20th Dec 2019 06:23
(Alliance News) - South32 Ltd on Friday said it has exercised its option to acquire a 50% interest in a joint venture company that will own the Upper Kobuk mineral projects
located in northwest Alaska.
The company said the reminder of the joint venture will be held by Trilogy Metals Inc, which will contribute all of its assets associated with the project. In turn, South32 said it will contribute USD145 million to the joint venture.
Establishment of the new entity is expected to occur in February 2020, South32 said, and follows an initial exploration partnership between South32 and Trilogy Metals over three field seasons to advance both parties' geological understanding of the project.
Following formation, the joint venture will retain USD87.5 million of the USD145 million subscription payment to fund its activities and exploration programmes with the remaining USD57.5 million loaned back to South32.
The loan will be repaid in instalments, South 32 said, on notice by the joint venture as required to advance development studies, resource drilling and regional exploration programmes.
South32 Chief Executive Officer Graham Kerr said: "The decision to exercise the option
follows a successful exploration partnership with Trilogy Metals and is an exciting step forward."
Trilogy Metals Interim President & Chief Executive James Gowans added: "The Ambler Mining District has great potential that we expect will finally be realised with the formation of the joint venture."
South32 shares closed down 2.8% at AUD2.78 in Sydney on Friday.
By Evelina Grecenko; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
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