Trilogy Metals Announces Updated Resource Estimate for the Bornite Project
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News Release
Trilogy Metals Announces Updated Resource
Estimate for the Bornite Project
January 20, 20 22 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX/NYSE
American: TMQ) (" Trilogy” or the “Company”) is pleased to announce the release of an
updated mineral resource estimate for the Bornite Project located in the highly prospective
Ambler Mining District of Northwest Alaska. The Bornite Project forms part of the Upper Kobuk
Mineral Projects (“UKMP”), owned by Ambler Metals LLC (“Ambler Metals”), the joint venture
operating company equally owned by Trilogy and a wholly owned subsidiary of South32 Limited
(ASX, LSE, JSE: S32; ADR: SOUHY) (“South32”).
Highlights of the Updated Bornite Resource Estimate
• At a base case 0.50% copper cut -off grade and constrained within a limiting pit shell,
the Bornite Project is estimated to contain in -pit indicated mineral resources of 41.7
million tonnes grading 1.04% copper for 955 million pounds of contained copper
and in-pit inferred mineral resources of 93.9 million tonnes grading 0.98% copper
for 2.0 billion pounds of contained copper (see Table 1 for details).
• Below the resource limiting pit shell, and at a base case cut-off grade of 1.5% copper,
the combined South Reef and Ruby Zone is estimated to contain additional inferred
mineral r esources of 50.3 million tonnes grading 2.97% copper for 3.3 billion
pounds of contained copper (see Table 1 for details).
• The South Reef area, which represents the bulk of the resources located below the pit
shell, has inferred mineral r esources estimated at 35.3 million tonnes grading
3.39% copper for 2.6 billion pounds of contained copper (see Table 1 for details).
• Below the resource pit shell, t he Ruby Zone has inferred mineral resources estimated
to be 15 million tonnes grading 1.98% copper for 653 million pounds of contained
copper (see Table 1 for details).
• The total cobalt inferred mineral resource (in-pit and below pit) , based on a cut -off
grade of 0.5% copper, is 185.8 million tonnes grading 0.021% cobalt for 88 million
pounds of contained cobalt (see Table 2 for details).
The sensitivity of mineral resources located below the pit shell to the cut-off grade is shown in
Table 3 for the South Reef area and in Table 4 for the Ruby Zone.
This mineral resource estimate was prepared for Trilogy Metals Inc. by Robert Sim, P.Geo.,
SIM Geological Inc. (“SGI”) and Bruce M. Davis, FAusIMM, (“BMD”), who are both independent
Qualified Persons as set forth by National Instrument 43 -101. A National Instrument 43-101
(NI 43-101) technical report detailing the mineral resource estimate for the Bornite Project will
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be completed and filed on SEDAR (www.sedar.com) within 45 days of this news release.
Table 1. Estimate of Copper Mineral Resources for the Bornite Project
Notes:
(1) Resources stated as contained within a pit shell developed using a metal price of US$3.50/lb
copper, mining costs of US$3.00/tonne, milling costs of US$11.00/tonne, underground mining
cost of US$65.00/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 Cobalt Mineral Resources for the Bornite Project
Notes:
(1) Mineral Resources stated as contained within a pit shell developed using a metal price of
US$3.50/lb copper, mining costs of US$3.00/tonne, milling costs of US$11.00/tonne,
underground mining cost of US$65.00/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.
(4) Due to limited sample data, none of the cobalt mineral resource meets the confidence level for
Indicated-class mineral resources. All cobalt mineral resources are considered to be in the
Inferred category.
Tonnes Average Grade Contained Metal
(million) Cu (%) Cu (Mlbs)
Indicated In-Pit 0.5 41.7 1.04 955
Total Indicated 41.7 1.04 955
Inferred In-Pit 0.5 93.9 0.98 2,034
Inferred Below-Pit South Reef 1.5 35.3 3.39 2,639
Inferred Below-Pit Ruby Zone 1.5 15.0 1.98 653
Total Inferred 144.1 1.68 5,326
Class Type Cut-off (Cu%)
Tonnes Average Grade Contained Metal
(million) Co (%) Co (Mlbs)
Inferred In-Pit 0.5 135.6 0.017 51
Inferred Below-Pit South Reef 1.5 35.3 0.039 30
Inferred Below-Pit Ruby Zone 1.5 15.0 0.021 7
Total Inferred 185.8 0.021 88
Class Type Cut-off (Cu%)
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Table 3. Sensitivity to Cut-Off Grade of Inferred Mineral Resources Below the Base Case Pit
Shell in the South Reef Area
Notes:
(1) Base case cut-off grade of 1.50% copper is shown in bold in the table.
(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 4. Sensitivity to Cut-Off Grade of Inferred Mineral Resources Below the Base Case Pit
Shell in the Ruby Zone
Notes:
(1) Base case cut-off grade of 1.50% copper is shown in bold in the table.
(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.
Tony Giardini, President and CEO of Trilogy, commented, ”As seen in Figure 1, the Bornite and
Arctic projects not only have a significant amount of copper but both assets also have some of
the highest grades in the world and easily stand apart from our copper peers . I want to also
note that the rationale of this u pdated resource estimate is to highlight the South Reef area
which, based on drilling, appears to be amenable to underground bulk mining methods due to
its exceptional mineralized widths and continuity. While our Ambler Metals Joint Venture team
has been focused on the Arctic Project, which is located 24 kilometers from Bornite, we want
to remind investors that Bornite is also a very compelling copper-cobalt project and is one of
the highest -grade undeveloped copper assets in the world. We will now pass alo ng this
resource estimate to the Ambler Metals Joint Venture team which will look at ways at
integrating this asset with our other assets within the UKMP.”
Cu (%) Co (%) Cu (Mlbs) Co (Mlbs)
1.00 60.3 2.51 0.028 3,339 37
1.25 42.2 3.07 0.035 2,861 32
1.50 Base Case 35.3 3.39 0.039 2,639 30
1.75 31.8 3.57 0.041 2,499 29
2.00 29.8 3.67 0.043 2,413 28
Average Grade Contained Metal
Inferred
Cut-off (Cu %) Tonnes
(million)
Cu (%) Co (%) Cu (Mlbs) Co (Mlbs)
1.00 48.7 1.5 0.019 1,604 21
1.25 26.8 1.75 0.02 1,033 12
1.50 Base Case 15.0 1.98 0.021 653 7
1.75 7.8 2.2 0.022 378 4
2.00 3.1 2.41 0.022 165 2
Inferred
Cut-off (Cu %) Tonnes
(million)
Average Grade Contained Metal
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Richard Gosse, Vice -President Exploration for Trilogy, commented, “The current resource
update confirms the significant size and copper grades at the Bornite project and puts the
spotlight on the high-grade resource in the South Reef area, which is being separately reported
in the below-pit inferred resource category in this update. Besides its exceptional grade, South
Reef is characterized by good thickness and continuity, and its discovery in 2011, more than
60 years after copper was first discovered at B ornite, points to the excellent exploration
potential for other Bornite-type deposits nearby in the Cosmos Hills and the Ambler Lowlands.”
Figure 1. Comparison of Trilogy’s Mineral Resources Compared to its Peers
Notes:
(1) Peer group data as per latest company documents and public filings.
(2) Assumes all assets on a 100% basis. Trilogy has a 50% interest in the UKMP which includes the
Arctic and Bornite Projects.
Comparison of 2018 and 2021 Resource Estimates
Table 5 shows a comparison between the 2018 resource estimate and the current estimate of
mineral resources. As can be seen below, the Indicated and Inferred in-pit resource tonnage
estimates increased by 3 % and 1 2%, respectively. While the below -pit resource tonnage
decreased by 13%, the average copper grade increased from 2.89% to 2.97%. Total inferred
resource tonnage (in-pit and below-pit) decreased by about 2%.
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Table 5. Comparison of Current and Previous Resource Estimates for the Bornite Deposit
Factors that contribute to the changes in mineral resources are summarized as follows:
• The current mineral resource estimate includes the results of drilling that was conducted
in 2017, 2018, and 2019, but the 2017 drill holes were too widely spaced to support
updated mineral resources on the northern (down-dip) part of the deposit at that time.
The additional drilling had no impact on the distribution of mineral resources in the
Indicated category located inside the resource pit shell. Most of the new drilling was
located along the northern, down-dip side of the deposit, or in the vicinity of the South
Reef area. These additional drill holes generally resulted in a slight reduction in the
volume (tonnage) of mineral resources , but with a corresponding increase in both
copper and cobalt grades.
• The interpretations of geologic domains and trend planes were updated based on all
available drilling information. The differences in these interpretations compared to the
previous resource estimate are relatively minor.
• The projected operating costs and metal prices used to generate the resource
constraining pit shell were updated to reflect the current mining environment. The
mining cost was increased, by 50% from US$2.00/tonne to US$3.00/tonne and the
copper price was increased from US$3.00/lb to US$3.50/lb. These changes have
resulted in a slightly larger resource constraining pit shell, which generally increased
the volume of open -pit mineral resources and decreased the amount of underground
mineral resources.
• The new mineral resource estimate was subjected to a critical review of the continuity
of grade and thickness of mineralization below the pit shell; this was completed to
ensure that the mineral resource exhibits reasonable prospect s for eventual economic
extraction using underground mining methods. This process has eliminated some of the
more isolated mineralized areas that were present in the previous mineral resource
estimate.
2017-2019 Drilling Campaigns
During the summer of 2017, seven drill holes were completed, totaling 8,437 meters, that
tested the down-dip continuity of the northern part of the Bornite deposit. As stated previously,
the spacing of these holes was considered too far apart to support the generation of additional
mineral resource estimates at that time, and as a result, the estimate of copper mineral
resources remained unchanged in the June 2018 report from those reported in the previous
technical report dated April 2016. However, the June 2018 technical report did include, for the
first time, an estimate of cobalt mineral resources for the Bornite Project.
In the summer of 2018, Trilogy Metals conducted a drilling progr am on the Bornite property
Tonnes
(million)
Average
Grade Cu (%)
Contained
Metal Cu
(Mlbs)
Tonnes
(million)
Average
Grade Cu (%)
Contained
Metal Cu
(Mlbs)
Indicated In-Pit 0.5 41.7 1.04 955 40.5 1.02 913
Inferred In-Pit 0.5 93.9 0.98 2,034 84.1 0.95 1,768
Inferred Below-Pit 1.5 50.3 2.97 3,292 57.8 2.89 3,683
Inferred 144.1 1.68 5,326 141.9 1.74 5,450Total Inferred
Cut-off
(Cu %)TypeClass
December 2021 June 2018
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that included the completion of 12 holes totaling 10,123 meters that, in part, filled the gaps in
previous drilling in the northern, down-dip part of the deposit.
In the summer of 2019, another drilling program , totaling 7,610 metres, was conducted on
the property comprising eight holes that tested the continuity of the mineralization within the
Bornite deposit and two holes that tested exploration targets located about 1 km south and
southeast of the deposit.
Database and Methodology
The project database comprises a total of 273 diamond drill (core) holes totaling 106,406
meters, including 203 holes that targeted the Ruby Zone to the west and 58 holes that targeted
the South Reef area to the east. The remaining 12 holes in the database were exploratory in
nature and tested for satellite mineralization proximal to the Bornite deposit or represent holes
that encountered problems and were therefore abandoned. The database contains a total of
39,740 samples that were analyzed for copper content and 34,177 samples that were analyzed
for cobalt content. Most holes were drilled by Trilogy Metals, plus a few select historical holes
drilled by Kennecott Mines Company, containing additional analyses for elements such as zinc,
lead, gold, silver, and cobalt . At this time, only copper and cobalt show any significant
economic potential, and the others were excluded from the estimation of mineral resources.
Grade estimates are made into model blocks measuring 5m x 5m x 5m, using ordinary kriging
with sample data composited to 2-meter intervals. The copper and cobalt resource models
were validated using a combination of a visual review and statistical comparisons with models
generated using other estimation methods. The effects of potentially anomalous high grade
sample data were controlled using a combination of traditional top cutting as well as restricting
the distance of influence during block grade interpolation. Copper and cobalt resources in the
Inferred category occur within a maximum distance of 100 meters from a drill hole and exhibit
reasonable confidence in the grade and continuity of mineralization. Copper resources included
in the Indicated category are considered am enable to open -pit extraction methods and are
delineated with holes spaced at a maximum distance of 75 meters. Note that there is less
available cobalt sample data and, as a result, none of the cobalt mineral resource is included
in the Indicated category. A portion of the mineral resource has been constrained within a pit
shell generated based on the copper content in the model using a copper price of US$3.50/lb,
mining operating costs of US$3.00/tonne, processing costs of US$11.00/tonne and G&A costs
of US$5.00/tonne, copper process recovery of 87% and a pit slope of 45 degrees. Mineral
resources located below the pit shell are based on an assumed mining cost of US$65.00/tonne
and exhibit the continuity and thickness to be considered amenable to underground extraction
methods such as longhole stoping and cut-and-fill mining. It is assumed that extraction from
the Bornite deposit is based on the copper content in the rocks and t hat cobalt would be a
secondary contributor to the potential economic viability of the deposit. As a result, both copper
and cobalt mineral resource estimates are defined based on a copper cut-off grade threshold.
Location and Distribution of Mineral Resources
The location of the Bornite Project is shown in Figure 2. The distribution of open pit and
underground mineral resources at the South Reef and Ruby Zone are shown in Figures 3 and
4.
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Figure 2. Location of the Arctic and Bornite Projects within the UKMP
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Figure 3. Perspective View Looking Northwest of Mineral Resources at Bornite
Figure 4. Perspective View Looking Southwest of Mineral Resources at Bornite