Trilogy Increases 2019 Upper Kobuk Exploration Budget
VANCOUVER, BC—Trilogy Metals Inc. (TSX/NYSE American: TMQ) announced a new regional exploration budget of $2 million that is in addition to the previously announced 2019 programs and budgets of $16.2 million, increasing the exploration budget at the company’s Upper Kobuk Mineral Projects (“UKMP”) located in the Ambler Mining District of Northwest Alaska for 2019 to $18.2 million.
Last December the company’s technical team held meetings in Perth, Australia with representatives of South32 Limited. Subsequent to these meetings, additional discussions took place in Vancouver resulting in both Companies agreeing to increase exploration expenditures at the UKMP by $2 million. The additional $2.0 million has been approved for regional or district exploration focused on identifying and testing new drill targets within the Ambler Volcanogenic Massive Sulphide (“VMS”) Belt. The company will contribute $1 million to the UKMP regional program and South32 will contribute the remaining $1 million.
The $1 million that South32 is contributing is in excess of the $30 million in option payments that South32 has already contributed to maintain the option to form a 50/50 joint venture on the UKMP.
Rick Van Nieuwenhuyse, President and CEO of Trilogy Metals commented, “As an exploration geologist, I am very excited that the Technical Committee and South32 have agreed to equally fund a $2 million exploration program along the Ambler VMS belt. The program will include a VTEM airborne geophysical survey along the entire belt. Follow-up ZTEM may be flown in certain areas. High priority targets will be evaluated with follow-up drilling. There are dozens of known VMS prospects along the 75 mile-long Ambler Belt including many with historic resources. It is exciting to be drilling new exploration targets again. We are confident that we can find additional high-grade polymetallic resources along this prolific mineral belt.”
Ambler VMS Belt
The Ambler mining district is located on the southern margin of the Brooks Range. Within this VMS belt, several deposits and prospects (including the Arctic Deposit) are hosted in the Ambler Sequence, a group of Middle Devonian to Early Mississippian, metamorphosed, bimodal volcanic and volcaniclastic rocks with interbedded siliceousclastic, graphitic, and calcareous metasediments. The Ambler sequence occurs in the upper part of the regional Anirak Schist. VMS-style mineralization is found along the entire 110 km strike length of the district. In addition to the Arctic Deposit, numerous other VMS-like occurrences are present on the Trilogy Metals land package. The most notable of these occurrences are the Dead Creek (also known as Shungnak), Sunshine, Cliff, Horse, and the Snow prospects to the west of the Arctic Deposit and the Red, Nora, Tom-Tom and BT prospects to the east (Figures 1 and 2).
Figure 1. Location of Historic Resources at the Ambler VMS Belt
Generally, VMS belts host clusters of deposits that can range from 1 million tonnes to over 100 million tonnes, and can contain high-grade copper, zinc, lead and precious metals. Some of the most prolific base-metal mineral belts in the world are within VMS districts such as the Flin Flon Belt of northern Manitoba, the Iberian Pyrite Belt in Spain and Portugal and the Noranda area of Quebec (Figure 3).
Figure 2. Location of Prospects within the Ambler VMS Belt
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The company is well financed to complete these programs. With cash and cash equivalents at its fiscal year-end over $20.0 million and the funding from South32 of $10.2 million, the company has over $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.
Figure 3. Comparison of the Ambler VMS Belt with other VMS Belts
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Out of the Mine and into the Smelter
Mining has long been a key fixture of Alaska’s economy. On a small scale, people flock to the 49th state to tour different operations. Kennecott Mine was once a booming copper mining site and is now a National Historic Landmark, attracting tourists eager to visit the ghost town and get a feel of the Gold Rush era it once dominated.