What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-10-02 compared with 2026-07-08 · 68 added, 53 removed, 183 unchanged (40% of the section changed)

2 unchanged sentences

Management’s Discussion & Analysis

For the Quarter Ended May 31, 2026

For the Quarter Ended August 31, 2026

(expressed in US dollars)

11 unchanged sentences

work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project;

timelines, strategic plans, statements regarding Ambler Metals’ plans and expectations relating to its Upper Kobuk Mineral Projects (the “UKMP”, as defined below);

timelines, strategic plans, statements regarding Ambler Metals’ plans and expectations relating to its Upper Kobuk Mineral Projects (the “UKMP”);

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

1 unchanged sentence

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.

successful implementation of the strategic equity investment with the U.S.

Department of War;

12 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

For the Quarter Ended August 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;

14 unchanged sentences

● 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.

government, and associated risks of having the U.S.

● risks following the completion of the U.S.

government investment in the Company and risks related to having the U.S.

government as a significant shareholder;

4 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

For the Quarter Ended August 31, 2026

● uncertainty related to title to our mineral properties;

20 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

For the Quarter Ended August 31, 2026

● adverse federal income tax consequences for U.S.

19 unchanged sentences

This MD&A of Trilogy Metals Inc.

(“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”, “Trilogy Metals”, the “Company” or “we”) is dated October 2, 2026 and provides an analysis of our unaudited condensed interim consolidated financial results for the quarter ended August 31, 2026 compared to the quarter ended August 31, 2025.

Trilogy Metals Inc.

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.

For the Quarter Ended August 31, 2026

The following information should be read in conjunction with our August 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.

3 unchanged sentences

References to “Canadian dollars” and “CDN$” are to the currency of Canada and references to “U.S.

dollars”, “$” or “US$” are to the currency of the United States.

dollars”, “$” or “US$” are to the currency of the United States of America.

Richard Gosse, P.Geo., Vice President, Exploration of the Company, is a Qualified Person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects and S-K 1300, and has approved the scientific and technical information in this MD&A.

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Corporate and project activities

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 Company has a 2026 fiscal budget of $5.0 million for corporate expenditures.

For the three-month period ended August 31, 2026, the Company recorded a net income of $0.2 million, compared with a budgeted loss of $9.7 million.

The $9.9 million variance was primarily driven by a $11.6 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 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.

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

For the nine-month period ended August 31, 2026, the Company recorded a net loss of $13.2 million, compared with a budgeted loss of $18.0 million.

The $4.8 million variance was primarily driven by non-cash expenses of $7.8 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 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.

Closing of Strategic Equity Investment from the United States Department of War

On August 28, 2026, the Company entered into the Investment Agreement (the “Investment Agreement”) with the United States Department of War (the “DOW”), relating to the DOW’s strategic investment in the Company (the “Strategic Investment”).

On September 11, 2026, the Company completed the Strategic Investment by the DOW, pursuant to the Binding Letter of Intent entered on October 6, 2025.

At closing, the Company issued 8,215,570 units to the DOW at a price of $2.17 per unit for gross proceeds of approximately $17.8 million.

Each unit consisted of one

Trilogy Metals Inc.

For the Quarter Ended August 31, 2026

common share and three-quarters of one warrant, resulting in the issuance of warrants to acquire up to 6,161,678 additional common shares at an exercise price of $0.01 per share.

The warrants have a ten-year term and become exercisable upon the earlier of the completion of Phase 1 of the Ambler Access Project, the achievement of certain specified usage milestones for the Ambler Access Project and a change of control of the Company.

The Company received gross proceeds of approximately $17.8 million upon closing of the Strategic Investment.

The proceeds are specifically designated to fund an additional cash capital contribution to Ambler Metals and, therefore, do not represent additional liquidity available to fund the Company’s general corporate activities.

South32 will make a corresponding contribution on a pro-rata basis, such that the Company’s 50% ownership interest in Ambler Metals will remain unchanged.

In connection with closing, the Company, through its wholly-owned subsidiary Trilogy Metals US, and the DOW, among other parties, also entered into a Cooperation Agreement (the “Cooperation Agreement”, and together with the Investment Agreement and other ancillary agreements, the “DOW Transaction Documents”) pursuant to which the DOW is entitled to (i) designate one independent third-party nominee for appointment to the Company’s Board of Directors, and (ii) appoint a representative to attend meetings of the Company’s Board of Directors in an observer capacity.

The closing also resulted in the settlement of the derivative liability previously recognized in connection with the Company’s obligation to issue common shares and warrants to the DOW.

Upon settlement, the Company recognized a gain of approximately $3.9 million, representing the change in the derivative liability through the closing date.

The derivative liability was extinguished upon issuance of the underlying securities, and the applicable amounts were reclassified to share capital and contributed surplus.

As a result, subsequent changes in the value of the Company’s common shares will no longer result in fair value adjustments associated with this derivative liability.

The gain recognized on settlement is non-cash in nature and therefore does not affect the Company’s cash flows.

The Strategic Investment represents a significant source of funding for the Company’s investment in Ambler Metals while maintaining the Company’s 50% ownership interest in the joint venture.

Future exercise of the warrants could result in future dilution of share capital, although such exercise is subject to the specified conditions described above.

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.

On April 21, 2026, the Company announced that Ambler Metals had commenced the permitting process for the Arctic Project, part of the 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.

In a press release dated June 9, 2026, the Company announced the start of the 2026 summer field program at the UKMP, 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.

In line with the June 9, 2026 press release, exploration was undertaken during summer 2026.

Expenses were incurred over the summer to advance planned exploration, permitting, engineering, environmental, and site activities while seasonal field conditions allowed the work to proceed.

Overall spending remained in line with expectations and reflected the planned timing and allocation of resources required to support the exploration program.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2026

Summary of results

in thousands of dollars, except per share amount

Three months ended May 31,

Six months ended May 31,

Three months ended August 31,

Nine months ended August 31,

Exploration expenses

4 unchanged sentences

Share of loss on equity investment

Loss on derivatives carried at fair market value

Gain on derivatives carried at fair market value

Interest and other income

Comprehensive loss for the period

Comprehensive gain/(loss) for the period

Basic and diluted loss per common share

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.

For the three-month period ended August 31, 2026, we reported a net income of $0.2 million compared to a net loss of $1.7 million for the three-month period ended August 31, 2025.

The net income was primarily driven by a mark-to-market gain arising from the change in fair value of the derivative liability related to our obligation to issue shares and warrants to the U.S.

Department of War, this was offset by an increase in our share of loss from Ambler Metals.

The increase in our share of loss from Ambler Metals was primarily driven by budgeted exploration activities undertaken during the period.

For the nine-month period ended August 31, 2026, we reported a net loss of $13.2 million, compared to a net loss of $7.5 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.

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

and ii) increased activity related to budgeted exploration activities 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.

This was offset by a mark-to-market gain arising from the change in fair value of the derivative liability related to our obligation to issue shares and warrants to the U.S.

Department of War.

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 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.

During the nine-month period ended August 31, 2026, we used $4.9 million in operating activities, used $17.0 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.

2 unchanged sentences

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 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.

As at August 31, 2026, we had cash and cash equivalents of $31.2 million and adjusted working capital of $30.3 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 $1.1 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.

Our share of Ambler Metals’ fiscal 2026 budget is $17.5 million, of which $17.0 million had been funded as at August 31, 2026.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2026

Future cash requirements may vary materially from current expectations.

4 unchanged sentences

Outstanding share data

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.

As at October 2, 2026, we had 181,361,209 common shares issued and outstanding.

As at October 2, 2026, we had 9,835,250 stock options outstanding with a weighted-average exercise price of CDN$2.01, 3,582,604 deferred share units and 451,670 restricted share units outstanding.

Upon the exercise of all convertible securities, the Company would be required to issue an aggregate of 13,869,524 common shares.

4 unchanged sentences

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,

Trilogy Metals Inc.

For the Quarter Ended May 31, 2026

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, 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.

8 unchanged sentences

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.

Department of War (settled post quarter end) and valuation of stock‐based compensation.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2026

Impairment of Investment in Ambler Metals LLC

10 unchanged sentences

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 August 31, 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