Trilogy Metals Drills 16.4 metres of 5.3% Copper and 0.21% Cobalt and Provides Corporate and Project Updates
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News Release
Trilogy Metals Drills 16.4 metres of 5.3% Copper and 0.21% Cobalt
and Provides Corporate and Project Updates
August 23, 2018 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX/NYSE
American: TMQ) (“Trilogy Metals” or the “Company”) is pleased to provide an update on its
summer activities at the Upper Kobuk Mineral Projects (“UKMP”) located within the Ambler
Mining District of northwestern Alaska. The Company is working on several fronts to advance
both the Arctic and Bornite Projects. All amounts are in US dollars.
Bornite Project
Initial Bornite Drilling Results
As of August 19 th, the Company has completed five drill holes comprising a total of 5,267
metres at Bornite. The objective of the 2018 drilling campaign is to infill and expand the
currently defined open pit and underground mineral resources . Mineralization occurs as a
series of “Reefs” hosted by both the Upper and Lower Bornite Carbonate sequences separated
by a generally unmineralized phyllite unit. The Cu-Co mineralization at Bornite occurs in three
distinct carbonate zones, the Upper Reef, the Lower Reef, and the South Reef. All three zones
are being drill tested this year.
The Company has received , on an expedited basis, initial assay results from drill hole RC18 -
0247 which is designed to test extensions of high-grade copper mineralization at depth, along
the South Reef trend . At a copper cut -off grade of 1 .5%, RC18-0247 contains an interval of
16.4 metres grading 5.34% copper and 0.21% cobalt . The mineralized interval was
intersected at a depth of 791.9 metres (total mineralized interval was between 7 91.9 metres
to 808. 3 metres). The high -grade mineralized zone in RC18 -0247 consists of massive
chalcopyrite occurring as breccia infill with intergrown pyrite and within dolomite-quartz veins
as centimetre scale blebs. Bornite and chalcocite mineralization replace chalcopyrite within
the breccia matrix in the highest-grade intervals from 795. 9 to 799.3 metres and 803.9 to
808.3 metres . Large (4 to 10 centimetres wide) carbonate/quartz veins also host a
chalcopyrite-bornite-chalcocite mineral assemblage. Massive cobaltiferous pyrite occurs as 10
to 20 centimetre-wide stringers between the two higher grade zones. This mineralized interval
is within the Lower Reef. Figure 1 and Table 1 shows the location of RC18-0247 while Figure 2
is a cross-section showing the location of RC18-0247 relative to other holes on the section.
Additional drilling results from the upper portion of the mineralized interval of this drill hole
will be made available as they are rece ived by the Company along with results for other drill
holes that have been completed and are in the laboratory.
Rick Van Nieuwenhuyse, President and CEO commented : ”We are pleased to report that the
high-grade copper and cobalt zones demonstrate continuity and continue down dip. We look
forward to reporting additional results as they become available”.
TSX/NYSE American
Symbol: TMQ
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Table 1 – Location of Drill Hole RC18-0247 at the Bornite Project
Drill hole East (m) North (m) Elev. (m) Azimuth Dip
RC18-0247 590524 7440658 312 206 80
Expansion of Bornite Drilling Program
The Company is also pleased to announce that its partner, South32 Limited (ASX, LSE, JSE:
S32; ADR: SOUHY) (“South32”), has agreed to increase its contribution to this year’s Bornite
drilling program by funding an additional $800,000 to the Company. The additional funding
will reduce South32’s 2019 minimum exploration budget commitment of $10 million to $9.2
million. The $800,000 is expected to allow the Company to add two drill rigs that are expected
to complete four holes totaling 1,500 to 2,100 metres.
Figure 1. Location of 2018 Bornite Drilling
The original program envisaged an 8,000 metre exploration program of in-fill and expansion
drilling to better define the high -grade copper resources at the Bornite Project Five drills are
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expected to be in operation for at least a month with the drilling campaign extendin g into the
middle of September.
Updated Bornite Resource Estimate
Once the drilling program is completed, the Company intends to move forward on an updated
copper-cobalt resource estimate at the Bornite Project. The updated resource estimate is
expected to incorporate the infill and expansion drilling that has been carried out during the
2017-2018 exploration campaigns. The resource estimate is expected to be completed in the
first half of 2019.
Figure 2. Cross-section RC18-247
Bornite Metallurgical Program
On June 5th, 2018 the Company announced a n initial cobalt resource estimate for the Bornite
Project of 77 million pounds of inferred cobalt resources (see Table s 2 and 3 for details
including grade ). An updated technical report entitled “NI 43 -101 Technical Report on the
Bornite Project, Northwest Alaska, USA” including the inferred cobalt resources was filed by
the Company on July 20, 2018, and is available on the Company’s website at
www.trilogymetals.com and on the Company’s profile at www.sedar.com and www.sec.gov.
With the completion this resource estimate the Company has now embarked on a metallurgical
study to investigate various methods of recovering both the copper and cobalt at Bornite.
Initial results from the metallurgical program are expected to be made available to the
Company in Q1, 2019.
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Initial Bornite Preliminary Economic Assessment
Once the updated resource estimate and metallurgical results are made available, the
Company expects to move forward on a Preliminary Economic Assessment (“PEA”) on the
Bornite Project. The PEA is expected t o investigate the viability of a combined open pit and
underground mining operation. The PEA is expected to be completed by the end of the second
quarter of 2019.
Table 2: 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 3: 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
(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.
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Arctic Project
The Company has recently completed its summer activities at the Arctic Project, which include
592 metres in 24 holes of geotechnical/hydrological drilling which is providing geotechnical and
hydrological information at the proposed tailings dam, waste rock facility and grinding mill
locations. The Company intends to continue with baseline environmental studies which
includes hydrology, wetlands delineation, meteorological and archeology data collection.
Arctic Ore Sorting Program
Ore sorting test work at the Steinert Labs facility in Kentucky, USA has been completed. Early
indications are 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 . The
recent pre-feasibility study estimated 20 -30% dilution at the mine face within the proposed
Arctic pit. Reducing the dilution to 10-20% may result in an improvement of the economics of
the Arctic Project. The Company expects to evaluate the potential for capital and operating
cost savings based on these initial results from the ore sorting test work before the end of the
end of the year.
Permitting of the Arctic Mine
The Company is continuing with its baseline environmental work and permitting application
work with a view of submitting its 404 Wetland Permit application to the U.S. Army Corps of
Engineers (“USACE”) during the first half of 2019. The USACE is expected to be the lead agency
for the permitting of the Arctic Project. Given that the Arctic Project is located on State and
private lands owned by NANA Regional Corporation, Inc. (no Federal lands) the Comp any
estimates a two to three-year permitting timeline for the project.
Ambler Mining District Industrial Access Project (“AMDIAP”)
On July 9th, 2018 at a joint session in Barrow, Alaska the Northwest Arctic Borough (“NWAB”)
Assembly and the North Slope Borough (“NSB”) Assembly, together, unanimously voted to
support evaluation of an industrial road in the Ambler Mining District which is located within
the NWAB.
Specifically, the two Boroughs Assemblies, which are the local g overnments in northern and
northwest Alaska, have jointly approved the following resolutions:
• Support for the Alaska Industrial Development Export Agency’s (“AIDEA”) evaluation of
an industrial road in the Ambler Mining District; and
• That food security and public benefit be considered a priority by evaluating agencies
and that public engagement and consultation be meaningfully incorporated into a final
decision; and
• That the NWAB shall commit to continuing its role as a cooperating agency; and
• That both Boroughs will examine ways to maximize community benefit and economic
development opportunities while undertaking an analysis of impacts and ways to
minimize or mitigate any adverse effects; and
• That both Boroughs shall explore opportunities for co-investment and ownership in the
Ambler Mining District Industrial Access Project (AMDIAP).
Mr. Nasruk Carl Weisner, the Assembly President for the NWAB stated, “The Northwest Arctic
Borough and North Slope Borough governments represent home -rule governments of the
people of northern Alaska. We support resource development in our Boroughs that respects
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the Inũpiat culture and protects our subsistence resources and the environment. We support
completing the Environmental Impact Assessment Statement on the Ambler Access Road.”
Background: Ambler Mining District Industrial Access Project
As announced in the Company’s press release dated May 29, 2018, AIDEA submitted permit
applications for the AMDIAP, a proposal for the construction and operation of a 211-mile (340
Km) long all -season controlled-access industrial road connecting the Ambler Mining District
with the Dalton Highway.
On April 30, 2018, the Bureau of Land Management (“BLM”) released the Ambler Road
Environmental Impact Statement Scoping Summary Report (s ee BLM’s website at
https://BLM's AMDIAP Website). Permitting of the AMDIAP under the National Environmental
Policy Act (“NEPA”) EIS process has now concluded the “Scoping Phase” of permitting and has
moved to the “Draft EIS Phase”. Per the BLM’s website, the Draft EIS is scheduled for the end
of March 2019 (Figure 1).
Approximately 20 miles of the proposed AMDIAP road crosses lands managed by the National
Park Service (“NPS”). The Alaska National Interest Lands Conservation Act (“ANILCA”) requires
that right-of-way access be permitted across NPS lands for this project. In addition, ANILCA
directs that an Environmental and Economic Analysis (“EEA”) be prepared for the right-of-way
across NPS lands in order to: 1) determine a preferred road alignment, and 2) develop
appropriate terms and conditions for the right-of-way permit. Two alternative routes are being
considered: North Route and South Route. The NPS has published a Project Schedule indicating
completion of the Final EEA by the end of 2018 on their website at
https://www.nps.gov/gaar/learn/management/ambler-row.htm.
Figure 3. Timeline of Permitting for the Ambler Mining District Industrial Access
Project
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QA/QC Program
The drill program and sampling protocol are managed by qualified persons employed by the
Company. Diamond drill holes were typically collared at PQ or HQ diameter drill core and
reduced to HQ and NQ diameter during the drilling process. Samples were collected using a
0.2-metre minimum length, 2.5-metre maximum length and 1.7-metre average sample length.
Drill core recovery averaged 9 0% overall and 94% wi thin the prospective lithologies . Three
quality control samples (one blank, one standard and one duplicate) were inserted into each
batch of 20 samples. The drill core was sawn, with half sent to ALS Minerals in Fairbanks for
sample preparation and the sam ple pulps forwarded to ALS's North Vancouver facility for
analysis. ALS Minerals in North Vancouver, B.C., Canada, is a facility certified as ISO
9001:2008 and accredited to ISO / IEC 17025:2005 from the Standards Council of Canada.
The Company will submit 5% of the assay intervals from prospective lithologies to an
independent check assay lab.
Qualified Persons
Andrew W. West, Certified Professional Geologist, Exploration Manager for Trilogy Metals Inc.,
is a Qualified Person as defined 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 high -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 approximately 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 "forward -looking
statements” (collectively "forward -looking statements”) within the 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 timing 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 operating or financial performance of the Company, planned expenditures and the
anticipated activity at the UKMP Projects , are forward-looking statements. The assay results
from drill hole RC18-0247 should not be considered representative of other drilling results for
the 2018 drilling campaign. Forward-looking statements are frequently, but not always,
identified by words such as "expects”, "anticipates”, "believes”, "intends”, "estimates”,
"potential”, "possible”, 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 statements regarding perceived merit of properties; exploration plans
and budgets; mineral reserves and resource estimates; 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 b e 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 operations, 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 PFS; 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 involved in the interpretation of drilling results
and geological tests and the estimation of reserves and resources; the need for cooperation 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 an d governmental
approvals; risks of construction and mining projects such as accidents, equipment breakdowns,
bad weather, non -compliance with environmental and permit requirements, unanticipated
variation in geological structures, metal grades or recovery rates; unexpected cost increases,
which could include 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 Fo rm 10-K for the year ended November 30, 201 7 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.