The path to discovering the viability of developing a mine at Arctic and the road needed to deliver the copper, zinc, lead, gold and silver from this exceptionally high-grade Northwest Alaska deposit to world markets are both making headway in 2017.
Arctic is the most advanced of the high-grade deposits that make up the Upper Kobuk Mineral Projects, an extensive land package that unites Trilogy Metals Inc.’s state mining claims that blanket a 70-mile- (110 kilometer) long belt of high-grade copper-lead-zinc-gold-silver deposits across the Ambler mining district with an adjacent package of NANA Regional Corp.-owned lands known for hosting exceptionally high-grade copper.
Trilogy is the operator of UKMP, and Alaska Native Regional Corporation NANA represents the Inupiaq people of Northwest Alaska and holds an option to be a 16 to 25 percent equity partner in the project or receive 15 percent net proceeds royalty from any mines developed on the 353,000-acre land package.
Arctic – a high-grade volcanogenic massive sulfide deposit on Trilogy Mining claims that encompasses some 1.65 billion pounds of copper, 2.62 billion lb of zinc, 444 million lb of lead, 610,000 ounces of gold and 45.3 million oz of silver in the inferred and indicated resource categories – will likely be the site of the first such mine.
Bornite, a world-class deposit on NANA lands about 16 miles south of Arctic, encompasses 40.5 million metric tons of in-pit indicated resources averaging 1.02 percent (913 million pounds) copper; and 84.1 million metric tons of inferred resources averaging 0.95 percent (1.8 billion lbs.) copper. Additionally, this UKMP deposit likely to be developed second, is estimated to contain 57.8 million metric tons of below-pit inferred resources averaging 2.89 percent (3.7 billion lbs.) copper.
Getting ready for permitting a priority
Already a world-class copper deposit in terms of size and grade, the various zones of Bornite are open to expansion in several directions.
While expanding Bornite is a compelling target for a junior mining company with the exploration expertise of Trilogy, getting Arctic ready for permitting is a top priority.
To this end, Triolgy has budgeted US$7.1 million for a 2017 work program focused on finalizing a pre-feasibility study that will outline the engineering and financial parameters of developing Arctic as the first UKMP mine.
“The PFS will demonstrate the true value of the high-grade Arctic deposit which we expect will be the first in a series of potential mines in the Ambler mining district,” explained Trilogy Metals President and CEO Rick Van Nieuwenhuyse.
Arctic feasibility
In 2013, Trilogy (then NovaCopper) completed a preliminary economic assessment that provided a first glimpse of what an open-pit mine at Arctic might look like.
This scoping level study outlined a 10,000-metric-ton-per-day mill at Arctic that is anticipated to produce roughly 1.5 billion lbs of copper, 1.8 billion lbs of zinc, 289 million lbs of lead, 30.5 million oz of silver and 349,000 oz of gold over a 12-year mine-life.
At the time, the cost to build such a mine was estimated to be US$717.7 million. Another US$164.4 million in sustaining capital and US$81.6 million in closing costs also were anticipated.
The mine outlined in the 2013 PEA was based on 23.85 million metric tons of indicated resource averaging 3.26 percent (1.71 billion lbs) copper, 4.45 percent (2.34 billion lbs) zinc, 0.76 percent (400 million lbs) lead, 0.71 grams per metric ton (550,000 oz) gold, and 53.2 g/t (40.8 million oz) silver.
Additionally, Arctic hosted 3.63 million metric tons inferred resource averaging 3.22 percent (239 million lbs) copper, 3.84 percent (285 million lbs) zinc, 0.58 percent (43.2 million lbs) lead, 0.59 g/t (60,000 oz) gold at the time of the PEA.
Over the past two years, Trilogy has carried out targeted drill programs aimed at upgrading and expanding these resources, much of which will be elevated to reserve status once supported by a pre-feasibility study.
In addition to resource drilling, the 2015 and 2016 programs included collecting the geotechnical, engineering, environmental and other data needed to complete the pre-feasibility study for Arctic.
This year’s field program aims to collect the final bits of data for the study with a program that includes geotechnical drilling, hydrology studies and test pits aimed at determining the best locations for the mill, tailing facility, waste rock storage and road.
Trilogy expects the pre-feasibility study will be completed early in 2018.
Movement on the Ambler Road
The mill at Arctic will likely produce three separate concentrates – copper with gold and silver; zinc; and lead with gold and silver – that will need to be shipped to refineries for further processing. This project, however, is located about 200 miles from the nearest road, at least for now.
Understanding the exceptional potential of the Ambler district, the state of Alaska began studies on the potential of building a road to the metals rich region in 2009. Alaska Industrial Development and Export Authority, a quasi-state-owned entity established by the Alaska Legislature to provide financing for Alaska businesses that will expand the state’s economy, took the lead on the potential development of a road to the Ambler district in 2013.
The Ambler Mining District Industrial Access Road, the official name of this proposed 211-mile transportation corridor, would run west from the Dalton Highway along the southern foothills of the Brooks Range to the Ambler Mining District near the Arctic deposit.
Trilogy and AIDEA entered into a memorandum of understanding in 2015 that paves the way for the development authority to investigate various ways to fund the construction and maintenance of the Ambler Road and create the framework by which this investment would be paid back from mines developed at the roads terminus.
A similar arrangement for the Delong Mountain Transportation System, a road and port facility linking the Red Dog zinc-lead mine to world markets, has proven to be a good investment for AIDEA and the state.
Ideally, the road and first mine would be completed about the same time. To keep the road side of this on schedule, AIDEA submitted applications for rights-of-way, permits and related authorizations needed for the road in 2016.
The U.S. Interior Department’s Bureau of Land Management, which will be the lead agency for permitting the road, opened a 90-day public scoping period for an Environmental Impact Statement for the Ambler Road on Feb. 28. This marks the official start of permitting for this vital transportation route linking the metals-rich Ambler mining district to world markets.
With a road and a mine to support it, the potential of one of the richest undeveloped mining districts may finally be realized.
“With the recent announcement that the BLM has initiated the permitting process on the AMDIAP, as well as an upswing in demand for copper and zinc, the company is well positioned to add value for shareholders by advancing development of the world-class Ambler mining district," Trilogy CEO Van Nieuwenhuyse said in a March 20 statement.
