Trilogy Metals Announces 2019 Program and Budgets for the Upper Kobuk Mineral Projects
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News Release
Trilogy Metals Announces 2019 Program and Budgets
for the Upper Kobuk Mineral Projects
January 31, 2019 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX/NYSE
American: TMQ) ("Trilogy Metals”, “Trilogy” or the “Company”) is pleased to announce its
2019 program and budgets, and provide an update of its corporate activities, including its
current and future exploration and permitting activities at the Company’s Upper Kobuk Mineral
Projects (“UKMP”) located in the Ambler Mining District of Northwest Alaska. All amounts are
in US dollars.
Highlights of the 2019 Program and Budgets
Trilogy and South32 Limited (ASX, LSE, JS E: S32; ADR: SOUHY) (“South32”) have
recently approved budgets totaling $16.2 million to be spent at the UKMP for 2019.
$9.2 million is approved for the Bornite Project focused on additional exploration drilling
for a combination of infill and expansion drilling of the known deposit;
$7.0 million is approved for the Arctic Pro ject focused on feasibili ty level engineering
and environmental work to complete a fe asibility study in 1H 2020 and prepare the
project for permitting later this year (2019); and
Strong cash position to execute the programs.
The Company is well financed to complete these programs. With cash and cash equivalents at
its fiscal year-end of $20.0 million and the funding from South32 of $9.2 million, the Company
has about $30.0 million to advance the UKMP Projects. Trilogy also has 6.5 million warrants
held by large shareholders expi ring on July 2, 2019, at an ex ercise price of $1.52 which is
below the Company’s current trading price. Tr ilogy would receive an additional $10 million
with the full exercise of the warrants.
Rick Van Nieuwenhuyse, President and CEO of Trilogy Metals commented, “2018 was a busy
and successful year for Trilogy and we expect more of the same for 2019. This is the last year
of the South32 Option Agreemen t and we look forward to work ing with South32 to execute
this year’s program. With the Bureau of Land Management (“BLM”) plan to complete a Draft
Environmental Impact Statement (“EIS”) on the Ambler Access Road (AMDIAP) by the summer
and a Final EIS by the end of the year, investors can count on several very significant catalysts
in the year ahead. Trilogy is well financed to advance our Arctic and Bornite projects and we
look forward to keeping investors informed of our progress.”
TSX, NYSE American
Symbol: TMQ
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South32
In mid-December Trilogy’s President and CEO, Rick Van Nieuwenhuyse, and the Company’s
technical team, attended meetings with represen tatives of South32 at their headquarters in
Perth, Australia. The purpose of the meetings was to review the results from the 2018 field
programs at the Company’s UKMPs and to formulate plans for the 2019 summer field season.
On April 10, 2017, Trilogy Metals entered into an Option Agreement to form a Joint Venture
with South32 on the Company’s Upper Kobuk Minerals Projects (“Option Agreement”). Under
the terms of the Option Agreement, Trilogy Metals granted South32 the right to form a 50/50
joint venture.
South32 may exercise its option at any time to form the 50/50 joint venture (“JV”) but must
do so by January 31, 2020. To subscribe for 50% of the JV, South32 must contribute $150
million, plus allowances and amounts Trilogy has spent at the Arctic Project during the option
period to a maximum of $5 million per year less the amount of the Initial Funding contributed
by South32. The Company will transfer its assets into the newly formed JV company. For more
details on the agreement please see the press release dated April 10, 2017.
To maintain its Option to form the 50/50 JV , South 32 contributed $10 million for the 2017
program, an additional $10.8 million for the 2018 program (which included $800,000 of pre-
funding credited for 2019) and are now funding for the 2019 program of $9.2 million – bringing
the total option payments to $30 million.
Ambler Mining District Industrial Access Project
On December 17, 2018, Company management attended a meeting with Mr. Joe Balash, who
is the United States Department of the Interior’s Assistant Secretary for Land and Minerals
Management. In this role, Mr. Balash overs ees the BLM which is th e lead agency in the
permitting of the Ambler Mining District Indu strial Access Project (“ AMDIAP”). During the
meeting, Mr. Balash informed the Company that the meetings between the BLM and the Alaska
Industrial Development Export Authority (“AIDEA”) which is the AMDIAP proponent, have
already recommenced and that fu ture meetings are expected in the near term. Mr. Balash
stated that the final EIS is expected to be completed by the end of 2019 with the Record of
Decision to follow shortly thereafter. The recently updated BLM website states that “the Draft
EIS will be completed in late Summer/early Fall 2019. The Final EIS will be completed late
Fall/early Winter 2019.” We will continue to u pdate shareholders on the AMDIAP permitting
as it moves through the EIS process.
Arctic Project
Arctic Feasibility Study and Permitting
The Company will continue to advance engineering and environmental work in 2019 in support
of completing a feasibility study and preparing the Arctic Project for permitting. Specifically,
the Company will undertake with additional hydrological and geotechnical work at the site
along with water management, tailings facility and waste rock containment analysis and
design. Additional metallurgical test work to verify ore hardness and grinding characteristics
will be carried out on material from the pr oject. The Company expects to complete the
feasibility study in the first half of 2020.
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Arctic Project Video
Based on the technical report titled "Arctic Project, Northwest Alaska, USA, NI 43-101 Technical
Report on Pre-Feasibility Study" with an effective date of February 20, 2018 and a release date
of April 6, 2018, the Company has prepared a video of the Arctic Project demonstrating mining,
milling and the transportation of concentrates within Alaska to year-round shipping ports near
Anchorage. The Arctic Project video is available on the homepage of the Company’s website
at http://www.trilogymetals.com.
Arctic Ore Sorting Program
Ore sorting test work at the Steinert Labs facility in Kentucky, USA was completed last summer.
While early indications were that the application of ore sorting technology could improve the
head grades of material being processed at the proposed Arctic grinding mill, by eliminating
waste rock, it was also found th at the additional capital costs required for the application of
this technology more than offset the benefits of increasing the head grades at the grinding
mill. However, the test work did demonstrate that the material tested had lower-than-
expected hardness which indicates that the mineralized material from the Arctic Deposit may
require less grinding, and hence lower processing requirements, than previously expected. This
could have positive implications for the estima ted capital and operatin g costs at the Arctic
processing facility. The Company will continue to investig ate the hardness characteristics of
the Arctic material as the Company progresses to a feasibility study at the project.
Bornite Project
Bornite Drilling Results and Resource Estimate
During the 2018 field season at the Bornite Project, the Company completed an additional 12
drill holes comprising 10,123 meters which were designed as infill and extension holes to the
300 to 400 meter step-out holes drilled by the Company’s previous round of drilling completed
in 2017 (please see the Company’s press releases dated December 13, 2018, November 19,
2018, October 9, 2018 and August 23, 2018 for more details on the drilling results).
Notable highlights from this program include (At a cutoff grade of 0.5% copper):
RC18-246 intersected three mineralized intervals of:
o 19.6 metres averaging 2.06% copper;
o 6.1 metres averaging 2.36% copper; and
o 7.6 metres averaging 1.04% copper.
RC18-247 intersected two mineralized intervals of:
o 33.4 metres averaging 0.82% copper; and
o 20.1 metres averaging 4.55% copper, including 16.4 meters grading 5.34%
Copper and 0.21% Cobalt.
RC18-0248 intersected five mineralized intervals of:
o 1.0 meter averaging 14.38% copper;
o 21.3 meters averaging 1.73% copper;
o 21.0 meters averaging 0.93% copper;
o 15.1 meters averaging 1.32% copper; and
o 4.9 meters averaging 2.97% copper.
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RC18-0249 intersected one mineralized interval of
o 38.3 meters averaging 1.12% copper.
RC18-0252 intersected four mineralized intervals of:
o 2.9 meters averaging 1.95% copper;
o 3.6 meters averaging 2.63% copper;
o 12.5 meters averaging 1.49% copper; and
o 7.5 meters averaging 2.25% copper.
RC18-0254 intersected six mineralized intervals of:
o 123.9 meters averaging 1.07% copper;
o 10.0 meters averaging 0.81% copper;
o 13.5 meters averaging 0.78% copper;
o 46.0 meters averaging 0.98% copper;
o 8.0 meters averaging 0.91% copper; and
o 29.0 meters averaging 1.68% copper.
The objective of the 2018 drill campaign was to infill and expand the currently defined open
pit and underground mineral resources. This drilling campaign was highly successful in that 11
of the 12 drill holes contained intervals of co pper-cobalt mineralization. Figure 1 shows the
grade-thickness distribution at the Bornite Project prior to the 2017 and 2018 drilling
campaigns in which a total of 25 holes were drilled at the project. Figure 2 shows the current
distribution of the grade-thickness copper mineralization after incorporating the copper assay
results from the 25 drill holes completed during the 2017 and 2018 summer drilling campaigns
at the Bornite Project. As seen in Figure 2, copper mineraliza tion has been expanded to the
north and northeast and the high-grade core has been bifurcated into two lobes, each of which
has grown in size. Mineralization remains open down dip and along strike with additional drilling
planned for 2019. The Company is currently working on a National Instrument 43-101
resource update for the Bornite Project which is expected to be completed by the end of
February 2019. Drilling during the 2019 field program for Bornite will be a combination of infill
and expansion drilling focused on the extension of the known deposit.
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Figure 1. Grade-Thickness Map prior to 2017 and 2018 Drilling Programs
Figure 2. Grade-Thickness Map Incorporat ing Results from 2017 and 2018 Drilling
Programs
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Bornite Copper-Cobalt Metallurgy
On June 5, 2018, the Company announced an init ial cobalt resource estimate for the Bornite
Project of 77 million pounds of inferred cobalt resources (see Tables 1 and 2 for details
including grade). An updated technical report entitled “NI 43-101 Tec hnical Report on the
Bornite Project, Northwest Alaska, USA” including the inferred cobalt resources was filed by
the Company on July 20, 2018 and is av ailable on the Comp any’s website at
www.trilogymetals.com and on the Company’s profile at www.sedar.com and www.sec.gov.
Upon the completion this resource estimate the Company embarked on a metallurgical study
expand on the existing coppe r recovery results and to in vestigate various methods of
recovering the cobalt at Bornite. Initial results from the metallurgical program are still expected
to be made available to the Company in Q1 2019.
Table 1: Estimate of Copper Mineral Resources for the Bornite Deposit
Type
Cut-off
(Cu%)
Tonnes
(million)
Average Grade
Cu (%)
Contained Metal
Cu (Mlbs)
In-Pit 0.5 40.5 1.02 913
Total Indicated 40.5 1.02 913
In-Pit 0.5 84.1 0.95 1,768
Below-Pit 1.5 57.8 2.89 3,683
Total Inferred 141.9 1.74 5,450
(1) Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb
Cu, mining costs of US$2.00/tonne, milling costs of US$11/tonne, G&A cost of US$5.00/tonne,
87% metallurgical recoveries and an average pit slope of 43 degrees.
(2) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
There is no certainty that all or any part of the Mineral Resources will be converted into Mineral
Reserves.
(3) It is reasonably expected that the majority of Inferred mineral resources could be upgraded to
Indicated mineral resources with additional exploration.
Table 2: Estimate of Inferred Cobalt Mineral Resources for the Bornite Deposit
Type Cut-off
(Cu%)
Tonnes
(million)
Average Grade
Co (%)
Contained Metal
Co (Mlbs)
In-Pit 0.5 124.6 0.017 45
Below-Pit 1.5 57.8 0.025 32
Total Inferred 182.4 0.019 77
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(1) Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb
Cu, mining costs of US$2.00/tonne, milling costs of US$11/tonne, G&A cost of US$5.00/tonne,
87% metallurgical recoveries and an average pit slope of 43 degrees.
(2) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
There is no certainty that all or any part of the Mineral Resources will be converted into Mineral
Reserves.
(3) It is reasonably expected that the majority of Inferred mineral resources could be upgraded to
Indicated mineral resources with additional exploration.
Qualified Persons
Andrew W. West, Certified Professional Geologist, Exploration Manager for Trilogy Metals Inc.,
is a Qualified Person as define d by National Instrument 43- 101. Mr. West has reviewed the
technical information in this news release and approves the disclosure contained herein.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration and development company focused on exploring and
developing the Ambler mining district located in northwestern Alaska. It is one of the richest
and most-prospective known copper-dominant districts located in one of the safest geopolitical
jurisdictions in the world. It hosts world-class polymetallic volcanogenic massive sulphide
(“VMS”) deposits that contain copper, zinc, lead, gold and silver, and carbonate replacement
deposits which have been found to host hi gh-grade copper and cobalt mineralization.
Exploration efforts have been focused on two deposits in the Ambler mining district - the Arctic
VMS deposit and the Bornite carbonate replacement deposit. Both deposits are located within
the Company's land package that spans a pproximately 143,000 hectares. The Company has
an agreement with NANA Regional Corporation, Inc., a Regional Alaska Native Corporation that
provides a framework for the exploration and potential development of the Ambler mining
district in cooperation with local communities. Our vision is to develop the Ambler mining
district into a premier North American copper producer.
Company Contact
Patrick Donnelly
Vice President, Corporate Communications & Development
604-630-3569
604-638-8088 or 1-855-638-8088
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Cautionary Note Regarding Forward-Looking Statements
This press release includes certain "forward-looking information” and "for ward-looking statements” (collectively
"forward-looking statements”) within th e meaning of applicable Canadian and United States securities legislation
including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of
historical fact, included herein, including, without limitation, further drilling activity, the potential advancement of the
AMDIAP, the UKMP and mining generally in Alaska, the ti ming and the filing of updated reports on the Company’s
projects, the future price of copper, the estimation of mineral reserves and mineral resources, the realization of mineral
reserve and mineral resource estimates, the timing and amount of estimated future production, costs of production,
capital expenditures, costs and timing of the development of projects, the likelihood and timing of the AMDIAP, the
potential future development of Bornite, the future oper ating or financial performance of the Company, planned
expenditures and the anticipated activity at the UKMP Projects, are forward-looking statements. The assay results
from the drill holes discussed in this press release should not be considered representative of other drilling results for
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the 2018 drilling campaign. Forward-looking statements are fre quently, but not always, identified by words such as
"expects”, "anticipates”, "believes”, "i ntends”, "estimates”, "potential”, "p ossible”, and similar expressions, or
statements that events, conditions, or results "will”, "may”, "could”, or "should” occur or be achieved. These forward-
looking statements may include statemen ts regarding perceived merit of proper ties; exploration plans and budgets;
mineral reserves and resource estimate s; work programs; capital expenditures; timelines; strategic plans; market
prices for precious and base metals; or other statements that are not statements of fact. Forward-looking statements
involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from the Company's expectations include the uncertainties involving
success of exploration, development and mining activities, permitting timelines, requirements for additional capital,
government regulation of mining op erations, environmental risks, unanticipated reclamation expenses; mineral
reserve and resource estimates and the assumptions upon which they are based; assumptions and discount rates
being appropriately applied to the pre-feasibility study; our assumptions with respect to the likelihood and timing of
the AMDIAP; capital estimates; prices for energy inputs, labour, materials, supplies and services the interpretation of
drill results, the need for additional financing to explore and develop properties and availability of financing in the debt
and capital markets; uncertainties invo lved in the interpretation of drillin g results and geological tests and the
estimation of reserves and resources; the need for cooper ation of government agencies and native groups in the
development and operation of properties as well as the construction of the access road; the need to obtain permits
and governmental approvals; risks of construction and mining projects such as accidents, equipment breakdowns, bad
weather, non-compliance with environm ental and permit requir ements, unanticipated variation in geological
structures, metal grades or recovery rates; unexpected cost increases, which could incl ude significant increases in
estimated capital and operating costs; fluctuations in metal prices and currency exchange rates; and other risks and
uncertainties disclosed in the Company’s Annual Report on Form 10-K for the year ended November 30, 2017 filed
with Canadian securities regulatory authorities and with the United States Securities and Exchange Commission and
in other Company reports and documents filed with applicable securities regulatory authorities from time to time. The
Company's forward-looking statements reflect the beliefs, opinions and projections on the date the statements are
made. The Company assumes no obligation to update the forward-looking statements or beliefs, opinions, projections,
or other factors, should they change, except as required by law.
Cautionary Note to United States Investors
This press release has been prepared in accordance with the requirements of the securities laws in effect in Canada,
which differ from the requiremen t s o f U . S . s e c u r i t i e s l a w s . U n l e s s o t h erwise indicated, all resource and reserve
estimates included in this press release have been prepared in accordance with Canadian National Instrument 43-101
Standards of Disclosure for Mineral Proj ects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and
Petroleum (CIM)—CIM Definition Standards on Mineral Reso urces and Mineral Reserves, adopted by the CIM Council,
as amended (“CIM Definition Standards”). NI 43-101 is a ru le developed by the Canadian Securities Administrators
which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning
mineral projects. Canadian standards, including NI 43-101, differ significantl y from the requirements of the United
States Securities and Exchange Commission (SEC), and resource and reserve information contained herein may not
be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of
the foregoing, the term "resource” does not equate to the term "reserves”. Under U.S. standards, mineralization may
not be classified as a "reserve” unless the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the rese rve determination is made. The SEC's disclosure standards
normally do not permit the inclusion of information conc erning "measured mineral reso urces”, "indicated mineral
resources” or "inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits
that do not constitute "reserves” by U.S. standards in do cuments filed with the SEC. Investors are cautioned not to
assume that all or any part of “measured” or “indicated resources” will ever be converted into “reserves”. Investors
should also understand that "inferred mineral resources” have a great amount of uncertainty as to their existence and
great uncertainty as to their economic and legal feasibility. Under Canadian rules, estimated "inferred mineral
resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Disclosure of "contained
ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits
issuers to report mineralization that does not constitute "reserves” by SEC standards as in-place tonnage and grade
without reference to unit measures. The requirements of NI 43-101 for identification of "reserves” are also not the
same as those of the SEC, and reserves reported by Trilo gy Metals in compliance with NI 43-101 may not qualify as
"reserves” under SEC standards. Arctic does not have kn own reserves, as defined under SEC Industry Guide 7.
Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made
public by companies that report in accordance with U.S. standards.