Ambler Road Update - Fireside Chat

0:03 I'll say good morning, good afternoon, or good evening, depending on where in the world you're signing in from today. I'm very lucky to be joined today by Tony Giardini, CEO of Trilogy Metals. And Rick Van Nuyen is a chairman of the Hollow Metals, to discuss the recent very big news out of the Ambler Mining District, that the newly named US Department of War is investing in Trilogy Metals, and that the Ambler Road has been approved, connecting the district to Alaska's transit network. Gentlemen, how are you today?

0:25 Doing well. Very good, thanks. Awesome. So here's how today's going to work for the folks in the room. It's going to be a pretty tight 30 minute event today. I've got some questions for both Rick and Tony. And then ideally, I'll have a couple minutes to take questions from the live audience, but no promises. Really hoping to stay on topic today. So if I don't get to your question for whatever reason, please do still enter it. I'll make sure the respective teams get the transcript of today's chat. And they'll reach out to you as soon as they're able. They'll have both your phone number or your email address or both, depending on what you entered on registration. But let's start at the beginnings for the folks who might not know the history. Rick, I'd love if you could give us a bit of background on Ambler. Kind of where we start, what happened and then how did we get to today?

1:03 Well, this goes back to Sarah Palin. You remember Governor Sarah Palin, and I promise not to do an SNL skit, but she was the first governor to recognize that the road connecting the Amarillo District to the existing infrastructure, which is the Dalton Highway,

1:25 it was necessary to get that done. Unfortunately, she left office and then Governor Parnell moved in. So we had to kind of switch gears and talk with the governor and convince him to get the road permitted and underway. And we recognized early on that having a public road was going to be a non-starter. And so convincing the governor to turn this road project over to the Alaska Industrial Development Export Authority, ADA, was the right approach. And that finally happened in about 2009 or so. And so That's where the permitting of the road, the Ambler Road kind of restarted. And it's, here we are in 2025, and it's been, it was approved back under the Trump, we started permitting the road under the Obama administration, it was approved under the Trump administration, then canceled under the Biden administration, and now finally

2:23 re-approved under the Trump administration. So here we are, literally 15 years later from when we started permitting the road project to having it reapproved. And we're all very excited in Alaska about it. And certainly Tony and I are. No, I bet.

2:45 And getting to today then, and Tony, I'll throw it to you. Can you walk us through Trump Section 1106 ANILCA decision? What makes this approval mechanism unique in Alaskan resource development? And why is this a big deal for Trilogy? And then Rick, I'll throw it to you for Valhalla. Sure, and Before I start, I just want to thank Rick for all of the heavy lifting that he's done in terms of this project. Rick's been the person that put this whole district together, starting in 2004 when he was able to get the Arctic deposit from Kennecott, and then putting the JV together in 2011 with Nana. So a lot of the credit goes to Rick that, you know, having this district to move forward, and I think a summary he gave about the road is really important because this thing has been going on for a long time. So basically, you know, President Trump, Section 1106 ANILCA decision is significant because it really involves a provision under ANILCA which grants a direct congressionally authorized right-of-way across federal lands. And that's something that's unique to Alaska. This provision

3:47 only exists in Inilka, as far as I know, and it's the first time that it's been used. So for Trilogy and for Valhalla, what this does is it effectively de-risks the infrastructure critical aspect, which is what Rick was talking about, and really provides long-term legal certainty. So it's more than a permit, it's really a legislatively backed pathway to unlock the district. And that's what's really important. And I think both Rick and I are looking forward to talking about the exploration potential in the district as opposed to talking about the road. Rick, I'll throw it to you for what it means for Val. Yeah, I mean, I think Tony covered it. I mean, the 1106 is specific to Anilka and Anilka is an Alaskan National Interest Land Conservation Act that was passed in 1980, back when President Carter was still president and just before President Reagan was not, was, became president,

4:47 you know, the following year. But ANILCA as it's referred, basically did set aside a right of way to access the Amber Mining District from the pipeline quarter, which is the Dalton, now known as the Dalton Highway. So it's hardwired and it has always been hardwired. The language is really clear that the secretary of interior shall grant an access.

5:15 A permit between the Amber Mining District and the Pipeline Corridor. It's so it's taken a long time to get here. We're here. As Tony say, let's talk about the geology and the what does this district really mean for Alaska and what does it mean for the United States? Here we go. I love a shall. Shall is one of my favorite words, government. So let's talk about the geology then. So the Ammon Mine District described is one of the world's richest copper-dominant polymetallic districts. So let's talk about what makes the region so geologically significant and then how your projects fit in. Tony, I'll throw it to you first, if you don't mind. I like it. The finance person gets to talk about geology before the geologist, so I'm gonna do my best, but Rick's gonna give you all the real detail here. So what really stands out about the district is the exceptional metal grades that we have and the diversity that

6:03 we have. We have copper, zinc, cobalt, and precious metals all within this very continuous, well- defined belt. It's one of the most metal-rich, undeveloped regions globally, and I think, you know, our project Arctic and Boronite, and I think the same for Valhalla, will be the cornerstone of a belt. So we see this as really a long-term district-scale development opportunity. And the other thing that I'll point out before I turn it over to Rick and he can get into the details of Devonian and carbon-hosted and BMS and all of that stuff, is that it's important to understand that just north of us is the world's largest zinc mine, Red Dog. So it's in the same district, and they're producing germanium there. And I wouldn't be surprised if there's rare earth metals in our district as well. It's just that we haven't been able to get to them because of a high cost of exploration in the district and the uncertainty that we have with respect to the road.

6:56 Yeah, I'll just, you know, from a geologic perspective, it's a volcanic Massive Sulfide Belt. It's 70 miles long, 100 kilometers long in metric. And we've only really scratched the surface. I mean, if this district were in Eastern Canada, you would have literally millions of miles of core drilled. And We don't have anywhere close to that. We have 4 well-known deposits that have been known for quite a while,

7:26 between what Trilogy has and what Valhalla has. We're literally just scratching the surface of the exploration. You know, early on when the Arctic project was first drilled, this was in the 60s, and you had limitation on the size rigs you could use because of the size of the helicopters that could move them. And early on, when we did early on a trilogy, we just drilled deeper. And that's how you were able to grow such a large, one of the, Arctic's one of the largest VMS deposits in the world, as a class of deposit. And we plan to do the same kind of exploration work at the Sun deposit, which is about 30 miles to the east of Arctic.

8:15 And same rocks, you put them right next to each other, you really can't tell them apart. So yeah, it's very exciting to be able to get the drills turning again, and that's certainly what we plan to do next year. Great. And obviously it's big news for both of your projects, but I also want to talk about the broader mining district, generally. What does this 211-mile Ambler Road actually unlock for the whole district?

8:40 And what's the timeline for road construction? I got a lot of questions over email about that, so I'd love if we could speak to that as well. Rick, I'll start with you this time. Yeah, I mean, obviously, so the Alaska Industrial Development Export Authority, or more known by its acronym, ADA, they are the project proponent. And Again, as I mentioned early on, the concept here is, AID is basically a state-owned development bank, and their job is to build infrastructure. They built the Red Dog Road and Port Facility. They financed that using third-party bonds.

9:15 And so there's a fair bit of work still to do to get all that organized and done. But at least now the more detailed engineering work can be done to design the bridges and all the culverts and the crossings and exactly where the road will go. And which incidentally runs right across the Sun property that Valhalla owns. So we're very conveniently located right along the road path. But yeah, there's a fair bit of work to do, but obviously we've got

9:49 an administration that supports development has now signed off on the permitting process. And so it's time to hit the ground running. Awesome. I appreciate that. Tony, do we still have you there? Just making sure before I throw a question. Yeah, I'm here. Awesome. Yeah, I'm here. So I want to talk about the investment from the newly named Department of War. A 10% equity stake in Trilogy, to me, I think to the market, signals pretty significant strategic importance. So how does federal involvement in critical mineral projects change the development landscape and kind of de-risk investments there?

10:24 I mean I think it's massive for us and I think it's massive for the district. I mean federal involvement really brings a validation of how important this project is and the national importance that it has. So having the US government as a shareholder aligns our interests and provides investors with additional confidence that there's a real pathway to move this forward and get it developed. I think it really creates stability, it mitigates long-term risks, It underscores how vital these critical metals are to the US economy and national security. I mean, if someone told me that we were going to have the US government as a 10% holder in Trilogy a year ago, I wouldn't have believed it. So the fact that they're there is just incredibly positive for us and for the district as a whole. I appreciate that. Rick, what do you think it signals? Yeah, I think it really underscores how far behind China we are

11:18 because this is not being done, This is not normal. This is not normal course action. And I think Secretary Byrd even said that. And so it really underscores how far behind China we are in terms of developing our mineral resources. And frankly, it's been the inaction of government in the past, either moving slowly or not at all. And the constant threat of lawsuits that have slowed the whole mineral development process down for the whole country. So this has to change. And I think this is a manifestation of some of that change. We need to be doing this and we need to We need to have done it about 20 years ago. So we're 20 years behind.

12:06 And there's a lot of talk about rare earths and critical metals. All of these metals are critical. Sure. And they're all on the list. So Yeah, it's great to see that we have an administration that realizes that. And I think it doesn't matter whether you're Republican or Democrat, they both recognize that we're behind, way behind, and we need to build this infrastructure.

12:30 And AMR has the goods, so it's a great place for us, at least, to start. And falling behind the competing superpowers in every position you want to be in, especially not 20 years behind. So, probably for the best. Tony, I got 2 questions directly to you, specific to your projects. 1, and this is a question that was reflected in almost all the questions I got in advance over email, and that's, what are the next key milestones for Trilogy? What should they be looking for, both for the road construction, but also for just advancing Arctic and Boronite deposits towards production from here? Sure. I think the next milestone is really about finalizing the road development plan. That's obviously the first and foremost in where we're going. Getting the remaining approvals, the decree from President Trump provided that those remaining approvals will be granted over a 30-day time period. And then really looking at securing funding for the initial construction once the work that's been done that needs to be done to advance the development plan is on track. And then from a project side perspective, you know, we're going to be back on the ground in 2026.

13:29 We haven't been for the last few years, simply because of the uncertainty that existed as a result of a no action decision by the Biden administration. So we're going to progress engineering. We had a pre feasibility study that had been done at the J. V. Level. We're gonna revisit that and determine what needs to be done to get us to the next stage, which is a full feasibility study at the project level, although Trilogy has its own feasibility study at the project level. And then we're looking to advance permitting at Arctic as quickly as possible, recognizing that we want the permitting process to be able to stand up to any potential litigation that could come forward. And we're going to be talking with the federal government about either the FAST 41 process or looking at some of the provisions that came up in the Budget Reconciliation Bill as it pertained permitting and looking to expedite the permitting process as quickly as possible. And then I think the other thing that we want to do is look at Boronite and determine what additional work we can do at Boronite and how we can fit Boronite into the shorter term as opposed to longer term development strategy for the district. So I think for the next 12 to 18 months, investors should be just looking for the tangible progress on infrastructure and the development, you know, and continued advancement towards development readiness. Plus, I think you'll see, whether it's from Trilogy or from Valhalla, exploration results coming out. And I won't be surprised once there's more finalization of the road that we end up seeing more people staking ground in the district.

15:00 And we welcome that simply because it will bring more people, more exploration potential to the district. And it really is a district that we're talking about. We're not talking about Arctic. We're not talking about Boronite or Sun. We're talking about the district potential here. And so I think that's what's really exciting from our perspective. Great. And Tony, one more for you, and then Rick, I've got back-to-backs for you. With copper, cobalt, zinc, lead all present in the upper-Kobuk mineral projects, how do the current and projected market dynamics – I'm asking you to do a bit of crystal ball gazing if you don't mind – for these critical minerals support the economic case for development there. Sure. You know Rick and I have been around for a long time and we've been involved with lots of different metals. But I see copper as really being the key metal here. It's a backbone of electrification and energy infrastructure. Demand's growing rapidly and we're well over 5 dollars right now in a Comex basis.

15:48 And you know whether you're looking at it from an AI perspective in terms of power that's needed there, or you're looking at it from electrification of the grid, EVs, low carbon economy, super important. Cobalt and zinc are also gonna be essential for batteries and storage technologies. And I'd be remiss if I didn't point out that we've got the largest inferred resource in cobalt in the US at boronite. There's 88 million pounds there. So having these metals produced domestically will help ensure that there's U.S. Supply chains and reduce dependencies on imports. The fundamentals are very strong for these metals and I think we're going to see very responsible development of these resources in the great state of Alaska.

16:34 Appreciate that. Now, Rick, like I said, I got 2 for you, just jumping right in. The first is, you mentioned restarting exploration efforts to expand the known resources at the Sun Project. What's the exploration potential beyond the current resource? And honestly, how does the road affect that exploration strategy from here? I mean, the road really just allows us to spend exploration dollars because there's no sense in spending exploration dollars and increasing the size of a resource if there's no road. I mean, it's just, it was always, we always said that. There's no road, there's no mines. But so, you know, with the road advancing and going through the process of construction and getting all that done, If this project, if the Sun or Ambler or any of the deposits in Ambler district were in Nevada or Montana, they'd have been mined 30 years ago.

17:27 These are high quality deposits of copper, lead, zinc, gold, silver, and in the case of Voronoi, it has cobalt as well. So they're high grade. I mean, these things are 4 or 5% copper equivalent grades. And that's, you know, those are moneymakers. You've got zinc at a dollar 40. Now you've got copper at 5 bucks. Silver's over 50. I mean, this is a great time to be in the metals business and exploring for metals that are critical to building infrastructure, electrification, electric transportation, all the AI, all of it. You need these metals and we need a domestic source. And there's 70 mile long belt of rocks in the Ambler district that can provide them all.

18:19 Awesome. And Rick, another one for you, and I know this is true of Trilogy as well, but Valhalla has seen a pretty significant re-rate obviously this month because of news, which makes sense. What do you think is the next catalyst that brings the market cap closer to at least your perception of the value of the potential resource? It's drilling. We're obviously significantly earlier stage than Arnik and Boronite, who have been doing this longer. But like we did at Trilogy early on, we doubled the size of the resource there. And as I said earlier, the size of the helicopters and the size of the drill rigs back in the 60s can only drill so deep. And now we can get bigger helicopters and bigger drill rigs and drill deeper. And these systems tend to go a long way. So we're really just scratching the surface at sun.

19:07 And so let's get the drills turning and add resource and build a I think we can build something that's 30, 40 million tons at sun, just like we did it at Arctic. So this district is very prolific. It's a drill, baby drill. I like it. Now, we have talked multiple times about just general U.S.'s critical mineral strategy and also competition with China, defense technologies, et cetera. But Tony, I'll throw it to you just to put a fine point on it. How does this district fit into America's domestic supply chain strategy? What kind of numbers are we working with and why is this district important for the United States domestic supply? Yeah, you know, I think that when we look at it, we think that it's, you know, focused on those critical metals that we've discussed in terms of, you know, what the U.S. Is looking for from an energy technology defense perspective. And we've mentioned, you know, copper and cobalt, and we think that those are going to be really key for infrastructure, electrification, manufacturing.

20:08 So I think what we have at Arctic and Boronite and Sun is, as Rick said, just scratching the surface. And I think what the real potential here is, is about that 70-mile belt, and the term that Rick coined a long time ago, the string of pearls that are there, and how we're going to really find the next deposits. And what I'm really excited about is the fact that a metal like germanium, which is prevalent in the boronate deposit, is actually mined in a significant way at Red Dog's mine, which is just north of us. So I think the potential for us isn't just about those metals that we know about, but it's about germanium and other rare earth metals and how they fit into the mix. How much of a contribution they're ultimately going to make to the US needs, I think, is really going to depend on how much exploration we can funnel into the district in terms of advancing it.

21:05 I just added these kind of VMS districts, if you look at them worldwide, you know, the Rio Tinto district in Spain, the Timmins district in the Valdora district in Canada, I mean, they'll be operating for 100 years. You just keep drilling, you find new targets, you keep drilling those. I mean, there's, like I say, We're just scratching the surface here. So a lot of work to do. And I think most of the drilling, Rick, has only been to about 300 meters. We haven't really drilled that deep in these deposits. And one thing that I know Rick's really proud of is at Boronite in 2011, we drilled 12% copper, 12%. So I mean, there's huge potential in this district.

21:53 That's exciting. One thing I do want to talk about politics, which I kind of talked about indirectly, but I want to talk about directly, just to stress out your IR teams. That gives me great joy. But Trump obviously seems to be a pretty big Alaska fan. I think from executive orders through this decision, this move is obviously no exception. And Tony, I can kind of start with you here, but I'd really love to hear from both of you on this one. What does this administration's support mean to your projects, the future of the district, Alaska broadly. Just curious for your take on that. Well, I think firstly, it starts with Governor Dunleavy. He has a great relationship with President Trump. I think there's extremely strong support for Alaska resource sector whether it's mining or whether it's oil and gas, and there's a recognition that these resources in Alaska are really of national importance. So I think what it does for us now, particularly with President Trump in office, it gives us regulatory clarity and momentum so that we can move forward. As I said before, we haven't been on the ground for 2 or 3 years and the reason isn't because we didn't want to be, it's because of the uncertainty that had been created by the previous administration relative to development in the district. So I think having such a positive signal for investment, for job creation, long-term U.S. Mineral dependence, really gives us the ability to now continue to invest heavily in the district and not just advance our projects, but hopefully find new ones that we can move forward. So that's how we see it. So I think kudos to the governor, ADA, and all the work they did to advance 1106, and that the president and the

23:24 White House effectively granted the presidential decree. Great, Rick, I'll throw it to you. Yeah, I mean, I'll echo what Tony is saying with respect to our governor, Dunleavy. He has a long relationship with President Trump. And we now have sort of, I would say, alignment between the state and the federal government. There was recently, you know, the permitting council met and they signed an MOU to align not only the federal agency, but the state and the federal agencies. And so now there's a real opportunity to move through the permitting process. And I hate the term fast track, but it's just efficiently, just not wasting a lot of time. And let's do the right thing.

24:13 Let's do, we do it well in Alaska. We've developed our energy resources and we've done it in a way that the lifespan of Alaskan Natives in the Northwest Arctic and the Arctic boroughs have significantly increased since the beginning of development of the energy resources on the North Slope and of the Red Dog mines. I mean, these are hard facts. So we've not done it poorly. We've done it well. And Alaska does it well. And our governor is very proud of saying that as he should be, because we follow the rules, we take care of our employees, and we take care of the environment. So I think That's what we've done. That's our track record that we've demonstrated that we can do.

25:05 I have no hesitation at all that we can develop the Amber mining district in a way that is sensitive to the environment and sensitive to the subsistence lifestyle of the people who live there. Awesome. Now, I do think I've tackled the vast majority of the dozens of questions that came in over email. Just weaved in the conversation. There's one that came up a couple of times that I'll ask just before asking each of you what you're most excited about for the rest of the year. And that's where we'll close it off for today's short event. But that's what's, and there were a couple of questions related to this, so I'm kind of combining them into one. And that's what's South32's ongoing involvement from here. Yeah, so South32 is 100% committed to the district. I mean, I think, I wouldn't read anything into the, you know, the sale down of their interest in Trilogy. That was really part of how the transaction was structured with the Department of War coming into the project, and they wanted to be at the Trilogy level, so that was a convenient way of doing it. South32 continues to hold a 50% JV interest in the district. As you know, they've invested about $200 million in the district or Trilogy directly. And in addition to that, they've staked a large area called Roosevelt, which is outside of the area of interest of the JV, and in fact, closer to Rick's son deposit. And they've been very active in terms of conducting exploration there.

26:22 So I think at the end of the day, they see this huge district potential and they very much welcome from everything I understand and there were comments that have come from Graham, the CEO of South32. They very much welcome the involvement of the US government, not just in terms of being an investor in Trilogy, but obviously the efforts that have been made by President Trump in terms of getting the road issue sorted out so we can advance the project. So I would say we're 100% aligned in terms of how we move this project together and I would be shocked if we're not going to be 100% aligned in terms of how we go forward in trying to bring it to reality. Great, appreciate that answer. Now, in the interest of keeping us to a half hour, which you're doing pretty good on actually, as I'll ask you one last question, which is what are you most excited about for the rest of this year? Rick, what are you most excited about at Valhalla?

27:14 I can't wait till we can get drilling next year. That's always the fun part of exploration. It's how you find deposits and you develop resources through the drill bit, and that is exactly what we plan to be doing. There you go. Good geologist answer. Tony, I'll throw it to you. What are you most excited about for the rest of the year? Yeah, I think I echo Rick's comments about obviously getting on the ground with respect to exploration. I think the other things are really starting to see the road advance in a meaningful fashion in terms of getting these final permits that need to be issued. And so we can start to really push ARTIC and Boronite forward from a development perspective, looking at the permitting associated with ARTIC. I think the other thing that I would encourage people to do is go have a look at the Department of Interior website where Secretary Burgum talked about conveyance of land back from the federal government to the state. We think that that's a big deal and so just like the executive orders that came out at the beginning of when Trump came into office, we think that that's a road map for what's going to happen in the future. So we're excited about those opportunities as well. Yeah. Awesome. Well, Tony, Rick, thanks so much for coming on to chat about the big news. Appreciate it very much. Thanks for another tons of people in the room.

28:30 Really appreciate you joining us today, especially for Canadians. Happy Thanksgiving. I hope we can get to your turkey as soon as this is over. But gentlemen, thank you