Trilogy Metals (TMQ.TO) has signed agreements with the U.S. government for an equity investment of about $35.6 million to advance the Upper Kobuk Mineral Projects in Alaska, the company said Friday.
The UKMP is held by Ambler Metals, Trilogy's 50/50 joint venture with South32. The US government will invest $17.8 million in Trilogy in exchange for 8.2 million units priced at $2.17 per unit. Each unit comprises one Trilogy common share and three-quarters of a 10-year warrant. Each warrant will be exercisable at $0.01 to acquire one common share after the completion of Phase 1 of the Ambler Access Project or a change of control of the company.
The U.S. government will pay $17.8 million to South32 in exchange for 8.2 million common shares of Trilogy held by South32, along with a 10-year call option to acquire 6.2 million common shares of Trilogy from South32 for US$0.01 apiece, exercisable following the completion of Phase 1 of Ambler Road or a change of control of the company.
At deal closing, the U.S. government will hold a 10% stake in Trilogy and will have the right to designate one independent third-party director to Trilogy's board until Oct. 6, 2028, and to appoint a non-voting board observer. The transaction is scheduled to close in September.