Progress for South32 in Alaska

SOUTH32 and Trilogy Metals have received a record of decision (RoD) from the US Bureau of Land Management for the Ambler Mining District industrial access road project.
Progress for South32 in Alaska Progress for South32 in Alaska Progress for South32 in Alaska Progress for South32 in Alaska Progress for South32 in Alaska

The Ambler project in Alaska

Staff reporter

The Section 404 permit allows for development of a 211-mile-long gravel private access road into the Ambler Mining District in Alaska, unlocking the economic potential of the region.

Just before Christmas last year, South32 spent US$145 million to acquire 50% of the Ambler project after three years of exploration.

South32 CEO Graham Kerr described the RoD as a key milestone to further progress the project.

"We look forward to continuing our partnership with Trilogy to unlock the value of the project's high-quality base and precious metals resources, working together to advance it through the current study phase," he said.

The Ambler road will transect the Rambler District, giving the partners access to its Upper Kobuk mineral projects (UKMP) including the Arctic and Bornite deposits.

The road will be built by AIDEA (the Alaska Industrial Development Export Authority) and it is expected to stimulate other mining and exploration activity in the region. AIDEA previously developed the road and port facility for the Red Dog base metals mine.

Last month, AIDEA approved a memorandum of understanding with the joint venture, specifying how the parties will jointly establish a plan regarding the permitting, feasibility, engineering and design, construction and operation, financing and closure of the Ambler road.

The JV committed to contribute up to $35 million to match AIDEA's contribution.

The partners expect to complete a feasibility study for Arctic in the third quarter, which is expected to include higher initial capital expenditure than the $780 million outlined in the 2018 prefeasibility study.

The PFS outlined a 10,000 tonne per day operation to produce more than 159 million pounds of copper, 199Mlb zinc, 33Mlb lead, 30,600 ounces gold and 3.3Moz silver in three different concentrates over a 12-year mine life.

Arctic hosts an indicated resource of 36Mt grading 3.1% copper, 0.7% lead, 4.2% zinc, 0.6 grams per tonne gold and 47.6g/t silver for 2.4Blb copper, 581Mlb lead, 3.4Blb zinc, 728,000oz gold and 55Moz silver.

Bornite is estimated to contain an inferred cobalt resource of 182.4Mt grading 0.019% for 77Mlb and an inferred copper resource of 141.9Mt grading 1.74% for 5.5Blb.

Shares in Trilogy jumped 17% overnight in Toronto to C$3.05, valuing the company at $430 million. South32 last traded 0.4% lower at A$2.20.