South32 has signed an option agreement with Trilogy Metals, formerly known as NovaCopper, for Upper Kobuk Mineral Projects (UKMP) situated in Alaska's Ambler Mining District.
The UKMP includes the Bornite and Arctic copper deposits.
South32 CEO Graham Kerr said: "This is another step in our strategy to identify opportunities to add value to our portfolio by investing through the drill bit.
“We are pleased to be partnering with Trilogy and NANA, the Inupiat-owned Alaska Native Corporation in the region, and we are looking forward to working together to explore the potential of the UKMP deposits.”
Under the agreement, South32 will invest $30m as initial funding over three years in these projects that will be utilised to evaluate the extension of the high-grade copper resource at Trilogy’s Bornite deposit.
The initial funding will be paid in tranches of $10m per annum, with the decision to proceed to year two and three following exploration results.
The agreement also gives South32 the opportunity to exercise the option to form a 50-50 joint venture at any time during a three-year period by providing $150m. South 32 also needs to pay any amount that Trilogy spends on the Arctic Project.
In addition, South32 and Trilogy Metals also agreed in principal on the 2017 exploration programme to be conducted at Bornite.
The programme will drill a minimum of seven drill holes as far as 1,400m deep to evaluate the northern extension of the Bornite mineralisation. The drilling will test an area of nearly 1km east-west by 400m north-south.
Trilogy Metals also planned to carry out a $7.1m geotechnical drilling programme at the Arctic Project to identify and evaluate potential locations for all mine-related facilities, including the ore processing facility (crushing and milling), the waste rock and tailings disposal areas, water storage locations and supporting road infrastructure.
This programme at Arctic will support the pre-feasibility level of study at this project scheduled in the first quarter of next year.
Under the agreement, Trilogy will manage both the Arctic and Bornite programmes.
Image: A copper ore sample. Photo: courtesy of John Mortimore/ Wikipedia.