What changed in this filing

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Item 1. Business

2022-02-11 compared with 2021-02-12 · 28 added, 33 removed, 169 unchanged (27% of the section changed)

Our principal business is the exploration and development of the Upper Kobuk Mineral Projects (“Upper Kobuk Mineral Projects” or “UKMP Projects”) located in the Ambler mining district in Northwest Alaska, United States.

Our principal business is the exploration and development of the Upper Kobuk Mineral Projects (“Upper Kobuk Mineral Projects” or “UKMP” or “UKMP Projects”) located in the Ambler mining district in Northwest Alaska, United States.

The Upper Kobuk Mineral Projects are held by Ambler Metals LLC (“Ambler Metals”), a limited liability company owned equally by Trilogy and South32 Limited (“South32”) (as defined below), and is comprised of the (i) Arctic Project, which contains a high-grade polymetallic volcanogenic massive sulfide (“VMS”) deposit (“Arctic Project”);

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(dba Trilogy Metals US) (“Trilogy Metals US”), registered to do business in the State of Alaska.

We also conduct early-stage exploration through a wholly owned subsidiary, 995 Exploration Inc.

Name, Address and Incorporation

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Significant Developments in 2021

● On January 6, 2021, the United States Bureau of Land Management (“BLM”), the National Park Service (“NPS”) and the AIDEA signed Right-of-Way agreements giving AIDEA the ability to cross federally owned and managed lands along the route for the Ambler Road Project approved in the Joint Record of Decision.

The agreements grant a 50-year right-of-way on federally owned and managed land by the federal agencies for the future development of the Ambler Mining District Industrial Access Road.

The authorizing documents with the two agencies are the final federal permits required for the Ambler Road Project.

● In a press release dated February 11, 2021, the Company announced its approval for Ambler Metals to enter into an Ambler Access Development Agreement (the “Development Agreement”) with AIDEA.

The Development Agreement defines how AIDEA and Ambler Metals will work cooperatively together on the pre-development work for the Ambler Access Project to address funding and oversight of the project’s feasibility and permitting activities until the parties reach a decision on the construction of the project.

The cost of the pre-development work and activities will be paid 50% by AIDEA and 50% by Ambler Metals based on an annually agreed program and budget.

Under the Development Agreement, Ambler Metals and AIDEA agree to contribute up to $35 million each for pre-development costs of the Ambler Access Project through December 31, 2024.

● In a press release dated April 19, 2021, the Company announced that the AIDEA had formally approved the proposed plan and budget for the 2021 summer field season activities and services of up to $13 million for the Ambler Access Project (“AAP”).

The cost was to be shared 50/50 by AIDEA and Ambler Metals.

The Board of AIDEA authorized up to $6.5 million for field season activities.

These funds were to be matched by up to another $6.5 million from Ambler Metals under the terms of the Ambler Access Development Agreement that was approved by the AIDEA Board on February 10, 2021 and subsequently executed by both parties, resulting in a total budget for 2021 of up to $13 million.

The AAP is a proposed 211-mile, east-west running controlled industrial access road that would provide industrial access to the Ambler Mining District in northwestern Alaska.

● In a press release dated May 17, 2021, the Company announced that Ambler Metals had finalized the details of the 2021 exploration field program at the UKMP for the previously approved $27 million exploration budget.

The exploration program was aligned with a strategy developed by the Company and South32 which prioritizes the exploration budget within the UKMP.

The strategy defines a program that advances the highest priority projects and exploration targets, both VMS and Carbonate-Hosted Copper (“CHC”), ranging from early-stage geophysical anomalies that were identified during the 2019 airborne Versatile Time Domain Electromagnetic (“VTEM”) survey to advanced VMS and CHC prospects with historical resources.

The site camp opened on June 1, 2021.

Significant Developments in 2020

● On April 10, 2017, we entered into an option agreement, as amended (the “South32 Option Agreement”) with South32 Group Operations Pty Ltd (“South32 Operations”), a wholly-owned subsidiary of South32 Limited, which agreement was later assigned by South32 Operations to its affiliate, South32 USA Exploration Inc.

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South32 was required to contribute a minimum of $10 million each year, for a maximum of three years, to keep the option in good standing (the “Initial Funding”).

If South32 elected to exercise the option, the subscription price less certain deductions for Initial Funding was to be paid in one tranche within 45 business days.

If South32 elected to exercise the

option, the subscription price less certain deductions for Initial Funding was to be paid in one tranche within 45 business days.

Had South32 not made its annual minimum payment or elected to withdraw, the option would lapse and South32 would have no claim to ownership or to the funds it had already spent.

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James (Jim) Gowans, the Interim President and Chief Executive Officer, remained in his role as a director of the Company.

● In a press release dated July 23, 2020, the Company, along with our joint venture partner, South32, announced the signing of the Record of Decision by the United States Bureau of Land Management (“BLM”) for the Ambler Mining District Industrial Access Project.

● In a press release dated July 23, 2020, the Company, along with our joint venture partner, South32, announced the signing of the Record of Decision by BLM for the Ambler Mining District Industrial Access Project.

The Record of Decision approves the development of the northern route, which is to be a 211-mile private gravel access road in the southern Brooks Range foothills to provide industrial access to the Ambler Mining District.

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The 2020 Arctic Report supersedes the Company’s 2018 Arctic Report (as defined below).

● On November 19, 2020, we issued a press release announcing that Ambler Metals had approved the 2021 program and budget of approximately US$27 million for the advancement of the UKMP Projects.

● On November 19, 2020, we issued a press release announcing that Ambler Metals had approved the 2021 program and budget of approximately $27 million for the advancement of the UKMP Projects.

The budget will be 100% funded by Ambler Metals.

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As a result of this warrant exercise, we issued a total of 6,521,740 common shares of the Company and received cash proceeds of approximately $9.9 million.

United States National Park Service (“NPS”) for that portion of AMDIAP that traverses the Gates of the Arctic National Park and Preserve.

● On August 26, 2019, we issued a press release reporting the public release of the Draft Environmental Impact Statement (“EIS”) Statement by the BLM for the AMDIAP and the Environmental and Economic Analysis by the NPS for that portion of AMDIAP that traverses the Gates of the Arctic National Park and Preserve.

The public comment period of 45 days had commenced with comments on the Draft EIS being accepted through October 15, 2019.

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Van Nieuwenhuyse remained a consultant to the Company until February 29, 2020 to assist with transitional matters and with advancing our interests in Alaska.

● On October 31, 2019, we filed a final short form base shelf prospectus with the securities commissions in each of the provinces of Canada, other than Québec, and a corresponding registration statement on Form S-3 with the SEC allowing for the future issuance, from time to time, of up to US$100,000,000 in common shares, warrants to purchase common shares, share purchase contracts of the Company, subscription receipts, units or a combination of those securities.

● On October 31, 2019, we filed a final short form base shelf prospectus with the securities commissions in each of the provinces of Canada, other than Québec, and a corresponding registration statement on Form S-3 with the SEC allowing for the future issuance, from time to time, of up to $100,000,000 in common shares, warrants to purchase common shares, share purchase contracts of the Company, subscription receipts, units or a combination of those securities.

The intention of the base shelf prospectus and shelf registration statement is to allow the Company to more quickly access capital when the capital is needed and as market opportunities permit.

Significant Developments in 2018

● On February 20, 2018, we issued a press release to announce Pre-Feasibility study (“PFS”) results and reserves for the Arctic Project.

The PFS was based on a conventional 10,000 tonnes per day truck and shovel, single open pit mine and mill design.

● On April 6, 2018, we filed the corresponding technical report for the Company’s Arctic Project entitled “Arctic Project, Northwest Alaska, USA, NI 43-101 Technical Report on Pre-Feasibility Study” with an effective date of February 20, 2018, prepared by Ausenco Engineering Canada Inc.

(the “2018 Arctic Report”).

The technical report describes the PFS on the Arctic Project as discussed above.

The 2018 Arctic Report is superseded by the 2020 Arctic Report.

● On April 20, 2018, we issued a press release to announce the closing of our bought deal financing.

The funds raised consisted of 24,784,482 Common Shares issued at $1.16 per share resulting in aggregate gross proceeds of approximately $28.7 million.

● On June 5, 2018, we issued a press release to announce the release of a maiden inferred cobalt resource of 77 million pounds for the Bornite Project.

At a base case of 0.50% copper cut-off grade, the Bornite Project is estimated to contain in-pit inferred resources of 124.6 million tonnes grading at 0.017% Co, resulting in 45 million pounds of contained cobalt.

Below the pit shell and at a base case copper cut-off grade of 1.5%, the Bornite Project is estimated to contain an additional inferred resource of 57.8 million tonnes grading 0.025% Co, resulting in an additional 32 million pounds of contained cobalt.

● On July 20, 2018, we filed the corresponding technical report for the Company’s Bornite Project entitled “NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA” prepared by BD Resource Consulting, Inc., SIM Geological Inc., and International Metallurgical & Environmental Inc.

(the “2018 Bornite Report”).

● On December 14, 2017, we announced that South32 has committed to fund the $10 million for the 2018 program and budget for the Bornite Project.

The funds, which represented the second tranche of $10 million, maintained the South32 Option Agreement in good standing, and was fully received by Trilogy on January 24, 2018.

History of Trilogy

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(“NovaGold”).

At a special meeting of securityholders of NovaGold held on March 28, 2012, the securityholders voted in favour of a special resolution approving the distribution of Common Shares of Trilogy to the shareholders of NovaGold as a return of capital through a statutory Plan of Arrangement under the Companies Act (Nova Scotia).

On April 30, 2012, all of the outstanding Trilogy Common Shares were distributed to shareholders of NovaGold such that each NovaGold shareholder of record at the close of business on April 27, 2012 received one Trilogy Common Share for every six common shares in the capital of NovaGold held at that time.

The Trilogy Common Shares were listed and posted for trading on the TSX and on the NYSE American (formerly the NYSE MKT) under its previous symbol, NCQ, and former name, NovaCopper Inc., on April 25, 2012.

In April 2012, Trilogy Common Shares were distributed to NovaGold shareholders pursuant to a Plan of Arrangement under the Companies Act (Nova Scotia) and were listed and posted for trading on the TSX and on the NYSE American.

We changed our corporate name to Trilogy Metals Inc.

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The cost to exercise such back-in-right is equal to the percentage interest in the project multiplied by the difference between (i) all costs incurred by Ambler Metals or its affiliates on the project, including historical costs incurred prior to the date of the NANA Agreement together with interest on the costs;

and (ii) $40 million (subject to

and (ii) $40 million (subject to exceptions).

This amount will be payable by NANA to Ambler Metals in cash at the time the parties enter into a joint venture agreement and in no event will the amount be less than zero.

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One way Ambler Metals does this is through collaborations with local communities in Alaska, including Native Alaskan groups.

Ambler Metals’ environmental performance will be overseen at the Ambler-board and Trilogy-board

level and environmental performance is the responsibility of the project manager.

Ambler Metals’ environmental performance will be overseen at the Ambler-board and Trilogy-board level and environmental performance is the responsibility of the project manager.

All new activities and operations will be managed for compliance with applicable laws and regulations.

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She became a full-time employee of the Company on November 13, 2012.

Segment Information

The Company’s reportable segments are based on geographic region for the Company’s operations.

Segment information relating to our assets is provided under the section heading “ Item 8.

Financial Statements and Supplementary Data ” below.

Competitive Conditions

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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-K

Item 1. Business