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Ambler JV approves 2022 budget in Alaska

Trilogy Metals and South32, 50:50 owners of Ambler Metals, have announced a US$28.5 million exploration budget for 2022 on the Upper Kobuk mineral projects in Alaska.
Ambler JV approves 2022 budget in Alaska Ambler JV approves 2022 budget in Alaska Ambler JV approves 2022 budget in Alaska Ambler JV approves 2022 budget in Alaska Ambler JV approves 2022 budget in Alaska

The Arctic project in Alaska

The budget, which was decided following a two-day meeting between South32 and Trilogy geologists in Fairbanks last month, was in line with BMO Capital Markets' expectations.

The expenditure will cover up to 10,000m of helicopter-supported diamond drilling from June.

The drilling will be split between resource development drilling at Arctic and exploration targets in the broader Ambler belt.

The Upper Kobuk mineral projects already host resources of more than 8.8 billion pounds of copper, 3.5Blb of zinc, 770,000 ounces of gold and 58 million ounces of silver.

The joint venture comprises the advanced Arctic deposit and the Bornite deposit.

The feasibility study for Arctic, released in August 2020, returned a post-tax net present value of $1.1 billion and 27% internal rate of return.

Engineering studies are advancing.

An independent consulting company has completed a preparedness review of the draft permitting package for Arctic and presented the results of this review to the technical teams of South32 and Trilogy.

The review concluded that Ambler's permitting strategy is sound and the permitting package can proceed with minor changes. 

Ambler is now making the recommended changes to the permitting package and expects to file the permitting application, which will start the formal permitting process for the Arctic project, with the United States Army Corps. of Engineers in early 2022.

Given that the Arctic project is located on state and private land, the key federal permit will be the 404 Dredge or Fill Permit that is issued by the USACE, the lead agency during the federal permitting process.

The overall permitting process is expected to take 24-30 months to complete.

"We are pleased that we are continuing to make progress on de-risking the Arctic project and that we are now very close to commencing the formal permitting activities," Trilogy president and CEO Tony Giardini said.

"Senior management at Trilogy Metals is working very closely with representatives from South32 and Ambler Metals in devising a 2022 program that will greatly assist in moving the Arctic project forward and to continue to add value through the drill bit."

Shares in New York-listed Trilogy rose 5.9% overnight to $1.62, valuing the company at $297 million.

South32 was up 1.7% to A$4.12 after reaching as high as $4.19, just below its 2018 all-time high of $4.23.