TSX/NYSE American Symbol: TMQ
VANCOUVER, Aug. 23, 2018 /CNW/ - 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 19th, 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 791.9
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 received 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".
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.
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
expected to be in operation for at least a month with the drilling
campaign extending 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.
Bornite Metallurgical Program
On June 5th, 2018 the
Company announced an initial cobalt resource estimate for the
Bornite Project of 77 million pounds of inferred cobalt resources
(see Tables 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.
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 to 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.
|
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 Company
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
governments 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 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 (see 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 3).
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.
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 90% overall and
94% within 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 sample 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.
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 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 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 and 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
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 requirements of
U.S. securities laws. Unless otherwise 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 Projects ("NI 43-101") and the
Canadian Institute of Mining, Metallurgy and Petroleum (CIM)—CIM
Definition Standards on Mineral Resources and Mineral Reserves,
adopted by the CIM Council, as amended ("CIM Definition
Standards"). NI 43-101 is a rule 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 significantly 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 reserve determination is made. The SEC's disclosure standards
normally do not permit the inclusion of information concerning
"measured mineral resources", "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 documents 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 Trilogy Metals in
compliance with NI 43-101 may not qualify as "reserves" under SEC
standards. Arctic does not have known 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.
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