Companies discuss exploring copper deposits in Northwest Alaska

The two companies will form a joint-venture entity in February, after which further plans will be announced, Trilogy said in a press release. South 32 will invest $145 million in the joint-venture, which will help fund three field seasons for additional geologic and engineering work.

Extensive exploration has been done on both Arctic and Bornite, a nearby copper deposit, by Trilogy and earlier by Kennecott Minerals, a previous owner. The Bornite depsit was discovered in 1965 by Bear Creek Exploration, which was affiliated with Kennecott. Arctic’s discovery, by Kenncott, came later after the company began exploring the region. Bornite is a larger deposit but has, so far, lower grades of copper than Arctic. However, Bornite also holds cobalt, and important strategic metal.

South 32, which mines several types of metals in mines in Australia, southern Africa and South America, said it will release new mineral resource estimates for both Arctic and Bornite in March after the joint-venture company is established.

South32 Chief Executive Officer, Graham Kerr said, “We look forward to furthering our partnership with Trilogy Metals and NANA Regional Corporation, the Iñupiat-owned Alaska Native corporation in the region, as we work together to advance the Arctic and Bornite deposits and further test the significant regional potential across the Ambler Mining District.”

James Gowans, Trilogy Metals Interim President and Chief Executive Officer said, “Having the support and partnership from a senior mining company like South32 – both in terms of their financial support and technical expertise – is tremendous for Trilogy Metals. The Ambler Mining District has great potential that we expect will finally be realised with the formation of the Joint Venture and when the Ambler Mining District Industrial Access Project, providing key infrastructure access, is approved. We are very excited to advance this partnership.”

The Ambler Mining District Industrial Access Project is a proposed 211-mile industrial road that would connect the Ambler Mining District to the Dalton Highway, a north-south road that connects the North Slope oil fields to Interior Alaska highways.

NANA Regional Corporation, a major landowner in Northwest Alaska, is in an alliance with Trilogy and could wind up with an ownership take in a project. “This joint venture is an investment in the future – not only for the UKMP but for NANA shareholders and the people of Alaska,” said Wayne Westlake, NANA’s CEO. “Continued exploration offers opportunities for economic growth, allowing NANA to further fulfill our mission to improve the quality of life for our people.”

In a related development Trilogy said that it has staked 465 additional mining claims on state land adjacent to its existing land holdings. Trilogy, soon with South 32 as a partner, will control 426,690 acres in the area, which is in the Ambler Mining District in Northwest Alaska. South 32’s commitment and Trilogy’s additional staking are important signals of confidence in the project.

The lands held by Trilogy, and soon by the joint-venture, include several other mineral discoveries that have been made in the region.

The access road, if it is built would provide surface access to the region for the first time. It would be built by the Alaska Industrial Development and Export Corporation, or AIDEA, the state’s development finance corporation. The plan would follow a model followed by AIDEA earlier with a 57-mile road and port for the Red Dog Mine, a major lead-zinc mine north of Kotzebue. AIDEA would fund construction of the road and be repaid by tolls paid by mining companies using the road.

Over the years Trilogy, Kennecott and other companies have studied several options for transportation access including railroads built both from Interior Alaska and from Norton Sound, to the southwest, where an ore-loading port could be built. In the end a road to the Dalton Highway seemed the most feasible. Trilogy’s plan is to truck ore concentrates to the Dalton Highway and then south to Fairbanks, where the concentrates would be shipped by rail to a Southcentral Alaska port.

In another Alaska mining development, the U.S. Army Corps of Engineers has delayed the release of a Final Environmental Impact Statement, or FEIS, until late June or early July for the big Pebble copper/gold project near Iliamna. The original plan was for the FEIS to be out in March. Corps officials said more time is needed to do the analysis. This would effectively push a Record of Decision on the application for federal permits for Pebble until later in the year.

In yet another development, Ucore Rare Earth Metals says it is still working on development of a rare earths separation plant in Ketchikan but will slow the project until suppliers of rare earths are lined up. The plant is intended to serve Ucor’s planned Bokan-Dotson Ridge rare earths mine on southern Prince of Wales Island, which is near Ketchikan.

Ucore is engaged in permitting and feasibility studies for the mine. There is still some time to obtain these so the company plans to build the processing plant early to test the separation process with concentrates from other mines. China is now the only nation with significant processing capacity, so the U.S. has a strategic interest in encouraging domestic rare earths production and processing.