Ambler Metals’ suspended access road permits in legal limbo

A judge of the Federal District of Alaska is expected to render a decision soon in a dispute regarding the development of a 340-km, east-west-running controlled industrial access road that would provide access to the Ambler Mining District in northwestern Alaska.

In its first-quarter financial report released on Wednesday, Trilogy Metals (TSX: TMQ; NYSE American: TMQ) revealed that the U.S. Department of the Interior’s (DOI) Bureau of Land Management (BLM) had on Apr. 5 filed a response to court briefs lodged on Mar. 22 by the so-called intervenor defendants, including Ambler Metals, the Aboriginal-owned NANA Regional Corporation (NANA), the Alaska Industrial Development and Export Authority (AIDEA) and the State of Alaska.

This means the judge now has all concerned parties’ briefings before them to render a verdict.

Ambler Metals is a joint venture held 50/50 by Trilogy and South32 Limited (ASX: S32; LSE: S32; JSE: S32) to develop the advanced Arctic and earlier-stage Bornite copper projects, also referred to as the Upper Kobuk Mineral Projects (UKMP), in a remote region of Alaska.

Trilogy VP of corporate communications and development, Patrick Donnelly, told The Northern Miner the issue dated back to the issuance under the Trump administration of the Final Environmental Impact Assessment (FEIS) in March 2020 and the subsequent Joint Record of Decision (JROD) by the BLM in July 2020.

“As had become the norm for developing mining projects in the U.S., the FEIS and JROD were essentially challenged immediately in court by a coalition of mainly Lower 48-based non-governmental concerns. This was followed by the change in government to the Biden administration, which essentially left things in the air,” he said in an interview.

Fast-forward several quarters, and the DOI, in the fall of 2021, filed a brief in court asking for a 60-day stay of the issuance of the right-of-way permit (ROW permits) for it to undertake additional consultations centred on purported deficiencies in the FEIS and JROD regarding subsistence and cultural issues. “The DOI argued this additional work would help strengthen the issued permits,” said Donnelly.

However, nothing happened, and in January this year, the DOI again asked for another 30-day stay of the ROW permits.

Subsequently, the DOI filed a motion on Feb. 22 to remand the FEIS and suspend the ROW permits issued to AIDEA for the Ambler Access Project (AAP).

The DOI stated at the time that the suspension of the road permits would allow it to carry out the additional supplemental work on the FEIS. The motion also indicated that the DOI had requested that the lawsuits filed early in 2021 against the DOI by a coalition of U.S. and Alaska environmental NGOs be suspended.

Donnelly said that despite the company having received solid endorsements for the AAP from NANA, AIDEA, the Northwest Arctic Borough, the State of Alaska and South32, the company had no control over the potential impact of the timing of the pending court decision, or the extra work the DOI is undertaking, on AIDEA’s proposed plan and budget for the 2022 summer field season activities.

Formal suspension of permits

In mid-March 2022, the BLM and the DOI formally suspended the right-of-way grant and the ROW permits to AIDEA, sending Trilogy’s Toronto-quoted stock crashing 40% on Mar. 23.

While the suspension decisions are in place, AIDEA may not conduct any activities that rely on the authority of the ROW permits; the terms and conditions of the ROW permits are tolled; and all rental fee obligations are suspended. The suspension does not preclude AIDEA from applying for special use permits to conduct activities on the lands subject to the ROW permits or granted under applicable law or authority other than the suspended ROW permits.

On Mar. 22, the intervenor defendants (the State of Alaska, NANA, AIDEA, and Ambler Metals) filed briefs in opposition to the DOI’s motion for a voluntary remand.

In its brief, Ambler Metals did not oppose the voluntary remand motion, subject to four conditions. These entail that there be no vacatur or termination of the permits; the remand must be completed within nine months; that there must be status updates to the court every 60 days during the remand period; and the federal defendants (DOI) must lodge the administrative record within 30 days of issuing any new decision.

“We don’t want them to drag out any decisions or developments affecting the AAP indefinitely,” said Donnelly.

Also on Mar. 22, the plaintiffs (the NGOs) filed a motion asking the court to deny the motion for voluntary remand without vacatur of the permits and either allow a merits briefing to proceed or simply vacate the federal defendants’ reviews and decisions.

While the ROW permits sit in limbo for the time being until a judge renders a final decision, Donnelly underlined that it did not preclude Ambler Metals from undertaking planned site work this summer. “We are planning to continue business as usual with US$27 million budgeted to undertake a further 10,000 metres of drilling at Arctic,” said Donnelly.

The company plans to soon embark on the formal mine permitting, pending a development decision.

He said the joint venture remained well cashed up with available reserves of US$111 million, which is expected to be enough to see the project through to a development decision.

A shadow on the Biden Administration’s record

“The legal issues we’re experiencing in developing a battery metal-oriented mine casts a shadow on the Biden Administration’s track record. Biden keeps talking up the importance of critical and green metals development. Yet, it had become the norm for NGOs to be allowed to, sometimes spuriously, challenge the progress in developing projects of national importance,” said Donnelly.

Donnelly also noted that the Northwest Arctic Borough in Alaska and five villages along the access road route had been clear that the construction of the AAP was expected to have positive impacts on their communities, underlining that a balance could be achieved regarding the environment and the local people’s subsistence culture and lifestyle.

The Ambler Metals partnership was formed in 2019 to develop the UKMP eventually. Building an access road to the deposit is one of the first steps to achieving that goal.

The UKMP projects have a combined resource of 8 billion lb. of copper, 3 billion lb. of zinc and 1 million oz. of gold equivalent.

The proposed mine is expected to produce more than 159 million lb. of copper, 199 million lb. of zinc, 33 million lb. of lead, 30,600 oz. of gold and 3.3 million oz. of silver over a 12-year mine life.

Despite the copper price trending near record levels, Trilogy’s Toronto-quoted equity had fallen nearly 49% over the past 12 months to $1.48, giving it a market capitalization of $221.1 million (US$176.37 million).