zinc, all in concentrates for provision to third party refiners. Waste and tailings materials will be stored in surface facilities, which will be closed and reclaimed at the end of the mine; contact water will be treated and discharged to the environment throughout the life of mine. Precious metals attendant with the concentrates will be largely payable. While there are expected to be several deleterious elements in the concentrates at levels that may incur penalties, there are no special processing requirements.
Under the assumptions presented in the 2020 Arctic Report, the Arctic Project shows positive economics.
The financial analysis excludes consideration of the NANA Agreement, whereby NANA has the right, following a construction decision, to elect to purchase a 16% to 25% direct interest in the Arctic Project or, alternatively, to receive a 15% Net Proceeds Royalty.
The financial analysis excludes consideration of the new joint venture formed between South32 and Trilogy.
The cost assumptions for the AMDIAP road are estimates provided by Trilogy. There is a risk to the capital and operating cost estimates, the financial analysis, and the Mineral Reserves if the toll road is not built in the time frame required for the Arctic Project, or if the toll charges are significantly different from what was assumed.
In terms of project execution, the mine requires nominally two years of pre-strip operations, tailings pond starter dam development and water accumulation before actual production mining operations can commence.
For that pre-strip work to start, the Arctic access road from the AMDIAP intersection to the mine site will have to be constructed to at least a pioneer road condition that will allow the mine fleet and the support facilities to be delivered, built and made operational.
Recommendations
A single-phase work program is recommended, which will include: additional drilling program to upgrade a portion of the indicated resource to measures resource; drill and blast study; geotechnical investigations and studies; further geohazards assessment; site specific seismic hazard assessment; updating of hydrogeological models and groundwater management plans; optimization of the plant and related service facilities and evaluation of the power supply; examination of water management, water treatment, WRF and TMF designs; baseline studies and environmental permitting activities; and additional metallurgical testwork. The budget for this work is estimated at about $7.0 million.
Bornite Project, Ambler District, Alaska
Bornite Project
Except as otherwise stated, the scientific and technical information relating to the Bornite Project contained in this Form 10-K is derived from the 2018 Bornite Report titled “NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA” dated July 20, 2018 with an effective date of June 5, 2018 prepared by BD Resource Consulting, Inc., SIM Geological Inc., and International Metallurgical & Environmental Inc. The information regarding the Bornite Project is based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the 2018 Bornite Report which has been filed with certain Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Bornite Project - Property Description and Location
The property is located in the Ambler mining district of the southern Brooks Range, in the NWAB of Alaska. The property is located in Ambler River A-2 quadrangle, Kateel River Meridian T 19N, R 9E, sections 4, 5, 8 and 9. The Bornite Project is located 248 km east of the town of Kotzebue, 19 km north of the village of Kobuk, 275 km west of the Dalton Highway, an all-weather state maintained public road, at geographic coordinates N67.07° latitude and W156.94° longitude (Universal Transverse Mercator North American Datum 83, Zone 4W coordinates 7440449N, 589811E).