Latest / Kitco MINING / U.S. Investment & FAST-41 Put Trilogy Metals on Path to 2028 | Tony Giardini

Transcript

U.S. Investment & FAST-41 Put Trilogy Metals on Path to 2028 | Tony Giardini · Kitco MINING

• 0:07
  SPEAKER_00: Hermitting Copper Mining in Alaska.
• 0:09
  SPEAKER_00: Hello and welcome back to Kitco Mining with me, Paul Harris, here at the 2026 Precious Metal Summit in Beaver Creek in Colorado.
• 0:16
  SPEAKER_00: Joining me now is Tony Giardini, CEO of Trilogy Metals, which trades on the Nighty American and the TSX under the tickers TMQ.
• 0:25
  SPEAKER_00: Tony, welcome back to Kitco.
• 0:27
  SPEAKER_01: Thanks for having us back.
• 0:28
  SPEAKER_01: We had a great interview at PDAC and looking forward to giving you an update as to how things are moving forward.
• 0:33
  SPEAKER_00: Well, thank you very much.
• 0:34
  SPEAKER_00: And there's a lot to update on because you had some sort of major news out recently.
• 0:38
  SPEAKER_00: But before we get to that, just as a reminder to our viewers, you're the sort of 50% owner, together with South 32, which owns 50% of Ambler Metals, which controls the upper Kobak mineral projects in the Arctic and Bornite deposits in Alaska.
• 0:52
  SPEAKER_00: The big news recently, the US Department of War executed definitive agreements early this month, in fact, for a 35.6 million US dollar strategic equity investment.
• 1:04
  SPEAKER_00: Congratulations, Tony.
• 1:05
  SPEAKER_00: How much of that investment goes direct to trilogy?
• 1:08
  SPEAKER_00: How does that break down?
• 1:09
  SPEAKER_00: Right.
• 1:10
  SPEAKER_01: So the the deal goes back to October of uh 2025, and basically it was$35 million of funding.
• 1:17
  SPEAKER_01: And of that 35, all of it goes into the JB.
• 1:20
  SPEAKER_01: So 17.5 came from a trilogy side, some 17.5 came from a South 32 side.
• 1:26
  SPEAKER_01: And it took a little longer than we were hoping.
• 1:28
  SPEAKER_01: Uh when we signed the agreement in October of uh 2025, uh we prepared the documentation on the basis that it was going to be a March 31st closing in 2026, but unfortunately it got dragged on a little longer than that.
• 1:42
  SPEAKER_01: And we finally signed the agreements uh just over a month ago, and then the funding uh just recently occurred.
• 1:48
  SPEAKER_01: So it's good that that is done and uh they're on the shareholder register now.
• 1:52
  SPEAKER_01: They're actually at 9.1% because there were some shares issued over the last year or so.
• 1:58
  SPEAKER_01: So there's been some dilution to their position, but nonetheless they're there, and we're looking forward to working with them in terms of advancing uh the development of a Yambler mining district.
• 2:08
  SPEAKER_00: Okay.
• 2:09
  SPEAKER_00: Did that uh let's say approximate six months delay?
• 2:12
  SPEAKER_00: Did that actually delay any sort of work programs or anything of that nature?
• 2:15
  SPEAKER_01: No, I I think what we were thinking about earlier in the year was if it if it had occurred earlier, that funding would have gone directly into the JB and it would have funded the current year, and we wouldn't have funded additional amounts.
• 2:26
  SPEAKER_01: So what basically happened was Trilogy and Cell 32 funded the current year program, and the money that's now being received has gone into the JB directly, so the JB is already cashed up for the next year.
• 2:38
  SPEAKER_00: Okay.
• 2:38
  SPEAKER_00: Um you mentioned the government, US government now has a sort of 9.1% uh equity interest.
• 2:43
  SPEAKER_00: How how did that element, how did that component come about, the government having an equity stake?
• 2:48
  SPEAKER_01: Yeah, so what uh what happened is uh the I believe the US government has been looking at this project for a long period of time, and really their interest stems from the critical metal component that exists in the AMLA mining district, whether it's copper, zinc, uh, silver, there's also cobalt, germanium in the district.
• 3:04
  SPEAKER_01: And so there's always been a lot of interest.
• 3:06
  SPEAKER_01: And we had looked at some potential funding uh associated with the Bornite project uh when we were in discussions with the government in 2025.
• 3:15
  SPEAKER_01: And as the president was getting ready to um uh basically pass the presidential decree associated with the road, uh, we also entered into discussions with the Department of War about potential funding.
• 3:28
  SPEAKER_01: And we initially talked about those applications that we had put forward, and their interest was actually having a 5% direct interest in the JV.
• 3:36
  SPEAKER_01: The challenge with that is that the JV is owned by Trilogy and South 32, but it also has Nana as a partner in that JV.
• 3:43
  SPEAKER_01: So to expedite the process, we looked at it a little differently, and we ended up doing the issuance of shares from Trilogy 5%, and uh South 32 sold a 5% stake that they held in Trilogy.
• 3:55
  SPEAKER_01: So giving the US government 10% diluted down to 9.1, which is an indirect 5% stake or 4.4.6, I guess approximately.
• 4:07
  SPEAKER_00: We're gonna tie ourselves in knots uh working that out.
• 4:10
  SPEAKER_00: Um but on a serious note, um US government involvement, particularly from the Department of War, I can understand how that opens up some some doors.
• 4:19
  SPEAKER_00: Is is there a possibility that that could somehow um impinge on your strategic flexibility going forward?
• 4:25
  SPEAKER_00: Because perhaps not all partners want to work or be associated directly with the US government, and certainly not the Department of War.
• 4:34
  SPEAKER_01: Well, you know, the the agreement has uh the ability for the Department of War to, you know, provide an independent board member to uh trilogy.
• 4:42
  SPEAKER_01: There's also a board observer right at the trilogy level.
• 4:45
  SPEAKER_01: And I think those are the belts and suspenders that you would expect from this type of investment.
• 4:50
  SPEAKER_01: I think for us it's really about not so much a quantum that we've received, but the validation that we have from the U.S.
• 4:56
  SPEAKER_01: government in terms of making the investment and participating.
• 4:59
  SPEAKER_01: And I do agree with you.
• 5:00
  SPEAKER_01: I think it opens up a lot of doors with us to work with the U.S.
• 5:03
  SPEAKER_01: government because we are very clearly aligned in what we want.
• 5:07
  SPEAKER_01: We want to see this project move forward and the district get developed.
• 5:10
  SPEAKER_01: And I want to talk a little bit more, obviously, about the district as we go forward.
• 5:14
  SPEAKER_01: Do I think it impinges us in any way?
• 5:16
  SPEAKER_01: I don't think so, because at the end of the day, trilogy is focused solely in Alaska and right in that district in the upper Kobak Mineral District.
• 5:25
  SPEAKER_01: So I think it ties quite nicely in what we're trying to do.
• 5:28
  SPEAKER_01: And the story is a critical metal story.
• 5:31
  SPEAKER_01: It's about what I said in our previous interview, uh, which is uh in domestic production for domestic purposes.
• 5:37
  SPEAKER_01: So I think it works quite well.
• 5:39
  SPEAKER_01: So I don't expect that there'll be an impact, a negative impact, in terms of the uh involvement of Department of War uh in the investment in trilogy.
• 5:49
  SPEAKER_00: Okay, thank you.
• 5:50
  SPEAKER_00: Now, before the deposits can actually be developed, uh you need to build a road.
• 5:54
  SPEAKER_00: The Trump administration uh approved the Ambler Road permit um last year, 2025.
• 6:00
  SPEAKER_00: You've got to build a 211-mile uh road called the Ambuler Road.
• 6:03
  SPEAKER_00: What's the the realistic timeline and and funding structure for that that you're you're working to?
• 6:08
  SPEAKER_01: Yeah, so you're absolutely correct.
• 6:10
  SPEAKER_01: Uh the President Trump, through the presidential decree, reinstated the permits and those were issued shortly after.
• 6:16
  SPEAKER_01: And then the other major development with respect to the road was that Secretary Bergman, Department of Interior, um uh repealed the PLO 5150, which was uh basically land that was at the beginning of uh the uh Ambler Access Road that was federal land.
• 6:32
  SPEAKER_01: It's now being conveyed back to the state.
• 6:34
  SPEAKER_01: So now we have a scenario where the federal government doesn't have any involvement with the road uh in in terms of uh the permitting of a road.
• 6:42
  SPEAKER_01: There's a 404 wetlands permit that needs to be required as part of the permitting process, but that's it.
• 6:47
  SPEAKER_01: And the the uh U.S.
• 6:49
  SPEAKER_01: Army Corps of Engineers will will likely be the lead agency in terms of the the U.S.
• 6:54
  SPEAKER_01: government.
• 6:54
  SPEAKER_01: In terms of timeline, what ADA has been working on is they've been doing geotech work.
• 6:59
  SPEAKER_01: They've that's progressed very, very well.
• 7:01
  SPEAKER_01: They've been looking at funding sources associated with the road, and they're updating the uh estimate uh for the capital.
• 7:09
  SPEAKER_01: As far as a realistic timeline, what we're looking at is probably uh funding slash building decision being made sometime in 2028.
• 7:18
  SPEAKER_01: And the reason why I say 2028 is because that's the same time that we expect to have the mine permitting done and be in a position to make an investment decision, hopefully, uh with respect to the mine.
• 7:31
  SPEAKER_01: And so the road is required, obviously, to advance the mine, but we don't need it before the mine is built.
• 7:38
  SPEAKER_01: In other words, what will likely happen is that we'll build what's called a pioneer road, which would be an ice road to bring supplies and materials into the district, and that then uh the road itself will be built at the same time that the mine is being built.
• 7:52
  SPEAKER_01: So I would say we would likely see a timeline of somewhere somewhere around 2028, although I expect there'll be lots of developments in 2027 uh relating to the funding of a road and the next steps in advancing the project.
• 8:05
  SPEAKER_00: Okay.
• 8:06
  SPEAKER_00: So what what I'm taking away from that is obviously building 211 miles of road, that's gonna be quite a quite an investment.
• 8:11
  SPEAKER_00: There's no point making that investment or that full investment until you've got the permits in hand to build the mine.
• 8:17
  SPEAKER_01: And the the road was always uh expected to be uh funded and developed by the state of Alaska through its development agency, ADA.
• 8:26
  SPEAKER_01: That's the same model that was used for the red dog road when it was constructed.
• 8:30
  SPEAKER_01: So they constructed an 80-mile road plus a port plus a storage facility in the in the 1980s.
• 8:36
  SPEAKER_01: And so our model is very similar.
• 8:38
  SPEAKER_01: And the idea on the recovery of that cost associated with the road is that it would come through tolls.
• 8:44
  SPEAKER_01: And you know, I mentioned earlier when we talk about the Ambler Mining District, we do see it as a district.
• 8:50
  SPEAKER_01: We don't see it as the Arctic mine or the Bornite mine.
• 8:53
  SPEAKER_01: We see an Ambler Mining District extending for a long period of time.
• 8:57
  SPEAKER_01: So we don't expect to be the only users of a road.
• 9:00
  SPEAKER_01: We expect other parties will be using that road, but it will be an in private industrial use road only.
• 9:06
  SPEAKER_00: Okay.
• 9:07
  SPEAKER_00: So the the State of Alaska and or AEDA, they're gonna finance the road, South 32 and and Trilogy.
• 9:14
  SPEAKER_00: Will you be financing that or you'll pay for it afterwards once it's built through the Trevor Burrus, we'll pay for it through tolls.
• 9:19
  SPEAKER_01: The expectation is that we'll pay for it through tolls.
• 9:21
  SPEAKER_01: And I expect what will happen, Paul, is that we will have um incremental payments that will be made based on where commodity prices are.
• 9:29
  SPEAKER_01: I suspect there could be higher payments that will be made if commodity prices are higher.
• 9:33
  SPEAKER_01: And I expect that there could be um payments that could be deferred possibly if commodity prices enter into uh a lower uh uh lower price ranges.
• 9:42
  SPEAKER_01: But I think those are all aspects that need to be negotiated.
• 9:46
  SPEAKER_01: We haven't at this point contemplated a direct investment in the road, although Ambler, the Ambler JV had committed$70 million in terms of advancing the road.
• 9:56
  SPEAKER_01: We've uh$70 million was committed between ourselves and ADA, so jointly$70 million, so$35 each, and we've funded a portion of that$35.
• 10:04
  SPEAKER_01: I think there's probably a remaining portion that's still to fund, which we will fund in terms of advancing the road.
• 10:10
  SPEAKER_01: And the thought process for funding that was that we would get credits against tolls in the future.
• 10:15
  SPEAKER_01: But it could end up that we will contribute more.
• 10:17
  SPEAKER_01: I think that's all going to be part and parcel of how we look at the funding scenarios with respect to the road.
• 10:22
  SPEAKER_01: Okay, but um if you're you you could be in a situation where your finance just focuses on on building the mine rather than that that's what my expectation would be that our financing will be associated with building the mine, and that financing may happen at the JV level, although the parties would need to agree, or it could happen individually where South 32 will fund their share, we'll fund our share.
• 10:43
  SPEAKER_00: Okay.
• 10:43
  SPEAKER_00: Um let's talk about the the permitting.
• 10:46
  SPEAKER_00: The Arctic project has Fast 41 status.
• 10:48
  SPEAKER_00: Uh what is the sort of timeline that that confers on the project?
• 10:51
  SPEAKER_01: Right.
• 10:52
  SPEAKER_01: So we just announced on Friday, this past Friday, that the uh notice of intent uh has gone out.
• 10:57
  SPEAKER_01: So we now have a very specific timeline associated with permitting.
• 11:02
  SPEAKER_01: And the expectation is that the permits permits would all be received in the final EIS would would be filed and uh in place by September of 2028.
• 11:13
  SPEAKER_01: Uh draft EIS in October of next year, and then uh final comment period after that.
• 11:19
  SPEAKER_01: So we're well on our way in terms of permitting.
• 11:21
  SPEAKER_01: We've got uh a permitting team at Ambler Medals, and we're obviously leveraging the support of So 32 that went through the FAST 41 permitting process for its Hermosa project in Arizona.
• 11:34
  SPEAKER_01: And we're using an individual called Ron Rimmelman at the JV level.
• 11:38
  SPEAKER_01: He's actually the president.
• 11:39
  SPEAKER_01: He started out doing the permitting process.
• 11:41
  SPEAKER_01: But Ron has uh great experience in the Great State of Alaska because he was involved with permitting the Donlin Creek mine uh as part of Nova Gold.
• 11:50
  SPEAKER_01: So the good thing about the permitting process and the FAST 41 is that it's integrating the federal permits and the state permits.
• 11:57
  SPEAKER_01: So this is the first time this has happened in Alaska.
• 12:00
  SPEAKER_01: And but we've got the template now.
• 12:02
  SPEAKER_01: We're in a FAST 41.
• 12:03
  SPEAKER_01: You can go online, you can look at the progress, you can look and see what the deadlines are, and we all have an expectation that we'll adhere to those deadlines, including the federal government in terms of the overview process that they provide.
• 12:17
  SPEAKER_00: And one of the part of the concept is that there's essentially a let's say a project manager who brings everybody together and sure everything's moving as it should be.
• 12:25
  SPEAKER_01: And that that is a big part of a pro uh process.
• 12:27
  SPEAKER_01: And the good thing is that we're not the first project in Fast Forward E1, so there's already uh experience, and we've seen other companies come through the whole process, and our expectation is that the timeline that has been defined uh will be adhered to.
• 12:40
  SPEAKER_01: And when do you anticipate a record of decision?
• 12:43
  SPEAKER_00: Uh September of uh 2028.
• 12:46
  SPEAKER_00: Okay.
• 12:46
  SPEAKER_00: Um I recall that there was um some sort of legisl litigation or something like that from one uh a a small tribe or small band in in Alaska to do with the road.
• 12:55
  SPEAKER_00: Uh what's the status of that?
• 12:56
  SPEAKER_00: Is does that still exist?
• 12:57
  SPEAKER_01: Yeah, so what happened was there was litigation that had been uh initially set aside when the Biden administration brought out the no action uh decision in April of 2024.
• 13:08
  SPEAKER_01: Uh with the um presidential decree and the restating of the licenses or permits with respect to the road, um uh it's not clear whether that litigation could actually still go forward.
• 13:20
  SPEAKER_01: And particularly given that uh Secretary Bergham has now transferred those uh federal lands from a federal government to the state, there's really it's not clear whether there's any basis for any litigation going forward.
• 13:34
  SPEAKER_01: That being said, Paul, look, there's going to be litigation here.
• 13:37
  SPEAKER_01: It's just gonna happen.
• 13:38
  SPEAKER_01: And we don't know how it's gonna progress.
• 13:40
  SPEAKER_01: We're looking at it from all of a different perspectives.
• 13:43
  SPEAKER_01: Um, the view that legally we were uh we had and were given was that the presidential decree wasn't subject to litigation.
• 13:52
  SPEAKER_01: That may not be the case in the sense that someone may try to argue that they can be litigated.
• 13:56
  SPEAKER_01: That being said, we feel like we're in a very strong position to defend it.
• 14:00
  SPEAKER_01: And when I say we, I mean that the Department of Justice would be the party that would be defending.
• 14:04
  SPEAKER_00: Because yeah, in those situations, it's usually the litigant suing the state or suing the federal government.
• 14:09
  SPEAKER_01: And the federal government is very committed to advancing this project, and I expect that they will put all of our resources available in terms of uh of of uh of of litigating these projects.
• 14:20
  SPEAKER_01: So I think we feel pretty comfortable and we're looking at all of the potential avenues that are there, but litigation is all part and parcel of this.
• 14:27
  SPEAKER_01: And and I would say it doesn't necessarily reflect that there isn't support for the project within the communities, particularly communities where we're going to operate.
• 14:36
  SPEAKER_01: What ends up happening is uh that travel organizations are um encouraged to participate as part of a litigation.
• 14:45
  SPEAKER_01: They're not funding it, it's usually funded by NGOs and organizations that are interested in these projects not advancing.
• 14:53
  SPEAKER_01: And so we'll have to let the process play itself out in in uh in Alaska through the court system.
• 15:00
  SPEAKER_00: Okay, well let's uh talk about something a bit more agreeable.
• 15:02
  SPEAKER_00: Um you mentioned earlier about um Arctic's just one deposit within the broader Ambular mining district.
• 15:08
  SPEAKER_00: You've also got the Bornite deposit.
• 15:10
  SPEAKER_00: So let's talk a little bit about you know what work programs um have you got underway or are you planning to get underway to further uh explore the Ambler mining district?
• 15:20
  SPEAKER_01: Yeah, that's a great question.
• 15:21
  SPEAKER_01: And we we've just finished the field season uh uh right now, in fact, we're gonna be uh demobing shortly.
• 15:28
  SPEAKER_01: And we had 80, 90 people on site.
• 15:30
  SPEAKER_01: I would say we're very successful in terms of getting the work done.
• 15:33
  SPEAKER_01: A lot of the drilling was related to geochec and hydrology, really to support the definitive feasibility study is going to be moving forward.
• 15:41
  SPEAKER_01: We should be announcing probably sometime in the next couple of weeks that we've hired a VP project director at the Ambler Meadows level to deliver the definitive feasibility study.
• 15:53
  SPEAKER_01: That person has very strong Alaska experience and has worked on Arctic projects and built Arctic projects in the past.
• 16:00
  SPEAKER_01: So I think that's a big step for us.
• 16:02
  SPEAKER_01: And what we would be looking at from that perspective is to be in a position where we'd have that study work done by 2028 and put us in a position to hopefully make uh uh uh an investment decision at that time, at the same time that we would have permits in hand from uh the perspective of the mind permitting process.
• 16:22
  SPEAKER_01: As far as the exploration, as I said, most of it this year was focused on hydrology and geotech.
• 16:27
  SPEAKER_01: We did drill a couple of exploration type holes, and what we're gonna be doing now is sitting down, looking at those results, and more importantly, really looking at where we want to go from an exploration perspective in 2027.
• 16:40
  SPEAKER_01: And we we think there's lots of options that we can look at.
• 16:43
  SPEAKER_01: We're considering possibly doing more exploration at the Born Aid area, which we haven't done for a while, but we have a number of targets in and around the Arctic VMS area that um we want to explore.
• 16:57
  SPEAKER_01: So lots of uh opportunities in the district.
• 17:01
  SPEAKER_00: Um incidentally, Tony, yeah, with the Ambular Access Road, it's gonna basically go from east to west, 211 miles to the Arctic project.
• 17:10
  SPEAKER_00: Will that continue on towards the Bornite project or will that be a later development?
• 17:14
  SPEAKER_01: No, what will happen is that it will go directly uh to the Arctic project, and then what we'll likely look at is a spur road at some point in the future with respect to uh Bornite, and uh it's not necessary to link it.
• 17:28
  SPEAKER_01: And and Bornite isn't part of the permitting process that we're going through uh with with respect to the mine.
• 17:35
  SPEAKER_01: We're looking at bornite right now from an exploration perspective.
• 17:38
  SPEAKER_01: There may be an opportunity in the future to uh process bornite material through the Arctic mine, but that would require a separate permitting process to occur, and that's something that we'll explore in the future.
• 17:50
  SPEAKER_01: But uh you know what we like about where where we're at is really about prospectivity and particularly with these VMS deposits, they occur in clusters, and even though we already have as one someone described today or the other day when we were talking, it's a unicorn in terms of these VMS deposits, 50 million tons, we know that there's a lot more opportunities in the district.
• 18:12
  SPEAKER_00: Okay.
• 18:12
  SPEAKER_00: Tony, uh you've just uh hit a couple of important catalysts.
• 18:16
  SPEAKER_00: Uh what are other catalysts that our viewers should watch out for over the next 12 to 18 months from trilogy?
• 18:21
  SPEAKER_01: I think you know I I've laid some of them out in terms of obviously the permitting process as it unfolds, and people can follow that on the dashboard and we'll be providing updates as to where that goes.
• 18:32
  SPEAKER_01: Once we bring on our um uh project director with respect to the project and we start down the feasibility, definitive feasibility study route.
• 18:40
  SPEAKER_01: We'll have more information there.
• 18:41
  SPEAKER_01: Uh the results from the drill season will be coming out at some point uh later this year, and then we'll be looking at the budget for uh 20 uh 27.
• 18:51
  SPEAKER_01: I expect there'll be updates with respect to the road and in terms of how we look at that, and then the greater exploration strategy in in the district itself.
• 19:01
  SPEAKER_01: So I think that's sort of the starting point.
• 19:03
  SPEAKER_01: We've had a great 2026, notwithstanding that you know we've had to wait a while to get the DOW funding closed, but we've increased uh our own bench strength at the trilogy level.
• 19:14
  SPEAKER_01: We've added a number of uh people at the JV level, and I expect we'll continue to be adding people at the JV level as we start to ramp up the project.
• 19:23
  SPEAKER_00: Excellent.
• 19:23
  SPEAKER_00: Well, congratulations once again on the DOW funding.
• 19:26
  SPEAKER_00: Tony Giardini, thank you very much for joining me today.
• 19:29
  SPEAKER_00: Thank you, Paul, and always great to be here.
• 19:31
  SPEAKER_00: Excellent, thank you.
• 19:32
  SPEAKER_00: And once again, trilogy metals trades on the Nicee American and the TSX under the tickers TMQ.
• 19:38
  SPEAKER_00: We have a lot more to come from the 2026 Precious Metal Summit here in Beaver Creek, Colorado.
• 19:43
  SPEAKER_00: So stay tuned and hit that subscribe button.
• 19:45
  SPEAKER_00: I'm Paul Harris, and this is Kiko Mining.