Trilogy Metals, South32 JV creates Ambler Metals

Camp at the Bornite project, one of the two most advanced of Upper Kobuk Mineral Projects. (Image courtesy of Trilogy Metals.)

Trilogy Metals NYSE: TMQ) and South32 Limited (ASX, LSE, JSE: S32) completed on Wednesday the formation of a 50/50 joint venture to create a new company: Ambler Metals.

The new partnership structure comes as the Australian major exercised an option acquired in 2017 to buy a 50% interest in Upper Kobuk Mineral Projects (UKMP), located in Alaska's Ambler mining district.

The UKMP projects have a combined resource of 8 billion pounds of copper, 3 billion pounds of zinc and 1 million ounces of gold equivalent

As part of the deal, Trilogy contributed all of its assets associated with the 172,675-hectare UKMP, including the Arctic and Bornite projects, while South32 contributed $145 million, resulting in each party owning a 50% interest in Ambler. The funds will be used to advance the Arctic and Bornite projects, along with exploration in the Ambler mining district.

"Forming the UKMP Joint Venture will be another important milestone as we reshape and improve our portfolio, by adding high-quality copper and base metals development options," South32's CEO, Graham Kerr, said in December.

The UKMP projects have a combined resource of 8 billion pounds of copper, 3 billion pounds of zinc and 1 million ounces of gold equivalent.