Investors that snagged some shares of Trilogy Metals Inc. (TSX:TMQ)(NYSE MKT:TMQ) at a low of 60 cents less than a month ago have been handsomely rewarded, as shares closed Friday at 75 cents and are up another 20 percent Monday morning to 90 cents on news of a new partnership.
The Vancouver-based explorer inked an agreement with globally diversified metals and mining company South32 Limited, giving South32 an option to from a 50/50 joint venture regarding Trilogy’s Alaskan assets, cumulatively referred to as the Upper Kobuk Mineral Projects (UKMP). Per the pact, South32 must spend at least $10 million per year to keep the option in good standing across the next three years and at any time during that time frame can exercise the option to form the JV.
The $10 million in funding for 2017 will be used at the UKMP called the Bornite Project to test and add to a data set from prior drilling that cut high-grade copper.
To earn its 50%, South32 must contribute $150 million plus up to an additional $15 million ($5 million per year for three years) to reimburse for any cap ex of Trilogy on the Arctic Project that is also part of the UKMP. Trilogy already planned to spend just over $7 million this year, with most of the expenses allocated for a pre-feasibility study for the Arctic Project.
Trilogy, known as NovaCopper until a name change in September, has a 52-week high of $1.08, which was printed early in May 2016.
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