What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-08 compared with 2026-04-02 · 65 added, 50 removed, 171 unchanged (40% of the section changed)

2 unchanged sentences

Management’s Discussion & Analysis

For the Quarter Ended February 28, 2026

For the Quarter Ended May 31, 2026

(expressed in US dollars)

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These forward-looking statements may include statements regarding the Company’s (as defined below) work programs and budgets;

the aggregate value of common shares that may be issued pursuant to the Nov ATM Program and the anticipated use of net proceeds;

the aggregate value of common shares that may be issued pursuant to the Company’s at-the-market equity program (the “Nov ATM Program”) and the anticipated use of net proceeds;

perceived merit of properties;

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sufficiency of the Ambler Metals’ cash to fund the UKMP;

the anticipated timing of permitting at the UKMP;

the anticipated benefits of recent management appointments;

statements regarding timing and planned undertakings of the 2026 field program;

the anticipated timing of permitting at the UKMP, including predicted outcomes and benefits of the FAST-41 program;

timing of the transaction with the U.S.

Department of War;

market prices for precious and base metals;

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Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

For the Quarter Ended May 31, 2026

● the receipt of third party contractual, regulatory and governmental approvals for the exploration, development, construction and production of our properties and any litigation or challenges to such approvals;

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● risks related to our ability to commence production and generate material revenues or obtain adequate financing for our planned exploration and development activities;

● risks related to lack of infrastructure including but not limited to the risk whether or not the Ambler Mining District Industrial Access Project, or AMDIAP, will receive the requisite permits and, if it does, whether the Alaska Industrial Development and Export Authority will build the AMDIAP;

● risks related to lack of infrastructure including but not limited to the risk whether or not the AMDIAP will receive the requisite permits and, if it does, whether the Alaska Industrial Development and Export Authority will build the AMDIAP;

● risks related to the ability to complete the anticipated strategic investment by the U.S.

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Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

For the Quarter Ended May 31, 2026

● uncertainty related to title to our mineral properties;

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Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

For the Quarter Ended May 31, 2026

● adverse federal income tax consequences for U.S.

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● uncertainty as to our ability to maintain the adequacy of internal control over financial reporting as per the requirements of Section 404 of the Sarbanes-Oxley Act;

● increased regulatory compliance costs, associated with rules and regulations promulgated by the United States Securities and Exchange Commission, Canadian Securities Administrators, the NYSE American Stock Exchange (“NYSE American”), the Toronto Stock Exchange (“TSX”), and the Financial Accounting Standards Boards(“FASB”), and more specifically, our efforts to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act;

● increased regulatory compliance costs, associated with rules and regulations promulgated by the United States Securities and Exchange Commission, Canadian Securities Administrators, the NYSE American Stock Exchange (“NYSE American”), the Toronto Stock Exchange (“TSX”), and the Financial Accounting Standards Board (“FASB”), and more specifically, our efforts to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act;

● the need for future financing;

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This MD&A of Trilogy Metals Inc.

(“Trilogy”, “Trilogy Metals”, the “Company” or “we”) is dated April 2, 2026 and provides an analysis of our unaudited condensed interim consolidated financial results for the quarter ended February 28, 2026 compared to the quarter ended February 28, 2025.

(“Trilogy”, “Trilogy Metals”, the “Company” or “we”) is dated July 8, 2026 and provides an analysis of our unaudited condensed interim consolidated financial results for the quarter ended May 31, 2026 compared to the quarter ended May 31, 2025.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

The following information should be read in conjunction with our February 28, 2026 unaudited condensed interim consolidated financial statements and related notes which were prepared in accordance with United States generally accepted accounting principles (“U.S.

For the Quarter Ended May 31, 2026

The following information should be read in conjunction with our May 31, 2026 unaudited condensed interim consolidated financial statements and related notes which were prepared in accordance with United States generally accepted accounting principles (“U.S.

The MD&A should also be read in conjunction with our audited consolidated financial statements and related notes for the year ended November 30, 2025.

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We conduct our operations through a wholly owned subsidiary, NovaCopper US Inc., which is doing business as Trilogy Metals US (“Trilogy Metals US”).

The UKMP were contributed into a 50/50 joint venture named Ambler Metals LLC (“Ambler Metals”) between Trilogy and South32 Limited (“South32”) on February 11, 2020 (see below).

The UKMP were contributed into a 50/50 joint venture named Ambler Metals LLC (“Ambler Metals”) between Trilogy and South32 Limited (“South32”) on February 11, 2020.

The projects contributed to Ambler Metals consist of:

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Corporate and project activities

Trilogy Corporate Developments

The Company expanded its corporate management capabilities with additions in strategic advisory, corporate development, investor relations, and communications.

These enhancements are expected to support increased oversight of joint venture activities, strengthen stakeholder engagement, and improve the Company’s ability to advance long ‑ term strategic initiatives.

Trilogy – Operating Results Compared to Budget

The Company has a 2026 fiscal year budget totaling $22.5 million, which is comprised of $5.0 million for corporate activities and $17.5 million for funding project activities at Ambler Metals.

For the three-month period ended February 28, 2026, the Company recorded a net loss of $7.1 million, compared with a budgeted loss of $4.8 million.

The variance was primarily driven by non-cash expenses that were not included in the budget, partially offset by lower than planned expenditures from Ambler Metals.

During the quarter, the Company recorded a $1.5 million non-cash mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to a U.S.

government department.

The Company also recognized $3.1 million of stock-based compensation expense associated with the current fiscal year’s annual equity grant.

These two non-cash expenses were not included in the budget and

Trilogy Annual General Meeting

The Annual General Meeting of shareholders was held on May 13, 2026.

All directors nominated by the Company were elected by shareholders of the Company, with each director receiving greater than 85% of votes cast.

Trilogy Financial Results Compared to Budget

The Company has a 2026 fiscal budget of $5.0 million.

For the three-month period ended May 31, 2026, the Company recorded a net loss of $6.3 million, compared with a budgeted loss of $3.5 million.

The $2.8 million variance was primarily driven by a $2.3 million mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to the United States Department of War and the remainder due to stock-based compensation expense associated with the current fiscal year’s annual equity grant.

These two non-cash expenses were not included in the budget.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

were partially offset by a favorable variance from the accounting for the equity investment in Ambler Metals, reflecting lower expenditures than budget due to slower than planned hiring of personnel at Ambler Metals.

For the Quarter Ended May 31, 2026

For the six-month period ended May 31, 2026, the Company recorded a net loss of $13.4 million, compared with a budgeted loss of $8.4 million.

The $5.0 million variance was primarily driven by non-cash expenses of $3.8 million mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to the United States Department of War, stock-based compensation expense related to the current fiscal year’s annual equity grant that were not in the budget, partially offset by lower than planned expenditures from Ambler Metals.

Extension of Binding Letter of Intent with the United States Department of War

On March 30, 2026, the Company, South32, Ambler Metals and the United States Department of War agreed to enter into an amendment to the previously disclosed binding letter of intent (“LOI”) dated October 6, 2025.

The amendment extends the deadline for the completion of the transaction from March 31, 2026 to May 31, 2026, to accommodate the completion of remaining procedural steps under the LOI.

All other terms and conditions of the original LOI remain unchanged.

On May 30, 2026, the Company, South32, Ambler Metals and the United States Department of War agreed to a second amendment to the binding letter of intent (“LOI”) dated October 6, 2025.

The second amendment extends the deadline for the completion of the transaction from May 31, 2026 to July 31, 2026.

Project Activities

On April 21, 2026, the Company announced that Ambler Metals had commenced the permitting process for the Arctic Project, part of the Upper Kobuk Mineral Projects (“UKMP”) and on May 15, 2026, the Company announced that the Arctic Project was added to the U.S.

FAST-41 permitting program.

This program is intended to improve coordination and transparency in the federal permitting process as the project moves into environmental review.

In a press release dated June 9, 2026, the Company announced the start of the 2026 summer field program at the Upper Kobuk Mineral Projects, with crews mobilizing to site and drilling activities expected to commence in mid-June.

The program includes drilling and technical work to support mine planning, permitting, and future development decisions at the Arctic Project, as well as site readiness activities at Bornite and regional exploration target assessments.

Summary of results

in thousands of dollars, except per share amount

Three months ended

February 28, 2026

February 28, 2025

Three months ended May 31,

Six months ended May 31,

Exploration expenses

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Basic and diluted loss per common share

For the three-month period ended February 28, 2026, we reported a net loss of $7.1 million compared to a net loss of $3.6 million for the three-month period ended February 28, 2025.

The increase in net loss is primarily driven by two non-cash items:

i) the mark-to-market fair value adjustment of $1.5 million for the derivative liability related to our obligation to issue shares and warrants to the U.S.

For the three-month period ended May 31, 2026, we reported a net loss of $6.3 million compared to a net loss of $2.2 million for the three-month period ended May 31, 2025.

The increase in net loss was primarily driven by a mark-to-market fair value adjustment for the derivative liability related to our obligation to issue shares and warrants to the U.S.

Department of War, as well as an increase in our share of loss from Ambler Metals.

The increase in our share of loss from Ambler Metals was primarily driven by higher mineral property expenditures.

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

For the six-month period ended May 31, 2026, we reported a net loss of $13.4 million, compared to a net loss of $5.8 million for the same period in 2025.

The increase in net loss was primarily driven by two non-cash items:

i) the mark-to-market fair value adjustment for the derivative liability related to our obligation to issue shares and warrants to the U.S.

Department of War;

and ii) stock-based compensation charges as a result of our annual grant with higher Black-Scholes values in the current year compared with the prior year.

The loss is also impacted by an increase in activity at Ambler Metals which resulted in a larger amount for our share of loss on the equity investment and an increase in personnel costs due to the addition of senior staff.

and ii) stock-based compensation expense related to our annual grant with higher Black-Scholes values in the current year compared to the prior year.

The net loss was also impacted by an increase in activity at Ambler Metals which resulted in a larger amount for our share of loss on equity investment and an increase in personnel costs due to the addition of senior staff.

Liquidity and capital resources

During the three-month period ended February 28, 2026, we used $2.7 million in operating activities, used $2.5 million in investing activities, and raised $1.3 million in financing activities.

During the six-month period ended May 31, 2026, we used $3.8 million in operating activities, used $10.5 million in investing activities, and raised $1.4 million in financing activities.

Operating expenditures were driven primarily by corporate salaries, professional fees and annual regulatory filing fees with the U.S.

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These cash outflows were offset by $1.4 million in proceeds from financing activities, primarily from the Company’s at-the-market equity program through which the Company may offer and issue up to $200 million of common shares of the Company from time to time pursuant to an equity distribution agreement dated November 7, 2025, and from the exercise of stock options.

As at February 28, 2026, we had cash and cash equivalents of $47.8 million and adjusted working capital of $47.3 million, which are current assets less current liabilities excluding the derivative liability which will be settled by way of the issuance of shares and warrants.

There is sufficient cash on hand to fund the Company’s fiscal 2026 budget of $5.0 million and our share of Ambler Metals’ fiscal budget of $17.5 million.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

As at May 31, 2026, we had cash and cash equivalents of $38.8 million and adjusted working capital of $38.3 million, which are current assets less current liabilities excluding the derivative liability which will be settled by way of the issuance of shares and warrants.

There is sufficient cash on hand for the next twelve months from the end of our most recent fiscal quarter, including funding the Company’s remaining fiscal 2026 corporate budget of $5.0 million.

Our share of Ambler Metals’ fiscal 2026 budget is $17.5 million, of which $10.5 million had been funded as at May 31, 2026.

Subsequent to May 31, 2026, the Company funded an additional $6.5 million to Ambler Metals, bringing total funding to $17.0 million as of the date of this MD&A.

Future cash requirements may vary materially from current expectations.

Beyond the next twelve months, the Company may need to raise additional funds in the future to support its operations and administration expenses.

Future sources of liquidity are likely in the form of an equity financing but may include debt financing, convertible debt, exercise of options, or other means, including, but not limited to, utilizing the Nov ATM Program.

Off-balance sheet arrangements

1 unchanged sentence

Outstanding share data

As at April 2, 2026, we had 172,545,639 common shares issued and outstanding.

As April 2, 2026, we had 9,935,250 stock options outstanding with a weighted-average exercise price of CDN$2.01, 3,580,862 deferred share units and 951,670 restricted share units outstanding.

As at July 7, 2026, we had 172,745,639 common shares issued and outstanding.

As at July 7, 2026, we had 9,835,250 stock options outstanding with a weighted-average exercise price of CDN$2.01, 3,581,653 deferred share units and 851,670 restricted share units outstanding.

Upon the exercise of all convertible securities, the Company would be required to issue an aggregate of 14,268,573 common shares.

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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 standard is effective beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended November 30,

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

2026, and subsequent interim periods, with early adoption permitted.

The Company is evaluating the impact of ASU 2023-09 on its disclosure in the annual consolidated financial statements.

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Critical accounting estimates

The most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our equity method investment in Ambler Metals LLC, fair value measurement of derivative liability and valuation of stock‐based compensation.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

The most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our equity method investment in Ambler Metals LLC, fair value measurement of the derivative liability related to our obligation to issue shares and warrants to the U.S.

Department of War and valuation of stock‐based compensation.

Impairment of Investment in Ambler Metals LLC

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As a result, estimating the probability of project completion requires significant judgement and incorporates inherently uncertain assumptions.

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

Stock-based compensation

6 unchanged sentences

Not applicable.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2026

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis