Trilogy Metals Inc. granted an option to form a 50/50 joint venture over its copper-prospective Upper Kobuk Mineral Projects in Alaska to South32 Ltd. by investing at least US$150 million.
The Upper Kobuk projects include the Arctic and Bornite projects, an exploration and option-to-lease agreement with NANA Regional Corp. Inc., and the remainder of the company's state mining claims along the 100-kilometer volcanogenic massive sulfide belt.
South32 will be required to fund US$10 million per year for up to three years to keep the option in good standing.
The BHP Billiton Group spinoff can exercise the option at any time to form the joint venture by investing a minimum of US$150 million, after which Trilogy will transfer the assets to a newly created limited liability company.
Following the initial investment, the companies will fund the project on a pro rata basis, and the joint venture's board will have nominees from both South32 and Trilogy.
Trilogy intends to spend the first US$10 million from South32 to explore the Bornite project this year, it said April 10.
The company also plans to conduct a US$7.1 million program at the Arctic project as part of a pre-feasibility study, estimated to be completed in the first quarter of 2018.