- A new joint venture has improved Trilogy Metals’ (TSX:TMQ) most recent quarterly earnings by $176 million, compared to a loss of around $4 million in the previous corresponding quarter
- The joint venture, called Ambler Metals, was created with South32 Limited to develop Trillogy’s Upper Kobuk Mineral Projects, in Alaska
- Of South32’s $146 million investment, $22.8 million has been allocated to develop the projects in 2020
- However, the evolving COVID-19 situation in Alaska could cause the company to delay or suspend exploration in the coming season
- Trilogy Metals Inc (TMQ) is down 3.3 per cent, with shares trading at $2.34 and a market cap of $329.2 million
Copper developer Trilogy Metals Inc (TSX:TMQ) has seen a short-term bump to its recent financials, but is anticipating a challenging few months ahead.
In its first quarterly report of the year, Trilogy Metals reported $176 million in earnings, compared to a comprehensive loss of more than $4 million in 2019.
As a mining developer with no currently operational sites, earrings like this generally depend on gains in the value of its assets, which is the case here.
A joint venture announced in mid-February, between Trilogy Metals and South32 Limited is the source of the recent earnings bump.
The joint venture, called Ambler Metals, was created to develop Trilogy’s Upper Kobuk Mineral Projects, in Alaska.
This includes Trilogy most prospective claims, the Arctic and Bornite projects. Both projects are copper sites, but contain notable levels of zinc, lead, gold and cobalt.
Though the joint venture, South32 committed $146 million to Ambler Metals. This investment, paired with around $30 million gain in mineral assets, is the cause of Trilogy’s revenue bump.
While earnings like this are not sustainable profit-driven activities, it does indicate an increase in the company’s value, as it accrues new resources to put toward its projects.
Through the joint venture, the company has allocated $22.8 million to develop the Upper Kobuk Mineral Projects in 2020. Much of this budget is allocated for 10,000 meters of drilling at the Arctic Project.
However, while the exploration is planned and funded, the developing COVID-19 pandemic in Alaska may disrupt the schedule. With this in mind, the company has said it will consider delaying the work, or even cancelling exploration this season, if the required.
Trilogy Metals Inc (TSX:TMQ) is down 3.3 per cent, with shares trading at $2.34 at 10:15am EST.