What changed in this filing

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Item 1. Financial Statements

2021-10-05 compared with 2021-07-07 · 89 added, 54 removed, 291 unchanged (33% of the section changed)

3 unchanged sentences

in thousands of US dollars

August 31, 2021

November 30, 2020

4 unchanged sentences

Investment in Ambler Metals LLC (note 4)

Mineral properties

Right of use asset (note 6 (a))

14 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

3 unchanged sentences

For the three months ended

For the six months ended

For the nine months ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Exploration expense

Feasibility study (note 4(a))

17 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

15 unchanged sentences

Balance – May 31, 2020

Exercise of options

Stock-based compensation

Loss for the period

Balance - August 31, 2020

Balance – November 30, 2020

7 unchanged sentences

Balance – May 31, 2021

Exercise of options

Restricted Share Units

Stock-based compensation

Loss for the period

Balance – August 31, 2021

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

1 unchanged sentence

in thousands of US dollars

For the six months ended

For the nine months ended

August 31, 2021

August 31, 2020

Cash flows used in operating activities

8 unchanged sentences

Net change in non-cash working capital

Decrease (increase) in accounts receivable

Decrease in accounts receivable

Decrease (increase) in deposits and prepaid amounts

2 unchanged sentences

Proceeds from exercise of options

Cash flows from investing activities

Mineral claims

Decrease in cash from operating activities

4 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

13 unchanged sentences

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 May 31, 2021 and our results of operations and cash flows for the six months ended May 31, 2021 and May 31, 2020.

The results of operations for the six months ended May 31, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2021.

These unaudited interim consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position as of August 31, 2021 and our results of operations and cash flows for the nine months ended August 31, 2021 and August 31, 2020.

The results of operations for the nine months ended August 31, 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 July 6, 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 4, 2021.

3) Accounts receivable

in thousands of dollars

August 31, 2021

November 30, 2020

9 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

8 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 May 31, 2021, totaled $ 170 million.

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, 2021, totaled $ 164 million.

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

12 unchanged sentences

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 six-month period ended May 31, 2020.

Carrying value of equity method investment

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 $ 3.4 million for the three-month period ending May 31, 2021 (2020 - $ 1.1 million) and $ 5.6 million for the six-month period ending May 31, 2021 (2020 - $ 1.5 million).

The carrying value of Trilogy’s 50 % investment in Ambler Metals LLC as at May 31, 2021 is summarized on the following table.

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 $ 12.1 million for the three-month period ending August 31, 2021 (2020 - $ 2.2 million) and $ 17.8 million for the nine-month period ending August 31, 2021 (2020 - $ 3.7 million).

The carrying value of Trilogy’s 50 % investment in Ambler Metals LLC as at August 31, 2021 is summarized on the following table.

in thousands of dollars

November 30, 2020, investment in Ambler Metals LLC

Share of loss on equity investment for the six-month period ending May 31, 2021

May 31, 2021, investment in Ambler Metals LLC

Share of loss on equity investment for the nine-month period ending August 31, 2021

August 31, 2021, investment in Ambler Metals LLC

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

The following table summarizes Ambler Metals LLC's Balance Sheet as at May 31, 2021.

The following table summarizes Ambler Metals LLC's Balance Sheet as at August 31, 2021.

in thousands of dollars

August 31, 2021

November 30, 2020

8 unchanged sentences

Lease obligation

The following table summarizes Ambler Metals LLC's comprehensive loss for the three and six-month period ending May 31, 2021.

The following table summarizes Ambler Metals LLC's comprehensive loss for the three and nine-month period ending August 31, 2021.

in thousands of dollars

Three months ending

Six months ending

For the three months ended

For the nine months ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Mineral properties expense

3 unchanged sentences

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.

During the three-month period ending February 28, 2021, 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.

There were no services provided to Ambler Metals during the three-month period ended May 31, 2021.

There were no further services provided to Ambler Metals under the agreement.

5) Accounts payable and accrued liabilities

in thousands of dollars

August 31, 2021

November 30, 2020

4 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

7 unchanged sentences

Net amortization

Balance as at May 31, 2021

Previously classified in fixed assets

Balance as at August 31, 2021

(b) Lease liabilities

3 unchanged sentences

in thousands of dollars

Six months ended

Nine months ended

August 31, 2021

August 31, 2020

Operating lease costs

2 unchanged sentences

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 May 31, 2021, the weighted-average remaining lease term is 3 years and the weighted-average discount rate is 8 % .

As of August 31, 2021, the weighted-average remaining lease term is 2.75 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 six months ended May 31, 2021 are as follows:

Supplemental cash and non-cash information relating to our leases during the nine months ended August 31, 2021 are as follows:

● Cash paid for amounts included in the measurement of lease liabilities was $ 150,418 .

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 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 May 31, 2021 are as follows:

Future minimum payments relating to the lease recognized in our balance sheet as of August 31, 2021 are as follows:

in thousands of dollars

August 31, 2021

Total undiscounted lease payments

11 unchanged sentences

Exercise of options

May 31, 2021, issued and outstanding

August 31, 2021, issued and outstanding

Stock options

During the six-month period ended May 31, 2021, the Company granted 3,374,150 options (2020 - 2,325,000 options) at a weighted-average exercise price of CAD$ 2.52 (2020 - CAD$ 2.93 ) 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 nine-month period ended August 31, 2021, the Company granted 3,374,150 options (2020 – 4,095,000 options) at a weighted-average exercise price of $ 2.00 (2020 - $ 2.14 ) 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 - $ 0.90 ).

For the six-month period ended May 31, 2021, Trilogy recognized a stock-based compensation charge of $ 2.60 million (2020 – $ 1.58 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

For the three-month period ended August 31, 2021, Trilogy recognized a stock-based compensation charge of $ 0.38 million (2020 – $ 1.02 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

For the nine-month period ended August 31, 2021, Trilogy recognized a stock-based compensation charge of $ 2.98 million (2020 – $ 2.60 million) for 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.

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Assumptions used in the pricing model for the six-month period ended May 31, 2021 are as provided below.

Assumptions used in the pricing model for the nine-month period ended August 31, 2021 are as provided below.

August 31, 2021

Risk-free interest rates

3 unchanged sentences

Expected dividends

As of May 31, 2021, there were 3,176,337 non-vested options outstanding with a weighted average exercise price of CAD$ 2.63 ;

As of August 31, 2021, there were 2,643,004 non-vested options outstanding with a weighted average exercise price of $ 2.09 ;

the non-vested stock option expense not yet recognized was $ 0.81 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 six-month period ended May 31, 2021 is as follows:

A summary of the Company’s stock option plan and changes during the nine-month period ended August 31, 2021 is as follows:

August 31, 2021

Weighted average

3 unchanged sentences

Balance – end of the period

The following table summarizes information about the stock options outstanding at May 31, 2021.

The following table summarizes information about the stock options outstanding at August 31, 2021.

average years

7 unchanged sentences

$ 2.51 to $ 2.70

The aggregate intrinsic value of vested share options (the market value less the exercise price) at May 31, 2021 was $ 6.8 million (2020 - $ 8.3 million) and the aggregate intrinsic value of exercised options for the six months ended May 31, 2021 was $ 0.71 million (2020 - $ 0.18 million).

The aggregate intrinsic value of vested share options (the market value less the exercise price) at August 31, 2021 was $ 2.20 million (2020 - $ 5.20 million) and the aggregate intrinsic value of exercised options for the nine months ended August 31, 2021 was $ 0.63 million (2020 - $ 4.50 million).

Restricted Share Units and Deferred Share Units

2 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

2 unchanged sentences

All units are accounted for as equity-settled awards.

A summary of the Company’s unit plans and changes during the six-month period ended May 31, 2021 is as follows:

A summary of the Company’s unit plans and changes during the nine-month period ended August 31, 2021 is as follows:

Number of DSUs

1 unchanged sentence

Balance – end of the period

For the six-month period ended May 31, 2021, Trilogy recognized a stock-based compensation charge of $ 0.07 million (2020- $ 0.39 million), net of estimated forfeitures.

The Company did not issue any RSU grants during the six-month period ended May 31, 2021.

As of May 31, 2021, there were no outstanding RSU grants.

For the three-month period ended August 31, 2021, Trilogy recognized a stock-based compensation charge of $ 0.03 million (2020- $ 0.04 million), net of estimated forfeitures.

For the nine-month period ended August 31, 2021, Trilogy recognized a stock-based compensation charge of $ 0.10 million (2020- $ 0.43 million), net of estimated forfeitures.

The Company did not issue any RSU grants during the nine-month period ended August 31, 2021.

As of August 31, 2021, there were no outstanding RSU grants.

8) Financial instruments

9 unchanged sentences

The Company operates in the United States and Canada.

The Company’s exposure to currency risk at May 31, 2021 is limited to the Canadian dollar balances consisting of cash of approximately CAD$ 123,000 , accounts receivable of approximately CAD$ 24,000 and accounts payable of approximately CAD$ 248,000 .

The Company’s exposure to currency risk at August 31, 2021 is limited to the Canadian dollar balances consisting of cash of approximately CAD$ 20,000 , accounts receivable of approximately CAD$ 19,000 and accounts payable of approximately CAD$ 178,000 .

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 $ 14,000 .

3 unchanged sentences

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, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Liquidity risk

2 unchanged sentences

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

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Contractually obligated undiscounted cash flow requirements as at May 31, 2021 are as follows:

Contractually obligated undiscounted cash flow requirements as at August 31, 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 May 31, 2021, a 1 % change in interest rates would result in a $ 200 change in net loss, assuming all other variables remain constant.

Based on balances as at August 31, 2021, a 1 % change in interest rates would result in a $ 130 change in net loss, assuming all other variables remain constant.

9) Commitment

1 unchanged sentence

Trilogy Metals Inc.

For the Quarter Ended May 31, 2021

For the Quarter Ended August 31, 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