 40.5 | 1.02 | 913 | 913 | 413,000 | 413,000 | ||||
| Total Indicated | 3,354 | 5,289 | 1,520,200 | 2,397,900 | |||||||
| INFERRED | |||||||||||
| Arctic1 | 0.5% Cu | 3.5 | 1.71 | 2.72 | 0.60 | 28.7 | 0.36 | 131 | 251 | 59,400 | 113,900 |
| Bornite (In-Pit)2 | 0.5% Cu | 84.1 | 0.95 | 1,768 | 1,768 | 802,000 | 802,000 | ||||
| Bornite (Below Pit)3 | 1.5% Cu | 57.8 | 2.89 | 3,683 | 3,683 | 1,671,000 | 1,671,000 | ||||
| Total Inferred | 5,582 | 5,702 | 2,532,400 | 2,586,900 | |||||||
| Type | Cut-off (Cu%) | Tonnes (million) | Co (%) | Contained Co (million pounds) |
|---|---|---|---|---|
| Bornite In-Pit | 0.5 | 124.6 | 0.017 | 45 |
| Bornite Below-Pit | 1.5 | 57.8 | 0.025 | 32 |
| Total Inferred | -- | 182.4 | 0.019 | 77 |
-
Notes
- 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.
- These resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standard, unless otherwise noted.
- See numbered footnotes below on resource information.
- Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content.
- Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces; contained copper, zinc, and lead pounds as imperial pounds.
- g/t = grams per tonne
- All amounts are stated in U.S. dollars unless otherwise noted.
-
Resource Footnotes
- Resources stated as contained within a pit shell developed using metals prices of $3.00/lb for copper, $0.90/lb lead, $1.00/lb zinc, $1,300/oz gold, $18/oz silver, mining costs of $3.00/tonne, milling and G&A costs of $35/tonne, metallurgical recoveries of 92% for copper, 77% for lead, 88% for zinc, 63% for gold, 56% for silver and an average pit slope of 43 degrees.
- Resources stated as contained within a pit shell developed using a metal price of $3.00/lb for copper, mining costs of $2.00/tonne, milling costs of $11/tonne, G&A cost of $5.00/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees.
- Mineral resources at a 1.5% cut-off are considered as potentially economically viable in an underground mining scenario based on an assumed projected copper price of $3.00/lb, underground mining costs of $65.00 per tonne, milling costs of $11.00 per tonne, G&A of $5.00 per tonne, and an average metallurgical recovery of 87%.
- The Arctic copper-equivalent resource is calculated using the following metal price assumptions: $3.00/lb Cu, $1.00/lb Zn, $0.90/lb Pb, $18.00 oz Ag , and $1,300/oz Au. Calculation excludes any adjustments for metal recoveries. Net of by-product credit.
- Cobalt 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.
- 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. It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with additional exploration.
History
In 1947, local prospector Rhinehart “Rhiny” Berg along with various partners traversing in the area located outcropping mineralization along Ruby Creek (Bornite) on the north side of the Cosmos Hills. They subsequently staked claims over the Ruby Creek showings and constructed an airstrip for access. In 1957, BCMC, Kennecott’s exploration subsidiary, optioned the property from Berg. Kennecott (now Rio Tinto) carried out intermittent exploration work in the area.
On March 22, 2004, Alaska Gold Company, a wholly-owned subsidiary of NOVAGOLD Resources Inc. (NOVAGOLD) completed an Exploration and Option to Earn an Interest Agreement with Kennecott Exploration Company and Kennecott Arctic Company (collectively, Kennecott) on the Ambler land holdings.
On December 18, 2009, a Purchase and Termination Agreement was entered into between Alaska Gold Company and Kennecott whereby NOVAGOLD agreed to pay Kennecott a total purchase price of $29 million for a 100% interest in the Ambler land holdings, which included the Arctic Project, to be paid as: $5 million by issuing 931,098 NOVAGOLD shares, and two installments of $12 million each, due 12 months and 24 months from the closing date of January 7, 2010.
The NOVAGOLD shares were issued in January 2010, the first $12 million payment was made on January 7, 2011, and the second $12 million payment was made in advance on August 5, 2011; this terminated the March 22, 2004 exploration agreement between NOVAGOLD and Kennecott. Under the Purchase and Termination Agreement, the seller retained a 1% net smelter return (NSR) royalty that is purchasable at any time by the landowner for a one-time payment of $10 million.
During 2011, NOVAGOLD incorporated the Trilogy Metals entities and transferred its Ambler land holdings, including the Arctic Project from Alaska Gold Company to Trilogy Metals Inc. In April 2012, NOVAGOLD completed a spin-out of Trilogy Metals, with the Ambler lands, to the NOVAGOLD shareholders and made Trilogy Metals an independent company publicly-listed on the TSX and NYSE AMERICAN exchanges.