targetsanomalous geochemical results and to investigate geophysical anomalies that were identified during the 2019 airborne VTEM survey.
Arctic Mine Permitting
Arctic mine permitting preparation work was ongoing during the quarter for 2022.the filing of the Notice of Intent (“NOI”), which marks the commencement of formal federal permitting activities at the Arctic Project. The Ambler Lowlands formnext step before the submittal of the NOI is a 10-kilometer-wide glaciated valley separating Arctic and Bornite that is virtually unexplored despite its proximity to Bornite.
COVID Safety Measures
During the 2021 field season, wepermit preparedness review which will be adheringan independent third-party audit of the draft NOI. The Company expects to file the NOI before the end of the year and anticipates the overall permitting process to take 24 to 30 months.
Ambler Mining District Industrial Access Project (“AMDIAP” or “Ambler Access Project”)
On July 23, 2020, the United States Bureau of Land Management (“BLM”) issued the Joint Record of Decision (“JROD”) for the AMDIAP. The JROD approves the development of the northern or “A” route which is to be a strict COVID safety protocol regime211-mile-long gravel private access road in the southern Brooks Range foothills to provide industrial access to the Ambler Mining District. Along with the JROD, a Section 404 Permit, which includes limited personnel rotations, COVID-19 testing, stringent sanitationis governed by the Clean Water Act (“CWA”), was issued by the United States Army Corp. of Engineers (“USACE”) to the Alaska Industrial Development and disinfection proceduresExport Authority (“AIDEA”).
On August 3, 2020, a coalition of national and contact tracing. These protocolsAlaska environmental non-government organizations (“ENGO”) filed the first of two lawsuits against the federal agencies responsible for issuing the JROD. A second similar lawsuit was filed in October 2020. The ENGO’s main position is that due process was not carried out during the permitting of the AMDIAP. Subsequently, AIDEA, Ambler Metals, the State of Alaska and NANA have filed for and received intervenor status in each of the lawsuits and will be followed throughoutdefending the issuance of the JROD and the permits.
On January 6, 2021, BLM, the National Park Service and AIDEA signed Right-of-Way agreements giving AIDEA the ability to cross federally owned and managed lands along the route for the Ambler Access Project approved in the JROD. The authorizing documents with the two agencies are the final federal permits required for the Ambler Access Project.
On September 28, 2021, the Department of Justice (“DOJ”) requested a 60-day stay with respect to each of the above referenced lawsuits. In its request for the stay, the DOJ stated that it was necessary to “accommodate review of this matter by officials within the United States Department of the Interior who have engaged in various discussions with multiple parties involving this matter and in government-to-government consultations with tribal entities”.
Development Funding Agreement regarding the Ambler Access Project with the Alaska Industrial Development and Export Authority
The summer field season for the Ambler Access Project commenced during the quarter with cultural heritage work along the proposed 211-mile, east-west-running controlled industrial access road that would provide industrial access to the Ambler Mining District in strict observanceNorthwestern Alaska. The Alaska Industrial Development and Export Authority has prioritized cultural heritage work, aquatic habitat studies and geotechnical planning for this year’s and next year’s field seasons to Governmentprogress the feasibility engineering and permitting work for the road. On August 9, 2021, the Governor of Alaska, guidelines.
Corporate Developments
Annual General Meeting
The Annual General Meeting of shareholders was held on May 19, 2021. AtMike Dunleavy, visited the Annual General Meeting, all directors nominated byUKMP. During the Company and standingvisit, the Governor reiterated his strong support for election were elected by shareholdersthe development of the Company, with each director receiving no less than 99.77%Ambler Mining District and for the development of the votes cast.
Joint Venture
Option agreement
On April 10, 2017, Trilogy and Trilogy Metals US entered into an Option Agreement to form a Joint Venture with South32 Group Operations Pty Ltd., a wholly-owned subsidiary of South32, which agreement was later assigned by South32 Operations Pty Ltd. to its affiliate, South32 USA Exploration Inc. on the UKMP (“Option Agreement”). Under the terms of the Option Agreement, as amended, Trilogy Metals US granted South32 the right to form a 50/50 joint venture to hold all of Trilogy Metals US’ Alaskan assets. South32 exercised its option on December 19, 2019.
Formation of joint venture
On February 11, 2020, Trilogy completedAmbler Access Project. He also announced the formation of the 50/50 joint venture with South32. Trilogy contributed all its assets associated withSubsistence Advisory Committee Working Group which is to include Native stakeholders within the UKMP, includingNorthwest Arctic Borough and the ArcticDoyon Region who could be affected by the proposed road. This committee is being formed to develop the terms of reference for the formal Subsistence Advisory Committee that will provide guidance on subsistence and Bornite Projects, while South32 contributed a subscription price of US$145 million (the “Subscription Price”), resulting in each party owning a 50% interest in Ambler Metals. The Subscription Price will be used to advanceother matters for the Arcticdesign and Bornite Projects, along with exploration in the Ambler mining district. With Ambler Metals being well funded, with access to $145 million, Trilogy does not expect to fund programs and budgets to advance the UKMP until the Subscription Price is spent by Ambler Metals. To assist Ambler Metals during the initial set up phase, Trilogy paid all of Ambler Metals’ invoices and was being reimbursed pursuant to a services agreement (the “Services Agreement”) until the back office was fully transitioned to a new team employed by Ambler Metals. The Services Agreement ended on December 31, 2020.
Ambler Metals is an independently operated company controlled by Trilogy and South32 through a four-member board of which two members are currently appointed by Trilogy based on its 50% equity interest. All significant decisions related to the UKMP require the approval of both companies. We determined that Ambler Metals is a variable interest entity, or VIE, because it is expected to need additional funding from its owners for its significant activities. However, we concluded that we are not the primary beneficiary of Ambler Metals as the power to direct its activities, through its board, is shared under the limited liability company agreement. As we have significant influence over Ambler Metals through our representation on its board, we use the equity method of accounting for our investment in Ambler Metals. Our investment in Ambler Metals was initially measured at its fair value of $176 million upon recognition. Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals, which, as of May 31, 2021, totaled $170 million.
During the three-month period ended May 31, 2020, Ambler Metals loaned $57.5 million back to South32 and retained $87.5 millionoperation of the cash subscription price. The loan has a 7-year maturity date, but Ambler Metals has begun drawingroad.
