South32 exercises option for half-share of Alaska project
South32 CEO Graham Kerr says the UKMP JV is an exciting step forward for the company as it reshapes its portfolio.
Global diversified miner South32 has exercised its option to acquire a 50% interest in a joint venture (JV) company that will own a polymetallic volcanogenic massive sulphide (VMS) style deposit, in the Arctic.
South32 entered into an option agreement with TSX-listed Trilogy Metals over the Upper Kobuk Mineral Project (UKMP) in 2017, and has completed three field seasons to advance its understanding of the copper resources.
With its option for a 50% shareholding exercised, South32 will contribute $145-million to the JV and TSX-listed Trilogy Metals will contribute all the assets associated with UKMP to the venture.
The JV will be established in February 2020.
Thereafter, the JV will retain $87.5-million of the $145-million subscription payment to fund its activities and exploration with the balance of $57.5-million loaned back to South32. The loan will be repaid in installments, on notice by JV as required to advance development studies, resource drilling and regional exploration programmes.
“Forming the UKMP JV will be another important milestone as we reshape and improve our portfolio, by adding high-quality copper and base metals development options. The decision to exercise the option follows a successful exploration partnership with Trilogy Metals and is an exciting step forward,” said South32 CEO Graham Kerr.
Trilogy interim president and CEO James Gowan commented that the company believed Ambler mining district had great potential, which would be realised with the formation of the JV and when the Ambler mining district industrial access project.
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