South32 Exercises Option for Half-Share of Alaska Project

South32 (ASX:S32, LSE:S32) and Trilogy Metals (TSX:TMQ,NYSE American:TMQ) announced that South32 has exercised its option to acquire a 50 percent interest in a joint venture (JV) company that will own the Upper Kobuk mineral projects (UKMP) located in northwest Alaska.

Trilogy Metals will contribute all of its assets associated with the UKMP and South32 will contribute US$145 million to the JV. Establishment of the JV is expected to occur in February 2020 and
follows an initial exploration partnership between South32 and Trilogy Metals over three field seasons to advance both parties’ geological understanding of the UKMP.

As quoted in the press release:

Trilogy Metals will contribute all of its assets associated with the UKMP and South32 will contribute US$145 million to the JV. Establishment of the JV is expected to occur in February 2020 and
follows an initial exploration partnership between South32 and Trilogy Metals over three field seasons to advance both parties’ geological understanding of the UKMP.

Following formation, the JV will retain US$87.5 million of the US$145 million subscription payment to fund its activities and exploration programs with the balance of US$57.5 million loaned back to South32. The loan will be repaid in instalments, on notice by the JV as required to advance development studies, resource drilling and regional exploration programs.

Graham Kerr, CEO, South32, commented:

Investing in exploration to create shareholder value is integral to our group’s strategy. 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.”

Click here to read the whole South32 (ASX:S32, LSE:S32) press release.