Trilogy Metals Inc. 10-K

Item 2. PROPERTIES The following descriptions summarize selected information about the Upper Kobuk Mineral Projects, which are located in the Ambler mining district of Alaska and include the Arctic Project and the Bornite Project. The Arctic Project and the Bornite Project are held by Ambler Metals, of which Trilogy holds a 50% interest. All mineral resources and mineral reserve estimates with respect to the Arctic Project and Bornite Project that are disclosed in this Annual Report on Form 10-K are reported on a 100% basis. All of the UKMP Projects are without known reserves, as defined under SEC Industry Guide 7, and all proposed programs for the properties are exploratory in nature. Please also see “ Management’s Discussion and Analysis—Project Activities ” for more information on the development and nature of our interest in the Upper Kobuk Mineral Projects. Arctic Project Except as otherwise stated, the scientific and technical information relating to the Arctic Project contained in this Form 10-K is derived from the 2020 Arctic Report titled “Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report” with an effective date of August 20, 2020, prepared for Trilogy by Ausenco Engineering Canada Inc., Wood Canada Limited and SRK Consulting (Canada) Inc. The information regarding the Arctic Project is based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the 2020 Arctic Report which has been filed with certain Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Arctic Project Description, Location and Access Project Description NovaGold acquired the Arctic Project from Kennecott Exploration Company and Kennecott Arctic Company (collectively, “Kennecott”) in 2004. In 2011, NovaGold transferred all copper projects to NovaCopper Inc. and spun-out NovaCopper to its then existing shareholders in 2012. NovaCopper Inc. subsequently underwent a name change to Trilogy Metals Inc. in 2016. Under the Kennecott Purchase and Termination Agreement, Kennecott retained a 1% net smelter return (NSR) royalty that was subsequently sold by Kennecott. The 1% NSR runs with the lands and is purchasable at any time from the royalty holder for a one-time payment of $10 million. The Arctic Project is directly held by Ambler Metals, a 50/50 joint venture formed between South32 and Trilogy in February 2020. Upon the formation of the joint venture, Trilogy contributed all of its Alaskan assets, including the Arctic 31 Table of Contents Project and the NANA Agreement, to Ambler Metals in exchange for a 50% membership interest and at the same time, South32 contributed $145 million in cash for a 50% membership interest. The Arctic Project land tenure consists of 1,988 contiguous State mining claims, including 905 40-acre claims, 1,083 160-acre claims, and 18 Federal patented claims comprising 271.9 acres (110 ha) held in the name of Ambler Metals. Surface use of the private land held as Federal patented claims is limited only by reservations in the patents and by generally-applicable environmental laws. Surface use of State claims allows the owner of the mining claim to make such use of the surface as is “necessary for prospecting for, extraction of, or basic processing of minerals.” NANA controls lands granted under the Alaska Native Claims Settlement Act to the south of the Arctic Project boundary. Ambler Metals and NANA are parties to the NANA Agreement that consolidates the parties’ land holdings into an approximately 172,675 ha land package and provides a framework for the exploration and development of the area. The NANA Agreement has a term of 20 years, with an option in favour of Ambler Metals to extend the term for an additional 10 years. If, following receipt of a feasibility study and the release for public comment of a related draft environmental impact statement, a decision is made to proceed with construction of a mine on the lands subject to the NANA Agreement, NANA will have 120 days to elect to either (a) exercise a non-transferrable back-in-right to acquire between 16% and 25% (as specified by NANA) of that specific project; or (b) not exercise its back-in-right, and instead receive a net proceeds royalty equal to 15% of the net proceeds realized from such project. In the event that NANA elects to exercise its back-in-right, the parties will, as soon as reasonably practicable, form a joint venture with NANA electing to participate between 16% to 25%, and Ambler Metals owning the balance of the interest in the joint venture. If Ambler Metals decides to proceed with construction of a mine on its own lands subject to the NANA Agreement, NANA will enter into a surface use agreement which will afford Ambler Metals access to the Arctic Project along routes approved by NANA. In consideration for the grant of such surface use rights, NANA will receive a 1% net smelter royalty on production and provide an annual payment on a per acre basis. Location and Access The Arctic Project is located in the Ambler mining district of the southern Brooks Range, in the Northwest Arctic Borough (NWAB) of Alaska. The Property is geographically isolated with no current road access or nearby power infrastructure. The Arctic Project is located 270 km east of the town of Kotzebue, 37 km north of the village of Kobuk, and 260 km west of the Dalton Highway, an all-weather state-maintained highway. Primary access to the Arctic Project is by air, using both fixed wing aircraft and helicopters. There are four well-maintained, approximately 1,500 m-long gravel airstrips located near the Arctic Project, capable of accommodating charter fixed wing aircraft. These airstrips are located 64 km west at Ambler, 46 km southwest at Shungnak, 37 km southwest at Kobuk, and 34 km southwest at Dahl Creek. There is daily commercial air service from Kotzebue to the village of Kobuk, the closest community to the Arctic Project. During the summer months, the Dahl Creek Camp airstrip is suitable for larger aircraft, such as a C-130 and DC-6. In addition to the four 1,500 m airstrips, there is a 700 m airstrip located at the Bornite Camp. The airstrip at Bornite is suited to smaller aircraft, which support the Bornite Camp with personnel and supplies. There is also a 450 m airstrip (Arctic airstrip) located at the base of Arctic Ridge that can support smaller aircraft. A winter trail and a one-lane dirt track suitable for high-clearance vehicles or construction equipment links the Arctic Project’s main camp located at Bornite to the Dahl Creek airstrip southwest of the Arctic deposit. An unimproved gravel track connects the Arctic airstrip with the Arctic deposit. History Prospectors first arrived in the Ambler Mining District around 1900, shortly after the discovery of the Nome and Fairbanks gold districts. Several years later, small gold placer deposits were located in the southern Cosmos Hills south of the Arctic deposit and worked intermittently over ensuing decades for gold and nephrite. During this time copper mineralization 32 Table of Contents was observed at Ruby Creek in the northern Cosmos Hills; however, no exploration was undertaken until 1947 when local prospector Rhinehart “Rhiny” Berg located outcropping copper mineralization along Ruby Creek. Berg subsequently staked claims over the Ruby Creek showings and constructed an airstrip for access (alaskamininghalloffame.org 2012). Bear Creek Mining Company (“BCMC”), an exploration subsidiary of Kennecott, optioned the property from Berg in 1957. The prospect became known as Bornite and Kennecott conducted extensive exploration over the next decade, culminating in the discovery of the high-grade No. 1 zone and the sinking of an exploration shaft to conduct underground drilling. In conjunction with the discovery of the Bornite deposit, BCMC greatly expanded their regional reconnaissance exploration in the Cosmos Hills and the southern Brooks Range. Stream silt sampling in 1965 revealed a significant copper anomaly in Subarctic Creek roughly 27 km northeast of Bornite. The area was subsequently staked and, in 1967, eight core holes were drilled at the Arctic deposit yielding massive sulphide intercepts over an almost 500-m strike length. BCMC conducted intensive exploration on the property until 1977 and then intermittently through 1998. No drilling or additional exploration was conducted on the Arctic Project between 1999 and 2003. In addition to drilling and exploration at the Arctic deposit, BCMC also conducted exploration at numerous other prospects in the Ambler Mining District (most notably Dead Creek, Sunshine, Cliff, and Horse). The abundance of VMS prospects in the district resulted in a series of competing companies in the area, including Sunshine Mining Company, Anaconda Company, Noranda Exploration Company, GCO Minerals Company, Cominco American Resource Inc. (Cominco), Teck Cominco, Resource Associates of Alaska, Watts, Griffis and McOuat Ltd., and Houston Oil and Minerals Company, culminating into a claim staking war in the district in 1973. Falconbridge and Union Carbide also conducted work later in the district. District exploration by Sunshine Mining Company and Anaconda resulted in two additional significant discoveries in the district; the Sun deposit located 60 km east of the Arctic deposit, and the Smucker deposit located 36 km west of the Arctic deposit. These two deposits are outside the current Arctic Project area. District exploration continued until the early 1980s on the four larger deposits in the district (Arctic, Bornite, Smucker and Sun) when the district fell into a hiatus due to depressed metal prices. In 1987, Cominco acquired the claims covering the Sun and Smucker deposits from Anaconda. Teck Resources Limited, as Cominco’s successor company, continues to hold the Smucker deposit. In 2007, Andover Mining Corporation purchased a 100% interest in the Sun deposit for US$13 million and explored the property through 2013. The Sun deposit and adjacent lands were acquired by Valhalla Metals Inc., a private company, which staked over the Sun deposit in 2017 after the creditors for the bankrupt Andover Mining Corporation failed to pay the annual rent of the state claims and submit the Annual Labour Statement. In 1981 and 1983, Kennecott received three US Mineral Survey patents (MS2245 totaling 240 acres over the Arctic deposit – later amended to include another 32 acres; and MS2233 and MS2234 for 25 claims totaling 516.5 acres at Bornite). The Bornite patented claims and surface development were subsequently sold to NANA Regional Corporation, Inc. in 1986. No production has occurred at the Arctic deposit or at any of the other deposits within the Ambler Mining District. Prior Ownership and Ownership Changes – Arctic Deposit and the Ambler Lands BCMC initially staked federal mining claims covering the Arctic deposit area beginning in 1966. The success of the 1960’s drill programs defined a significant high-grade polymetallic resource at the Arctic deposit and, in the early 1970s, Kennecott began the patent process to obtain complete legal title to the Arctic deposit. In 1981, Kennecott received US Mineral Survey patent M2245 covering 16 mining claims totaling 240.018 acres. In 1983, US Mineral Survey patent M2245 was amended to include two additional claims totaling 31.91 acres. 33 Table of Contents With the passage of the Alaska National Interest Lands Conservation Act in 1980, which expedited native land claims outlined in the ANSCA and State lands claims under the Alaska Statehood Act, both the State of Alaska and NANA selected significant areas of land within the Ambler Mining District. State selections covered much of the Ambler schist belt, host to the volcanogenic massive sulphide deposits including the Arctic deposit, while NANA selected significant portions of the Ambler Lowlands to the immediate south of the Arctic deposit as well as much of the Cosmos Hills including the area immediately around Bornite. In 1995, Kennecott renewed exploration in the Ambler schist belt containing the Arctic deposit patented claims by staking an additional 48 state claims at Nora and 15 state claims at Sunshine Creek. In the fall of 1997, Kennecott staked 2,035 state claims in the belt consolidating their entire land position and acquiring the majority of the remaining prospective terrain in the VMS belt. Five more claims were subsequently added in 1998. After a short period of exploration which focused on geophysics and geochemistry combined with limited drilling, exploration work on the Arctic Project again entered a hiatus. On March 22, 2004, Alaska Gold Company, a wholly-owned subsidiary of NovaGold completed an Exploration and Option Agreement with Kennecott to earn an interest in the Ambler land holdings. Previous Exploration and Development Results – Arctic Deposit Kennecott’s ownership of the Arctic Project saw two periods of intensive work from 1965 to 1985 and from 1993 to 1998, before optioning the property to NovaGold in 2004. Though reports, memos, and files exist in Kennecott’s Salt Lake City office, only limited digital compilation of the data exists for the earliest generation of exploration at the Arctic deposit and within the VMS belt. Beginning in 1993, Kennecott initiated a re-evaluation of the Arctic deposit and assembled a computer database of previous work at the Arctic deposit and in the district. A computer-generated block model was constructed in 1995 and an updated resource estimate was performed using the block model. Subsequently, Kennecott staked a total of 2,035 State of Alaska claims in 1997 and, in 1998 undertook the first field program since 1985. Due to the number of companies and the patchwork exploration that occurred as a result of the 1973 staking war, much of the earliest exploration work on what now constitutes the Ambler Schist belt was lost during the post-1980 hiatus in district exploration. The following subsections outline the best documented data at the Arctic deposit as summarized in the 1998 Kennecott exploration report, including the assembled computer database; however, this outline is not considered to be either exhaustive or in-depth. In 1982, geologists with Kennecott, Anaconda and the State of Alaska published the definitive geologic map of the Ambler schist belt (Hitzman et al. 1982). Table 6-1 of the 2020 Arctic Report lists known exploration mapping, geochemical, and geophysical programs conducted for VMS targets in the Ambler Mining District. Geological Setting, Mineralization and Deposit Types Regional Geology – Southern Brooks Range The Ambler Mining District occurs along the southern margin of the Brooks Range within an east-west trending zone of Devonian to Jurassic age submarine volcanic and sedimentary rocks (Hitzman et al., 1986). The district covers both: 1) VMS-like deposits and prospects hosted in the Devonian age Ambler Sequence (or Ambler Schist belt), a group of metamorphosed bimodal volcanic rocks with interbedded tuffaceous, graphitic and calcareous volcaniclastic metasediments; and 2) epigenetic carbonate-hosted copper deposits occurring in Silurian to Devonian age carbonate and phyllitic rocks of the Bornite Carbonate Sequence. The Ambler Sequence occurs in the upper part of the Anirak Schist, the thickest member of the Schist belt or Coldfoot subterrane (Moore et al., 1994). VMS-like stratabound mineralization can be found along the entire 110 km strike length of the district. Immediately south of the Schist belt, in 34 Table of Contents the Cosmos Hills, a time equivalent section of the Anirak Schist that includes the approximately 1 km thick Bornite Carbonate Sequence. Mineralization of both the VMS-like deposits of the Schist belt and the carbonate-hosted deposits of the Cosmos Hills has been dated at 375 to 387 Ma (Selby et al., 2009; McClelland et al., 2006). In addition, the Ambler Mining District is characterized by increasing metamorphic grade north perpendicular to the strike of the east-west trending units. The district shows isoclinal folding in the northern portion and thrust faulting to south (Schmidt, 1983). The Devonian to Late Jurassic age Angayucham basalt and the Triassic to Jurassic age mafic volcanic rocks are in low-angle over thrust contact with various units of the Ambler Schist belt and Bornite Carbonate Sequence along the northern edge of the Ambler Lowlands. Ambler Sequence Geology Rocks that form the Ambler Sequence consist of a lithologically diverse sequence of lower Devonian age carbonate and siliciclastic strata with interlayered mafic lava flows and sills. The clastic strata, derived from terrigenous continental and volcanic sources, were deposited primarily by mass-gravity flow into the sub-wavebase environment of an extending marginal basin. The Ambler Sequence underwent two periods of intense, penetrative deformation. Sustained upper greenschist-facies metamorphism with coincident formation of a penetrative schistosity and isoclinal transposition of bedding marks the first deformation period. Pervasive similar-style folds on all scales deform the transposed bedding and schistosity, defining the subsequent event. At least two later non-penetrative compressional events deform these earlier fabrics. Observations of the structural and metamorphic history of the Ambler Mining District are consistent with current tectonic evolution models for the Schist belt, based on the work of others elsewhere in the southern Brooks Range (Gottschalk and Oldow, 1988; Till et al., 1988; Vogl et al., 2002). Arctic Deposit Geology Previous workers at the Arctic deposit (Russell 1995 and Schmidt 1983) describe three mineralized horizons: the Main Sulphide Horizon, the Upper South Horizon and the Warm Springs Horizon. The Main Sulphide Horizon was further subdivided into three zones: the southeast zone, the central zone and the northwest zone. Previous deposit modelling was grade-based resulting in numerous individual mineralized zones representing relatively thin sulphide horizons. Recent work by Trilogy defines the Arctic deposit as two or more discrete horizons of sulphide mineralization contained in a complexly deformed isoclinal fold with an upright upper limb and an overturned lower limb hosting the main mineralization. Nearby drilling suggests that a third upright lower limb, likely occurs beneath the currently explored stratigraphy. Mineralization Mineralization occurs as stratiform semi-massive sulphide (“SMS”) to massive sulphide (“MS”) beds within primarily graphitic schists and fine-grained quartz mica schists. The sulphide beds average 4 m in thickness but vary from less than 1 m up to as much as 18 m in thickness. The sulphide mineralization occurs within eight modelled zones lying along the upper and lower limbs of the Arctic isoclinal anticline. The zones are all within an area of roughly 1 km 2 with mineralization extending to a depth of approximately 250 m below the surface. There are five zones of MS and SMS that occur at specific pseudo-stratigraphic levels which make up the bulk of the Mineral Resource estimate. The other three zones also occur at specific pseudo-stratigraphic levels, but are too discontinuous. Unlike more typical VMS deposits, mineralization is not characterized by steep metal zonation or massive pyritic zones. Mineralization dominantly consists of sheet-like zones of base metal sulphides with variable pyrite and only minor zonation, usually on a small scale. Mineralization is predominately coarse-grained sulphides comprising chalcopyrite, sphalerite, galena, tetrahedrite-tennantite, pyrite, arsenopyrite, and pyrrhotite. Sulphides occur as disseminated (<30%), semi-massive (30 to 50% 35 Table of Contents sulphide) to massive (greater than 50% sulphide) layers. Trace amounts of electrum are also present. Gangue minerals associated with the mineralized horizons include quartz, barite, white mica, chlorite, stilpnomelane, talc, calcite, dolomite and cymrite. Deposit Types The mineralization at the Arctic deposit and at several other known occurrences within the Ambler Sequence stratigraphy of the Ambler Mining District consists of Devonian age, polymetallic (zinc-copper-lead-silver-gold) VMS-like occurrences. VMS deposits are formed by and associated with sub-marine volcanic-related hydrothermal events. These events are related to spreading centres such as fore arc, back arc or mid-ocean ridges. VMS deposits are often stratiform accumulations of sulphide minerals that precipitate from hydrothermal fluids on or below the seafloor. These deposits are found in association with volcanic, volcaniclastic and/or siliciclastic rocks. They are classified by their depositional environment and associated proportions of mafic and/or felsic igneous rocks to sedimentary rocks. There are five general classifications (Franklin et al., 2005) based on rock type and depositional environment: ● Mafic rock dominated often with ophiolite sequences, often called Cyprus type. ● Bimodal-mafic type with up to 25% felsic volcanic rocks. ● Mafic-siliciclastic type with approximately equal parts mafic and siliciclastic rocks, which can have minor felsic rocks and are often called Besshi type. ● Felsic-siliciclastic type with abundant felsic rocks, less than 10% mafic rocks and shale rich. ● Bimodal-felsic type where felsic rocks are more abundant than mafic rocks with minor sedimentary rocks also referred to as Kuroko type. Prior to any subsequent deformation and/or metamorphism, these deposits are often bowl or mound-shaped with stockworks and stringers of sulphide minerals found near vent zones. These types of deposit exhibit an idealized zoning pattern as follows: ● Pyrite and chalcopyrite near vents. ● A halo around the vents consisting of chalcopyrite, sphalerite and pyrite. ● A more distal zone of sphalerite and galena and metals such as manganese. ● Increasing manganese with oxides such as hematite and chert more distal to the vent. Alteration halos associated with VMS deposits often contain sericite, ankerite, chlorite, hematite and magnetite close to the VMS with weak sericite, carbonate, zeolite, prehnite and chert more distal. These alteration assemblages and relationships are dependent on the degree of post deposition deformation and metamorphism. A modern analogue of this type of deposit is found around fumaroles or black smokers in association with rift zones. In the Ambler Mining District, VMS-like mineralization occurs in the Ambler Sequence schists over a strike length of approximately 110 km. These deposits are hosted in volcaniclastic, siliciclastic and calcareous metasedimentary rocks interlayered with mafic and felsic metavolcanic rocks. Sulphide mineralization occurs above the mafic metavolcanic rocks but below the Button schist, a distinctive district wide felsic unit characterized by large K-feldspar porphyroblasts after relic phenocrysts. The presence of the mafic and felsic metavolcanic units is used as evidence to suggest formation in a rift-related environment, possibly proximal to a continental margin. Based on these characteristics, the Arctic deposit is similar to Kuroko-type VMS deposits. 36 Table of Contents Historic interpretation of the genesis of the Ambler Schist belt deposits has called for a syngenetic VMS origin with steep thermal gradients in and around seafloor hydrothermal vents resulting in metal deposition due to the rapid cooling of chloride-complexed base metals. A variety of VMS types have been well documented in the literature (Franklin et al., 2005) with the Ambler Schist belt deposits most similar to deposits associated with bimodal felsic dominant volcanism related to incipient rifting. The majority of field observations broadly support such a scenario at the Arctic deposit and include: 1) the tectonic setting with Devonian volcanism in an evolving continental rift; 2) the geologic setting with bimodal volcanic rocks including pillow basalts and felsic volcanic tuffs; 3) an alteration assemblage with well-defined magnesium-rich footwall alteration and sodium-rich hanging wall alteration; and 4) typical polymetallic base-metal mineralization with massive and semi-massive sulphides. A preserved sulphide-smoker occurrence has been tentatively identified near Dead Creek, northwest of the Arctic deposit and suggests local hydrothermal venting during deposition. However, the lack of stockworks and stringer-type mineralization at the Arctic deposit suggest that the deposit may not be a proximal vent-type VMS. Although the deposit is stratiform in nature, it exhibits characteristics and textures common to replacement-style mineralization. At least some of the mineralization may have formed as a diagenetic replacement. A VMS model is considered applicable for use in exploration targeting in the Arctic Project area. Exploration Table 1 summarizes the exploration work conducted by NovaGold and Trilogy from 2004 to the present. Field exploration was largely conducted during the period between 2004 to 2007 with associated engineering and characterization studies between 2008 and 2019. 37 Table of Contents Table 1 - Summary of Overall Exploration Activities Targeting VMS Style Mineralization in the Ambler Sequence Stratigraphy and the Arctic Deposit ​ ​ ​ ​ ​ ​ ​ ​ ​ Work Completed Year Details Focus Geological Mapping ​ - 2004 - Arctic deposit surface geology ​ - 2005 - Ambler Sequence west of the Arctic deposit ​ - 2006 - COU, Dead Creek, Sunshine, Red ​ - 2015, 2016 SRK Geotechnical Structural Mapping ​ - 2016 - Arctic deposit surface geology ​ Geophysical Surveys ​ SWIR Spectrometry 2004 2004 drill holes Alteration characterization ​ TDEM 2005 2 loops Follow-up of Kennecott DIGHEM EM survey ​ ​ 2006 13 loops District targets ​ ​ 2007 6 loops Arctic extensions ​ Downhole EM 2007 4 drill holes Arctic deposit ​ VTEM Plus (Versatile Time Domain Electromagnetic) airborne helicopter geophysical 2019 400m line spacing with 200m infill with tie lines 4000m spacing Ambler Mining District and Cosmos Hills with infill over Arctic, Sunshine and Horse-Cliff ​ ZTEM (Z-Axis Tipper Electromagnetic) airborne helicopter geophysical 2019 400m line spacing with tie lines 4000m spacing Ambler Mining District and Cosmos Hills with infill over Arctic, Sunshine and Horse-Cliff ​ Geochemistry ​ - 2005 - Stream silts – core area prospects ​ - 2006 - Soils – core area prospects ​ - ​ - Stream silts – core area prospects ​ - 2007 - Soils – Arctic deposit area ​ Survey ​ Collar 2004 to 2011, 2018, 2019 DGPS All 2004 to 2019 NovaCopper drill holes ​ ​ 2004, 2008 Resurveys Historical Kennecott drill holes ​ Photography/Topography 2010 - Photography/topography ​ LiDAR Survey 2015, 2016 - LiDAR over Arctic Deposit ​ Technical Studies ​ Geotechnical 2010 BGC Preliminary geotechnical and hazards ​ ML/ARD 2011 SRK Preliminary ML and ARD ​ Metallurgy 2012 SGS Preliminary mineralogy and metallurgy ​ Geotechnical and Hydrology 2012 BGC Preliminary rock mechanics and hydrology ​ ​ 38 Table of Contents Note: SWIR = short wave infrared; LiDAR = light detection and ranging; ML = metal leaching; BGC = BGC Engineering Inc.; SGS = SGS Canada; ALS = ALS Metallurgy Drilling Drilling at the Arctic deposit and within the Ambler Mining District has been ongoing since its initial discovery in 1967. Approximately 60,857 m of drilling was completed within the Ambler Mining District, including 42,571 m of drilling in 207 drill holes at the Arctic deposit or on potential extensions in 29 campaigns spanning 52 years. Drill programs were completed by Kennecott and its subsidiaries, Anaconda, and Trilogy and its predecessor companies. Core recoveries are acceptable. Geological and geotechnical logging is in line with industry generally-accepted practices. Drill collar and downhole survey data were collected using industry-recognized instrumentation and methods at the time the data were collected. Between 2004 and 2005, NovaGold conducted a systematic drill core re-logging and re-sampling campaign of Kennecott and BCMC era drill holes. NovaGold either took 1 m to 2 m samples every 10 m, or sampled entire lengths of previously un-sampled core within a minimum of 1 m and a maximum of 3 m intervals. During the Trilogy campaigns, sample intervals were determined by the geological relationships observed in the core and limited to a 2.5 m to 3 m maximum length and 0.3 m minimum length. An attempt was made to terminate sample intervals at lithological and mineralization boundaries. Sampling was generally continuous from the top to the bottom of the drill hole. When the hole was in un-mineralized rock, the sample length was generally 3 m, whereas in mineralized units, the sample length was shortened to 1 m to 2 m with a maximum of 2.5 m. Gold assays were conducted using fire assay fusion followed by an atomic absorption spectroscopy finish. An additional 49-element suite was assayed by inductively coupled plasma-mass spectroscopy (ICP-MS) methodology, following a four acid (hydrochloric, nitric, hydrofluoric, and perchloric) digestion. The copper, zinc, lead, and silver analyses were completed by AA, following a triple acid digest, in 2004 and 2005, and by inductively coupled plasma-atomic emission spectroscopy following a triple acid digestion from 2006 to 2019, when overlimits occurred with the ICP-MS methodology. Standard reference materials, blanks, duplicates, and check samples have been regularly submitted at a combined level of 20% of sampling submissions for all NovaGold/NovaCopper/Trilogy era campaigns. BD Resource Consulting, Inc. reviewed the QA/QC dataset and reports and found the sample insertion rate and the timeliness of results received and reviewed meets or exceeds industry best practices. SG measurements were conducted on 4,708 samples in the database and range from a minimum of 1.49 to a maximum of 5.35 and average 3.04. The distribution of SG data is considered sufficient to support estimation in the resource model. Current Mineral Resource estimates and geologic models use topography completed in 2010 by PhotoSat Inc. The resolution of the satellite imagery used was at 0.5 m, and a 1 m contour map and digital elevation model were generated. An aerial LiDAR survey was completed to support feasibility level resource estimation, engineering design, environmental studies, and infrastructure layout evaluations. Agreement between surveyed drill hole collar elevations and a LiDAR topographic surface verifies the correctness of the digital topography for use in estimation. It was concluded that the drill database and topographic surface for the Arctic deposit is reliable and sufficient to support the current estimate of mineral resources. 39 Table of Contents Sampling, Analysis and Data Verification Sampling and Analysis The data for the Arctic deposit were generated over three primary drilling campaigns: 1966 to 1986 when BCMC, a subsidiary of Kennecott was the primary operator, 1998 when Kennecott resumed work after a long hiatus, and 2004 to present under NovaGold, NovaCopper, and Trilogy. Between 2004 and 2005, NovaGold conducted a systematic drill core re-logging and re-sampling campaign of Kennecott and BCMC era drill holes AR-09 to AR-74. NovaGold either took 1 to 2 m samples every 10 m, or sampled entire lengths of previously unsampled core within a minimum of 1 m and a maximum or 3 m intervals. The objective of the sampling was to generate a full ICP geochemistry dataset for the Arctic deposit and ensure continuous sampling throughout the deposit. During NovaGold, NovaCopper, and Trilogy eras, samples were selected based on lithologic contacts, significant mineralization and alteration. Drill core was sampled at no less than 30 cm and no more than 2.5 m when in un-mineralized material, and 2 m maximum intervals when in mineralized material. All samples processed at the logging facility at the Bornite Camp were sawn in half with one half being sent to ALS Minerals in Vancouver, BC for analysis and the other half stored on site at the Bornite Camp. Shipment of core samples from the site occurred on a drill hole by drill hole basis. Rice bags, containing two to four poly-bagged core samples each, were marked and labelled with the ALS Minerals address, project and hole number, bag number, and sample numbers enclosed. Rice bags were secured with a pre-numbered plastic security tie and a twist wire tie and then assembled into standard fish totes for transport by chartered flights on a commercial airline to Fairbanks, where they were met by a contracted expeditor for delivery directly to the ALS Minerals preparation facility in Fairbanks. In addition to the core, control samples are inserted into the shipments at the approximate rate of one standard, one blank and one duplicate per 17 core samples. Samples were logged into a tracking system on arrival at ALS Minerals, and weighed. Samples were then crushed, dried, and a 250 g split pulverized to greater than 85% passing 75 μm. Gold assays were determined using fire assay fusion followed by an atomic absorption spectroscopy finish. The lower detection limit was 0.005 ppm gold; the upper limit was 1,000 ppm gold. An additional 49-element suite was assayed by ICP-MS, following a 4-acid digestion. The copper, zinc, lead, and silver analyses were completed by AA, following a triple acid digest, when over limit results occurred using the ICP-MS assay method. Data Verification Drill hole collars, topography, core logging, and database verification were completed by third party independent contractors. Quality assurance and quality control measures have been in place on an annual basis since 2011 with full data audits of the NovaGold era assay database including retaining independent consultant Caroline Vallat, P.Geo. of GeoSpark Consulting Inc. (“GeoSpark”) to: 1) re-load 100% of the historical assay certificates, 2) conduct a QA/QC review of paired historical assays and NovaGold era re-assays; 3) monitor an independent check assay program for the 2004 to 2008 and 2011-2019 drill campaigns; and 4) generate QA/QC reports for the NovaGold era 2004 to 2008 and NovaCopper/Trilogy era 2011, 2015, 2016, 2017 and 2019 drill campaigns. BDRC reviewed the QA/QC dataset and reports and found the sample insertion rate and the timeliness of results analysis met or exceeded industry best practices. The QA/QC results indicate that the assay results collected by Trilogy, and previously by NovaGold and NovaCopper, are reliable and suitable for use in the Arctic FS. Mineral Processing and Metallurgical Testing Since 1970, metallurgical testwork has been conducted to evaluate the ability of the Arctic deposit to produce copper, lead and zinc concentrates. In-general, the samples tested produced similar metallurgical performances and the Arctic Project has seen the development of a robust metal recovery process to support the current operational plans. Work 40 Table of Contents conducted included mineralogy and flotation testing, locked cycle tests, comminution tests, copper/lead separation testwork, talc optimization testwork, and thickening and filtration testing. Testwork can be broken into three key time periods: 1. Historical testwork completed prior to 2012, primarily by Kennecott Research Center in Utah, and Lakefield Research Ltd., Lakefield, Ontario; 2. Preliminary Trilogy test work conducted at SGS Mineral Services, Vancouver (“SGS Vancouver”), in 2012 to 2015; and 3. Detailed Trilogy test work conducted at ALS Metallurgy in Kamloops, BC (“ALS Metallurgy”) in 2015 to 2019. In 2012, SGS Vancouver conducted a metallurgical test program to further study metallurgical responses of the samples produced from Zones 1, 2, 3, and 5 of the Arctic deposit. The flotation test procedures used talc pre-flotation, conventional copper-lead bulk flotation and zinc flotation, followed by copper and lead separation. In general, the 2012-2015 test results indicated that the samples responded well to the flowsheet tested. The average results of the locked cycle tests (without copper and lead separation) were as follows: ● The copper recoveries to the bulk copper-lead concentrates ranged from 89 to 93% excluding the Zone 1 & 2 composite which produced a copper recovery of approximately 84%; the copper grades of the bulk concentrates were 24 to 28%. ● Approximately 92 to 94% of the lead was recovered to the bulk copper-lead concentrates containing 9 to 13% lead. ● The zinc recovery was 84.2% from Composite Zone 1 & 2, 93.0% from Composite Zone 3 and 90.5% from Composite Zone 5. On average, the zinc grades of the concentrates produced were higher than 55%, excluding the concentrate generated from Composite Zone 1 & 2, which contained only 44.5% zinc. ● Gold and silver were predominantly recovered into the bulk copper-lead concentrates. Gold recoveries to this concentrate ranged from 65 to 80%, and silver recoveries ranged from 80 to 86%. Using an open circuit procedure, the copper and lead separation tests on the bulk copper–lead concentrate produced from the locked cycle tests generated reasonable copper and lead separation. The copper concentrates produced contained approximately 28 to 31% copper, while the grades of the lead concentrates were in the range of 41% to 67% lead. In this testwork program, it appeared that most of the gold reported to the copper concentrate and on average the silver was equally recovered into the copper and lead concentrates. Subsequent testwork to better define the copper and lead separation process was conducted in 2017, including a more detailed evaluation of the precious metal deportment in the copper and lead separation process. Grindability testing was completed during both the SGS Vancouver and ALS Metallurgy testwork programs to support the design and economics of efficient grinding of the Arctic materials. SAG mill test results included a single JKTech drop-weight test and 19 SAG media competency tests using variability samples. Test results show the material is amenable to SAG milling and is relatively soft, with a reported breakage (axb) average value of 189.7. Bond ball mill work index (BWi) tests were completed on 44 samples and values ranged from 5.4 to 13.1 kWhr/t with an average BWi of 8.82 kWhr/t. Abrasion index (Ai) tests were completed on five samples and values fluctuated from 0.017 to 0.072 g for the measured samples. The data indicate that the samples are neither resistant nor abrasive to ball mill grinding. The materials are considered to be soft or very soft in terms of grinding requirements. The grinding testwork was used to support detailed grinding circuit design. In 2017, ALS Metallurgy conducted detailed copper and lead separation flotation testwork using a bulk sample of copper–lead concentrate produced from the operation of a pilot plant. This testwork confirmed high lead recoveries in locked 41 Table of Contents cycle testing of the copper–lead separation process and confirmed precious metal recoveries into the representative copper and lead concentrates. This testwork indicated a clear tendency of the gold values to follow the lead concentrate, giving it a significant gold grade and value. Detailed mineralogical analysis showed that a majority of gold values were occurring as liberated fine-grained gold particles. The conclusions of testwork conducted both in 2012 and 2017 indicate that the Arctic materials are well-suited to the production of high-quality copper and zinc concentrates using flotation techniques which are industry standard. Copper and zinc recovery data were reported in the range of 88 to 92%, which reflected the high-grade nature of the deposit as well as the coarse-grained nature of these minerals. Grade variations within the deposit will be observed as indicated by the grade variations observed in variability samples, however mill feed variability is expected to be limited and readily manageable with good plant operational practices. Lead concentrates have the potential to be of good quality and can also be impacted by zones of very high talc. Considerable care will be required to ensure maximum talc recovery to remove talc, which has the potential to dilute lead concentrate grades. The lead concentrate is also shown to be rich in precious metals, which has some advantages in terms of marketability of this material. An overall metallurgical balance for the Arctic Project is summarized in Table 2. The projected metallurgical recoveries are based on an expected average recovery over the life-of-mine (LOM), and results of metallurgical testwork conducted in 2012 and 2017–2019. Table 2 - Summary of Overall Metal Recovery – Arctic Project ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Concentrate Grade ​ Metal Recoveries ​ ​ ​ Mass ​ ​ Cu ​ ​ Pb ​ ​ Zn ​ ​ Au ​ ​ Ag ​ ​ Cu ​ ​ Pb ​ ​ Zn ​ ​ Au ​ ​ Ag Process stream ​ ​ % ​ ​ % ​ ​ % ​ ​ % ​ ​ g/t ​ ​ g/t ​ ​ % ​ ​ % ​ ​ % ​ ​ % ​ ​ % Process Feed ​ 100.0 ​ 2.24 ​ 0.54 ​ 3.12 ​ 0.47 ​ 34.69 ​ — ​ — ​ — ​ — ​ — ​ Copper Conc ​ 6.65 ​ 30.3 ​ 0.66 ​ 1.6 ​ 0.76 ​ 138 ​ 89.9 ​ 8.1 ​ 3.4 ​ 10.9 ​ 26.4 ​ Lead Conc ​ 0.78 ​ 6.9 ​ 55.0 ​ 1.8 ​ 37.3 ​ 2,806 ​ 2.4 ​ 79.0 ​ 0.4 ​ 62.1 ​ 63.1 ​ Zinc Conc ​ 4.78 ​ 1.3 ​ 0.25 ​ 59.2 ​ 0.53 ​ 24.5 ​ 2.7 ​ 2.2 ​ 90.6 ​ 5.4 ​ 3.4 ​ Process Tailings ​ 87.8 ​ 0.13 ​ 0.07 ​ 0.20 ​ 0.12 ​ 2.81 ​ 4.95 ​ 10.7 ​ 5.56 ​ 21.6 ​ 7.11 ​ ​ Ancillary testwork was completed by third party consultants on representative concentrate samples, to provide thickening and filtration data for the various concentrates. Settling and filtration rates were observed to be typical for sulphide concentrates and moisture contents in final filter cakes were observed to be lower than expected. Metallurgical testwork was completed to provide representative tailings samples for use in detailed solids settling and compaction testwork to provide data for tailings design studies. A detailed study of water treatment chemistry was undertaken to evaluate and confirm the option of destroying cyanide contained in solutions from the proposed copper–lead separation process. The use of an SO2/air process in a small-scale pilot plant demonstrated removal of 99% of the contained cyanide and supported the concept of maintaining low cyanide concentrations within the proposed tailings pond solutions. Mineral Resource and Mineral Reserve Estimates Mineral Resource Estimate Mineral resource estimates are estimated from a 3D block model based on geostatistical applications using commercial mine planning software (MineSight v11.60-2). The block model has a nominal block size measuring 10 x 10 x 5 m and uses data derived from 152 drill holes in the vicinity of the Arctic deposit. The resource estimate was generated using drill hole sample assay results and the interpretation of a geological model which relates to the spatial distribution of copper, lead, zinc, gold and silver. Interpolation characteristics were defined based on the geology, drill hole spacing, and geostatistical analysis of the data. The effects of potentially anomalous high-grade sample data, composited to two meter intervals, are controlled by limiting the distance of influence during block grade interpolation. The grade models 42 Table of Contents have been validated using a combination of visual and statistical methods. The resources were classified according to their proximity to the sample data locations and are reported using the 2014 CIM Definition Standards. Model blocks estimated by three or more drill holes spaced at a maximum distance of 100 m are included in the Indicated category. Inferred blocks are within a maximum distance of 150 m from a drill hole. The estimate of Indicated and Inferred Mineral Resources is constrained within a conceptual pit shell derived using the projected technical and economic parameters in Table 3. Table 3 - Parameters Used to Generate a Resource-Limiting Pit Shell ​ ​ ​ Optimization Parameters Open Pit Mining Cost ​ US$3/t Milling + General and Administrative (G&A) Costs US$35/t Pit Slope 43 degrees Copper Price US$3.00/lb Lead Price US$0.90/lb Zinc Price US$1.00/lb Gold Price US$1,300/oz Silver Price US$18/oz Metallurgical Recovery: Copper 92% Lead 77% Zinc 88% Gold 63% Silver 56% ​ Note: no adjustments for mining recovery or dilution. The pit shell was generated about copper equivalent (CuEq) grades that incorporate contributions of the five different metals present in the deposit. The formula used to calculate copper equivalent grades is: CuEq%= (Cu% x 0.92) + (Zn% x 0.290) + (Pb% x 0.231) + (Au g/t x 0.398) + (Ag g/t x 0.005) The Mineral Resource estimate is listed in Table 4. Mineral Resources are reported inclusive of those Mineral Resources that were converted to Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Table 4 - Mineral Resource Estimate for the Arctic Deposit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Grade: ​ ​ Contained metal: Class M tonnes Cu % Pb% Zn% Au g/t Ag g/t Cu Mlbs Pb Mlbs Zn Mlbs Au koz Ag Moz Indicated ​ ​ 36.0 ​ ​ 3.07 ​ ​ 0.73 ​ ​ 4.23 ​ ​ 0.63 ​ ​ 47.6 ​ ​ 2,441 ​ ​ 581 ​ ​ 3,356 ​ ​ 728 ​ ​ 55 Inferred ​ 3.5 ​ 1.71 ​ 0.60 ​ 2.72 ​ 0.36 ​ 28.7 ​ 131 ​ 47 ​ 210 ​ 40 ​ 3 ​ ​ Notes: (1) The Qualified Persons for the estimate are employees of SIM and BDRC. The estimate is reported using the 2014 CIM Definition Standards. The effective date of the Mineral Resource estimate is April 25, 2017. The results of the 2019 drilling supports the current estimate of mineral resources and the inclusion of these nine new drill holes would have no material impact on the estimate of mineral resources for the Arctic Project. (2) Mineral Resources stated are contained within a conceptual pit shell developed using metal prices of US$3.00/lb Cu, US$0.90/lb Pb, US$1.00/lb Zn, US$1,300/oz Au and US$18/oz Ag and metallurgical recoveries of 92% Cu, 43 Table of Contents 77% Pb, 88% Zn, 63% Au and 56% Ag and operating costs of US$3/t mining and US$35/t process and general and administrative costs. The assumed average pit slope angle is 43º. (3) The base case cut-off grade is 0.5% copper equivalent: CuEq = (Cu% x 0.92) + (Zn% x 0.290) + (Pb% x 0.231) + (Au g/t x 0.398) + (Ag g/t x 0.005). (4) The Mineral Resource estimate is reported on a 100% basis without adjustments for metallurgical recoveries. Trilogy holds 50% of Ambler Metals. (5) The Mineral Resource estimate is reported inclusive of those Mineral Resources that were converted to Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. An inferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource and must not be converted to a mineral reserve. Mineral Resources have been rounded. Factors that may affect the Mineral Resource estimates include: ● Metal price and exchange rate assumptions. ● Changes to the assumptions used to generate the CuEq cut-off grade. ● Changes in local interpretations of mineralization geometry and continuity of mineralized zones. ● Changes to geological and mineralization shapes, and geological and grade continuity assumptions. ● Density and domain assignments. ● Changes to geotechnical, mining and metallurgical recovery assumptions. ● Change to the input and design parameter assumptions that pertain to the conceptual pit constraining the estimates. ● Assumptions as to concentrate marketability, payability and penalty terms. ● Assumptions as to the continued ability to access the site, retain mineral and obtain surface rights titles, obtain environment and other regulatory permits, and maintain the social license to operate. ● Assumptions as to future site access. There are no known factors related to environmental, permitting, legal, title, taxation, socioeconomic, marketing, or political issues which could materially affect the Mineral Resource estimate that are not discussed in the 2020 Arctic Report. Mineral Reserve Estimates Mineral Reserves were classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014). Only Mineral Resources that were classified as Measured and Indicated were given economic attributes in the mine design and when demonstrating economic viability. Mineral Reserves for the Arctic deposit incorporate appropriate mining dilution and mining recovery estimations for the open pit mining method. 44 Table of Contents Table 5 – Optimization Inputs ​ ​ ​ ​ ​ ​ ​ ​ Parameter ​ Unit ​ Value Metal Prices ​ ​ ​ Copper ​ ​ $/lb ​ 3.00 ​ Lead ​ ​ $/lb ​ 1.00 ​ Zinc ​ ​ $/lb ​ 1.10 ​ Gold ​ ​ $/oz ​ 1,300.00 ​ Silver ​ ​ $/oz ​ 18.00 ​ Discount Rate ​ ​ % ​ ​ 8 ​ Slope Angles ​ ​ ​ ​ Sector 1 (2L-E) ​ ​ degrees ​ 26 ​ Sector 2 (2L-W) ​ ​ degrees ​ 40 ​ Sector 3 (2U) ​ ​ degrees ​ 42 ​ Sector 4 (3) ​ ​ degrees ​ 30 ​ Sector 5 (4L) ​ ​ degrees ​ 38 ​ Sector 6 (4U) ​ ​ degrees ​ 43 ​ Dilution ​ ​ % ​ ​ Estimated in a block-by-block basis ​ Mine Losses ​ ​ % ​ ​ Taken into account by block ​ Mining Cost ​ ​ ​ ​ Base Elevation ​ ​ m ​ 730 ​ Base Cost ​ ​ $/t ​ 2.78 ​ Incremental Mining Cost ​ ​ ​ ​ Uphill ​ ​ $/t/5m ​ 0.020 ​ Downhill ​ ​ $/t/5m ​ 0.015 ​ Process Costs ​ ​ ​ ​ Operating Cost ​ ​ $/t milled ​ 15.09 ​ G&A ​ ​ $/t milled ​ 6.55 ​ Process Sustaining Capital ​ ​ $/t milled ​ 1.53 ​ Road Toll Cost ​ ​ $/t milled ​ 4.70 ​ Closure ​ ​ $/t milled ​ 1.52 ​ Processing Rate ​ ​ Kt/d ​ 10 ​ Process Recovery ​ ​ ​ ​ Copper ​ ​ % ​ ​ 91.2 ​ Lead ​ ​ % ​ ​ 80.0 ​ Zinc ​ ​ % ​ ​ 91.0 ​ Gold ​ ​ % ​ ​ 58.9 ​ Silver ​ ​ % ​ ​ 34.9 ​ Treatment & Refining Cost ​ ​ — ​ Variable by concentrate type/ metal ​ Royalties ​ ​ ​ ​ NANA Surface Use ​ ​ %NSR ​ 1.00 ​ NANA 1 ​ ​ %NP ​ 0.00 ​ ​ Note: (1) NANA may elect to either (a) exercise a non-transferrable back-in-right to acquire between 16% and 25% (as specified by NANA) of the Arctic Project; or (b) not exercise its back-in-right, and instead receive a net proceeds royalty equal to 15% of the net proceeds realized by Ambler Metals. Upon the direction of Trilogy, the Arctic FS 45 Table of Contents was evaluated on a 100% basis, of which Trilogy’s share is 50%, and does not include the impact on Ambler Metals of the NANA options, either purchasing an interest in the Arctic Project or receiving a royalty payment. Dilution was applied to the resource model in two steps: planned dilution and contact dilution. As the mining cost varies with depth individual blocks captured within the final pit design were tagged as either ore or waste by applying the parameters shown in Table 5. Using the partial block percentages within the final pit design the ore tonnage and average grades were calculated. The Mineral Reserve estimates are shown in Table 6. Only Probable Mineral Reserves have been classified. Table 6 – Mineral Reserve Statement ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tonnage ​ ​ Grades Class t x 1000 Cu (%) Zn (%) Pb (%) Au (g/t) Ag (g/t) Proven Mineral Reserves ​ — ​ — ​ — ​ — ​ — ​ — ​ Probable Mineral Reserves ​ 43,443 ​ 2.24 ​ 3.12 ​ 0.54 ​ 0.47 ​ 34.7 ​ Proven & Probable Mineral Reserves ​ 43,443 ​ 2.24 ​ 3.12 ​ 0.54 ​ 0.47 ​ 34.7 ​ ​ Notes: (1) The Qualified Person for the Mineral Reserves estimates is an employee of Wood. Mineral Reserves have an effective date of January 31, 2020. Mineral Reserves are reported on a 100% basis. Trilogy has a 50% interest in Ambler Metals. (2) Mineral Reserves estimated assuming open pit mining methods and include a combination of planned and contact dilution. Total dilution is expected to be between 30% and 35%. Pit slopes vary by sector and range from 26° to 43°. Cut-off grade is variable and ranges from US$32.83/t NSR to US$33.96/t NSR. Commodity prices used were US$3.00/lb Cu, US$1.00/lb Pb, US$1.10/lb Zn, US$1,300/oz Au and US$18/oz Ag. Fixed process recoveries were assumed to be 91.2% Cu, 80.0% Pb, 91.0% Zn, 58.9% Au and 80.0% Ag. Mining costs were estimated at US$2.78/t incremented at US$0.02/t/5 m and US$0.015/t/5 m below and above 730 m elevation respectively. Processing costs were estimated at US$29.39/t, which includes a process operating cost of US$15.09/t, general and administrative cost of US$6.55/t, sustaining capital cost of US$1.53/t. Closure cost of US$1.52/t, and a road toll cost of US$4.70/t. Treatment costs include US$80/t Cu concentrate, US$180/t Pb concentrate and US$200/t Zn concentrate. Refining costs were estimated at US$0.08/lb Cu, US$10/oz Au, US$0.80/oz Ag. Transport costs were included as US$270.38/t concentrate. There is a fixed royalty percentage of 1%. Risks that may affect the Mineral Reserve estimates include: commodity price and exchange rate assumptions; changes to the assumptions used to generate the NSR cut-off grades that constrains the estimate; changes in local interpretations of mineralization geometry and continuity of mineralized zones; changes to geological and mineralization shapes, and geological and grade continuity assumptions; density and domain assignments; changes to geotechnical and hydrological assumptions, changes to mining and metallurgical recovery assumptions; changes to the input and design parameter assumptions that pertain to the conceptual pit constraining the estimates; assumptions as to concentrate marketability, payability and penalty terms; assumptions as to the continued ability to access the site, retain mineral and obtain surface rights titles, obtain environment and other regulatory permits, and maintain the social license to operate. There is a risk to the estimate if the Ambler Mining District Industrial Access Project road is not constructed as envisaged, or in the time frame envisaged, or that the toll charges assumed in the 2020 Arctic Report are not the final charges levied. Other risks include: proper management of groundwater will be important to maintaining pit slope stability; the east wall is highly sensitive to several geotechnical parameters, and talc horizons that may not have been included in the geological model might also affect its stability; the presence of talc layers in the rock could affect recoveries in the process plant and therefore could be a risk to the Mineral Reserves. 46 Table of Contents Mining Operations The Arctic Project is designed as a conventional truck–shovel operation assuming 144 t trucks, and 15 m 3 shovels. The pit design includes three nested phases to balance stripping requirements while satisfying the concentrator requirements. The design parameters include a ramp width of 28.5 m, maximum road grades of 10%, bench height of 5 m, targeted mining width of between 70 and 100 m, berm interval variable by sector, variable slope angles by sector and a minimum mining width of 30 m. The smoothed final pit design contains approximately 43.4 Mt of ore and 298.3 Mt of waste for a resulting stripping ratio of 6.9:1. Within the 43.4 Mt of ore, the average grades are forecast to be 2.24% Cu, 3.12% Zn, 0.54% Pb, 0.47 g/t Au and 34.7 g/t Ag. The scheduling constraints set the maximum mining capacity at 36 Mt/a and the maximum process capacity at 10 kt/d. The production schedule results in a LOM of 12 years. The mine will require three years of pre-production before the start of operations in the processing plant. Processing and Recovery Operations The 10,000 t/d process plant design is conventional for the industry and will operate two 12-hour shifts per day, 365 d/a with an overall plant availability of 92%. The process plant will produce three concentrates: 1) copper concentrate, 2) zinc concentrate, and 3) lead concentrate. Gold and silver are expected to be payable at a smelter; silver is expected to be payable in the copper and lead concentrates, with gold expected to be payable in the lead concentrate only. There are several deleterious elements reporting to the concentrates at levels which would incur penalties; however, there are no special processing provisions required to make a readily saleable concentrate. The mill feed will be hauled from the open pit to a primary crushing facility where the material will be crushed by a jaw crusher to a particle size of 80% passing 80 mm. The crushed material will be ground by two stages of grinding, consisting of one SAG mill and one ball mill in closed circuit with hydrocyclones (SAB circuit). The hydrocyclone overflow with a grind size of approximately 80% passing 70 μm will first undergo talc pre-flotation, and then be processed by conventional bulk flotation (to recover copper, lead, and associated gold and silver), followed by zinc flotation. The bulk rougher concentrate will be cleaned and followed by copper and lead separation to produce a lead concentrate and a copper concentrate. The final tailings from the zinc flotation circuit will be pumped to a TMF. Copper, lead, and zinc concentrates will be thickened and pressure-filtered before being transported by truck to a port and shipped to smelters. Based on the mine plan developed for the Arctic FS and metallurgical testwork results, the LOM average metal recoveries and concentrate grades will be: ● Copper concentrate: ● Recovery: 89.9% copper; 10.9% gold; 26.4% silver ● Copper grade: 30.3% ● Lead concentrate: ● Recovery: 79.0% lead; 62.1% gold; 63.1% silver ● Lead grade: 55.0% 47 Table of Contents ● Zinc concentrate: ● Recovery: 90.6% zinc ● Zinc grade: 59.2% The average annual dry concentrate production is estimated as: ● Copper concentrate: 241,024 t/a ● Lead concentrate: 28,234 t/a ● Zinc concentrate 173,093 t/a The recovery plan includes provision for reagents, and water and power requirements Infrastructure, Permitting and Compliance Activities Infrastructure The Arctic Project site is a remote, greenfields site that is remote from existing infrastructure. Infrastructure that will be required for the mining and processing operations will include: ● Open pit mine ● Stockpiles and WRF ● Truck workshop, truck wash, mine offices, mine dry facility and warehouse ● Administration building ● Mill dry facility ● Plant workshop and warehouse ● Primary crushing building ● Fine ore stockpile building ● Process plant and laboratory ● Concentrate loadout building ● Reagent storage and handling building ● Raw water supply building ● Tailings management facility ● Surface water diversion and collection channels, culverts, and containment structures ● WRCP ● WTPs. 48 Table of Contents Access The Arctic Project site will be accessed through a combination of State of Alaska-owned highways (existing), an Alaska Industrial Development and Export Authority-owned private road (proposed) and Trilogy-owned access roads (proposed). The AMDIAP road is proposed by AIDEA to connect the Ambler mining district to the Dalton Highway. The AMDIAP road expected to be permitted as a private road with restricted access for industrial use. To connect the Arctic Project site and the existing exploration camp to the proposed AMDIAP road, a 30.7 km access road (the Arctic access road) will need to be built. The State of Alaska-owned, public Dahl Creek airport will require upgrades to support the planned regular transportation of crews to and from Fairbanks. The cost of these upgrades has been included in the capital cost estimate. Power Power generation will be by five diesel generators, producing a supply voltage of 13.8 kV. The total connected load will be 27.1 MW with a normal running load of 16.0 MW. Diesel will be supplied via existing fuel supply networks in the region and shipped along the AMDIAP road. Accommodation The Arctic Project will require three different self-contained camps, equipped with their own power and heat generation capabilities, water treatment plant, sewage treatment plant, and garbage incinerator. The existing 90-person exploration camp will be used to start the construction of the Arctic access road. A 185-person construction camp will be constructed at the intersection of the AMDIAP road and Arctic access road and will be decommissioned once construction is complete. The permanent camp will be constructed along the Arctic access road, closer to the planned processing facility. The 400-person permanent camp will be constructed ahead of operations to support the peak accommodation requirements during construction. Waste Rock Facility A large WRF will be developed north of the Arctic pit in the upper part of the Subarctic Creek valley. The WRF is be designed to store waste rock as well as provide a buttress for the tailings containment in the adjacent footprint. The total volume of waste rock is expected to be 146 Mm 3 (298 Mt); however, there is potential for expanded volume in the waste if placement density is <2.0 t/m 3 . The WRF will have a final height of 280 m to an elevation of 930 masl and is planned to be constructed in lifts of either 5, 10 or 20 m height with catch benches every 20 m to achieve an overall slope angle of 2.7H:1V. Most of the waste rock is anticipated to be potentially acid-generating and there will be no separation of waste based on acid generation potential. Rather, seepage from the WRF will be collected and treated. Overburden Stockpiles There will also be two small overburden stockpiles to store the stripped topsoil and overburden from the TMF footprint. The topsoil stockpile will be placed between the haul roads with capacity to store up to 325,000 m 3 of material while the overburden stockpile will be located below the lower haul road between the pit and the mill site with capacity to store up to 2,200,000 m 3 . Tailings Management Facility The TMF will be located at the headwaters of Subarctic Creek, in the upper-most portion of the creek valley. The 58.6 ha footprint of the TMF will be fully lined with an impermeable liner. Tailings containment will be provided by the natural topography on the valley sides and an engineered cross valley dam that will be buttressed by the WRF constructed immediately downstream of the TMF. A starter dam will be constructed to elevation 830 m. Three subsequent raises will 49 Table of Contents bring the final dam crest elevation to 890 m, which is 40 m lower than the final elevation of the WRF. The TMF is designed to store approximately 34.5 Mm 3 (37.8 Mt) of tailings plus 4.5 Mm 3 of water produced over the 12-year mine life and still provide capacity for the probable maximum flood with 2.5 m of freeboard. Water Management The proposed mine development is located in the valley of Subarctic Creek, a tributary to the Shungnak River. A surface water management system will be constructed to segregate contact and non-contact water. Non-contact water will be diverted around mine infrastructure to Subarctic Creek. A groundwater seepage monitoring and collection system will be located down gradient of the WRF and seepage collection pond. Contact water will be conveyed to treatment facilities prior to discharge to the receiving environment. A collection pond (WRCP) will be located directly below the toe of the WRF and will be used to collect seepage from the WRF, runoff from the WRF and haul road corridor area, and water pumped from the open pit. The Arctic Project water and load balance indicates that during operations excess water from the WRCP will need to be treated prior to discharge to the receiving environment. In the last year of operations and during closure, water from the dewatering of the TMF will also need to be treated prior to discharge to the receiving environment. Water Treatment Plants A HDS lime-based neutralization and precipitation process will be used to treat effluent from the WRCP. The HDS WTP will operate during the open water season from May through October, during operations through to post-closure. Treated effluent will be discharged via a 12 km pipeline to the Shungnak River. Long-term water treatment at the HDS WTP will be required in perpetuity. A Selenium water treatment plant (SeWTP) will treat excess water in the TMF that is predicted to have elevated selenium concentrations. The SeWTP is anticipated to commence treatment during operation in mine year 12. A portion of the treated effluent from the HDS WTP will be combined with excess water from the TMF, and treated for selenium such that the selenium water quality standard is met after a mixing zone in the Shungnak River. The SeWTP will cease once the TMF is dewatered (by approximately year 15 of closure). Studies are being conducted to evaluate alternative water management strategies and treatment methods that will not require a mixing zone in the Shugnak River. Market Studies Metal pricing was based on combination of two year trailing actual metal prices, market research and bank analyst forward price projections, prepared in July 2020 by Jim Vice of StoneHouse Consulting Inc., who was retained by Trilogy. The long-term consensus metal price assumptions selected for the Arctic FS were: ● Copper: $3.00/lb ● Zinc: $1.10/lb ● Lead: $1.00/lb ● Gold: $1,300/oz ● Silver: $18.00/oz Smelter terms were applied for the delivery of copper, zinc and lead concentrate. It was assumed that delivery of all concentrates would be to an East Asian smelter at currently available freight rates. Total transport costs for the concentrate are estimated at $270.98/dmt. 50 Table of Contents Environmental, Permitting, Social and Closure Considerations Environmental Considerations The Arctic Project area includes the Ambler lowlands and Subarctic Creek within the Shungnak River drainage. A moderate amount of baseline environmental data collection has occurred in the area including surface and groundwater quality sampling, surface hydrology monitoring, wetlands mapping, aquatic life surveys, avian and mammal habitat surveys, cultural resource surveys, hydrogeology studies, meteorological monitoring, and ML/ARD studies. Permitting Considerations Trilogy undertakes its current mineral exploration activities at the Arctic deposit under State of Alaska and Northwest Arctic Borough (“NWAB”) permits. Trilogy is presently operating under a State of Alaska Miscellaneous Land Use Permit that expires at the end of 2022, and a NWAB Permit that expires also expires at the end of 2022. Both permits are renewable. Mine development permitting will be largely driven by the underlying land ownership; regulatory authorities vary depending on land ownership. The Arctic Project area includes patented mining claims (private land under separate ownership by Trilogy), State of Alaska land, and NANA land (private land). Because the Arctic Project is situated to a large extent on State land, it will be necessary to obtain a Plan of Operation Approval (which includes the Reclamation Plan and Closure Cost Estimate) from the Alaska Department of Natural Resources (“ADNR”). The Arctic Project will also require certificates to construct and then operate a dam(s) (tailings and water storage) from the ADNR (Dam Safety Unit) as well as water use and discharge authorizations, an upland mining lease and a mill site lease, as well as several minor permits including those that authorize access to construction material sites from ADNR. The Alaska Department of Environmental Conservation (“ADEC”) would authorize waste management under an integrated waste management permit, air emissions during construction and then operations under an air permit, and an Alaska Pollutant Discharge Elimination System permit for any wastewater discharges to surface waters, and a Multi-Sector General Permit for stormwater discharges. The ADEC would also be required to review the US Army Corps of Engineers (“USACE”) Section 404 permit to certify that it complies with Section 401 of the Clean Water Act (“CWA”). The Alaska Department of Fish and Game would have to authorize any culverts or bridges that are required to cross fish-bearing streams or other impacts to fish-bearing streams that result in the altering or affecting fish habitat. U.S. Army Corps of Engineers (“USACE”) would require a CWA Section 404 permit for dredging and filling activities in Waters of the United States including jurisdictional wetlands. The USACE Section 404 permitting action would require the USACE to comply with the Natural Environmental Policy Act (“NEPA”) and, for a project of this magnitude, the development of an Environmental Impact Statement is anticipated. The USACE would likely be the lead federal agency for the NEPA process. As part of the Section 404 permitting process, the Arctic Project will have to meet USACE wetlands guidelines to avoid, minimize and mitigate impacts to waters of the US including wetlands. The Arctic Project will also have to obtain approval for a Master Plan from the NWAB. In addition, actions will have to be taken to change the borough zoning for the Arctic Project area from Subsistence Conservation and General Conservation to Resource Development and transportation. The overall timeline required for permitting would be largely driven by the time required for the NEPA process, which is triggered by the submission of the Section 404 permit application to the USACE. The timeline includes the development and publication of a draft and final EIS and ends with a Record of Decision, and Section 404-permit issuance. In Alaska, the EIS and other State and Federal permitting processes are generally coordinated so that permitting and environmental review occurs in parallel. The NEPA process could require between two to three years to complete, and could potentially take longer. 51 Table of Contents Social and Community The Arctic Project is located approximately 40 km northeast of the villages of Shungnak and Kobuk, and 64 km east-northeast of the native village of Ambler. The population in these villages range from 151 in Kobuk (2010 Census) to 262 in Shungnak (2010 Census). Residents live a largely subsistence lifestyle with incomes supplemented by trapping, guiding, local development projects, government aid and other work in, and outside of, the villages. The Arctic Project has the potential to significantly improve work opportunities for village residents. Trilogy is working directly with the villages to employ residents in the ongoing exploration program as mechanics, geotechnicians, core cutters, administrative staff, camp-services staff, heavy equipment operators, drill helpers, and environmental technicians. Trilogy and NANA have established a Workforce Development Committee to assist with developing a local workforce. In addition, Trilogy has existing contracts with native-affiliated companies (such as NANA Management Services and KUNA Engineering Inc.) that are providing camp catering and environmental services for the Arctic Project, respectively. Local community concerns will also be formally recognized during the development of the Arctic Project EIS. Early in the EIS process, the lead federal permitting agency will hold scoping meetings in rural villages to hear and record the concerns of the local communities so that the more significant of these concerns can be addressed during the development of the EIS. In addition, the lead federal agency would have government-to-government consultations with the Tribal Councils in each of the villages, as part of the EIS process, to discuss the Arctic Project and hear Council concerns. Closure Planning Mine reclamation and closure are largely driven by State regulations that specify that a mine must be reclaimed concurrent with mining operations to the greatest extent possible and then closed in a way that leaves the site stable in terms of erosion and manages degradation of water quality from acid rock drainage or metal leaching on the site. A detailed Reclamation Plan and Closure Cost Estimate will be submitted to the State agencies for review and approval in the future, during the formal mine permitting process. Owing to the fact that the Arctic Project is likely to have facilities on a combination of private (patented mining claims and native land) and State land, it is likely that the Reclamation Plan will be submitted and approved as part of the plan of operations, which is approved by the ADNR. However, since the reclamation plan must meet regulations of both ADNR and the ADEC, both agencies will review and approve the Reclamation Plan and Closure Cost Estimate. In addition, private land owners must formally concur with the portion of the Reclamation Plan for their lands so that it is compatible with their intended post-mining land use. The estimate cost of closure is based on unit rates used by SRK on other closure projects in cold environments. The indirect costs were included as percentages of the estimated direct costs based on guidelines for Alaska (DOWL 2015). Long-term water treatment and maintenance of certain water management facilities were calculated separately, and a NPV is provided for the first 100 years, at a discount rate of 4.3%. Reclamation and closure costs were estimated to be $158.2 million, in discounted 2020 US dollars. Annual (undiscounted) costs associated with long-term closure activities and operation of the HDS WTP are estimated to be $5.1 million. 52 Table of Contents Capital and Operating Costs Capital Costs The capital cost estimate has an estimated accuracy of ±15% and uses quarter 4, 2019 US dollars as the base currency. The total estimated initial capital cost for the design, construction, installation, and commissioning of the Arctic Project is estimated to be $905.6 million. A summary of the estimated capital cost is shown in Table 7. Table 7 – Initial Capital Costs ​ ​ ​ ​ ​ ​ ​ ​ Cost Type Description US$M Direct ​ Mine ​ 280.1 ​ ​ ​ Crushing ​ 28.3 ​ ​ ​ Process ​ 116.6 ​ ​ ​ Tailings ​ 70.0 ​ ​ ​ On-Site Infrastructure ​ 109.3 ​ ​ ​ Off-Site Infrastructure ​ 53.7 ​ ​ ​ Direct Subtotal ​ 658.0 ​ Indirect ​ Indirects ​ 130.7 ​ ​ ​ Contingency ​ 94.6 ​ ​ ​ Owners Costs ​ 23.4 ​ ​ ​ Indirect Total ​ 248.7 ​ Project Total ​ ​ ​ 906.7 ​ ​ The total sustaining capital cost estimate is $113.8 million for the 12-year LOM which includes equipment, tailings and other items. Closure costs were estimated to be $205.4 million. These costs are summarized in Table 8. Table 8 – Sustaining Capital and Closure Costs ​ ​ ​ ​ ​ ​ ​ ​ Cost Type ​ Description ​ US$M Direct ​ ​ Mine ​ 15.1 ​ ​ ​ ​ Process ​ 1.3 ​ ​ ​ ​ Tailings ​ 25.1 ​ ​ ​ ​ On-Site Infrastructure ​ ​ 50.4 ​ Indirect ​ ​ Indirects ​ 13.8 ​ ​ ​ ​ Contingency ​ 8.0 ​ Total Sustaining Capital ​ ​ 113.8 ​ Closure Costs ​ 205.4 ​ ​ Operating Costs The operating cost estimates use US dollars as the base currency and have an accuracy of ±15%. An average operating cost was estimated for the Arctic Project based on the proposed mining schedule. These costs included mining, processing, G&A, surface services, and road toll costs. The average LOM operating cost for the Arctic Project is estimated to be $50.65/ t milled. The breakdown of costs in Table 9 is estimated based on the LOM average mill feed rate. All pre-production costs have been included in capital costs. 53 Table of Contents Table 9 – Operating Costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LOM Average Unit ​ ​ ​ ​ ​ ​ Operating Cost ​ ​ Percentage of Total ​ Description ($/ t milled) Annual Operating Costs ​ Mining* ​ ​ 18.48 ​ ​ 36% ​ Processing ​ ​ 18.31 ​ ​ 36% ​ G&A ​ 5.15 ​ 10% ​ Surface Operations ​ 0.68 ​ 1% ​ Road Toll ​ 8.04 ​ 16% ​ Total Operating Cost ​ 50.65 ​ 100% ​ ​ ​ ​ * Excludes pre-production costs ​ Economic Analysis The results of this economic analysis represent forward looking information. The results depend on the inputs that are subject to several known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those presented in this section. Information that is forward looking includes mineral reserve estimates, commodity prices, the proposed mine production plan, construction schedule, projected recovery rates, proposed capital and operating cost estimates, closure cost estimates, toll road cost estimates, and assumptions on geotechnical, environmental, permitting, royalties, and hydrogeological information. An economic analysis was undertaken on a 100% basis to determine the IRR, net present value and payback on initial investment of the Arctic Project. Trilogy holds 50% of Ambler Metals. The Arctic Project consists of a three-year pre-production construction period, followed by 12 years of production. Ausenco developed a pre-tax cash flow model for the Arctic Project and the NPV and IRR were calculated at the beginning of the construction period in Year -3. The pre-tax financial model incorporated the production schedule and smelter term assumptions to produce annual recovered payable metal, or gross revenue, in each concentrate stream by year. Off-site costs, including the applicable refining and treatment costs, penalties, concentrate transportation charges, marketing and representation fees, and royalties were then deducted from gross revenue to determine the NSR. The operating cash flow was then produced by deducting annual mining, processing, G&A, surface services, and road toll charges from the NSR. Initial and sustaining capital was deducted from the operating cash flow in the years they occur, to determine the net cash flow before taxes. Initial capital cost includes all estimated expenditures in the construction period, from Year -3 to Year -1 inclusive. First production occurs at the beginning of Year 1. Sustaining capital expenditure includes all capital expenditures purchased after first production, including mine closure and rehabilitation. The model includes an allocation of a 1% NSR attributable to NANA. The pre-tax financial results are: ● 30.8% IRR ● $1,550.9 million NPV at an 8% discount rate ● 2.4 year payback period, on the initial capital costs of $905.6 million ● Undiscounted pre-tax cashflow of $3,768.0 million over LOM 54 Table of Contents The following tax regimes were incorporated in the post-tax analysis: US Federal Income Tax, Alaska State Income Tax, and Alaska Mining License Tax. Taxes are calculated based on currently enacted United States and State of Alaska tax laws and regulations, including the US Federal enactment of the Tax Cuts & Jobs Act on December 22, 2017. At the base case metal prices used for this study, the total estimated taxes payable on the Arctic Project profits are $924.7 million over the 12-year mine life. The post-tax financial results are: ● 27.1% IRR ● $1,134.7 million NPV at an 8% discount rate ● 2.6 year payback period, on the initial capital costs of $905.6 million ● Undiscounted post-tax cashflow of $ 2,843.4 million over LOM Sensitivity Analysis Ausenco investigated the sensitivity of the Arctic Project’s pre-tax NPV, and IRR to several project variables, including metal prices (copper, zinc, lead, gold, silver), capital costs, and operating costs (onsite and offsite). The metal grade is not presented in these sensitivity graphs because the impacts of changes in the metal grade mirror the impact of changes in metal price. The Arctic Project’s pre-tax NPV at an 8% discount rate is most sensitive to changes in copper price, followed by zinc price, off-site operating costs, on-site operating costs, capital costs, silver price, gold price, and lead price. The Arctic Project’s pre-tax IRR is most sensitive to changes in copper price and capital cost, followed by zinc price and off-site operating costs, and in then decreasing order, on-site operating costs, silver price, gold price, and lead price Exploration, Development, and Production Constraints and Interfaces The Arctic Project will be an integrated development with several consultants contributing to the overall design process. Specialist contractors will most likely be engaged for specific packages, such as the Arctic access road, and the construction camps, generally on a “design and construct” basis. It is essential that these parties work together to ensure data being used is both current and meaningful. Data transfer between parties shall be strictly controlled and in accordance with Document Control protocols. The early design interfaces for the Arctic Project will include at least: ● Mine development ● Waste Rock placement and Tails Dam ● Project water management and treatment ● Arctic Access Road design and construction, in particular the pioneer road necessary to allow earliest possible access to the Mine pre-assembly construction site ● Pioneer, Construction and Permanent Camps. ​ 55 Table of Contents The Interface Management procedures will be developed to ensure services at the battery limits are clearly defined and understood by all parties affected. Key Project Milestones Key project milestones will be developed once the project is committed to construction and the required permits are in hand. The Mine requires nominally two years of pre-strip operations, tailings pond starter dam development and water accumulation before actual production mining operations can commence. For that pre-strip work to start, the Arctic access road from the AMDIAP intersection to the mine site will have to be constructed to at least a pioneer road condition that will allow the mine fleet and the support facilities to be delivered, built and made operational. Tailings pond construction must be to a height to allow natural collection of water in quantities that will allow plant operations to commence. Proven Technology The Arctic Project will utilize proven technology and equipment that can be built, operated and maintained under adverse weather conditions The Design Criteria, Technical Specifications and Data sheets shall reflect the location, the environmental and initial logistics constraints that may affect the procurement and construction effort. Engineering, Procurement and Construction Management Approach Two engineering, procurement and construction management (“EPCM”) strategies have been identified that are structured to account for the abnormally long pre-strip mining operation. The first option is the basis for the capital and operating cost estimate. Early Engineering Only with 2-Stage Procurement There is a need to establish the mine facilities and assemble the Mine Fleet in time to allow the pre-strip operation to start some two years before the Process Plant receives its first ore. This means that there will be a significant amount of detailed engineering requiring completion well in advance of the time required for conventional engineering, procurement and construction of just the process plant and supporting infrastructure. This has been assessed as requiring detailed engineering to start some four years before the process plant starts production. In particular, the pioneer access road design and contracts and civil design for the Mine Support facilities will be required early in the schedule. By default, the rest of the civil design would need to attach to that early works for simple plant layout and construction coordination purposes. For that to occur the plant layout will be required to be frozen a lot earlier than normal. That in turn is dependent on sizing and selection of the major process equipment items and the receipt of certified vendor data. Effectively, the detailed design phase will need to follow the conventional approach and run its course but started at a time that meets the early works schedule requirements. Everything other than the mine support facilities will be designed some two years in advance of when it is needed. With the early equipment order placement, the supply phase could become inordinately long, extending over three years in most cases, when in fact the equipment is not likely to be needed until the last eighteen months prior to plant start-up. 56 Table of Contents An unorthodox but proven option to this extended design, supply and construction schedule is to have the EPCM Contractor buy the major equipment in two steps: ● Step 1: Buy only the vendor certified engineering data to allow detailed engineering to continue to completion but hold the manufacturing functions until later in the overall schedule, effectively a delay of around twelve to fifteen months. ● Step 2: Based on agreed vendor manufacturing durations, apply a “late” release of the equipment for manufacture with deliveries effectively becoming a “Just-in Time” logistics operation. This strategy provides the following advantages: ● Engineering can start and continue to completion using critical certified vendor data without the need for an extended “standby” involvement. ● Procurement functions can work in parallel with the engineering group with no disconnect between the two disciplines. ● The Procurement team can generally disband early in the schedule with just key personnel retained to provide continuity of support. ● The expediting team can mobilize later in the schedule to drive manufacture and delivery in a concerted campaign. ● Equipment deliveries can be orchestrated to suit the conditions at the time with everything consolidated into a transit compound for coordinated shipping to site. ● Reduced cashflow demands. The disadvantages with this approach are: ● The vendors need to be clearly briefed as to what the system means to their manufacturing schedule. ● A payments formula needs to be in place to account for a delayed delivery strategy. ● Some vendors have difficulty in determining just what their actual engineering costs are. Early EPCM Leading to Plant Care and Maintenance Under this approach, the EPCM would work to conventional design and construction schedule, starting to suit the mine access requirements but following on to completion without interruption. That would bring the total process plant and supporting infrastructure to a mechanical completion condition nominally twelve to fifteen months before it is able to start work. The plant could not be commissioned through lack of ore and would have to be placed into care and maintenance mode until ore became available. This has an inherent advantage in that if the pre-strip operation was completed earlier than scheduled, and sufficient water is accumulated, the plant operations would be able to take advantage of the fact the plant was already mechanically complete. The care and maintenance requirements in that environment for that duration will require close assessment. Interpretations and Conclusions The Arctic deposit will be mined at an annual rate of 36 Mt/a, with an overall stripping ratio of 6.9:1. Ore will be processed by conventional methods to annually produce 241,024 tonnes of copper, 28,234 tonnes of lead, and 173,093 tonnes of 57 Table of Contents zinc, all in concentrates for provision to third party refiners. Waste and tailings materials will be stored in surface facilities, which will be closed and reclaimed at the end of the mine; contact water will be treated and discharged to the environment throughout the life of mine. Precious metals attendant with the concentrates will be largely payable. While there are expected to be several deleterious elements in the concentrates at levels that may incur penalties, there are no special processing requirements. Under the assumptions presented in the 2020 Arctic Report, the Arctic Project shows positive economics. The financial analysis excludes consideration of the NANA Agreement, whereby NANA has the right, following a construction decision, to elect to purchase a 16% to 25% direct interest in the Arctic Project or, alternatively, to receive a 15% Net Proceeds Royalty. The financial analysis excludes consideration of the new joint venture formed between South32 and Trilogy. The cost assumptions for the AMDIAP road are estimates provided by Trilogy. There is a risk to the capital and operating cost estimates, the financial analysis, and the Mineral Reserves if the toll road is not built in the time frame required for the Arctic Project, or if the toll charges are significantly different from what was assumed. In terms of project execution, the mine requires nominally two years of pre-strip operations, tailings pond starter dam development and water accumulation before actual production mining operations can commence. For that pre-strip work to start, the Arctic access road from the AMDIAP intersection to the mine site will have to be constructed to at least a pioneer road condition that will allow the mine fleet and the support facilities to be delivered, built and made operational. Recommendations A single-phase work program is recommended, which will include: additional drilling program to upgrade a portion of the indicated resource to measured resource; drill and blast study; geotechnical investigations and studies; further geohazards assessment; site specific seismic hazard assessment; updating of hydrogeological models and groundwater management plans; optimization of the plant and related service facilities and evaluation of the power supply; examination of water management, water treatment, WRF and TMF designs; baseline studies and environmental permitting activities; and additional metallurgical testwork. The budget for this work is estimated at about $7.0 million. Bornite Project, Ambler District, Alaska Bornite Project Except as otherwise stated, the scientific and technical information relating to the Bornite Project contained in this Form 10-K is derived from the technical report entitled “NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA” dated February 11, 2022, with an effective date of December 31, 2021, prepared by SIM Geological Inc., Bruce M. Davis and International Metallurgical & Environmental Inc. (the “2021 Bornite Report”). The information regarding the Bornite Project is based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the 2021 Bornite Report which has been filed with certain Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Bornite Project - Property Description and Location The property is located in the Ambler Mining District of the southern Brooks Range in the Northwest Artic Borough (“NWAB”) of Alaska. The property is located in Ambler River A-2 quadrangle, Kateel River Meridian T 19N, R 9E, sections 4, 5, 8 and 9. The Bornite Project is located 248 km east of the town of Kotzebue, 19 km north of the village of Kobuk, 275 km west of the Dalton Highway (an all-weather state maintained public road) at geographic coordinates N67.07° 58 Table of Contents latitude and W156.94° longitude (Universal Transverse Mercator North American Datum 83, Zone 4W coordinates 7440449N, 589811E). At the time of the formation of Ambler Metals, Trilogy transferred its Alaskan assets, including the Bornite Project, to the newly formed joint venture. The mineral resource estimates with respect to the Bornite Project are reported on a 100% basis, of which Trilogy’s share is 50%. Bornite Project - Accessibility, Climate, Local Resources, Infrastructure, and Physiography Primary access to the Bornite Project is by air, using both fixed wing aircraft and helicopters. There are four well maintained, approximately 1,500 m-long gravel airstrips located near the property, capable of accommodating charter fixed wing aircraft. These airstrips are located 40 km west at Ambler, 23 km southwest at Shungnak, 19 km south at Kobuk, and 15 km south at Dahl Creek. There is daily commercial air service from Kotzebue to the village of Kobuk, the closest community to the property. During the summer months, the Dahl Creek airstrip is suitable for larger aircraft, such as C-130 and DC-6. There is also a 700 m airstrip located at the Bornite Camp. The airstrip at Bornite is suited to smaller aircraft, which support the Bornite Camp with personnel and supplies. There is no direct water access to the property. During spring runoff, river access is possible by barge from Kotzebue Sound to Ambler, Shungnak, and Kobuk via the Kobuk River. A two-lane, two-wheel drive gravel road links the Bornite Project’s main camp to the 1,525 m Dahl Creek airstrip and village of Kobuk. The climate in the region is typical of a sub-arctic environment. Exploration is generally conducted from late May until late September. Weather conditions on the Bornite Project can vary significantly from year to year and can change suddenly. During the summer exploration season, average maximum temperatures range from 10°C to 20°C, while average lows range from -2°C to 7°C. By early October, unpredictable weather limits safe helicopter travel to the property. During winter months, the property can be accessed by snow machine, track vehicle, or fixed-wing aircraft. Winter temperatures are routinely below -25°C and can exceed -50°C. Annual precipitation in the region averages 395 mm with the most rainfall occurring from June through September, and the most snowfall occurring from November through January. Drilling and mapping programs are seasonal and have been supported out of the main Bornite Camp. The main Bornite Camp facilities are located on Ruby Creek on the northern edge of the Cosmos Hills. The camp provides office space and accommodations for the geologists, drillers, pilots, and support staff. There were four two-person cabins installed by NANA prior to our tenure. The 85-person capacity Bornite Camp consists of 35 structures most of which are metal-framed, insulated tents that house multi-occupancy sleeping accommodations, kitchen facilities, dining facilities, medical services, showers, washrooms, laundry, administrative offices, and a recreation tent. Early 1960s-era legacy structures constructed by Kennecott to support Bornite Shaft sinking are used for equipment maintenance, storage, and sleeping cabins. Core is logged in two, metal-clad buildings: one from the early 1970s and one 30 m x 9 m structure that was built in 2011. Electricity is generated at site by one 275 kW primary and one 300 kW backup diesel-powered generator. Potable water is sourced from a permitted well. Solid waste disposal is accomplished by a combination of diesel-fired incineration and permitted landfill placement. The primary camp’s domestic wastewater is treated in a packaged bioreactor-style treatment plant before it is discharged. Wastewater from a small portion of the camp is treated in a conventional septic system. The Bornite Project is located on Ruby Creek on the northern edge of the Cosmos Hills. The Cosmos Hills are part of the southern flank of the Brooks Range in Northwest Alaska. Topography in the area is moderately rugged. Maximum relief in the Cosmos Hills is approximately 1,000 masl with an average of 600 masl. Talus covers the upper portions of the hills; glacial and fluvial sediments occupy valleys. The Kobuk Valley is located at the transition between boreal forest and Arctic tundra. Spruce, birch, and poplar are found in portions of the valley, with a ground cover of lichens (reindeer moss). Willow and alder thickets and isolated cottonwoods follow drainages, and alpine tundra is found at higher elevations. 59 Table of Contents Tussock tundra and low, heath-type vegetation covers most of the valley floor. Patches of permafrost exist on the property. Wildlife in the property area is typical of Arctic and Subarctic fauna. Larger animals include caribou, moose, Dall sheep, bears (grizzly and black), wolves, wolverines, coyotes, and foxes. Fish species include salmon, sheefish, arctic char, and arctic grayling. The Kobuk River, which briefly enters the Upper Kobuk Mineral Projects on its southwest corner, is a significant salmon spawning river. The caribou on the property belong to the Western Arctic herd that migrates twice a year – south in August, from their summer range north of the Brooks Range, and north in March from their winter range along the Buckland River. Bornite Project - History Kennecott and Bear Creek Mining Tenure Regional exploration began in the early 1900s when gold prospectors noted copper occurrences in the hills north of Kobuk, Alaska. In 1947, local prospector Rhinehart “Rhiny” Berg along with various partners traversing in the area located outcropping mineralization along Ruby Creek (Bornite) on the north side of the Cosmos Hills. They subsequently staked claims over the Ruby Creek showings and constructed an airstrip for access. In 1957, Bear Creek Mining Company (“BCMC”), Kennecott's exploration subsidiary, optioned the property from Berg. Exploration drilling in 1961 and 1962 culminated in the discovery of the “No.1 Ore Body” where drill hole RC-34 cut 20 m of 24% Cu (the “No.1 Ore Body” is a historical term used by BCMC that does not connote economic viability in the present context; it is convenient to continue to use the term to describe exploration work and historical mineral resource estimation in a specific area that was previously referred to as the Ruby Creek zone and is now referred to simply as the Ruby Zone). The discovery of the “No.1 Ore Body” led to the development of an exploration shaft in 1965 through 1966. The shaft, which reached a depth of 328 m, encountered a significant watercourse and was flooded near completion depth. The shaft was subsequently dewatered and an exploration drift was developed to provide access for sampling and mapping, and to accommodate underground drilling to further delineate mineralization. A total of 59 underground holes were drilled before the shaft was allowed to re-flood. The discovery of the Arctic Project in 1965 prompted a hiatus in exploration at Bornite, and only limited drilling occurred up until 1976. In the late 1990s, Kennecott resumed its evaluation of the Bornite deposit and the mineralization in the Cosmos Hills with an intensive soil, stream, and rock chip geochemical sampling program using a 32-element ICP analyses. Grid soil sampling yielded 765 samples. Ridge and spur sampling resulted in an additional 850 soil samples in the following year. Skeletonized core samples (85 samples) from key historical drill holes were also analyzed using 32 element ICP analytical methods. Geochemical sampling identified multiple areas of elevated copper and zinc in the Bornite region. Kennecott completed numerous geophysical surveys as an integral part of exploration throughout its tenure on the property. Various reports, notes, figures, and data files stored in Kennecott’s Salt Lake City exploration office indicated that geophysical work included, but was not limited to, the following: ● Airborne magnetic and EM surveys (fixed-wing INPUT) (1950s) ● Gravity, single point (“SP”), audio-frequency magnetotelluric (“AMT”), EM, borehole and surface IP/resistivity surveys (1960s) ● Gravity, airborne magnetic, and controlled-source audio-frequency (“CSAMT”) surveys (1990s) We have minimal information or documentation associated with these geophysical surveys conducted prior to the 1990s. Where data are available in these earlier surveys, the lack of details in data acquisition, coordinate systems, and data reduction procedures limit their usefulness. The only complete geophysical report that is available concerns down-hole IP/resistivity results. Most notable is the 1996 Bouguer gravity survey from the Bornite deposit into the Ambler Lowlands. The Bornite deposit itself is seen as a significant 3 milligal anomaly. Numerous 2 milligal to > 6 milligal anomalies occur under cover in the Ambler Lowlands and near the Aurora Mountain and Pardner Hill occurrences. In addition to the 60 Table of Contents geophysical surveys conducted by Kennecott, the ADNR completed an aeromagnetic survey of portions of the Ambler mining district in 1974-1975. Several studies have been undertaken reviewing the geology and geochemistry of the Bornite deposit. Most notable is Murray Hitzman’s PhD dissertation at Stanford University and Don Runnel’s PhD dissertation at Harvard University. Bernstein and Cox reported on mineralization of the “No. 1 Ore Body” in a 1986 paper in Economic Geology. In addition to the historical work, Ty Connor at the Colorado School of Mines recently completed a Master’s thesis which reported on the timing of alteration and mineralization at the Bornite deposit. Kennecott conducted two technical reviews of the groundwater conditions and a summary of the findings related to the flooding of the exploration shaft. In 1961, Kennecott collected 32 coarse reject samples from five drill holes to support preliminary metallurgical test work at Bornite. Samples targeted high-grade (> 10%) copper mineralization from the Upper Reef at the Ruby Zone. Bornite Project - Geological Setting and Mineralization The Bornite Project is located within the Arctic Alaska Terrane, a sequence of mostly Paleozoic continental margin rocks that make up the Brooks Range and North Slope of Alaska. It is within the Phyllite Belt geologic subdivision, which together with the higher-metamorphic grade Schist Belt, stretches almost the entire length of the southern Brooks Range and is considered to represent the hinterland of the Jura-Cretaceous Brookian orogeny. The southern margin of the Phyllite Belt is marked by mélange and low-angle faults associated with the Kobuk River fault zone, while the northern boundary is thought to be gradational with the higher-grade metamorphic rocks of the Schist Belt. The geology of the Bornite resource area is composed of alternating inervals of carbonate rocks (limestone and dolostone) and calcareous phyllite. Limestone transitions laterally into dolostone near zones of mineralization and is considered to be hydrothermally altered. Spatial relationships and petrographic work suggest that dolomitization is genetically related to early stages of the copper mineralizing system; however, recent re-logging has questioned this view. In 2015, Trilogy made an effort to improve the understanding of the distribution and nature of the various lithologic units and their context within a sedimentary depositional model. A new interpreation, based on lithogeochemical signatures of the various units along with their historical visual logging, concluded that stacked debris flows composed of basal non-argillaceous channelized breccias were overlain by upward fining upward sequence of increasingly argillaceous-rich breccias capped by high calcium (Ca) phyllites, confined laterally in channels between either massive or thin-bedded platform carbonates. Two mineralized stacked debrite sequences were named the Lower and Upper Reefs. The Upper Reef grades upward into argillaceous limestones instead of discrete high Ca phyllites indicating a waning of debris supply. Based on this interpretation, a series of individual debrites were identified and modeled. In contrast to the locally derived high-Ca phyllites of the debrite- dominated Bornite carbonate sequence, low calcium (Ca) phyllites are abundant in the allochthonous Anirak schist (quartz phyllite) and the The Beaver Creek phyllite that underlie and overlie the Bornite carbonate sequence, respectively. In addition to depositional lithostratigraphy, a crosscutting mineralized breccia called the “P-Breccia” has been identified in and around the South Reef deposit. Though poorly defined due to lack of drilling in the area, the P-Breccia zone—which contains excellent copper grade—lies at the apex of the Iron Mountain discontinuity. Although clearly post-deformational, it remains unclear whether the P-Breccia is a post-depositional structural, hydrothermal or solution-collapse breccia. A short lithostratigraphic project carried out during the 2021 field season updated the depositional environment of the Bornite succession; this resulted in significant differences when compared to the previously summarized interpretations. The Bornite succession is now understood to be a carbonate slope deposit characterized by (a) lime mudstone, exported to the slope from a contemporaneous shallow-marine carbonate factory, variably mixed with and interlayered with (b) “background” argillaceous sediment that is locally carbonaceous. Superimposed on these calcite-dominated “normal” 61 Table of Contents slope strata are locally impressive thicknesses of dolomudstone-clast conglomerate (formerly “breccia”). Slope limestone and siltstone-mudstone were originally centimetrically to decimetrically bedded, but are commonly ductilely deformed, producing the variably limey ‘phyllites’ that exhibit sub-mm scale foliation. In contrast, the dolostone-clast conglomerates and individual dolomudstone clasts responded brittlely to Brookian stress and show no significant shearing or plastic deformation. Instead, plastic deformation is largely restricted to the various phyllitic layers around the peripheries of the dolostone bodies. Structural fabrics observed on the property include rare bedding and two distinct metamorphic foliations. Bedding (S0) can be measured only rarely where phyllite and carbonate are interbedded and it is unclear to what extent it is transposed. The pervasive foliation (S1) is often mylonitic and exhibits both an imprinted stretching lineation and preferred “top” direction. It is easily measured in phyllites and is commonly reflected by colour banding and/or stylolamination (flaggy habit in outcrop) of the carbonates. Core logging shows that S1 is folded gently on the 10 m scale and locally tightly folded at the decimetre scale. S2 axial planar cleavage is locally developed in decimetre scale folds of S1. Both S1 and S2 foliations are considered to be Jurassic in age. Some limestone outcrops, in particular the “TBLS” on Aurora Mountain and the marbles at the base of Coral Hill, also exhibit a stretching lineation. Core-logging shows that S1 is folded gently on a 10 m scale and locally tightly folded at the decimetre scale forming a common S2 axial planar cleavage. S2 is folded gently on a 10 m scale forming an upright mesoscale S3 foliation. S1 and S3 foliations are thought to be Jura-Cretaceous in age. Structural mapping in 2021 recognized a well-developed stretching lineation (i.e., L-tectonite) in the carbonate-phyllite rocks, typically oriented shallowly towards the NNE or SSW. “Top” direction indicate movement to the S or SSW along the vector of the stretching lineation. Moreover, new mapping indicates that stiff Bornite rocks, in particular metric to hectametric dolostone bodies, have been boudinaged into 3-D ellipsoids. Slip is accommodated by phyllites., Additional mapping is required to determine whether such a tectonic style plays a role in the distribution of copper mineralization. Owing to their greater rigidity, dolostone bodies of secondary dolostone manifest strain differently: tan hydrothermal dolostone tends to be broken into centimetre- to decimetre-scale blocks, whereas grey (diagenetic?) dolostone may exhibit unusual, contorted forms, some resembling human fingers or swan necks, as evident in outcrop. Dolostone is rarely cut by plastically deformed zones and instead forms metric to hectametric lenses (“augens”) encased in plastically deformed calc-mylonite and calc-phyllite. This deformation, presumably a product of the Jura-Cretaceous Brookian orogeny, complicates sedimentological interpretations. Mineralization at Bornite forms tabular mineralized zones that coalesce into crudely stratabound bodies hosted in dolostone conglomerate/breccia. Two significant dolomitic horizons that host mineralization have been identified by drilling and include: 1) the Lower Reef, a substantial 100 m to 300 m thick dolomitized zone lying immediately above the basal quartz phyllite unit of the Anirak schist and 2) the Upper Reef, a 100 m to 150 m thick dolomite horizon that sits roughly 300 m higher in the section. The Lower Reef is separated from the Upper Reef by a zone of ductilely sheared phyllites up to 60 m thick. The Lower Reef dolostone outcrops along the southern margin of the Ruby Zone and is spatially extensive throughout the deposit area. It hosts a significant portion of the shallow mineral resources in the Ruby Zone as well as higher grade mineral resources down-dip and to the northeast in the South Reef area. The Upper Reef hosts relatively high-grade mineral resources to the north in the Ruby Zone. The Upper Reef appears to lie at an important NE-trending facies transition to the NW of the main drilled area and appears to be at least partially thrust over the Lower Reef stratigraphy to the southeast. Drill results from 2013 show dolomitization and copper mineralization in the Upper and Lower Reefs coalescing into a single unit along the northern limits of current exploration. The NE- trending Ruby Zone and South Reef areas also coalesce into a roughly 1,000 m wide zone of >200 m thick dolomite containing significant copper mineralization dipping north at roughly 5-10 degrees. The 2017 drill results show that the mineralized dolomite interval continues for at least another 700m down-dip to the northeast from mineralization in the Upper and Lower Reefs. 62 Table of Contents Bornite Project – Mineralization Copper mineralization at Bornite comprises chalcopyrite, bornite, and chalcocite distributed in stacked, roughly stratiform zones exploiting favourable lithologies (conglomerate/berccia) within the Bornite sequence. Mineralization occurs, in order of increasing grade, as disseminations, irregular and discontinuous stringer-style veining, breccia matrix replacement, and stratabound massive sulphides. The distribution of copper minerals is zoned around the bottom-centre of each zone of mineralization, with bornite-chalcocite-chalcopyrite at the core progressing outward to a fringe of chalcopyrite-pyrite. Additional volumetrically minor copper minerals include carrollite, digenite, tennantite-tetrahedrite, and covellite. Stringer pyrite and locally significant sphalerite occur above and around the copper zones and locally massive pyrite and sparse pyrrhotite are associated with siderite alteration below copper mineralization in the Lower Reef. Significant cobalt mineralization is found accompanying bornite-chalcocite mineralization. Cobalt often occurs with high-grade copper as carrollite (Co2CuS4) and as cobaltiferous rims on recrystallized pyrite grains. Preliminary geometallurgical work by Trilogy showed that cobalt occurs primarily as cobaltiferious pyrite (approximately 80% of he contained cobalt) and within other cobalt minerals such as carrollite, and cobaltite (CoAsS). Some appreciable silver values are also found at Bornite, particularly in association with bornite-rich mineralization in the South Reef area and Ruby Zones. Bornite Project – Exploration Exploration in and around the Bornite Project by Kennecott from 1957 to 1998 is summarized above. In addition to the extensive drilling completed during the more than 40-year tenure of Kennecott in the district, Kennecott completed widespread surface geochemical sampling, regional and property scale mapping, and numerous geophysical surveys employing a wide variety of techniques. The majority of this data has been acquired by us and forms the basis for renewed exploration that targets Bornite-style mineralization in the Bornite carbonate sequence. NovaGold as the precursor company to us began to actively pursue an agreement to explore the Bornite Project with NANA in 2005 resulting in an initial airborne geophysical survey in 2006. Negotiations on the consolidation and exploration of the entire Ambler district continued for the next several years culminating in the NANA Agreement in October 2011. With the NANA Agreement approaching completion, NovaGold initiated work in 2010 to begin to characterize the exploration potential and depositional controls by re-logging and re-analyzing select drill holes with a Niton portable x-ray fluorescence (“XRF”) to determine geochemical variability. In 2011, NovaGold began an initial drill program to verify the historical database and exploration potential and conducted additional geophysical surveys to provide better targeting tools for continued exploration in the district. In 2012, we expanded the IP geophysical coverage completing a major district-wide survey that targeted the prospective Bornite Carbonate sequence. Subsequent resource drilling between 2011 and 2013 based on the exploration targeting is discussed in the “ Bornite Project - Mineral Resource Estimates” section below. 2006 NovaGold In 2006, NovaGold contracted Fugro Airborne Surveys to complete a detailed helicopter DIGHEM (frequency-domain EM), magnetic and radiometric survey of the Cosmos Hills. The survey covered a rectangular block approximately 18 km by 49 km which totaled 2,852-line km. The survey was flown at 300 m line spacing with a line direction of N20E. The DIGHEM helicopter survey system produced detailed profile data of magnetics, EM responses and radiometrics (total count, uranium, thorium, and potassium) and was processed into maps of magnetics, discrete EM anomalies, EM apparent resistivity, and radiometric responses. 63 Table of Contents 2010 NovaGold In 2010, in anticipation of completing the NANA Agreement, NANA granted NovaGold permission to begin low level exploration at Bornite; this consisted of re-logging and re-analyzing select drill holes using a Niton portable XRF. In addition to the 2010 re-logging effort, NovaGold contracted a consulting geophysicist, Lou O'Connor, to compile a unified airborne magnetic map for the Ambler mining district from Kennecott, Alaska DNR, and NovaGold airborne geophysical surveys. 2011 NovaGold In 2011, NovaGold contracted Zonge International Inc. (“Zonge”) to conduct both dipole-dipole complex resistivity induced polarization (“CRIP”) and natural source audio-magnetotelluric (“NSAMT”) surveys over the northern end of Bornite to develop tools for additional exploration targeting under cover to the north. NSAMT data were acquired along two lines totaling 5.15 line-km; one line is oriented generally north-south through the centre of the survey area and the other being the southernmost east-west line in the survey area. CRIP data were acquired on five lines: four east-west lines and one north-south line, for a total coverage of 14.1 line-km and 79 collected CRIP stations. The initial objective of the survey was to investigate geological structures and the distribution of sulphides possibly associated with copper mineralization. Results from the paired surveys show that wide-spaced dipole-dipole resistivity is the most effective technique to directly target the mineralization package. Broad, low-resistivity anomalies reflecting pyrite haloes and mineralization appear to define the limits of the fluid package. Well-defined and often very strong chargeability anomalies are also present, but appear in part to be masked by phyllitic units which also have strong chargeability signatures. NSAMT shows similar resistivity features as the IP, but these are less well resolved. 2012 NovaCopper In light of the success of the 2011 geophysical program, we contracted Zonge to conduct a major district-wide dipole/dipole IP survey, a down-hole IP radial array survey in the South Reef area, and an extensive physical property characterization study of the various lithologies to better interpret the existing historical geophysical data. Zonge completed 48 line km of 200 m dipole/dipole IP during 2012, infilling and expanding on the 2011 survey, and stretching across the most prospective part of the outcropping permissive Bornite carbonate sequence. The results show a well-defined low resistivity area associated with mineralization and variable IP signatures attributed both to mineralization and the overlying Beaver Creek phyllite. Numerous target areas occur in the immediate Bornite area with lesser targets occurring in the Aurora Mountain and Pardner Hill areas and in the far east of the survey area. During the 2012 drill program at South Reef, a single drill hole was targeted on a low resistivity area approximately 500 m to 600 m southeast of the South Reef mineralization trend. Although the drill hole intersected some dolomite alteration in the appropriate stratigraphy, no significant sulphides were encountered. In addition to the extensive ground IP survey, Zonge also completed 9 km of down-hole radial IP using an electrode placed in drill hole RC12-0197 to further delineate the trend and potential in and around the South Reef. Extensive physical property data including resistivity, chargeability, specific gravity, and magnetic susceptibility were captured for use in modelling the existing ground IP and gravity surveys, and the airborne EM and magnetic surveys. In addition to geophysical focused exploration, a district wide geologic map was compiled integrating Kennecott’s 1970’s mapping of the Cosmos Hills with selective Trilogy mapping in 2012. 64 Table of Contents 2013 NovaCopper The emphasis of the 2013 program was to further validate and refine the 2012 geologic map of the Cosmos Hills. A deep penetrating soil and vegetation geochemical orientation survey was completed over the South Reef deposit, using various partial leaches and pH methods. The initial, approximately 1 km, test lines suggest a good response for several of the partial leaches of the soils but little response in the vegetative samples. Follow-up is warranted to the north of the deposit into the Ambler Lowlands. 2014 NovaCopper During 2014, exploration work was limited to a re-logging and re-sampling program of historical Kennecott drill core. 2015 NovaCopper As a follow-up to the 2013 field program, a deep penetrating soil and vegetation geochemical survey was extended north of the deposit into the Ambler Lowlands. Trilogy geologists completed a lithogeochemical desktop study and a comprehensive update to the 3D lithology model. 2017 Trilogy The 2017 field program extended the 2013 and 2015 deep penetrating geochemical (“DPG”) soil survey another 500m to the northeast. The 2013 soil line was extended 1,500m to the east to test over the covered projection of the Two Grey Hills carbonate section. The 3D lithology model was updated to incorporate the 2017 drill program results, which are described in Section 10, Trilogy also completed a close spaced ground gravity survey over a 2 km by 4km grid with 100 m station spacing over the resource area and extending northeast over the 2017 drill target area. The complete Bouguer anomaly residual plot (removes a strong decreasing to the northeast regional gradient) shows good correlation with the Lower Reef mineralization that outcrops on surface with the gravity high gradually decreasing down-dip to the northeast. As part of the overall gravity program, Mira Geosciences created a petrophysical model for the Bornite deposit that synthesized the expected gravity response on surface (forward model) for the 2017 gravity stations. This forward model matches very closely with the actual survey data over the deposit area, but diverges on the south end where the expected response of gravity low is actually a strong gravity high that may reflect shallow mineralization up-dip along the South Reef trend. Mira also completed a geologically constrained 3D inversion using the 2017 gravity data. Two areas of anomalously high densities (>2.9 g/cc) were identified. The first area extends up to 750m to the east-northeast of RC17-0239, which was one of the more successful holes in 2017 and is coincident with the Iron Mountain structure. The second anomaly is located just above the Anirak contact (Lower Reef) to the west of the 2017 target area and 700m to the north of the closest drill hole (RC-53), which is weakly mineralized along that horizon. This area falls along the northwest-southeast high grade thickness trend. 2018 Trilogy During the 2018 field season, Trilogy Metals carried out additional DPG and a 2D seismic survey at Bornite. In addition, geophysical and geochemical data from Bornite were studied using existing datasets. Soil sampling was completed on the westerly extension of the DPG lines on the northwestern portion of the Bornite deposit. DPG was used to assist with outlining the edges of the deposit as well as to corroborate gravity anomalies defined during the 2017 field season. A 2D seismic survey was completed by HiSeis (3D seismic imaging) in June 2018. This 2D acquisition program was designed to test whether seismic reflection was suitable for the Bornite deposit and to understand the logistics of any future 3D seismic survey over the project area. Two 6 km 2D seismic lines, a dip line and a strike line, were acquired with a total of 792 unique source locations to attempt to image hanging wall and footwall shears; other faults and shears; folding of stratigraphy; internal (within Bornite sequence) phyllite units; facies changes within the dolostones; and direct 65 Table of Contents detection of massive sulphide mineralization; and any alteration associated with mineralization. Acquisition of this 2D dataset used 500 g seismic charges as a means of producing seismic energy. All seismic vibrations were measured on a “fully active” line of 1,189 geophone receivers which provided up to 6 km of offset on either side of the source using the Aries I seismic acquisition system. Supporting rock property data were acquired from drill core stored in Fairbanks, Alaska. Mira Geosciences completed a 3D inversion model of the 100 m spaced ground gravity data that were collected over the Bornite deposit during the 2017 exploration season. Using geology to constrain the model, three areas of anomalously higher gravity were defined. Unfortunately, none of these intervals were properly tested in 2017 with two holes, those at Anomaly “B” and “C”, ending above the gravity anomalies. Two of the three identified anomalies from the 2017 inversion modelling changed in size and relative orientation with the updated geologic model. Anomaly B, which stretches to the northwest from hole RC17-0238 decreased in extent, likely the result of a thicker-than-previously-modelled Upper Reef carbonate section in RC17-0238. Anomaly C is much broader and less defined, indicating that it may be the result of underestimating the SG in the lithology model (incorrect interpretation). This anomaly remains untested with the failures of drill holes RC17-0242 and RC18-0245 and should be redrilled in the future. Anomaly A is relatively unchanged and remains coincident with the Iron Mountain structure. Holes RC18-0246, RC18-0249, and RC18-0250 tested the southwest edge of the anomaly where it joins the South Reef trend. Hole RC18-0250 suggests that mineralization wanes to the east, though this hole may have just missed mineralization controlled by the Iron Mountain structure. The northeast extent of this anomaly is still considered a viable exploration target. South32 completed a QA/QC review, lithogeochemical-alteration assessment, and a vectoring/targeting exercise on downhole geochemical data on the Bornite deposit. The purpose of this exercise was to use downhole analyses to assess the geology, alteration, and mineralogy of the deposit to vector towards mineralization. The Bornite sequence can be classified into three geochemical groups including: 1) very low immobiles; 2) low immobiles; and 3) higher immobiles. The latter was then subdivided into five groups based on Al, Cr, and V concentrations. The “very low” and “low immobile” groups are predominately limestones and dolomites (including breccias), whereas increasing Al in “higher immobiles” represent the increasingly argillaceous/micaceous units (phyllites). High Al samples in the lower Bornite sequence can be discriminated from those in the upper sequence based on high Ni:Cu ratios. In the South Reef area, lithogeochemistry supported Trilogy Metals’ geologic model, identified the lower, central and upper Bornite sequence units and distinguished many of the logged phyllites from breccias. The results support Trilogy Metals’ interpretation that the Ruby Zone in the Lower Reef is hosted in units corresponding to the South Reef central sequence. 2019 Trilogy In 2019, Trilogy Metals contracted Geotech Ltd. (Geotech) of Aurora, Ontario to complete VTEM Plus (versatile time domain electromagnetic) and ZTEM (z-axis tipper electromagnetic) airborne helicopter geophysical surveys over the Cosmos Hills and the Ambler VMS belt. Magnetics were measured using a cesium vapour sensor, while radiometrics was not collected due to snow cover. The VTEM survey was flown along 200 m spaced lines oriented northwest-southeast over the entire Bornite carbonate sequence north of the Cosmos Arch (which hosts the Bornite deposit), with additional lines at 100 m spacing directly above the Bornite resource. A second set of perpendicular lines (southwest-northeast) were flown at 200 m spacing over just the general Bornite area. Tie lines at ~4,000 m spacing were flown perpendicular to the EM flight lines to provide control for the magnetic survey. The VTEM results from the Bornite sequence are complex and appear to be mostly reflecting bedrock lithologies (the graphitic phyllites). The conductive plates that were modelled are generally coincident with the interpreted phyllite units, as are the apparent anomalies tested by holes RC19-0263 and RC19-0266. 66 Table of Contents 2020 Ambler Metals Trilogy Metals and South32 decided not to proceed with the 2020 exploration program due to the coronavirus (COVID-19) pandemic. The Bornite geologic model was updated using the 2019 drill program results. The Irish Centre for Research in Applied Geosciences initiated a machine-learning geochemical modelling project to help define the controls on high-grade copper mineralization. 2021 Ambler Metals During the 2021 field season, the understanding of the Bornite deposit and the potential for additional deposits was advanced with a new interpretation of the carbonate sequence at Bornite and an improved structural understanding of the Cosmos Hills. Dr. Elizabeth Turner, specialist in carbonate geology from Laurentian University, re-logged two fences/sections of drill holes, E-W and N-S, through the Bornite deposit, to identify, distinguish and correlate lithofacies within the Bornite sequence and to identify and distinguish different types/ages of dolomitization, including, if possible, their relation to mineralization. Turner describes the Bornite sequence as a tectonized ”normal” carbonate slope deposit that consists of calcitic material (lime mud) derived from a nearby shallow-marine source area, interlayered with variable amounts of ”background” terrigenous mud (argillaceous proportion increases with distance downslope). The observed sequence includes massive lime mudstone, thin-bedded argillaceous lime mudstone, lime mudstone centimetrically interbedded with terrigenous mudstone, calcareous siltstone, and limestone-clast slope conglomerates. Brookian deformation strained these argillaceous limestone slope deposits to varying degrees producing phyllites and recrystallized, strained limestones/marbles. Importantly, superimposed on the active limestone slope system is the local presence of dolostone-clast conglomerate. Dolostone clasts are equant and irregular; predominantly dolomudstone (locally with fossil fragments) and are likely derived from subaqueous horst blocks of pre-existing older dolostone and shed into the slope limestone system. The fault scarp(s) that shed dolostone clasts were probably part of a seafloor paleotopographic system that developed during regional extension and associated fault-mediated syn-depositional subsidence. Also initiated in 2021 was structural mapping around Pardner Hill and Aurora Mountain by Dr. Jason Price. Initial results indicate: (1) Large carbonate bodies, such as Pardner Hill, Shield Mountain, and probably also Aurora Mountain, are fault klippen in allochthonous contact with the structurally subjacent Anirak schist; (2) Dolostone bodies are typically boudinaged forming metric to hectametric 3-D ellipsoids encased in ductilely deformed phyllites and, in some places, calc-mylonites (limestone protolith); (3) Top-South (to SSW) deformation at a number of outcrops in the Cosmos Hills suggest that this entire structural “block” may have been juxtaposed southward from the position of the Ambler Lowlands or, potentially, from off the top of the Ambler Highlands (Arctic area) during exhumation that was part of the Brookian orogeny; (4) the fault contact with the overlying Beaver Creek phyllite is likely a low-angle normal fault that cuts out of the Bornite deposit to the southeast where Beaver Creek is in structural contact with Anirak schist. Bornite Project – Drilling From 1957 to 2019, a total of 273 holes targeted the Bornite deposit during 24 different campaigns; 222 surface core holes and 51 underground core holes were drilled, totalling 106,406 m. All of the drill campaigns prior to 2011 were completed by Kennecott or its exploration subsidiary, BCMC, and the drill campaigns since 2011 were completed by NovaGold (2011), NovaCopper (2012 and 2013) or Trilogy. In the summer of 2017, Trilogy Metals initiated eleven holes, but four were abandoned due to drilling problems. The seven remaining drill holes stepped-out to the north for distances between 250 m to 400 m from the previous drill holes; these were distances considered too far to support the estimation of mineral resources at that time. From 1957 to 1976, Kennecott used drilling contractor Sprague and Henwood, a Pennsylvania-based drilling company. Kennecott’s 1997 program (three drill holes) was completed by Tonto Drilling Services, Inc. (a NANA-Dynatec company). 67 Table of Contents The 2011 through to 2013 NovaGold/Trilogy Metals programs used Boart Longyear Company as the drill contractor. The 2017 program used Tuuq drilling, a NANA company, who sub-contracted Major Drilling. The 2018 program used both Major and Tuuq as the primary drill contactors and the 2019 program used Major as the primary contractor. In the initial years of drilling at Bornite, Kennecott relied on AX diameter core (1.1875 in or 30.2 mm diameter), but, as drilling migrated towards deeper targets, a change to BX diameter core (1.625 in or 41.3 mm diameter) was implemented to help limit deviation. From 1966 to 1967, drilling activity at Bornite moved underground and EX diameter core (0.845 in or 21.5 mm diameter) was implemented to define the Ruby Upper Reef zone “No.1 Ore Body”. In 1968, drilling activity moved back to the surface and from 1968 to 1972, BX diameter core was most commonly drilled. In later years, core size increased to NX (2.125 in or 54.0 mm diameter) and finally, in 2011, core size increased to NQ (1.874 in or 47.6 mm diameter) and HQ (2.5 in or 63.5 mm diameter). Over the years, progressively larger diameter drill rods have been used in an effort to minimize drill hole deviation. There is only limited information with respect to the specific drill core handling procedures used by Kennecott during its tenure at the Bornite deposit. All of the drill data collected during the Kennecott drilling programs (1958 to 1997) were logged on paper drill logs, and copies were stored in the Kennecott office in Salt Lake City, Utah. Electronic, scanned copies of the paper logs, in PDF format, are held by Trilogy. Drill core was sawed or split in half with a splitter, half was submitted to various assay labs and the remainder was stored in the Kennecott core storage facility at the Bornite deposit. In 1995, Kennecott converted the drill assay data, geologic core logs and the down-hole collar survey data into an electronic format. In 2009, NovaGold geologists verified the geologic data from the original paper logs against the Kennecott electronic format and then merged the data into a MicrosoftTM SQL database. Sampling of drill core by Kennecott and BCMC focused primarily on the moderate to high grade mineralized zones. Intervals of visible sulphide mineralization containing roughly >0.5% to 1% Cu were selected for analysis by Union Assay Office Inc. of Salt Lake City, Utah. This approach left numerous intervals containing weak to moderate copper mineralization, un-sampled in the historical drill core. During the 2012 exploration program, we began sampling a portion of this remaining drill core in select holes in the South Reef area. Trilogy extended this sampling program to the Ruby Zone in 2013 and 2014. Throughout our tenure at Bornite, the following core handling procedures have been implemented (including programs conducted by NovaGold and NovaCopper). Core is slung by helicopter, or transported by truck or ATV, from the drill rig to the core-logging facility. Upon delivery, geologists and geotechnicians open and inspect the core boxes for any irregularities. They first mark the location of each drilling block on the core box, and then convert footages on the blocks into metric equivalents. Geotechnicians or geologists measure the intervals (or “from/to”) for each box of core and include this information, together with the drill hole ID and box number, on a metal tag stapled to the end of each box. Geotechnicians then measure the core to calculate percent recovery and rock quality designation (“RQD”). RQD is the sum of the total length of all pieces of core in a run over 12 cm. The total length of core in each run is measured and compared to the corresponding run length to determine percent recovery. Core is then logged with lithology and visual alteration features captured on observed interval breaks. Mineralization data, including sulphide species and abundance (recorded as percent), and gangue and vein mineralogy are collected for each sample interval with an average interval of approximately 2 m. Structural data is collected as point data. Geologists then mark sample intervals to indicate each lithology or other geologically appropriate intervals. Sample intervals of core are typically between 1 m and 3 m in length but are not to exceed 3 m long. Occasionally, if warranted by the need for better resolution of geology or mineralization, smaller sample intervals have been used. Geologists staple sample tags on the core boxes at the start of each sample interval and mark the core itself with a wax pencil to designate sample intervals. This sampling approach is considered sound and appropriate for this style of mineralization and alteration. Drill core is digitally photographed prior to sampling. Drill core is cut in half using diamond core saws. Specific attention to core orientation is maintained during core sawing to ensure that representative samples are obtained. One-half of the core is retained in the core box for storage on site, or at our Fairbanks warehouse, and the other half is bagged and labeled for analysis. Samples are selected for specific gravity measurements. In 2013 and 2014, 33 historical drill holes and 37 historical drill holes, respectively, in the Ruby Zone were re-logged, re-sampled and re-assayed as these holes had previously only been selectively sampled by Kennecott. Entire holes were re-logged using Trilogy protocols discussed above. Samples were submitted either as half-core, where previously sampled, 68 Table of Contents or whole core where un-sampled (to ensure that a sufficient volume of material was provided for analysis). Sample intervals were matched to historical intervals whenever possible or selected to reflect Trilogy sampling procedures described above. The objectives of the re-assay/re-logging program were threefold: 1) to implement a QA/QC program on intervals previously sampled by Kennecott in order to confirm the validity of its results; 2) to identify additional lower grade (0.2%-0.5% Cu), which was not previously sampled; and 3) to provide additional multi-element ICP data to assist in the geologic interpretation of the deposit. Bornite Project - Sample Preparation, Analyses and Security Sample preparation, analytical lab accreditation and security measures taken during historical Kennecott and BCMC programs are unknown to us; however, we are not aware of any reason to suspect that any of these samples have been tampered with. The 2011 to 2013 and 2017 samples were either in the custody of NovaGold or Trilogy personnel or the assay laboratories at all times, and the chain of custody of the samples is well documented. Once drill core was sawed in half, one half was retained for future reference and the other half was sent to ALS Minerals (formerly ALS Chemex) in Vancouver, BC for analyses. Core samples were shipped from the Bornite Camp when backhaul capacity was available on the chartered aircraft; this was generally five to six days a week. Rice bags, containing two to four individual poly-bagged core samples, were marked and labeled with the ALS Minerals address, project name (Bornite), drill hole number, bag number, and the enclosed sample numbers. Rice bags were secured with a pre-numbered plastic security tie, assembled into loads for transport by chartered flights on a commercial airline to Fairbanks, Alaska, and delivered directly to the ALS Minerals preparation facility by a contracted expeditor. Core samples were also inserted into these shipments at the rate of one standard, one blank and one duplicate per 17 core samples. Samples were logged into a tracking system on arrival at ALS Minerals, and weighed. Samples were then crushed, dried, and a 250 g split was pulverized to greater than 85% passing 75 μm. Copper and cobalt data were derived using an additional 48-element suite assayed by inductively coupled plasma-mass (ICP-MS) and atomic emission spectroscopy (ICP-AES) methodologies, following a four-acid digestion. Over limit (>1.0%) copper and cobalt analyses were completed by atomic absorption (AA), following a four-acid digestion. In 2011 and 2012, gold assays were determined using fire analysis followed by an atomic absorption spectroscopy (AAS) finish. Gold was not analyzed in 2013 or 2014. The lower detection limit was 0.005 ppm Au; the upper limit was 10 ppm Au. ALS Minerals has attained International Organization for Standardization (ISO) 9001:2000 registration. In addition, the ALS Minerals laboratory in Vancouver is accredited to ISO 17025 by Standards Council of Canada for a number of specific test procedures including fire assay of gold by AA, ICP and gravimetric finish, multi-element ICP and AA assays for silver, copper, lead and zinc. Trilogy has no relationship with any of the primary or check assay labs used on the Bornite Project. In 2012, 2013, 2014, and 2017 through to 2019, Trilogy Metals staff performed continuous validation of the drill data during the logging process and after the field program was complete (West, 2013; Morris, 2014). Trilogy Metals also retained independent consultant Caroline Vallat, P.Geo. of GeoSpark Consulting Inc. (GeoSpark) to import digital drill data to the master database and conduct QA/QC checks upon import; conduct a QA/QC review of paired historical assays and Trilogy Metals 2012, 2013 and 2014 re-assays; monitor an independent check assay program for the 2012, 2013 and 2014 campaigns; and generate a QA/QC report for each of the drilling campaigns conducted in 2012, 2013, 2014, 2017, 2018 and 2019, including a 2017 review of the cobalt data. Bornite Project - Mineral Resource Estimates We have filed several previous NI 43-101 Technical Reports on the Bornite Project dated March 18, 2014, February 5, 2013, July 18, 2012, April 19, 2016 and July 20, 2018. The effective date of this resource is December 31, 2021. These discussions of underground and surface mining parameters are used solely for the purpose of testing the “reasonable prospects for economic extraction” and do not represent an attempt to estimate mineral reserves. No mineral reserves were calculated for the Bornite Project. These preliminary evaluations are used to assist with the preparation of a Mineral Resource Statement and to select appropriate reporting assumptions. 69 Table of Contents In the opinion of the QPs, the mineral resource evaluation reported herein is a sound representation of the copper and cobalt mineral resources for the Bornite Project at the current level of sampling. The mineral resources were estimated in conformity with generally accepted CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines (November 2019) and are reported in accordance with the Canadian Securities Administrators’ NI 43-101. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into a mineral reserve. The QPs audited the database used to estimate the Bornite Project mineral resource, and the QPs are of the opinion that the current drilling information is sufficiently reliable to confidently interpret the boundaries for copper and cobalt mineralization, and the assay data are sufficiently reliable to support mineral resource estimation. In the summer of 2017, seven holes were drilled that tested the down-dip continuity of the northern part of the Bornite deposit. These drill holes successfully intersected the mineralized target horizon, but the spacing of these holes was considered too far apart to support the generation of additional mineral resource estimates at that time, and as a result, the estimate of copper mineral resources remained unchanged in the June 2018 report from those reported in the previous technical report dated April 2016, and the June 2018 technical report included an estimate of cobalt mineral resources. In the summer of 2018, Trilogy Metals conducted a drilling program on the Bornite deposit that included the completion of 12 holes that infilled gaps in previous drilling in the northern, down-dip part of the deposit as well as in the central area between the Ruby Zone and South Reef area. In the summer of 2019, another drilling program was conducted on the Property comprising eight holes that tested the continuity of the mineralization within the Bornite deposit and two holes that tested exploration targets located about 1 km south and southeast of the deposit. From 2011 through 2017, Trilogy Metals implemented an expanded program of re-sampling and re-assaying for an extended suite of elements, including cobalt. Analyses of these additional elements were continued on samples collected during the 2018 and 2019 drilling programs, and once again, estimates of both copper and cobalt mineral resources are included in this report. The Bornite Project database comprises a total of 273 diamond drill (core) holes totalling 106,406 m; 203 holes target the Ruby Zone to the west and 58 holes target the South Reef area to the east. The remaining 12 holes in the database are exploratory in nature and test for satellite mineralization proximal to the Bornite deposit or represent holes that encountered problems and were therefore abandoned. The database contains a total of 39,740 samples that were analyzed for copper content and 34,177 that were analyzed for cobalt content. Most holes drilled by Trilogy, plus a few select historical holes drilled by Kennecott, contain additional analyses for elements such as zinc, lead, gold, silver, and cobalt; at this time, only copper and cobalt show any significant economic potential, and the others were excluded from the estimation of mineral resources. During the 2012, 2013 and 2014 field seasons, Trilogy collected samples from drill hole intervals that Kennecott never sampled. It is assumed that Kennecott did not sample these intervals because, visually, they did not exhibit the presence of high-grade copper mineralization (amenable to underground mining). In previous mineral resource estimates, these un-sampled intervals were assigned a default grade of 0% Cu. At this current stage, the majority of the core drilled by Kennecott has been sampled and analyzed for copper content. The sampling and assaying for cobalt is less extensive. Where assay data are not available, these intervals are assigned a zero grade for copper (0% Cu) when the host rocks are phyllite, or they left as “missing” when the host rocks are carbonates. No adjustments were made to intervals where cobalt grades are missing, and mineral resource estimates are estimated using the available sample data. Individual sample intervals range from 3 cm to 39.58 m long and average 2.09 m. Drill hole spacing at the Ruby Zone varies from approximately 10 m to 20 m for underground holes and 50 m to 100 m or more for holes drilled from surface. All holes testing the South Reef area are collared from surface and typically intersect mineralization at approximately 100 m to 200 m spacing. 70 Table of Contents Specific gravity (SG) measurements were conducted on 7,476 samples in the database and range from a minimum of 2.12 to a maximum of 5.20 and average 2.89. The distribution of SG data is considered sufficient to support block model estimation. Drill core recovery was recorded for approximately one half of the drill holes at the Ruby Zone and in essentially all of the South Reef drill holes. Overall, core recoveries are considered to be very good with an average of 86% for the Project. Only 8% of samples have recoveries ≤ 50%, and approximately 85% of samples have core recoveries ≥ 75%. There is no apparent correlation between copper grade and drill core recovery. There were no adjustments or omissions to the mineral resource database in response to drill core recoveries. Trilogy provided a topographic digital terrain surface derived from a 2010 PhotoSat 1 m resolution model. Drill hole collar locations, surveyed using a differential GPS, correlate very well with the local, digital terrain (topographic) surface. The geologic model interpreted for the Bornite deposit consists primarily of a series of inter-bedded carbonate and phyllitic rocks that dip gently to the north and overlay a quartz-phyllite footwall. Copper and associated cobalt mineralization occurs primarily as massive, semi-massive, stringer, veinlet and disseminated accumulations of chalcopyrite, bornite and chalcocite in dolomitized portions of the sedimentary host rocks. Cobalt minerals such as carrolite and cobaltiferous pyrite tend to be associated with the copper mineralization. The geologic model comprises 18 individual phyllite domains and 16 separate carbonate domains plus a series of separate domains representing the hanging wall (Beaver Creek phyllite), the footwall (quartz-phyllite Anirak schist), and the overlying overburden. Some of the phyllite and carbonate units are continuous across the entire deposit area and others “pinch out” and are more localized. The parts of the deposit with the highest grades occur within areas where semi-massive and massive sulphides are present. The density of drilling is insufficient in most areas to allow for the interpretation of these massive sulphide domains, and a probability shell approach is used to identify areas where higher grade mineralization is likely to occur. Two probability shells were generated: one at a threshold of 2% Cu and another at a threshold of 0.2% Cu. The 2% Cu shell generally correlates with the presence of massive and semi-massive zones of bornite and chalcopyrite mineralization, and the 0.2% Cu shell correlates with the visual presence of chalcopyrite mineralization. Cobalt mineralization is strongly associated with both sets of copper mineralization. The higher grade shell occurs mainly in the South Reef area and is based primarily on visual observations of the distribution of sample data suggesting that a relatively continuous zone of higher grade copper mineralization occurs above a threshold grade of 2% Cu. Note: Approximately 90% of the sample data in the South Reef area is below 2% Cu and 10% of the data is greater than 2% Cu. A relatively small (>2%) copper probability shell is also generated in the Upper Reef area of the Ruby Zone. Approximately one half of the samples in the carbonate domains have copper grades above the lower grade threshold of 0.2% copper. This limit roughly segregates areas of “mineralized” versus “unmineralized” (including cobalt) rocks and is still below the anticipated cut-off grade of the mineral resource, ensuring that sufficient internal dilution is retained in the mineral resource model. There are also areas where the phyllite domains contain appreciable copper or cobalt grades (above the 0.2% copper threshold), but these tend to be rare and localized occurrences. Indicator values are assigned to 2 m composites at the grade thresholds described here, and indicator variograms are produced. Probability values are estimated in model blocks using ordinary kriging; the vertical range and locations are controlled dynamically using elevations relative to the trend planes described previously. A series of shells are generated at varying probability thresholds and are then compared to the distribution of the underlying sample data. The higher grade shell represents areas where there is greater than a 30% probability that the grade will be more than 2% Cu. The lower grade shell envelopes areas where there is a greater than 50% probability that the grade will exceed 0.2% Cu. At this stage of project evaluation, copper is the main economic contributor at Bornite, and it can be assumed that cobalt will act as a secondary metal or byproduct. Therefore, reasonable prospects for eventual economic extraction only address the copper content in the deposit, and the available cobalt is reported based on a copper cut-off grade threshold. It is very rare that appreciable cobalt grades occur where there is no associated copper mineralization. The Bornite 71 Table of Contents deposit comprises several zones of relatively continuous moderate- to high-grade copper mineralization that extends from surface to depths of more than 800 m below surface. The deposit is potentially amenable to a combination of open pit and underground extraction methods. The “reasonable prospects for eventual economic extraction” requirement was tested using a pit shell based on a series of technical and economic assumptions considered appropriate for a deposit of this type, scale and location. A pit shell was generated in the area of the Ruby Zone that extends to a depth of approximately 500 m below surface and contains a total of 1.01 billion tonnes. As stated previously, it is assumed that extraction from the Bornite deposit is based on the copper content in the rocks and that cobalt would be a secondary contributor to the potential economic viability of the deposit. As a result, both copper and cobalt mineral resource estimates are defined based on a copper cut-off grade threshold. Mineral resource estimates are reported based at two cut-off grades: 0.5% Cu for material that is amenable to open pit extraction and 1.5% Cu for mineral resources that occur below the pit shell. The cut-off grade of mineral resources amenable to underground extraction is based on an underground mining cost of US$65/tonne. Mineral resources below the open pit shell are separated into two separate areas to highlight that the underground mineral resources in the South Reef area are much thicker and higher grade than those present in the area of the Ruby Zone. Based on the drilling information to date, the South Reef underground resource occurs in a relatively continuous zone, measuring approximately 1,100 m north-south by 400 m east-west, that dips at about -25 degrees to the north and is located between 400 m and 1,000 m below surface. The true thickness of the underground mineral resource at South Reef is variable from 5 m to more than 40 m in some areas and averages about 15 m to 20 m thick. The underground resources at the Ruby Zone tend to be lower grade, narrower and more patchy or discontinuous in nature, with average true thicknesses typically ranging from 5 m to 10 m in most areas. Mineral resources located below the open pit shell exclude zones of mineralization that are above the base case cut-off grade of 1.5% Cu but are considered too small and/or isolated to be considered economically viable. The resulting continuity of grade and thickness of mineralization included in the estimate of mineral resources below the pit shell exhibits reasonable prospects of eventual economic extraction using underground mining methods such as a combination of longhole stoping and cut-and-fill mining. Bornite Project - Mineral Resource Statement Mineral Resources are classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014). Table 10: Indicated Resource Estimate for the Bornite Project See “Cautionary Note to United States Investors”. This section uses the term “indicated resources”. We advise United States investors that these terms are not recognized by the SEC. United States investors are cautioned not to assume that estimates of indicated mineral resources are economically minable or will be upgraded into measured mineral resources. See “ Risk Factors ” and “ Cautionary Note to United States Investors ”. Estimate of Copper Mineral Resources for the Bornite Project - Indicated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class ​ ​ Type/Area Cut-off (Cu %) Tonnes (million) Average Grade Cu (%) Contained Metal Cu (Mlbs) Indicated ​ ​ In-Pit (1) ​ 0.5 41.7 1.04 955 ​ 1. These resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standards. See “Risk Factors” and “Cautionary Note to United States Investors.” 72 Table of Contents 2. Mineral resources stated as contained within a pit shell developed using a metal price of US$3.50/lb Cu, mining costs of US$3/tonne, milling costs of US$11/tonne, G&A cost of US$5/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees. Underground mining cost is US$65/tonne. 3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves. 4. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and con-tained metal content. 5. Tonnage and grade measurements are in metric units. Contained copper are reported as imperial pounds. 6. All amounts are stated in U.S. dollars unless otherwise noted. 7. Mineral resources are reported on a 100% basis. Following the formation of Ambler Metals, Trilogy and South32 each own 50% of the Bornite Project. Table 11: Inferred Resource Estimate for the Bornite Project See “ Cautionary Note to United States Investors ”. This section uses the term “inferred resources”. We advise United States investors that these terms are not recognized by the SEC. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. See “ Risk Factors ” and “ Cautionary Note to United States Investors ”. Estimate of Copper Mineral Resources – Inferred ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class ​ Type/Area Cut-off (Cu %) Tonnes (million) Average Grade Cu (%) Contained Metal Cu (Mlbs) ​ ​ ​ In-Pit (1) ​ 0.5 93.9 0.98 2034 Inferred ​ ​ Below-Pit South Reef ​ 1.5 35.3 3.39 2639 ​ ​ ​ Below-Pit Ruby Zone ​ 1.5 15.0 1.98 653 ​ ​ ​ Total Inferred ​ ​ 144.1 1.68 5326 ​ 1. These resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standards. See “ Risk Factors ” and “ Cautionary Note to United States Investors .” 2. Mineral resources stated as contained within a pit shell developed using a metal price of US$3.50/lb Cu, mining costs of US$3/tonne, milling costs of US$11/tonne, G&A cost of US$5/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees. Underground mining cost is US$65/tonne. 3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves. 4. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and con-tained metal content. 5. Tonnage and grade measurements are in metric units. Contained copper are reported as imperial pounds. 6. All amounts are stated in U.S. dollars unless otherwise noted. 73 Table of Contents 7. Mineral resources are reported on a 100% basis. Following the formation of Ambler Metals, Trilogy and South32 each own 50% of the Bornite Project. 8. It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with additional exploration. Estimate of Cobalt Mineral Resources – Inferred ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Class Type/Area Cut-off (Cu %) Tonnes (million) Average Grade Co (%) Contained Metal Co (Mlbs) ​ ​ ​ In-Pit (1) ​ 0.5 135.6 0.017 51 Inferred ​ ​ Below-Pit South Reef ​ 1.5 35.3 0.039 30 ​ ​ ​ Below-Pit Ruby Zone ​ 1.5 15.0 0.021 7 ​ ​ Total Inferred ​ 185.8 0.021 88 ​ 1. Mineral resources stated as contained within a pit shell developed using a metal price of US$3.50/lb Cu, mining costs of US$3/tonne, milling costs of US$11/tonne, G&A cost of US$5/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees. Underground mining cost is US$65/tonne. 2. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves. 3. It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with additional exploration. 4. Due to limited sample data, none of the cobalt mineral resource meets the confidence level for Indicated-class mineral resources. All cobalt mineral resources are considered to be in the Inferred category. 5. Mineral resources are reported on a 100% basis. Following the formation of Ambler Metals, Trilogy and South32 each own 50% of the Bornite Project. There are no known factors related to environmental, permitting, legal, title, taxation, socio-economic, marketing, or political issues which could materially affect the mineral resource. Bornite Project – Metallurgy Metallurgical test work to date indicates that the Bornite Project can be treated using standard grinding and flotation methods to produce copper concentrates. Initial testing indicates copper recoveries of approximately 87% resulting in concentrate grades of approximately 28% Cu with very low potential penalty elements. Further metallurgical test work is warranted to test these assumptions. Bornite Project – Environmental Considerations The Bornite Project area includes NANA’s Bornite and ANCSA lands, the Ruby Creek drainage (a tributary of the Shungnak River), the Shungnak River drainage, and portions of the Ambler Lowlands. Since 2008, baseline environmental data collection has occurred in the area including archaeology, aquatic life surveys, sediment sampling, wetlands mapping, surface water quality sampling, hydrology, meteorological monitoring, and subsistence. Additional baseline environmental data in NANA’s Bornite and ANCSA lands, Ruby Creek drainage, Shungnak River drainage, portions of the Ambler Lowlands, and downstream receiving environments will be required to support future mine design, development of an EIS, permitting, construction and operations. 74 Table of Contents Bornite Project – Mining Operations The Bornite Project is not currently in production; for contemplated exploration or development activities see above. Bornite Project – Exploration and Development Permitting Development of the Bornite Project will require a significant number of permits and authorizations from state, federal, and regional organizations. Much of the groundwork to support a successful permitting effort must be conducted before permit applications are submitted so that issues can be identified and resolved, baseline data can be acquired, and regulators and stakeholders can become familiar with the proposed project. The comprehensive permitting process for the Bornite Project can be divided into three categories: 1. Exploration state/regional permitting phase: required to obtain approval for drilling, camp operations, engineering, and environmental baseline studies. 2. Pre-application phase: conducted in conjunction with engineering feasibility studies. This stage includes the collection of environmental baseline data and interaction with stakeholders and regulators to facilitate the development of a project that can be successfully permitted. 3. The National Environmental Policy Act phase: formal agency review of the Federal and State requirements for public and agency participation to determine if and how the Bornite Project can be done in an acceptable manner. The permit review process will determine the number of management plans required to address all aspects of the Project to ensure compliance with environmental design and permit criteria. Each plan will describe the appropriate environmental engineering standard and the applicable operations requirements, maintenance protocols, and response actions. Glossary of Technical Terms The following technical terms defined in this section are used throughout this Form 10-K: “2D” is two dimensional. “3D” is three dimensional. “ AA ” is atomic absorption. “ Ag ” is the chemical symbol for silver. “ Ai ” is abrasion index. “Al” is the chemical symbol for aluminum. “ AMT ” is audio-magnetotelluric. “ Au ” is the chemical symbol for gold. “ BWi ” is bond ball mill work index. “C” is the chemical symbol for carbon. “Ca” is the chemical symbol for calcium. 75 Table of Contents “ CIM ” is the Canadian Institute of Mining, Metallurgy and Petroleum. “ Co ” is the chemical symbol for cobalt. “CSAMT” is controlled-source audio-frequency magnetotelluric. “ Cu ” is the chemical symbol for copper. “ CuEq ” is copper equivalent. &quot; d/a &quot; is days per annum. “ dilution ” is waste, which is unavoidably mined with ore. “ dip ” is the angle of inclination of a geological feature/rock from the horizontal. “ DIGHEM ” is a proprietary geophysical survey system. “DPG” is deep penetrating geochemistry. “ EM ” is electromagnetic. “ fault ” is the surface of a fracture along which movement has occurred. “Fe” is the chemical symbol for iron. “ gangue ” are non-valuable components of the ore. “ grade ” is the measure of concentration of metal within mineralized rock. “ g ” is a gram. “ g/t ” is grams per metric tonne. “ ha ” is a hectare. “HDS ” is high density sludge. “ ICP ” is induced couple plasma. “ ICP-MS ” is inductively coupled plasma-mass spectroscopy. “ ICP-AES ” is inductively coupled plasma-atomic emission spectroscopy. “IP” is induced polarization. “ IRR ” is internal rate of return. “K” is the chemical symbol for potassium. “ km ” is a kilometer. “ kWhr ” is kilowatt hours. “ kV ” is a kilovolt. 76 Table of Contents “ LOM ” is the life-of-mine. “ LiDAR ” is light detection and ranging. “ μm ” is a micron or mircrometer and is one millionth of a meter. “ m ” is a meter. “ Ma ” is million years. “masl” is meters above sea level. “Mg” is the chemical symbol for magnesium. “ ML/ARD ” is metal leaching and acid rock drainage. “ mm ” is a millimeter. “ Mm 3 ” is million cubic meters. “ MS ” is massive sulphide. “ Mt/a ” is million tonnes per annum. “ MW ” is million watts. “ NPV ” is net present value. “NSAMT” is natural source audio-magnetotelluric. “ NSR ” is net smelter return “ ounce ” or “ oz ” is a troy ounce. “ Pb ” is the chemical symbol for lead. “ ppm ” is parts per million. “ QA/QC ” is quality assurance and quality control. “ SAG ” is semi-autogenous grind. “ SeWTP ” is a selenium water treatment plant. “ SG ” is specific gravity. “ SMS ” is semi-massive sulphide. “ strike ” is the duration of line formed by the intersection of strata surfaces within the horizontal plane, always perpendicular to the dip direction. “ tailings ” is the finely ground waste rock from which valuable minerals or metals have been extracted. “ TMF ” is a tailings management facility. 77 Table of Contents “ tonne&quot; or &quot;t” is a metric tonne: 1,000 kilograms or 2,204.6 pounds. “ t/d ” is tonnes per day. “ VMS ” is volcanogenic massive sulphide. “ WRCP ” is a waste rock collection pond. “ WRF ” is a waste rock facility. “ WTP ” is a water treatment plan. “ XRF ” is x-ray fluorescence spectroscopy. “ Zn ” is the chemical symbol for zinc. ​