What changed in this filing

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Item 1. Financial Statements

2021-04-07 compared with 2020-10-07 · 103 added, 203 removed, 259 unchanged (54% of the section changed)

3 unchanged sentences

in thousands of US dollars

August 31, 2020

February 28, 2021

November 30, 2020

3 unchanged sentences

Deposits and prepaid amounts

Equity method investment (note 4)

Plant and equipment (note 5)

Mineral properties and development costs (note 6)

Rent deposit (note 8 (a))

Investment in Ambler Metals LLC (note 4)

Fixed assets (note 5)

Right of use asset (note 7 (a))

3 unchanged sentences

Long-term portion of lease liability (note 7 (b))

Mineral properties purchase option

Shareholders’ equity

9 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

3 unchanged sentences

For the three months ended

For the nine months ended

August 31, 2020

August 31, 2019

August 31, 2020

August 31, 2019

Feasibility study (note 6(a))

Foreign exchange (gain) loss

February 28, 2021

February 29, 2020

Foreign exchange loss

General and administrative

7 unchanged sentences

Interest and other income

Comprehensive (loss) earnings for the period

Services agreement income (note 4(e))

Comprehensive (loss) earnings for the year

Basic (loss) earnings per common share

4 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

10 unchanged sentences

Balance - February 29, 2020

Exercise of options

Stock-based compensation

Loss for the period

Balance – May 31, 2019

Exercise of options

Stock-based compensation

Deferred share units

Exercise of warrants

Loss for the period

Balance – August 31, 2019

Balance – November 30, 2020

Exercise of options

Restricted Share Units

Stock-based compensation

Earnings for the period

Balance – February 29, 2020

Exercise of options

Restricted Share Units

Stock-based compensation

Loss for the period

Balance – May 31, 2020

Exercise of options

Restricted Share Units

Stock-based compensation

Loss for the period

Balance – August 31, 2020

Balance – February 28, 2021

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

1 unchanged sentence

in thousands of US dollars

For the nine months ended

August 31, 2020

August 31, 2019

For the three months ended

February 28, 2021

February 29, 2020

Cash flows used in operating activities

Earnings (loss) for the period

Items not affecting cash

Right of use asset amortization

(Loss) earnings for the period

Adjustments to reconcile net loss to cash flows in operating activities

Right of use asset amortization and lease accretion

Office lease payments

Loss on working capital written-off upon joint venture formation

3 unchanged sentences

Stock-based compensation

Operating lease payments

Net change in non-cash working capital

Decrease (increase) in accounts receivable

Decrease in deposits and prepaid amounts

(Decrease) increase in accounts payable and accrued liabilities

Cash flows from financing activities

Proceeds from exercise of warrants

Cash flows from investing activities

Acquisition of plant & equipment

Mineral properties funding

(Decrease) increase in cash and cash equivalents

Decrease (increase) in deposits and prepaid amounts

(Decrease) in accounts payable and accrued liabilities

Decrease in cash from operating activities

Effect of exchange rate on cash and cash equivalents

Cash and cash equivalents – beginning of period

Cash and cash equivalents – end of period

Cash and cash equivalents – end of the period

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

9 unchanged sentences

(dba “Trilogy Metals US”).

All significant intercompany transactions are eliminated on consolidation.

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.

1 unchanged sentence

References to CAD$ refer to amounts in Canadian dollars.

The unaudited interim consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position as of August 31, 2020 and our results of operations and cash flows for the nine months ended August 31, 2020 and August 31, 2019.

The results of operations for the nine months ended August 31, 2020 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2020.

The unaudited interim consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position as of February 28, 2021 and our results of operations and cash flows for the three months ended February 28, 2021 and February 29, 2020.

The results of operations for the three months ended February 28, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2021.

As these interim consolidated financial statements do not contain all of the disclosures required by U.S.

1 unchanged sentence

Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities on February 12, 2021.

These interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on October 6, 2020.

Accounting standards adopted

In February 2016, the FASB issued new accounting requirements for accounting for, presentation of, and classification of leases (“ASU 2016-02”) which, together with subsequent amendments, is included in ASC 842, Leases.

ASC 842 became effective for the Company as of December 1, 2019.

The Company adopted ASC 842 using the modified retrospective transition method by applying the transition provision and recording our cumulative adjustment to opening deficit at the beginning of the period of adoption on December 1, 2019, rather than at the beginning of the comparative period presented.

Therefore, in the comparative periods, we continue to apply the legacy guidance in ASC 840, including its disclosure requirements.

We elected to apply all of the transition practical expedients available, including:

● the package of three practical expedients to (1) not reassess whether any expired or existing contracts are or contain leases, (2) not reassess the lease classification for any expired or existing leases, and (3) not reassess initial direct costs for any existing lease;

● the hindsight practical expedient to use hindsight when determining lease term and assessing impairment of right-of-use assets, if any;

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

● the easements practical expedient to continue applying our current policy for accounting for any land easements expired before or existing as of December 1, 2019.

In addition, we elected to apply the short-term lease recognition exemption and elected to apply the practical expedient to not separate lease and non-lease components for all applicable leases on transition.

The adoption of this new standard resulted in the recognition of right of use assets and lease liabilities of $ 786,000 as at December 1, 2019.

New accounting policy

Investment in affiliates

Investments in unconsolidated ventures over which the Company has the ability to exercise significant influence, but does not control, are accounted for under the equity method and include the Company’s investment in the Ambler Metals project.

We identified Ambler Metals LLC as a VIE as the entity is dependent on funding from its owners.

All funding, ownership, voting rights and power to exercise control is shared equally on a 50 /50 basis between the owners of the VIE.

Therefore, the Company has determined that it is not the primary beneficiary of the VIE.

The Company’s maximum exposure to loss is its investment in Ambler Metals LLC.

Ambler Metals LLC is a non-publicly traded equity investee holding exploration and development projects.

The Company reviews and evaluates its investment in affiliates for other than temporary impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

Events that could indicate impairment of an investment in affiliates include a significant decrease in long-term expected commodity prices, a significant increase in expected operating or capital costs, unfavorable exploration results or technical studies, a significant decrease in reserves, a loss of significant mineral claims or a change in the development plan or strategy for the project.

Asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset.

If the underlying assets are not recoverable, an impairment loss is measured and recorded based on the difference between the carrying amount of the investee and its estimated fair value which may be determined using a discounted cash flow model.

These interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on April 6, 2021.

3) Accounts receivable

in thousands of dollars

August 31, 2020

February 28, 2021

November 30, 2020

GST input tax credits

Recoverable payments

Ambler Metals LLC

5 unchanged sentences

On February 11, 2020, the Company completed the formation of a 50/50 joint venture named Ambler Metals LLC 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 US$ 145 million, resulting in each party’s subsidiaries directly owning a 50 % interest in Ambler Metals LLC.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Ambler Metals LLC is an independently operated company jointly controlled by Trilogy and South32 through a four-member board, of which two members are currently appointed by Trilogy based on its 50 % equity interest.

party’s subsidiaries directly owning a 50 % interest in Ambler Metals LLC.

To assist Ambler Metals during the initial set up phase, Trilogy was paying all of Ambler Metals LLC’s invoices and being reimbursed pursuant to a services agreement (the “Services Agreement”) between Trilogy and Ambler Metals LLC until the back office was fully transitioned to a new permanent team employed by the joint venture.

The Services Agreement ended on December 31, 2020.

Ambler Metals LLC is an independently operated 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.

3 unchanged sentences

Our investment in Ambler Metals LLC was initially measured at its fair value of $ 176 million upon recognition.

Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals LLC, which, as at August 31, 2020, totaled $ 174 million, as well as $ 106,000 of amounts receivable per a service agreement.

Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals LLC, which, as at February 28, 2021, totaled $ 172 million.

The following table summarizes the gain on recognition of the UKMP assets upon transfer to the Ambler Metals LLC joint venture on February 11, 2020.

11 unchanged sentences

Gain on derecognition

No additional mineral properties expenses were incurred subsequent to February 11, 2020 as upon the formation of the joint venture with South 32, all mineral properties previously held by the Company were contributed to Ambler Metals LLC.

Prior to the formation of the joint venture, the Company had also incurred $ 0.7 million in Arctic Project feasibility costs that are included in the mineral properties expense balance of $ 1.5 million for the three-month period ended February 29, 2020.

Carrying value of equity method investment

During the nine-month period ended August 31, 2020, Trilogy recognized, based on its 50 % ownership interest in Ambler Metals LLC, an equity loss equivalent to its pro rata share of Ambler Metals LLC's comprehensive loss of $ 3.67 million for the period between February 11, 2020 (date of joint venture formation) to August 31, 2020 and $ 2.19 million for the three-month period ended August 31, 2020.

The carrying value of Trilogy’s 50 % investment in Ambler Metals LLC as at August 31, 2020 is summarized on the following table.

During the three-month period ending February 28, 2021, Trilogy recognized, based on its 50 % ownership interest in Ambler Metals LLC, an equity loss equivalent to its pro rata share of Ambler Metals LLC's comprehensive loss of $ 2.2 million for the three month period ending February 28, 2021.

The carrying value of Trilogy’s 50 % investment in Ambler Metals LLC as at February 28, 2021 is summarized on the following table.

in thousands of dollars

February 11, 2020, fair value ascribed to Ambler Metals LLC interest

Share of loss on equity investment for the nine-month period ended August 31, 2020

August 31, 2020, equity method investment

November 30, 2020, investment in Ambler Metals LLC.

Share of loss on equity investment for the three month period ending February 28, 2021

February 28, 2021, investment in Ambler Metals LLC.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

The following table summarizes Ambler Metals LLC's Balance Sheet as at August 31, 2020.

The following table summarizes Ambler Metals LLC's Balance Sheet as at February 28, 2021.

in thousands of dollars

August 31, 2020

February 28, 2021

November 30, 2020

Current assets:

7 unchanged sentences

Lease obligation

The following table summarizes Ambler Metals LLC's comprehensive loss from the formation of the joint venture on February 11, 2020 to the end of the reporting period on August 31, 2020.

The following table summarizes Ambler Metals LLC's comprehensive loss for the three-month period ending February 28, 2021.

in thousands of dollars

Three months ended

Nine months ended

August 31, 2020

Period ending

February 28, 2021

February 29, 2020

Mineral properties expense

2 unchanged sentences

Comprehensive loss

5) Plant and equipment

Related party transactions - services agreement income

The Company charged $ 22,151 of expenses related to technical services, including geological, engineering, environmental and human resources, and accounting services in connection with the Services Agreement.

In addition, the Company received payments of $ 4,053 related to operating expenses paid on behalf of Ambler Metals during the three-month period ending February 28, 2021.

5) Fixed assets

in thousands of dollars

August 31, 2020

February 28, 2021

British Columbia, Canada

2 unchanged sentences

Computer hardware and software

Machinery, and equipment

Computer hardware and software

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

6 unchanged sentences

Computer hardware and software

Machinery, and equipment

Computer hardware and software

6) Mineral properties and development costs

in thousands of dollars

November 30, 2019

August 31, 2020

in thousands of dollars

November 30, 2018

Acquisition costs

November 30, 2019

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

(a) Mineral properties expense

The following table summarizes mineral properties expense for the noted periods.

In thousands of dollars

Three months ended

Nine months ended

August 31, 2020

August 31, 2019

August 31, 2020

August 31, 2019

Environmental

Geochemistry and geophysics

Land and permitting

Project support

Wages and benefits

No additional mineral properties expenses were incurred during the three-month period ended August 31, 2020, as on February 11, 2020, upon the formation of the joint venture with South 32, all mineral properties previously held by the Company were contributed to Ambler Metals LLC.

The Company continues to fund the Arctic Project feasibility study, costs for which were $ 1.0 million since the formation of the joint venture on February 11, 2020.

(b) Derecognition

As part of the formation of the joint venture with South32 on February 11, 2020, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite projects.

As a result, $ 0.62 million of machinery and equipment as well as $ 30.6 million of mineral properties related to the UKMP were derecognized in Trilogy on February 11, 2020.

6) Accounts payable and accrued liabilities

in thousands of dollars

August 31, 2020

February 28, 2021

November 30, 2020

3 unchanged sentences

Accounts payable and accrued liabilities

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

(a) Right-of-use asset

3 unchanged sentences

Derecognition of Fairbanks warehouse lease

The pre-transition rent deposit of $ 0.11 million was transferred to the Right-of-use asset upon adoption of ASC 842 on December 1, 2019 and is included in the opening balance of $ 0.68 million.

Balance as at November 30, 2020

Lease accretion

Balance as at February 28, 2021

(b) Lease liabilities

3 unchanged sentences

in thousands of dollars

Nine months ended

August 31, 2020

Three months ended

February 28, 2021

February 29, 2020

Operating lease costs

1 unchanged sentence

Total lease expense

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.

As of August 31, 2020, the weighted-average remaining lease term was 3.9 years and the weighted-average discount rate is 8 % .

Significant judgment was used in the determination of the incremental borrowing rate which included estimating the Company’s credit rating.

Supplemental cash and non-cash information relating to our leases during the nine months ended August 31, 2020 are as follows:

● Cash paid for amounts included in the measurement of lease liabilities was $ 141,784 .

● No cash was paid upon termination of a lease for office and warehouse space and reassignment to Ambler Metals LLC that resulted in the derecognition of the right-of-use asset of $ 92,974 and the operating lease liability of $ 93,006 .

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Future minimum payments relating to the lease recognized in our balance sheet as of August 31, 2020 are as follows:

As of February, 28, 2021, the weighted-average remaining lease term was 3.3 years and the weighted-average discount rate is 8 % .

Significant judgment was used in the determination of the incremental borrowing rate which included estimating the Company’s credit rating.

Supplemental cash and non-cash information relating to our leases during the three months ended February 28, 2021 are as follows:

● Cash paid for amounts included in the measurement of lease liabilities was $ 48,830 .

Future minimum payments relating to the lease recognized in our balance sheet as of February 28, 2021 are as follows:

in thousands of dollars

August 31, 2020

February 28, 2021

Total undiscounted lease payments

9 unchanged sentences

Restricted Share Units

Deferred Share Units

Exercise of warrants

November 30, 2020

Exercise of options

Restricted Share Units

August 31, 2020, issued and outstanding

On April 30, 2012, in connection with the transaction with NovaGold Resources Inc.

whereby Trilogy was spun-out to NovaGold shareholders and publicly listed, Trilogy committed to issue common shares to satisfy holders of NovaGold deferred share units (“NovaGold DSUs”) on record as of the close of business April 27, 2012.

When vested, Trilogy committed to deliver one common share to the holder for every six shares of NovaGold the holder is entitled to receive, rounded down to the nearest whole number.

As of August 31, 2020, 11,927 NovaGold DSUs remained outstanding representing a right to receive 1,988 common shares in Trilogy, which will settle upon certain directors retiring from NovaGold’s board.

February 28, 2021, issued and outstanding

Stock options

During the nine-month period ended August 31, 2020, the Company granted 4,095,000 options (2019 - 2,527,500 options) at a weighted-average exercise price of CAD$ 2.80 (2019 - CAD$ 2.96 ) 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.

During the three-month period ended February 28, 2021, the Company granted 3,374,150 options (2020 - 2,050,000 options) at a weighted-average exercise price of CAD$ 2.52 (2020 - CAD$ 3.02 ) 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 weighted-average fair value attributable to options granted in the period was $ 0.84 (2020 - $ 0.99 ).

For the nine-month period ended August 31, 2020, Trilogy recognized a stock-based compensation charge of $ 2.60 million (2019 – $ 2.23 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

For the three-month period ended February 28, 2021, Trilogy recognized a stock-based compensation charge of $ 2.10 million (2019 – $ 1.16 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

1 unchanged sentence

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 the nine-month period ended August 31, 2020 are as provided below.

August 31, 2020

Assumptions used in the pricing model for the three-month period ended February 28, 2021 are as provided below.

February 28, 2021

Risk-free interest rates

3 unchanged sentences

Expected dividends

As of August 31, 2020, there were 2,373,337 non-vested options outstanding with a weighted average exercise price of $ 2.15 ;

As of February 28, 2021, there were 3,374,150 non-vested options outstanding with a weighted average exercise price of $ 2.07 ;

the non-vested stock option expense not yet recognized was $ 1.63 million.

This expense is expected to be recognized over the next two years .

A summary of the Company’s stock option plan and changes during the nine-month period ended August 31, 2020 is as follows:

August 31, 2020

A summary of the Company’s stock option plan and changes during the three-month period ended February 28, 2021 is as follows:

February 28, 2021

Weighted average

2 unchanged sentences

Balance – beginning of the period

( 2,924,221 )

Balance – end of period

The following table summarizes information about the stock options outstanding at August 31, 2020.

Balance – end of the period

The following table summarizes information about the stock options outstanding at February 28, 2021.

average years

7 unchanged sentences

$ 2.51 to $ 3.00

$ 2.51 to $ 2.61

The aggregate intrinsic value of vested share options (the market value less the exercise price) at August 31, 2020 was $ 5.2 million (2019 - $ 10.6 million) and the aggregate intrinsic value of exercised options for the nine months ended August 31, 2020 was $ 4.5 million (2019 - $ 0.50 million).

The aggregate intrinsic value of vested share options (the market value less the exercise price) at February 28, 2021 was $ 3.3 million (2020 - $ 5.9 million) and the aggregate intrinsic value of exercised options for the three months ended February 28, 2021 was $ 0.17 million (2020 - $ 0.04 million).

Restricted Share Units and Deferred Share Units

The Company has a Restricted Share Unit Plan (“RSU Plan”) and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to provide long-term incentives to employees, officers and directors.

Awards under the RSU Plan and DSU Plan

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Restricted Share Units and Deferred Share Units

Awards under the RSU Plan and DSU Plan may be settled in cash and/or common shares of the Company at the Company’s election with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company or equivalent value.

may be settled in cash and/or common shares of the Company at the Company’s election with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company or equivalent value.

All units are accounted for as equity-settled awards.

A summary of the Company’s unit plans and changes during the nine-month period ended August 31, 2020 is as follows:

Number of RSUs

A summary of the Company’s unit plans and changes during the three-month period ended February 28, 2021 is as follows:

Number of DSUs

Balance – beginning of the period

Balance – end of period

For the nine-month period ended August 31, 2020, Trilogy recognized a stock-based compensation charge of $ 0.43 million (2019- $ 0.78 million), net of estimated forfeitures.

The 200,000 RSUs granted and fully vested during the period were settled on April 16, 2020 through the issuance of 200,000 common shares.

The 225,000 RSUs granted for the annual incentive payout for the 2018 fiscal year vested half on the grant date and half on the first anniversary of the grant date.

RSUs vesting in December 2019 were settled on December 17, 2019 through the issuance of 212,501 common shares.

Balance – end of the period

For the three-month period ended February 28, 2021, Trilogy recognized a stock-based compensation charge of $ 0.04 million (2020- $ 0.04 million), net of estimated forfeitures.

The Company did not issue any RSU grants during the three-month period ended February 28, 2021.

As of February 28, 2021, there were no outstanding RSU grants.

9) Financial instruments

9 unchanged sentences

The Company operates in the United States and Canada.

The Company’s exposure to currency risk at August 31, 2020 is limited to the Canadian dollar balances consisting of cash of CDN$ 1,462,000 , accounts receivable of CDN$ 20,000 and accounts payable of CDN$ 1,500,000 .

The Company’s exposure to currency risk at February 28, 2021 is limited to the Canadian dollar balances consisting of cash of approximately CDN$ 78,000 , accounts receivable of approximately CDN$ 29,000 and accounts payable of approximately CDN$ 413,000 .

Based on a 10 % change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change by approximately $ 24,000 .

1 unchanged sentence

The Company holds cash and cash equivalents with Canadian Chartered financial institutions.

The Company’s accounts receivable consists of Canadian Goods and Services Tax receivable from the Federal Government of Canada and other receivables for recoverable expenses.

The Company’s exposure to credit risk is equal to the balance of cash and cash equivalents and accounts receivable as recorded in the financial statements.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

The Company’s accounts receivable consists of Canadian Goods and Services Tax receivable from the Federal Government of Canada and other receivables for recoverable expenses.

The Company’s exposure to credit risk is equal to the balance of cash and cash equivalents and accounts receivable as recorded in the financial statements.

Liquidity risk

2 unchanged sentences

therefore, the Company manages liquidity risk through the management of its capital structure and financial leverage.

Contractually obligated cash flow requirements as at August 31, 2020 are as follows:

Contractually obligated cash flow requirements as at February 28, 2021 are as follows:

in thousands of dollars

3 unchanged sentences

The Company is exposed to interest rate risk with respect to interest earned on cash and cash equivalents.

Based on balances as at August 31, 2020, a 1 % change in interest rates would result in a change in net loss of $ 0.1 million, assuming all other variables remain constant.

Based on balances as at February 28, 2021, a 1 % change in interest rates would result in a $200 change in net loss, assuming all other variables remain constant.

10) Commitment

1 unchanged sentence

Trilogy Metals Inc.

For the Quarter Ended August 31, 2020

For the Quarter Ended February 28, 2021

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 1. Financial Statements