Trilogy Metals, South32 and Ambler Metals have signed a binding letter of intent (LoI) with the US Department of War (DoW) for an investment to progress exploration and development at the Upper Kobuk Mineral Projects (UKMP) in Alaska.
Ambler Metals, a 50/50 joint venture between Trilogy and South32, holds the UKMP.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The DoW plans to invest approximately $17.8m in Trilogy Metals in return for 8,215,570 units, priced at $2.17 each.
Each unit includes one common share and three-quarters of a ten-year warrant.
A full warrant can be exercised to acquire one common share of Trilogy at $0.01 after the completion of the Ambler Access Project (Ambler Road).
The DoW also plans to pay approximately $17.8m to South32 in return for 8,215,570 common shares of Trilogy Metals held by South32 and a ten-year call option to buy an additional 6,161,678 shares of Trilogy Metals from South32 at a price of $0.01 per share.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThis call option is exercisable only after construction is finished at Ambler Road, with all proceeds from the transaction being reinvested in Ambler Metals.
Following the transaction, the DoW will hold around 10% of Trilogy Metals.
Trilogy Metals and South32 will use the proceeds from the transaction for the exploration and development of the UKMP and to reinvest in Ambler Metals.
Trilogy Metals president and CEO Tony Giardini said: “This proposed partnership with the US Government represents a significant milestone for Trilogy Metals and for the development of a secure, domestic supply of critical minerals for America in Alaska.
“The Department of War’s interest underscores the strategic importance of the Upper Kobuk Mineral Projects in supporting US energy, technology and national security priorities.
“We look forward to working with our partners at South32, federal and state agencies, and Alaska Native communities to advance this world-class district responsibly and collaboratively.”
Under the terms of the agreement, the DoW is entitled to appoint an independent third-party director to Trilogy Metals’ board for three years.
Trilogy Metals will not procure any third-party debt exceeding $1bn without the DoW’s approval until 1 January 2029.
The proposed transaction also envisions Ambler Metals, South32, Trilogy Metals, the US Government and other relevant stakeholders negotiating a framework agreement.
This agreement would set the foundation for permitting, financing and construction at Ambler Road, thereby unlocking the development of the Arctic, Bornite and any additional mineral projects identified through Ambler Metals’ exploration efforts.
The Ambler Road project is a proposed 211-mile, industrial-use-only road linking the Ambler Mining District to the Dalton Highway.
It is intended to support and accelerate exploration and development of the company’s mineral projects in north-west Alaska.
The US Government will work with Alaska state to finance the building of Ambler Road.
The stakeholders also plan to work collaboratively for future UKMP permit applications under the FAST-41 process to speed up the mine approval process.
The transaction is subject to regulatory and stock exchange approvals.
The deal is required to meet certain conditions before 31 March 2026 or else the LoI will be terminated.
The investment is part of the US Government’s strategy to secure stakes in North American critical minerals.
Reuters recently reported that the US Government is in talks to acquire a stake in Critical Metals Corporation.
