Trilogy Metals Inc. 10-Q

Item 1. Financial Statements Trilogy Metals Inc. Condensed Interim Consolidated Balance Sheets (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of US dollars ​ ​ ​ ​ August 31, 2025 ​ ​ November 30, 2024 ​ ​ $ $ Assets ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ 23,372 ​ ​ 25,834 ​ Accounts receivable ​ ​ 17 ​ ​ 16 ​ Deposits and prepaid amounts ​ ​ 344 ​ ​ 195 ​ Total current assets ​ ​ 23,733 ​ ​ 26,045 ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment in Ambler Metals LLC (note 3) ​ ​ 105,261 ​ ​ 107,497 ​ Right of use asset (note 5(a)) ​ ​ 126 ​ ​ 155 ​ Total assets ​ ​ 129,120 ​ ​ 133,697 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ Accounts payable and accrued liabilities (note 4) ​ ​ 333 ​ ​ 756 ​ Current portion of lease liability (note 5b) ​ ​ 40 ​ ​ 37 ​ Total current liabilities ​ ​ 373 ​ ​ 793 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term portion of lease liability (note 5(b)) ​ ​ 82 ​ ​ 110 ​ Total liabilities ​ ​ 455 ​ ​ 903 ​ ​ ​ ​ ​ ​ ​ ​ ​ Shareholders' equity ​ ​ ​ ​ ​ Share capital (note 6) – unlimited common shares authorized, no par value issued – 164,291,410 (2024 – 161,085,313 ) ​ ​ 192,898 ​ ​ 190,503 ​ Contributed surplus ​ ​ 118 ​ ​ 118 ​ Contributed surplus – options (note 6(a)) ​ ​ 29,712 ​ ​ 28,801 ​ Contributed surplus – units (note 6(b)) ​ ​ 3,884 ​ ​ 3,772 ​ Deficit ​ ​ ( 97,947 ) ​ ​ ( 90,400 ) ​ Total shareholders' equity ​ ​ 128,665 ​ ​ 132,794 ​ Total liabilities and shareholders' equity ​ ​ 129,120 ​ ​ 133,697 ​ Subsequent Events (note 10) (See accompanying notes to the condensed interim consolidated financial statements) /s/ Tony Giardini, President, CEO and Director /s/ Diana Walters, Director Approved on behalf of the Board of Directors ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 3 ​ Table of contents Trilogy Metals Inc. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of US dollars, except share and per share amounts ​ ​ ​ ​ ​ For the three months ended ​ For the nine months ended ​ ​ ​ ​ ​ August 31, 2025 ​ ​ August 31, 2024 ​ August 31, 2025 ​ ​ August 31, 2024 ​ ​ ​ ​ ​ $ $ ​ $ $ ​ Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 4 ​ ​ ​ Exploration expenses ​ ​ 40 ​ ​ 28 ​ ​ 40 ​ ​ 28 ​ ​ ​ Foreign exchange (gain) loss ​ ​ 2 ​ ​ 2 ​ ​ ( 9 ) ​ ​ 3 ​ ​ ​ General and administrative ​ ​ 214 ​ ​ 293 ​ ​ 910 ​ ​ 1,027 ​ ​ ​ Investor relations ​ ​ 38 ​ ​ 15 ​ ​ 72 ​ ​ 46 ​ ​ ​ Professional fees ​ ​ 246 ​ ​ 138 ​ ​ 1,305 ​ ​ 530 ​ ​ ​ Salaries ​ ​ 251 ​ ​ 158 ​ ​ 774 ​ ​ 527 ​ ​ ​ Salaries and directors expense – stock-based compensation ​ ​ 374 ​ ​ 506 ​ ​ 2,971 ​ ​ 3,014 ​ ​ ​ Total expenses ​ ​ 1,165 ​ 1,141 ​ ​ 6,063 ​ 5,179 ​ ​ ​ Other items ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income and other income ​ ​ ( 311 ) ​ ​ ( 152 ) ​ ​ ( 741 ) ​ ​ ( 200 ) ​ ​ ​ Net services agreement income ​ ​ 2 ​ ​ ( 22 ) ​ ​ ( 11 ) ​ ​ ( 47 ) ​ ​ ​ Share of loss on equity investment (note 3(b)) ​ ​ 891 ​ ​ 624 ​ ​ 2,236 ​ ​ 2,019 ​ ​ ​ Loss and comprehensive loss for the period ​ ​ ( 1,747 ) ​ ( 1,591 ) ​ ​ ( 7,547 ) ​ ( 6,951 ) ​ ​ ​ Basic loss per common share ​ ​ ( 0.01 ) ​ ​ ( 0.01 ) ​ ​ ( 0.05 ) ​ ​ ( 0.04 ) ​ ​ ​ Diluted loss per common share ​ ​ ( 0.01 ) ​ ​ ( 0.01 ) ​ ​ ( 0.05 ) ​ ​ ( 0.04 ) ​ ​ ​ Basic weighted average number of common shares outstanding ​ ​ 164,258,258 ​ ​ 160,542,286 ​ ​ 163,770,522 ​ ​ 159,466,414 ​ ​ ​ Diluted weighted average number of common shares outstanding ​ ​ 164,258,258 ​ ​ 160,542,286 ​ ​ 163,770,522 ​ ​ 159,466,414 ​ ​ ​ (See accompanying notes to the condensed interim consolidated financial statements) ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 4 ​ Table of contents Trilogy Metals Inc. Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (unaudited) in thousands of US dollars, except share amounts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contributed ​ ​ Contributed ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ Contributed ​ ​ surplus – ​ ​ surplus – ​ ​ ​ ​ ​ shareholders’ ​ ​ Number of shares ​ ​ Share capital ​ ​ surplus ​ ​ options ​ ​ units ​ ​ Deficit ​ ​ equity ​ ​ outstanding $ $ $ $ $ $ Balance – November 30, 2023 ​ 155,925,990 ​ ​ 187,886 ​ ​ 118 ​ ​ 28,237 ​ ​ 3,127 ​ ​ ( 81,813 ) ​ ​ 137,555 ​ Restricted Share Units 3,633,065 ​ ​ 1,804 ​ ​ — ​ ​ — ​ ​ ( 1,804 ) ​ ​ — ​ ​ — ​ Joint venture contribution ​ 143,507 ​ ​ 112 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 112 ​ Services settled by common shares 64,368 ​ ​ 30 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 30 ​ Stock-based compensation ​ — ​ ​ — ​ ​ — ​ ​ 318 ​ ​ 1,681 ​ ​ — ​ ​ 1,999 ​ Loss for the period — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,601 ) ​ ​ ( 3,601 ) ​ Balance – February 29, 2024 159,766,930 ​ ​ 189,832 ​ 118 ​ 28,555 ​ 3,004 ​ ( 85,414 ) ​ ​ 136,095 ​ Restricted Share Units ​ 353,347 ​ ​ 155 ​ ​ — ​ ​ — ​ ​ ( 155 ) ​ ​ — ​ ​ — ​ Services settled by common shares ​ 66,511 ​ ​ 30 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 30 ​ Stock-based compensation ​ — ​ ​ — ​ ​ — ​ ​ 92 ​ ​ 417 ​ ​ — ​ ​ 509 ​ Loss for the period — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,759 ) ​ ​ ( 1,759 ) ​ Balance – May 31, 2024 ​ 160,186,788 ​ ​ 190,017 ​ ​ 118 ​ ​ 28,647 ​ ​ 3,266 ​ ​ ( 87,173 ) ​ ​ 134,875 ​ Restricted Share Units ​ 326,020 ​ ​ 153 ​ ​ — ​ ​ — ​ ​ ( 153 ) ​ ​ — ​ ​ — ​ Services settled by common shares ​ 54,706 ​ ​ 30 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 30 ​ Stock-based compensation ​ — ​ ​ — ​ ​ — ​ ​ 94 ​ ​ 415 ​ ​ — ​ ​ 509 ​ Loss for the period — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,591 ) ​ ​ ( 1,591 ) ​ Balance – August 31, 2024 ​ 160,567,514 ​ ​ 190,200 ​ ​ 118 ​ ​ 28,741 ​ ​ 3,528 ​ ​ ( 88,764 ) ​ ​ 133,823 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance – November 30, 2024 ​ 161,085,313 ​ ​ 190,503 ​ ​ 118 ​ ​ 28,801 ​ ​ 3,772 ​ ​ ( 90,400 ) ​ ​ 132,794 ​ Exercise of options 263,333 ​ ​ 195 ​ ​ — ​ ​ ( 64 ) ​ ​ — ​ ​ ​ ​ ​ 131 ​ Restricted Share Units 2,647,945 ​ ​ 1,863 ​ ​ — ​ ​ — ​ ​ ( 1,863 ) ​ ​ — ​ ​ — ​ Services settled by common shares ​ 24,260 ​ ​ 30 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 30 ​ Stock-based compensation — ​ ​ — ​ ​ — ​ ​ 738 ​ ​ 1,520 ​ ​ — ​ ​ 2,258 ​ Loss for the period ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,623 ) ​ ​ ( 3,623 ) ​ Balance – February 28, 2025 ​ 164,020,851 ​ ​ 192,591 ​ ​ 118 ​ ​ 29,475 ​ ​ 3,429 ​ ​ ( 94,023 ) ​ ​ 131,590 ​ Exercise of options ​ 86,667 ​ ​ 110 ​ ​ — ​ ​ ( 39 ) ​ ​ — ​ ​ — ​ ​ 71 ​ Restricted Share Units ​ 119,906 ​ ​ 145 ​ ​ — ​ ​ — ​ ​ ( 145 ) ​ ​ — ​ ​ — ​ Services settled by common shares ​ 13,986 ​ ​ 20 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 20 ​ Stock-based compensation ​ — ​ ​ — ​ ​ — ​ ​ 140 ​ ​ 372 ​ ​ — ​ ​ 512 ​ Loss for the period — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 2,177 ) ​ ​ ( 2,177 ) ​ Balance – May 31, 2025 164,241,410 ​ ​ 192,866 ​ 118 ​ 29,576 ​ 3,656 ​ ( 96,200 ) ​ ​ 130,016 ​ Exercise of options ​ 50,000 ​ ​ 32 ​ ​ — ​ ​ ( 10 ) ​ ​ — ​ ​ — ​ ​ 22 ​ Stock-based compensation ​ — ​ ​ — ​ ​ — ​ ​ 146 ​ ​ 228 ​ ​ — ​ ​ 374 ​ Loss for the period — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,747 ) ​ ​ ( 1,747 ) ​ Balance – August 31, 2025 164,291,410 ​ ​ 192,898 ​ 118 ​ 29,712 ​ 3,884 ​ ( 97,947 ) ​ ​ 128,665 ​ (See accompanying notes to the condensed interim consolidated financial statements) ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 5 ​ Table of contents Trilogy Metals Inc. Condensed Interim Consolidated Statements of Cash Flows (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of US dollars ​ ​ ​ For the nine months ended ​ ​ ​ August 31, 2025 ​ ​ August 31, 2024 ​ ​ ​ ​ $ $ Cash flows used in operating activities ​ ​ ​ ​ Loss for the period ​ ​ ​ ( 7,547 ) ​ ( 6,951 ) ​ Adjustments to reconcile net loss to cash flows used in operating activities ​ ​ ​ ​ ​ ​ Amortization ​ ​ ​ — ​ 4 ​ Consulting fees settled by common shares ​ ​ ​ 30 ​ ​ 90 ​ Office lease accounting ​ ​ ​ 2 ​ ​ 76 ​ Loss on equity investment in Ambler Metals LLC ​ ​ ​ 2,236 ​ ​ 2,019 ​ Unrealized foreign exchange gain ​ ​ ​ ( 2 ) ​ — ​ Stock-based compensation ​ ​ ​ 2,971 ​ 3,014 ​ Net change in non-cash working capital ​ ​ ​ ​ ​ ​ ​ (Increase) Decrease in accounts receivable ​ ​ ​ ( 1 ) ​ 25 ​ Decrease in deposits and prepaid amounts ​ ​ ​ ( 149 ) ​ ( 93 ) ​ Increase in accounts payable and accrued liabilities ​ ​ ​ ( 230 ) ​ ( 38 ) ​ Total cash flows used in operating activities ​ ​ ​ ( 2,690 ) ​ ( 1,854 ) ​ Cash flows from financing activities ​ ​ ​ ​ ​ Proceeds from exercise of options ​ ​ ​ 224 ​ ​ — ​ Total cash flows from financing activities ​ ​ ​ 224 ​ — ​ Cash flows from investing activities ​ ​ ​ ​ ​ Return of capital from Ambler Metals LLC ​ ​ ​ — ​ 25,000 ​ Total cash flows from investing activities ​ ​ ​ — ​ 25,000 ​ Change in cash ​ ​ ​ ( 2,466 ) ​ 23,146 ​ Effect of exchange rate on cash ​ ​ ​ 4 ​ 2 ​ Cash – beginning of the year ​ ​ ​ 25,834 ​ 2,590 ​ Cash – end of the period ​ ​ ​ 23,372 ​ 25,738 ​ (See accompanying notes to the condensed interim consolidated financial statements) ​ ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 6 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ 1) Nature of operations Trilogy Metals Inc. (“Trilogy” or the “Company”) was incorporated in British Columbia, Canada under the Business Corporations Act (British Columbia) on April 27, 2011. The Company is engaged in the exploration and development of mineral properties, through its equity investee Ambler Metals LLC (see note 3), with a focus on the Upper Kobuk Mineral Projects (“UKMP”), including the Arctic and Bornite Projects located in Northwest Alaska in the United States of America (“US”). The Company also conducts early-stage exploration through a wholly owned subsidiary, 995 Exploration Inc. 2) Summary of significant accounting policies Basis of presentation These condensed interim consolidated financial statements have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Trilogy and its wholly owned subsidiaries, NovaCopper US Inc. (dba “Trilogy Metals US”) and 995 Exploration Inc. All intercompany transactions are eliminated on consolidation. For variable interest entities (“VIEs”) where Trilogy is not the primary beneficiary, we use the equity method of accounting. All figures are in United States dollars unless otherwise noted. References to CDN$ refer to amounts in Canadian dollars. These condensed interim consolidated financial statements include all adjustments necessary for the fair statement of the Company’s financial position as of August 31, 2025 and our results of operations and cash flows for the nine-month periods ended August 31, 2025 and August 31, 2024. The results of operations for the nine-month period ended August 31, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2025. As these condensed interim consolidated financial statements do not contain all of the disclosures required by U.S. GAAP for annual financial statements, these condensed interim consolidated financial statements should be read in conjunction with the annual financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024, filed with the U.S. Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities on February 14, 2025. These condensed interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on September 30, 2025. Use of estimates and measurement uncertainties The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions of future events that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenditures during the period. Significant estimates include the measurement of income taxes and the valuation of stock-based compensation. Actual results could differ materially from those reported. Management assesses the possibility of impairment in the carrying value of its equity method investment in Ambler Metals LLC (“Ambler Metals”) whenever events or circumstances indicate that the carrying amount of the investment may not be recoverable. Ambler Metals is a non-publicly traded equity investment owning exploration and development projects. Significant judgments are made in assessing the possibility of impairment. The Company assesses whether there has been a potential triggering event for other-than-temporary impairment by assessing the underlying assets of Ambler Metals for recoverability and assessing whether there has been a change in the development plan or strategy for the projects. If the Company concludes there is sufficient evidence for an other-than-temporary impairment, an assessment of fair value is performed. If the underlying assets are not recoverable, the Company will record an impairment charge ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 7 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ equal to the difference between the carrying amount of the equity investment and its fair value. This assessment is subjective and requires consideration at each period end. ​ New accounting pronouncements Updates to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. AUS 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss and interim disclosures of a reportable segment’s profit or loss and assets. The standard is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2025, and subsequent interim periods, with early adoption permitted. The Company is evaluating the impact of the guidance on the consolidated financial statements. Updates to Income Tax Disclosure In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. The standard is effective beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2026, and subsequent interim periods, with early adoption permitted. The Company is evaluating the impact of the guidance on the consolidated financial statements. ​ 3) Investment in Ambler Metals LLC (a) Formation of Ambler Metals LLC On February 11, 2020, the Company completed the formation of a 50 / 50 joint venture named Ambler Metals LLC (“Ambler Metals”) with South32 Limited (“South32”). As part of the formation of the joint venture, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite Projects, while South32 contributed cash of $ 145.0 million, resulting in each party’s subsidiaries directly owning a 50 % interest in Ambler Metals. Ambler Metals is a company jointly controlled by Trilogy and South32 through a four -member board, of which two members are appointed by Trilogy based on its 50 % equity interest. All significant decisions related to the UKMP require the approval of both companies. We determined that Ambler Metals is a VIE because it is expected to need additional funding from its owners for its significant activities. However, we concluded that we are not the primary beneficiary of Ambler Metals as the power to direct its activities, through its board, is shared under the Ambler Metals limited liability company agreement. As we have significant influence over Ambler Metals through our representation on its board, we use the equity method of accounting for our investment in Ambler Metals. Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals, which, as of August 31, 2025, totaled $ 105.3 million (2024 - $ 108.1 million). ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 8 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ (b) Carrying value of equity method investment Trilogy recognized, based on its 50 % ownership interest in Ambler Metals, an equity loss of $ 2.2 million equivalent to its pro rata share of Ambler Metals’ comprehensive loss of $ 4.4 million for the nine-month period ending August 31, 2025. The carrying value of Trilogy’s 50 % investment in Ambler Metals as at August 31, 2025 is summarized in the following table. ​ ​ ​ ​ ​ ​ in thousands of dollars ​ ​ ​ $ ​ November 30, 2024, Investment in Ambler Metals ​ 107,497 ​ Share of loss on equity investment for the nine-month period ending August 31, 2025 ​ ( 2,236 ) ​ August 31, 2025, Investment in Ambler Metals ​ 105,261 ​ ​ (c) The following table provides Ambler Metals’ balances on a 100% basis as at August 31, 2025. ​ ​ ​ ​ ​ ​ in thousands of dollars ​ ​ August 31, 2025 ​ ​ $ Cash and cash equivalents ​ 3,749 ​ Mineral properties ​ 30,899 ​ Other assets ​ 766 ​ Total assets ​ 35,414 ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ 622 ​ Other liabilities ​ 63 ​ Total liabilities ​ 685 ​ ​ ​ ​ ​ Members' equity (total assets less total liabilities) ​ 34,729 ​ ​ Ambler Metals’ cash and cash equivalents are held at one bank. The majority of the cash and cash equivalents is uninsured as at August 31, 2025. ​ (d) The following table summarizes Ambler Metals’ loss for the nine-month period ended August 31, 2025. ​ ​ ​ ​ in thousands of dollars ​ ​ For the nine months ended ​ ​ August 31, 2025 ​ ​ $ ​ Corporate salaries and wages 209 ​ General and administrative 379 ​ Mineral property expense - exclude Ambler Access Project 2,126 ​ Professional fees 1,124 ​ ​ 3,838 ​ Ambler Access Project 710 ​ Depreciation 88 ​ Foreign exchange (gain)/loss 1 ​ Interest and other income ( 166 ) ​ Comprehensive loss 4,471 ​ ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 9 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ (e) Related party transactions ​ During the nine-month period ended August 31, 2025, the Company charged $ 102,250 (2024 - $ 47,000 ) to Ambler Metals related to administrative and accounting services in connection with a service agreement between the Company and Ambler Metals. In addition, the Company received payments of $ 58,080 (2024 - $ 64,000 ) related to expenses paid on behalf of Ambler Metals. ​ 4) Accounts payable and accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of dollars ​ ​ ​ August 31, 2025 ​ ​ November 30, 2024 ​ ​ $ $ Trade accounts payable ​ 141 ​ ​ 196 ​ Accrued liabilities 112 ​ 62 ​ Accrued salaries and vacation 80 ​ 498 ​ Accounts payable and accrued liabilities 333 ​ 756 ​ ​ ​ ​ ​ ​ ​ 5) Leases (a) Right-of-use asset ​ ​ ​ ​ ​ ​ ​ in thousands of dollars ​ ​ $ Balance as at November 30, 2024 ​ 155 ​ Net amortization ​ ( 29 ) ​ Balance as at August 31, 2025 ​ 126 ​ ​ (b) Lease liabilities The Company’s lease arrangement consists of an operating lease for the corporate office. On July 1, 2024, the Company entered into a four-year lease for office space expiring in June 2028. The lease has no extension option. The current monthly lease payment is approximately CDN $ 9,500 consisting of both base rent and variable operating costs. Total lease expense recorded within general and administrative expenses was comprised of the following components: ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of dollars ​ ​ ​ Nine months ended ​ ​ Nine months ended ​ ​ ​ August 31, 2025 ​ ​ August 31, 2024 ​ ​ ​ $ $ Operating lease costs ​ 38 ​ ​ 122 ​ Variable lease costs ​ 13 ​ ​ 103 ​ Total lease expense ​ 51 ​ ​ 225 ​ ​ Variable lease costs consist primarily of the Company’s portion of operating costs associated with the office space lease as the Company elected to apply the practical expedient not to separate lease and non-lease components. For the nine-month period ended August 31, 2025, variable lease costs have been reduced by a refund received for adjusted operating costs. ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 10 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ As at August 31, 2025, the weighted-average remaining lease term is 2.6 years and the weighted-average discount rate is 9 % . Significant judgment was used in the determination of the incremental borrowing rate which included estimating the Company’s credit rating. Supplemental cash flow information relating to our leases during the nine-month period ending August 31, 2025 is as follows: ● Cash paid for base rent included in the measurement of lease liabilities was approximately $ 36,000 ​ Future minimum payments relating to the lease recognized in our balance sheet as of August 31, 2025 are as follows: ​ ​ ​ ​ ​ ​ in thousands of dollars ​ ​ ​ August 31, 2025 Fiscal year ​ $ 2025 12 ​ 2026 50 ​ 2027 51 ​ 2028 25 ​ 2029 — ​ Total undiscounted lease payments 138 ​ Effect of discounting ( 16 ) ​ Present value of lease payments recognized as lease liability 122 ​ Less: current portion of lease liability ​ ( 40 ) ​ Long-term portion of lease liability ​ 82 ​ ​ ​ ​ ​ 6) Share capital Authorized: unlimited common shares, no par value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of dollars, except share amounts ​ ​ Number of shares $ November 30, 2024 161,085,313 ​ ​ 190,503 ​ Exercise of options ​ 400,000 ​ ​ 337 ​ Shares issued from Restricted Share Units ​ 2,767,851 ​ ​ 2,008 ​ Services settled by common shares ​ 38,246 ​ ​ 50 ​ August 31, 2025, issued and outstanding ​ 164,291,410 ​ ​ 192,898 ​ ​ The Company filed a final short form base shelf prospectus with the securities commissions in each of the provinces and territories of Canada (the “Canadian Base Shelf Prospectus”), and a corresponding shelf registration statement on Form S-3 (the “Registration Statement”, and together with the Canadian Base Shelf Prospectus, the “Base Shelf Prospectus”) with the United States Securities and Exchange Commission (“SEC”) allowing for the future issuance, from time to time, of up to $ 50 million in common shares of the Company (the “Common Shares”), warrants to purchase Common Shares, share purchase contracts of the Company, subscription receipts and units comprised of some or all of the foregoing securities (collectively, the “Securities”). Any amounts, prices and terms will be determined based on market conditions ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 11 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ at the time of an offering and will be set out in an accompanying prospectus supplement. The final Base Shelf Prospectus became effective on April 14, 2025. The Canadian Base Shelf Prospectus will remain effective for 25 months, while the Registration Statement will remain effective for three years. On May 27, 2025, the Company entered into an equity distribution agreement (the “Distribution Agreement”) with BMO Nesbitt Burns Inc., Cantor Fitzgerald Canada Corporation (the “Canadian Agents”), BMO Capital Markets Corp. and Cantor Fitzgerald & Co. (the “U.S. Agents”, and together with the Canadian Agents, the “Agents”) for an at-the-market equity program (“ATM Program”) to distribute up to $ 25 million of Common Shares of the Company. As of August 31, 2025, the Company has not utilized the ATM Program. (a) Stock options During the three-month period ended February 28, 2025, the Company granted 2,125,000 stock options (2024 - 2,775,000 stock options) at an exercise price of CDN$ 1.52 (2024 - CDN$ 0.59 ) to employees, consultants and directors exercisable for a period of five years with various vesting terms from immediate vesting to vesting over a two-year period. The fair value attributable to each of these option grants was $ 0.59 (2024 - $ 0.20 ). No grants were made during the fiscal quarter ended May 31, 2025 and August 31, 2025. For the nine-month period ended August 31, 2025, Trilogy recognized a stock-based compensation charge of $ 1.0 million (2024 - $ 0.5 million) for stock options granted to directors, employees and service providers, net of estimated forfeitures. The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model. Assumptions used in the pricing model for stock options granted in the nine-month period ended August 31, 2025 are as provided below. ​ ​ ​ ​ ​ August 31, 2025 Risk-free interest rates 2.85 % Exercise price CDN$ 1.52 Expected life 3 years Expected volatility 89.3 % Expected dividends Nil ​ As at August 31, 2025, there were 1,925,004 non-vested stock options outstanding with a weighted average exercise price of CDN$ 1.12 . The unvested stock option expense not yet recognized was $ 0.3 million. This expense is expected to be recognized over the next sixteen months. ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 12 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ A summary of the Company’s stock options outstanding and changes during the nine-month period ended August 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ August 31, 2025 ​ ​ ​ ​ ​ ​ Weighted average ​ ​ ​ ​ ​ ​ exercise price ​ ​ Number of options CDN$ Balance – beginning of the year 13,630,234 ​ ​ 1.77 ​ Granted 2,125,000 ​ ​ 1.52 ​ Exercised ( 400,000 ) ​ ​ 0.79 ​ Expired ( 3,640,000 ) ​ ​ 2.75 ​ Balance – end of the period 11,715,234 ​ ​ 1.45 ​ ​ During the nine-month period ended August 31, 2025, the Company issued 400,000 common shares (2024 – nil ) of the Company on the exercise of stock options with a weighted average price of CDN$ 0.79 per share. The Company also reclassified $ 0.1 million from reserves to share capital on exercise of these stock options. The following table summarizes information about the stock options outstanding at August 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ Exercisable ​ ​ Unvested ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Number of ​ ​ Weighted ​ ​ average ​ ​ Number of ​ ​ average ​ ​ Number of ​ ​ outstanding ​ ​ average years ​ ​ exercise price ​ ​ exercisable ​ ​ exercise price ​ ​ unvested ​ Range of exercise price - CDN options to expiry CDN$ options CDN$ options ​ $ 0.59 to $ 1.00 5,463,334 ​ ​ 2.74 ​ ​ 0.69 ​ ​ 4,638,331 ​ ​ 0.71 ​ ​ 825,003 ​ $ 1.01 to $ 2.00 2,080,000 ​ ​ 4.27 ​ ​ 1.52 ​ ​ 979,999 ​ ​ 1.52 ​ ​ 1,100,001 ​ $ 2.01 to $ 3.00 ​ 4,171,900 ​ ​ 0.61 ​ ​ 2.42 ​ ​ 4,171,900 ​ ​ 2.42 ​ ​ — ​ ​ ​ 11,715,234 ​ ​ 2.25 ​ ​ 1.45 ​ ​ 9,790,230 ​ ​ 1.52 ​ ​ 1,925,004 ​ ​ The aggregate intrinsic value of vested stock options (the market value less the exercise price) at August 31, 2025 was $ 6.1 million (2024 - $ Nil ) and the aggregate intrinsic value of exercised stock options for the nine-month period ending August 31, 2025 was $ 0.3 million (2024 - $ Nil ). (b) Restricted Share Units and Deferred Share Units The Company has a Restricted Share Unit Plan (“RSU Plan”) to provide long-term incentives to employees and consultants, a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”), and a Non-Executive Directors Fixed Deferred Share Unit Plan (“Fixed DSU Plan”) to offset cash payments for fees to directors. Awards under the RSU Plan, DSU Plan and Fixed DSU Plan will be settled in common shares of the Company with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company. All units are accounted for as equity-settled awards. ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 13 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ A summary of the Company’s unit plans and changes during the nine-month period ending August 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of RSUs Number of DSUs Number of Fixed DSUs Balance – beginning of the year ​ 2,793,339 ​ 3,133,412 ​ ​ — ​ Granted 1,811,096 ​ ​ 72,943 ​ ​ 304,605 ​ Settled in common shares ( 2,806,097 ) ​ ​ — ​ ​ — ​ Balance – end of the period 1,798,338 ​ 3,206,355 ​ ​ 304,605 ​ ​ For the nine-month period ending August 31, 2025, Trilogy recognized a combined RSU and DSU stock-based compensation charge of $ 2.0 million (2024 - $ 2.5 million), net of estimated forfeitures. 7) Fair value accounting Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities. The fair value of the Company’s financial instruments approximates their carrying value due to the short-term nature of their maturity. The Company’s financial instruments initially measured at fair value and then held at amortized cost include cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities. The majority of the Company’s cash and cash equivalents is held with a single Canadian Financial Institution and is uninsured as at August 31, 2025. The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accrued expenses and accounts payable approximate fair value due to the short-term nature of these instruments. ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 14 ​ Table of contents Trilogy Metals Inc. Notes to the Condensed Interim Consolidated Financial Statements ​ 8) Commitment The Company has commitments with respect to an office lease requiring future minimum lease payments as summarized in note 5(b) above. ​ 9) Supplemental cash flow information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in thousands of dollars ​ Nine months ended ​ ​ Nine months ended ​ ​ August 31, 2025 ​ ​ August 31, 2024 ​ ​ $ ​ ​ $ Interest received ​ 741 ​ ​ 200 ​ ​ ​ ​ 10) Subsequent events On September 2, 2025, pursuant to previous elections, the Board of Directors were granted 49,343 DSUs in settlement of approximately $ 82,000 of director fees. ​ ​ ​ ​ ​ ​ ​ ​ ​ Trilogy Metals Inc. For the Quarter Ended August 31, 2025 15 ​ Table of contents