The Department of War’s Office of the Assistant Secretary of War for Industrial Base Policy Aug. 28 finalized definitive agreements for a $35.6 million equity investment that will give the Pentagon a 10% direct ownership stake in Trilogy Metals Inc., which is developing copper-rich critical mineral projects in Alaska’s Ambler Mining District under a 50-50 joint venture with South32 Ltd.
The definitive agreements mark the final major step ahead of closing, which Trilogy expects in September. DOW characterized the executed agreement more definitively, saying the $35.6 million investment “secures” a 10% direct ownership stake in Trilogy.
“This partnership with Trilogy Metals is a decisive investment in America’s supply chain independence and our long-term national security,” said Assistant Secretary of War for Industrial Base Policy Mike Cadenazzi.
Under the agreements, the Pentagon will invest $17.8 million directly in Trilogy to acquire 8.22 million units at $2.17 each, with each unit consisting of one Trilogy share and three-quarters of a 10-year warrant. Another $17.8 million will go to South32 in exchange for 8.22 million Trilogy shares it currently owns and a 10-year call option on another 6.16 million shares.
Each full warrant and call option allows DOW to acquire an additional Trilogy share for one cent following the completion of phase one of the Ambler Road or a change of control of Trilogy. Together, the warrants and options represent an additional 7.5% economic position in Trilogy, bringing the U.S. government’s total potential economic position to 17.5%.
The definitive agreements also give DOW a more direct role in Trilogy and Ambler Metals. The Pentagon has the right to designate an independent third-party director to Trilogy’s board through Oct. 6, 2028, and maintain a non-voting board observer for as long as it holds at least 8 million Trilogy shares.
Under a separate cooperation agreement, DOW also gains an observer right at Ambler Metals, along with consent rights involving investments and asset and product sales and limited veto rights intended to prevent certain foreign entities from gaining control of the joint venture.
The Pentagon separately agreed to work with Alaska to help facilitate financing needed to build the 211-mile Ambler Road, infrastructure key to the development of mines in the Northwest Alaska mining district.
“Having finalized the transaction documents to the standard this landmark investment deserves, we’re pleased to be positioned to close on this financing from the U.S. Government in the near term,” said Trilogy Metals President and CEO Tony Giardini.
Alaska Industrial Development and Export Authority
Development of the 211-mile Ambler Road will be needed to deliver metal concentrates from the Ambler District to market.
Trilogy Metals and South32 have committed to investing the proceeds received from the Pentagon’s equity investment into Ambler Metals, which will apply the funds to exploration and development of the Upper Kobuk Mineral Projects in the Ambler District.
Ambler Metals is carrying out a $35 million 2026 program at UKMP focused largely on geotechnical, hydrogeological and exploration drilling to support final mine design, infrastructure planning and permitting at Arctic, one of the highest-grade undeveloped copper deposits in the world.
The program also includes reopening and upgrading the camp at Bornite, a large copper-cobalt deposit roughly 16 miles southwest of Arctic, and assessing targets along the roughly 60-mile mineralized belt for expanded exploration in 2027.
Together, Arctic and Bornite host 9 billion pounds of copper, 3.5 billion lb of zinc, 88 million lb of cobalt, 57 million ounces of silver, and 737,000 oz of gold in all resource categories.
Arctic, the first UKMP deposit slated for development, is projected to produce 1.9 billion lb of copper, 2.2 billion lb of zinc, 335 million lb of lead, 36 million oz of silver, and 423,000 oz of gold over a 13-year mine life, according to a 2023 feasibility study.
Bornite is projected to add 1.9 billion lb of copper over a 17-year mine life based on a 2025 preliminary economic assessment.
Studies carried out by the U.S. Geological Survey and the Colorado School of Mines indicate that Bornite could also be a significant source of germanium, a critical metal used in semiconductors, fiber optics, and advanced energy technologies.
“The Department is tirelessly working to secure the critical minerals needed to build and sustain America’s defense and economy,” said George K. Kollitides II, director of the Pentagon’s Economic Defense Unit. “This investment puts the taxpayer and our warfighters first by taking decisive action to protect our economy from manipulation, revitalize our industrial base, and create thousands of American jobs that will support our national security for decades to come.”
According to DOW, UKMP mine development is expected to create more than 2,730 construction jobs and 500 long-term mining jobs in Alaska, generating over $1.1 billion in state revenues, while driving downstream smelting, refining, and high-value manufacturing across multiple states including Arizona, Utah, Texas, Ohio, and Pennsylvania.
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Shane Lasley, Publisher
Over his more than 18 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
