Thursday, February 21, 2019 - AGS Luncheon Lecture

Copper in the Ambler Mining District and the Green Energy and Transportation Revolution -
Part of the Problem or Part of the Solution?

Noon Luncheon 11:30-1:00 pm

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LECTURE ABSTRACT

Governments around the world are collaborating to focus on addressing Climate Change and Global Warming. The Paris Climate Accord adopted numerous measures to “limit a global temperature rise this century below 2 degrees Celsius above pre-industrial levels”, but two stand out as the most meaningful and obvious: use cleaner forms of energy and transportation.

Coal, oil, and natural gas make up 90% of our global energy production. To curb greenhouse gas emissions, more non-carbon energy sources such as Solar, Wind, Geothermal, Hydro, and Nuclear are needed. Regardless of which form of Alternative Energy is used, each requires 5X more copper than conventional coal. Similarly, to reduce greenhouse gases related to transportation, more hybrid and electric vehicles need to be built. Internal Combustion Engine vehicles use 20kg of copper while all- electric vehicles use 80kg of copper per car, even more for trucks, buses and mass transit. More power generation and charging stations will require more copper. Bottom line, Green Energy and Transportation solutions require 5X more copper than conventional energy and transportation. If we want less CO2 going into the atmosphere, we need to produce more copper under it! And the absolutely great thing about copper is that it’s 100% re-usable. Today, about 80% of the copper mined is recycled and with some effort we can get this to 95%. There is no doubt that copper is the key to a sustainable green energy and transportation future.

We have choices to make as a society. We can do nothing and the earth keeps warming up; we can do nothing “in our backyard”, leaving it to others to fill our global need for copper and cobalt knowing that it may involve child labor, corruption and human rights atrocities; or, we can support mining in safe jurisdictions with responsible resource development. It is our responsibility as an industry to educate the public and inform them of the requirements of a more sustainable future.

Alaska has the good fortune to be well endowed with minerals and the Ambler Mining District is one such place where Trilogy is developing the Upper Kobuk Mineral Projects (UKMP) containing: Copper- Zinc-Lead-Gold-Silver and Cobalt. The UKMP consists of two main projects within a larger 100km long regional land package. The two projects include the Arctic Volcanogenic Massive Sulfide (VMS) deposit containing 43 million tonnes averaging 5% CuEq and the Bornite carbonate-hosted Cu replacement deposit located ~20 miles to the southwest of Arctic and containing 6 billion pounds of copper and 77 million pounds of cobalt.

The Ambler District is defined by a series of metamorphosed Devonian VMS deposits and occurrences that are hosted within the Ambler Sequence, of which Arctic is the largest and most studied deposit identified to date. The Ambler Sequence is comprised of about two-thirds felsic to mafic composition meta-volcanic rocks and one-third metasedimentary rocks and is host for the VMS mineralization. The Arctic deposit is polymetallic in nature and is characterized by massive to semi-massive lenses of sulfide mineralization ranging in thickness between 1-18 meters and enriched in Cu, Zn, Pb, Ag, and Au. Models for this deposit started with ‘multiple stacked ore lenses’ each zoned from a high oxidation state (fO 2 ) ‘core’ to a low fO 2 margin, and metal zoning within the deposit was due to chemical interaction between hydrothermal fluids and carbonaceous sediments at or near the ocean floor (Schmidt, 1983). However, the current and most accepted model has evolved to a structural understanding that Arctic consists of multiple ore lenses that are folded repeats rather than stacked lenses whether it’s one complexly folded horizon, some combination or folding and low angle faulting of one horizon, and/or multiple folded horizons. Several academic studies ranging from the Geology of Arctic, to understanding metal zoning and metal deportment have been completed over the years to help unravel these questions. In addition to the academic studies, several new technology and engineering studies completed by Trilogy include: mineralogic/geometallurgical understanding using QEMSCAN and electron microscopy, Corescan – automated hyperspectral mineralogy and alteration mapping, and multiple geotechnical and mine engineering and hydrological studies. A VTEM geophysical survey will be flown across both the Ambler Schist Belt and the Cosmos Hills during 2019 to further refine and identify prospective areas within the Ambler Sequence for further exploration.

Twenty miles to the southwest is the Bornite property, a carbonate-hosted deposit with an already sizable resource containing 6 billion pounds and 77 million pounds of cobalt. The Company has an agreement with NANA Regional Corporation, Inc., an Alaskan Native Corporation which consolidates a 353,000 acre land package. In addition, we have an infrastructure partnership with the Alaska Industrial Development and Export Agency (AIDEA) to finance construction of an access road, and an option agreement with South32 Ltd. to form a joint venture to develop the projects. Through partnerships, it is our objective to develop the Ambler Mining District into a world class metal producing region – metals that can be used to meaningfully address climate change.

The Bornite deposit has long been known as a significant Cu deposit in the Cosmos Hills along the southwest flank of the Brooks Range. The deposit is hosted within the Bornite Sequence and is characterized by copper-rich sulfides replacing Devonian carbonate rocks, with the bulk of the mineralization occurring in a dolostone breccia encased by limestone and argillic phyllite packages. The deposit consists of multiple ore bodies: the long-known Number One ore body – part of the Upper Reef stratigraphy and identified and defined by Kennecott Mining in the 1960’s, the Lower Reef, and the more recently discovered South Reef which follows the Lower Reef stratigraphy and New Reef which represents an area where the Upper Reef and Lower Reef come together. The Cu sulfides, chalcopyrite, bornite, and chalcocite predominate in the core and chalcopyrite+sphalerite+pyrite are more common in the fringes. Anomalous cobalt has been noted since the 1960’s, but mineralogy and distribution has not been extensively studied. A Masters student at UAF is currently undergoing research to better understand cobalt mineralogy and distribution – in addition to on-going metallurgical work to further understand cobalt deportment. Trilogy completed a 2D seismic survey over the Bornite deposit during 2018 to test seismic reflectivity within the Bornite Sequence; to determine if the semi-massive and massive sulfides can be seen using this technique; and to understand major structures and basin architecture better.

SPEAKER BIOGRAPHY

Rick Van Nieuwenhuyse, President and CEO of Trilogy Metals Inc.

Rick Van Nieuwenhuyse is President and Chief Executive Officer of Trilogy Metals and is the founder and a director of NovaGold. Rick grew up in Alaska and graduated from West High School in 1972. He worked in the Ambler Mining District among other places throughout Alaska during his early career for Kennecott, Anaconda, and Freeport. Rick has more than 40 years of international experience in the natural resource sector including years of working in and knowledge of Alaska. He has managed projects from grassroots discovery through to advanced feasibility studies, production and losure. Rick holds a Candidature degree in Science from the Université de Louvain, Belgium, and a Master of Science degree in Geology from the University of Arizona. He received the Thayer Lindsley award in 2009 for his role in the Donlin Gold discovery and the Colin Spence award in 2015 for the Bornite discovery.

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