UKMP Development Plan Looking To Include Bornite Project

VANCOUVER - Trilogy Metals Inc. reported that 2021 was another pivotal year as it marked the resumption of in-the-field activities at the Upper Kobuk Mineral Projects (UKMP), including significant advancements at the Arctic Project – part of the UKMP. Despite the challenges of the Covid-19 pandemic, which resulted in the suspension of the 2020 field program, the team at Ambler Metals LLC – the 50/50 joint venture company with South32 Ltd., was able to complete the 2021 program in a safe and effective manner. Throughout the last year, there has also been incredible progress in advancing the Ambler Access Project (AAP), which is the proposed 211-mile (340-km) industrial-use-only road from the UKMP to the Dalton highway.

Recall that in 2020, our infrastructure partner – The Alaska Industrial Development and Export Authority (AIDEA) – received the Joint Record of Decision (JROD) from the United States Bureau of Land Management ("BLM"), and the Section 404 Permit from the United States Army Corps. of Engineers ("USACE"). These are the two key permits required for the road. As previously disclosed, lawsuits were filed shortly thereafter by a coalition of national and Alaska environmental non-government organizations in response to the BLM's issuance of the JROD for the Ambler Access Project and the lawsuits are ongoing.

Subsequently, there have been several positive developments with the AAP starting with a funding agreement between AIDEA and Ambler Metals, in which both parties have each committed $35 million towards the pre-development work on the AAP. The Alaska Industrial Development and Export Authority (AIDEA) signed agreements for Right-of-Ways for the AAP with the BLM and the National Parks Service. AIDEA also signed a land access agreement with Doyon, Limited, which is an Alaska Native regional corporation. This agreement allows AIDEA to carry out feasibility and permitting activities on Doyon land. During the summer of 2021, AIDEA commenced formal field work on the proposed road. The budgeted $13 million program involved cultural heritage work, aquatic habitat studies and geotechnical work. This month, AIDEA announced the approval of the 2022 program and budget for the AAP of $30.8 million, of which $15.4 million will be funded by AIDEA and $15.4 million will be funded by Ambler Metals. During the 2022 field season, AIDEA will be carrying out additional work, including geotechnical studies, right-of-way surveys, environmental studies, road and bridge engineering design work, and cultural heritage work. Nearly 50 local jobs have been identified for the 2022 field season.

Despite challenging weather and recruitment issues, we were still able to make tangible progress at the Arctic Project. During the summer drilling campaign, we drilled 18 drill holes totaling 4,131 meters. The goal of this program was to convert a portion of the mineral resources from the indicated category to the measured category and provide material for metallurgical testing and geotechnical information. So far, we have released the drilling results for six holes, all of which hosted significant intervals of high-grade mineralization. We are already planning for the 2022 field season which will encompass 10,000 meters of drilling, with three drills starting up in late spring.

In the fall of 2021, Ambler Metals engaged Stantec to conduct a permitting preparedness review for the Arctic Project. After a thorough review, Stantec concluded that the permitting strategy is sound, and the permitting package can proceed with minor changes. Ambler Metals is now making the recommended changes to the permitting package and expects to file the permitting application, which will start the formal permitting process for the Arctic Project, with the United States Army Corps. of Engineers in 2022. We continue to anticipate that the permitting process will take 24 to 30 months.

While the immediate focus has been on Arctic, we want to remind investors that Bornite is still a remarkable asset. This was highlighted when we announced a new resource estimate in January 2022. Like Arctic, Bornite has extremely high copper grades, specifically the South Reef area which hosts inferred resources of 35.3 million tonnes at a grade of 3.4% copper. Overall, Bornite is impressive with indicated in-pit resources grading over 1% copper, containing almost a billion pounds of copper and inferred in-pit resources of just over two billion pounds of copper at a grade of almost 1% copper. The company has passed along findings to the Ambler Metals team who will look at how the Bornite Project fits into the overall development plan at the UKMP.

The company is moving towards the exploration and development of its assets at the UKMP. The joint venture partners have already approved a $28.5 million budget for 2022, which will include approximately 10,000 meters of drilling at Arctic and the rest of the UKMP.