overnments around the world are collaborating for the first time in a long time to focus on addressing Climate Change and Global Warming. With the Paris Climate Accord, governments have agreed to adopt a number of measures with the purpose of “limiting a global temperature rise this century below 2 degrees Celsius above pre-industrial levels”. Although there are many things that can be done to reduce greenhouse gases, the most meaningful and obvious is to use cleaner forms of energy and transportation.
Currently Fossil Fuels – coal, oil and natural gas – make up 90% of our global energy production and that must change, if we are going to meaningfully address Global Warming. There are five non-carbon based Alternative Energy Sources: Solar, Wind, Geothermal, Hydro and Nuclear. Clearly, some are more controversial than others. Wind, solar and geothermal are generally the least controversial. Hydro in all forms is clean and renewable, but depending on where it is located, can be controversial – particularly where it competes with other uses of water and/or fish; and of course, nuclear will always garner a lively discussion.
“ If we want less CO2 going into the atmosphere, we need to produce more copper under it – there’s no way around it!”
Regardless of which form of alternative, non-carbon-based energy is used, they all require more copper than coal and diesel to generate power. Conventional coal and diesel take 1 ton of copper to produce 1 Megawatt of power, whereas wind, solar and the others require 3 to 5 tons of copper per MW, plus additional copper wire to connect the power generation source to the grid. For example, large off-shore wind generators take 10 tons of copper per MW – it takes a lot of copper to make a wind turbine, and then even more copper to connect all the turbines to one another, and then to the grid. Bottom line, Green Energy production requires an average of 5 times more copper than conventional, carbon-based energy generation. So, if we want less CO2 going into the atmosphere, we need to produce more copper under it – there’s no way around it!
Now let’s talk cars – specifically hybrid and electric cars. A typical Internal Combustion Engine (ICE) vehicle uses 20kg of copper per vehicle while an all-electric car uses 80kg of copper – Hybrids lie in between. In addition to copper, significant amounts of nickel, cobalt, manganese, graphite and lithium are also needed. If you want to replace the highly CO2 polluting ICE and replace it with hybrid or electric vehicles, then you need 3 to 4 times as much copper per car and even more for trucks, buses and mass transit. Plus, you need more power generation and charging stations – they are electric after all! Add it all up and we need 5 times more copper to build electric vehicles and the infrastructure to support them.
The greatest thing about copper is that it is 100% re-usable. Today, about 80% of the copper mined is eventually recycled. New supply chains for renewable energy, and hybrid and electric vehicles will improve this to well above 95% – resulting in a sustainable supply of copper and clean, green energy. There are solutions to reducing pollution and C02 in the atmosphere, but copper and a host of other base and specialty metals are required and that is the reality! In my opinion, if you are truly concerned about Global Warming and consider yourself an environmental steward of the world, you must think copper!
Mining In Alaska
We have choices to make here. We can do nothing and allow our planet Earth to keep warming up, or we can act! If we do nothing here in our own backyard, we are only leaving it to others to fill our global need for copper and cobalt knowing that it may involve child labour, corruption and human rights atrocities (see Amnesty International Report on Child Labor in Africa) or displacing water used by farmers in areas like Chile and Peru (see BioOne report on Water and Mining Conflicts in Peru) where much of the world copper supply comes from… or we can support mining in a jurisdiction with responsible resource development and absolutely no history of any significant disasters.
“Alaska is a safe, mining-friendly jurisdiction that understands resource development.”
The Ambler Mining District (AMD) located in northwest Alaska is a high-quality, well-known, resource-rich area containing over 10 Billion Pounds copper, significant cobalt and host of other metals. The State of Alaska and NANA , an Alaska Regional Native Corporation, specifically selected lands here for mining based on two pieces of Federal Legislation: the Alaska Native Claims Settlement Act (ANCSA) and the Alaska National Interests Lands Conservation Act (ANILCA). Furthermore, under ANILCA the Federal Government specifically granted a Right-of-Way to connect this metals-rich district with the Dalton Hwy and the rest of Alaska’s infrastructure. As a result, the Alaska Industrial Development and Export Authority (AIDEA), a State of Alaska-owned public corporation whose mission statement is “….to encourage the economic growth of the state, including the development of its natural resources…” is currently permitting the Ambler Mining District Industrial Access Project (AMDIAP). Permits are expected in 2019 with construction of the 211 mile access road to follow soon after.
Alaska is a safe, mining-friendly jurisdiction that understands resource development. It is home to one of the largest zinc mines in the world at Red Dog, one of the highest-grade silver mines in North America at Greens Creek, a large low-grade open pit gold mine at Fort Knox and the high-grade underground gold mine at Pogo.
Trilogy In Alaska
Trilogy Metals is advancing our Arctic and Bornite projects in the Ambler Mining District as part of our vision to develop the district into a premier North American mining camp. Trilogy just recently published a Pre-feasibility Study 43-101 Technical Report on our Arctic Project. With Reserves of 43 Mmt grading 5% copper equivalent (2.3% Copper, 3.2% Zinc, 0.57% Lead, 0.49g/t Gold and 36 g/t Silver) it is easy to see why the project demonstrates a (post tax) US$1.4 Billion Net Present Value at an 8% discount, an IRR of 33% and a 2-year payback of invested capital. Next steps for Arctic are to ready the project for permitting and completing a feasibility study. Meanwhile, we are still exploring our Bornite project located just 20 miles to the southwest of Arctic. We have already outlined a resource in excess of 6 Billion pounds of copper averaging nearly 1% in a potential open pit resource and 3% in a potential underground resource. This year we will be back exploring with a $10 Million exploration program with the objective of expanding the already sizeable resource. In addition, based upon a significant amount of geometallurgical test work, we will be reporting a cobalt resource at Bornite in 2018. We believe that our cobalt at Bornite will be well received by investors keen to identify a North American source of cobalt.
It will be a busy year for the Trilogy Team! We believe our Arctic and Bornite projects will make excellent additions to Alaska’s premier mining community as well as be able to make a meaningful contribution towards a sustainable green energy future. I invite you to read more about Trilogy Metals and our Arctic and Bornite Projects in this edition of The Assay on pages 10 – 11.