Arctic project remains robust despite capital and operating cost jump

14th February 2023 By: Mariaan Webb - Creamer Media Senior Deputy Editor Online

The Arctic base and precious metals project, in Alaska, continues to be robust, even in the high inflationary environment that has seen its initial capital expenditure (capex) forecast rise by 30% to $1.12-billion.

Canada’s Trilogy Metals, which owns the Arctic project in a joint venture with Australia’s South32, on Tuesday announced the results of an updated feasibility study that describes the viability of establishing a conventional copper/zinc/lead/silver/gold mine and mill complex for a 10 000 t/d operation over a 13-year mine life.

“Arctic continues to be an extremely robust project even in a high inflationary environment. We have updated the capital and operating costs to reflect high-inflation and supply-chain challenges and yet the economics continue to stand out,” said Trilogy president and CEO Tony Giardini.

Operating costs increased by 18% from the 2020 feasibility study to $59.83/t milled, while initial capex jumped from $905.6-million in 2020 to $1.18-billion.

The latest feasibility study yielded an after-tax net present value of $1.11-billion, compared with $1.13-billion, and an after-tax internal rate of return of 22.8%, compared with 27.1% in 2020.

The 2023 feasibility study uses long-term metal prices of $3.65/lb for copper, $1.15/lb for zinc, $1.00/lb for lead, $1 650/oz for gold and $21.00/oz for silver in its economic analysis.

On average, Arctic will produce 148.68-million pounds of copper, 172.60-million pounds of zinc, 25.75-million pounds of lead, 32 538 oz of gold and 2 773 oz of silver every year.

Total life-of-mine 13-year production is projected at 1.9-billion pounds of copper, 2.2-billion pounds of zinc, 335-million pounds of lead, 423 000 oz of gold and 36-million ounces of silver.