Trilogy Metals partnered with NANA, the Alaska Industrial Development and Export Authority (AIDEA), and South32 to advance UKMP. The business arrangement with NANA involves giving Trilogy Metals access to about 350,000 acres of NANA land. In return, NANA receives net smelter royalties of 1 percent to 2.5 percent and the option to become an equity partner (16 percent to 25 percent) or receive a net proceeds royalty (15 percent NPI). For its part, Trilogy Metals is committed to promoting employment for NANA shareholders, as well as providing scholarships and ensuring the area’s subsistence lifestyle is not interrupted by project operations.

According to 2017 numbers, nearly 65 percent of UKMP’s direct hires are NANA shareholders. Nearly 50 percent are from the Upper Kobuk region.

“The real guts and the working part of the arrangement is the oversight committee and the subcommittees that work underneath that specifically address subsistence related issues, workforce development, and just making sure that we’re aware of any community concerns. We’ve been working with NANA since 2011 and it’s a great working relationship,” says Van Nieuwenhuyse.

The company’s second partnership is to help it advance its infrastructure needs. Specifically, AIDEA and Trilogy are working to obtain the proper permitting to build a 211-mile private access road connecting the Ambler mining district to four ice-free ports in Point MacKenzie, Anchorage, Seward, and Whittier, according to Van Nieuwenhuyse.

“The road that’s been proposed would connect to the Dalton Highway which then connects down to Fairbanks and the rail and down to the ports in Southcentral Alaska,” he says. AIDEA has begun the permitting process for the road and a draft environmental impact study (EIS) is anticipated by March 2019, with the final EIS expected by the end of 2019.

“Our last partnership is a financial one with a company called South32. You’ll notice the Australians have shown up in numbers here in Alaska in the last year or two. South32 were spun out of the largest mining company in the world in 2015 and they produce a whole host of metals,” says Van Nieuwenhuyse. Trilogy and South32 signed an agreement in which South32 has the option to form a 50/50 joint venture to hold Trilogy’s Alaska assets, an option it can exercise by January 2020 by contributing approximately $150 million. The agreement also calls for South32 to receive option payments of $10 million a year for up to three years. “They are the largest manganese producer the world; they also produce nickel, silver, lead, zinc, and both thermal and energy coal, but they don’t produce copper and that is the core of the relationship that they’ve developed with Trilogy Metals,” says Van Nieuwenhuyse. He goes on to note that the companies have just finished the second year of the three-year option, “so at the end of next year they’ll have to be making a big decision about forming a 50/50 partnership by investing $150 million, which is plenty of money to get both projects well through permitting and feasibility and start thinking about building things.”

With its three partners in place, Trilogy is set to advance UKMP. But what does that involve?

The Arctic Project sits underneath the top of one of the first set of mountains in the Brooks Range. Trilogy estimates the project has probable mineral reserves of 43 million tonnes.

“It’s basically 5 percent copper equivalent, 2 percent copper, 2 percent zinc, 0.6 percent lead, half a gram of gold, and over an ounce of silver. That’s about ten times the average grade being mined in open pit copper mines today. So this is not a low-grade deposit,” says Van Nieuwenhuyse.

Trilogy expects Arctic to have a mine life of twelve years and mill capacity of 10,000 tons per day. The company is focusing on three separate “high-value” concentrates: copper (90 percent recovery), zinc (91.7 percent recovery), and lead (80 percent recovery). It intends to put the mill “right across the valley very conveniently located and close to the pits, and then our waste and tailings facilities at the head of the valley.” The mill will be built as a “typical crush-grind-flotation” mill circuit with onsite power generation fueled by liquid natural gas (LNG).

The LNG could come from a few different locations. A plant is already located in the area but would have to be expanded to accommodate the new mines’ fuel needs. In addition, Siemens is looking at building a plant in cooperation with Knik Village Corporation, “so there’re some alternatives to look at and some business opportunities that we’ll be investigating starting this year. But the idea would be to either truck it or rail it up to Fairbanks.”

The second project at UKMP is Bornite. Located about twenty miles from the Arctic Project, the company’s primary focus at the Bornite Project is copper and cobalt. “The cobalt is located in the pyrite mineral, which is rejected in our copper sorting. So the higher-grade copper concentrate we make, the more we put the cobalt in the tails, and then we can separate the cobalt from pyrite in the tail… we get good cobalt out of that. And we’re working on that right now,” he says.

As of early fall, the company had drilled twenty-two exploration holes at a depth of 1,200 meters each. It anticipates being able to extract 6 billion pounds of copper from the proposed pit and 77 million pounds of cobalt. “We have spent about $20.8 million dollars since this resource was put out a few years ago, and this is the South32 money. We drilled twenty-two holes up to 1,200 meters in depth on the North and East plane of the deposit. So we’ll be updating the resource early next year when we get all the results from this year’s drilling program finished and wrapped up.”

Before Trilogy, NANA, AIDEA, and South32 see tangible results from UKMP, there are a number of hurdles that must be cleared. First, the foursome must receive various federal and state permits and borough approval. The 404 Wetlands Permit is the only federal permit needed; all other significant permits will come from the state, including mine operation; air quality; dam operating; and water discharge. Finally, they will need Northwest Arctic Borough Authorization.

And, of course, AIDEA and Trilogy have to get the access road built. The road is through scoping and the draft EIS, which is set to be released to the public for comment during the first quarter of 2019. The current schedule has the EIS completed by the end of the year with a record of decision published “shortly after that.”

One point that Van Nieuwenhuyse says is particularly important to note is that “this road is intended to be industrial access only, not open to the public. It has been quite controversial because although the application was for a private road, that wasn’t made clear by the documentation that BLM [the Bureau of Land Management] put out to the public during the scoping process. So I think that it has now been made very clear that it’ll be maintained as a permanent private road and it will be maintained with a guard station to ensure that it remains a private road,” he says.

Trilogy estimates it will employ about 450 people at the mine on a rotational basis, with additional jobs related to maintaining and making the road.

“We’re doing all the pre-application work now hoping to get the notice of intent and the EIS/NEPA notice that we can kick off. If the Trump Administration executive orders the hold firm, it should be a one to two year process,” says Van Nieuwenhuyse.