What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-04-06 compared with 2021-10-05 · 141 added, 185 removed, 195 unchanged (63% of the section changed)

3 unchanged sentences

in thousands of US dollars

August 31, 2021

February 28, 2022

November 30, 2021

1 unchanged sentence

Cash and cash equivalents

Accounts receivable (note 3)

Accounts receivable

Deposits and prepaid amounts

17 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Interim Consolidated Statements of Income (Loss)

and Comprehensive Income (Loss )

Interim Consolidated Statements of Loss

and Comprehensive Loss

in thousands of US dollars, except share and per share amounts

For the three months ended

For the nine months ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Exploration expense

Feasibility study (note 4(a))

Foreign exchange loss (gain)

February 28, 2022

February 28, 2021

Amortization of exploration expenses

Foreign exchange loss

General and administrative

Investor relations

Mineral properties expense

Professional fees

Salaries – stock-based compensation

Salaries and directors expense – stock-based compensation

Total expenses

1 unchanged sentence

Interest and other income

Services agreement income (note 4(e))

Gain on derecognition of assets contributed to joint venture (note 4(a))

Comprehensive (loss) earnings for the period

Basic (loss) earnings per common share

Diluted (loss) earnings per common share

Services agreement income

Comprehensive loss for the period

Basic loss per common share

Diluted loss per common share

Basic weighted average number of common shares outstanding

2 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

6 unchanged sentences

Exercise of options

Restricted Share Units

Stock-based compensation

1 unchanged sentence

Balance – February 28, 2021

Exercise of options

Restricted Share Units

Stock-based compensation

Loss for the period

Balance – May 31, 2020

Exercise of options

Stock-based compensation

Loss for the period

Balance - August 31, 2020

Balance – November 30, 2021

Exercise of options

Stock-based compensation

Loss for the period

Balance – February 28, 2021

Exercise of options

Stock-based compensation

Loss for the period

Balance – May 31, 2021

Exercise of options

Restricted Share Units

Joint venture contribution

Stock-based compensation

Loss for the period

Balance – August 31, 2021

Balance – February 28, 2022

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

1 unchanged sentence

in thousands of US dollars

For the nine months ended

August 31, 2021

August 31, 2020

For the three months ended

February 28, 2022

February 28, 2021

Cash flows used in operating activities

(Loss) earnings for the period

Loss for the period

Adjustments to reconcile net loss to cash flows in operating activities

Office lease accounting

Loss on working capital written-off upon joint venture formation

Gain on derecognition of assets (note 4(a))

Loss on equity investment in Ambler Metals LLC (note 3(b))

7 unchanged sentences

Proceeds from exercise of options

Cash flows from investing activities

Mineral claims

Decrease in cash from operating activities

Decrease in cash and cash equivalents

Effect of exchange rate on cash and cash equivalents

Cash and cash equivalents – beginning of year

Cash and cash equivalents – beginning of period

Cash and cash equivalents – end of the period

1 unchanged sentence

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

4 unchanged sentences

The Company is engaged in the exploration and development of mineral properties, through our equity investee (see note 4), with a focus on the Upper Kobuk Mineral Projects (“UKMP”), including the Arctic and Bornite Projects located in Northwest Alaska in the United States of America (“US”).

The Company also conducts early-stage exploration through a wholly owned subsidiary, 995 Exploration Inc.

2) Summary of significant accounting policies

2 unchanged sentences

GAAP”) and include the accounts of Trilogy and its wholly owned subsidiary, NovaCopper US Inc.

(dba “Trilogy Metals US”).

(dba “Trilogy Metals US”) and 995 Exploration Inc.

All intercompany transactions are eliminated on consolidation.

1 unchanged sentence

All figures are in United States dollars unless otherwise noted.

References to CAD$ refer to amounts in Canadian dollars.

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

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

References to CDN$ refer to amounts in Canadian dollars.

These unaudited interim consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position as of February 28, 2022 and our results of operations and cash flows for the three months ended February 28, 2022 and February 28, 2021.

The results of operations for the three months ended February 28, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2022.

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

1 unchanged sentence

Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities on February 11, 2022.

These interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on October 4, 2021.

3) Accounts receivable

in thousands of dollars

August 31, 2021

November 30, 2020

GST input tax credits

Ambler Metals LLC

Accounts receivable

The balance due from Ambler Metals LLC (see note 4 below) consisted of services rendered by Trilogy and reimbursements for invoices paid by Trilogy on behalf of Ambler Metals LLC per a service agreement.

4) Equity method investment

Formation of Ambler Metals LLC

On February 11, 2020, the Company completed the formation of a 50/50 joint venture named Ambler Metals LLC with South32 Limited (“South32”).

As part of the formation of the joint venture, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite Projects, while South32 contributed US$ 145 million, resulting in each party’s subsidiaries directly owning a 50 % interest in Ambler Metals LLC.

To assist Ambler Metals during the initial set up

These interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on April 5, 2022.

Use of estimates and measurement uncertainties

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions of future events that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of expenditures during the period.

Significant judgments include the assessment of potential indicators of impairment of mineral properties and investments in affiliates.

Significant estimates include the measurement of the equity method investment, income taxes, and the valuation of stock-based compensation.

Actual results could differ materially from those reported.

Management assesses the possibility of impairment in the carrying value of its equity method investment in Ambler Metals whenever events or circumstances indicate that the carrying amount of the investment may not be recoverable.

Significant judgments are made in assessing the possibility of impairment.

Factors that may be indicative of an impairment include a loss in the value of an investment that is not temporary.

Management considers several factors in considering if an indicator of impairment has occurred, including but not limited to, sustained losses by the investment, the absence of the ability to recover the carrying amount of the investment, significant changes in the legal, business or regulatory environment, significant adverse changes impacting the investee and internal reporting indicating the economic performance of an investment is, or will be, worse than expected.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

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

The Services Agreement ended on December 31, 2020.

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

These factors are subjective and require consideration at each period end.

If an indicator of impairment is determined to exist, the fair value of the impaired investment is determined based on the valuation of cohort companies with similar projects or upon the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants and observed market earnings multiples of comparable companies.

Management calculates the estimated undiscounted future net cash flows relating to the asset or asset group using estimated future prices, proven and probable reserves and other mineral resources, and operating, capital and reclamation costs.

When the carrying value of an asset exceeds the related undiscounted cash flows, the asset is written down to its estimated fair value, which is usually determined using discounted future cash flows.

Management’s estimates of mineral prices, mineral resources, foreign exchange rates, production levels operating, capital and reclamation costs are subject to risk and uncertainties that may affect the determination of the recoverability of the long-lived asset.

It is possible that material changes could occur that may adversely affect management’s estimates.

3) Investment in Ambler Metals LLC

Formation of Ambler Metals LLC

On February 11, 2020, the Company completed the formation of a 50/50 joint venture named Ambler Metals LLC (“Ambler Metals”) with South32 Limited (“South32”).

As part of the formation of the joint venture, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite Projects, while South32 contributed cash of US$ 145 million, resulting in each party’s subsidiaries directly owning a 50 % interest in Ambler Metals.

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

All significant decisions related to the UKMP require the approval of both companies.

We determined that Ambler Metals LLC is a VIE because it is expected to need additional funding from its owners for its significant activities.

However, we concluded that we are not the primary beneficiary of Ambler Metals LLC as the power to direct its activities, through its board, is shared under the Ambler Metals LLC limited liability company agreement.

As we have significant influence over Ambler Metals LLC through our representation on its board, we use the equity method of accounting for our investment in Ambler Metals LLC.

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

Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals LLC, which, as at August 31, 2021, totaled $ 164 million.

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

in thousands of dollars

Fair value ascribed to Ambler Metals LLC interest

carrying value of contributed /eliminated assets

Mineral properties

Property, plant and equipment

Elimination of Fairbanks warehouse right of use asset

Elimination of prepaid State of Alaska mining claim fees

Reimbursement of claims staking

Demobilization costs of drills

Cancellation of Fairbanks warehouse lease liability

Fair value of mineral properties purchase option

Gain on derecognition

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

Prior to the formation of the joint venture, the Company had also incurred $ 0.7 million in Arctic Project feasibility costs that are included in the mineral properties expense balance of $ 1.5 million for the nine-month period ended August 31, 2020.

We determined that Ambler Metals is a VIE because it is expected to need additional funding from its owners for its significant activities.

However, we concluded that we are not the primary beneficiary of Ambler Metals as the power to direct its activities, through its board, is shared under the Ambler Metals LLC limited liability company agreement.

As we have significant influence over Ambler Metals through our representation on its board, we use the equity method of accounting for our investment in Ambler Metals.

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

Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals, which, as at February 28, 2022, totaled $ 158 million.

Carrying value of equity method investment

Trilogy recognized, based on its 50 % ownership interest in Ambler Metals LLC, an equity loss equivalent to its pro rata share of Ambler Metals LLC's comprehensive loss of $ 12.1 million for the three-month period ending August 31, 2021 (2020 - $ 2.2 million) and $ 17.8 million for the nine-month period ending August 31, 2021 (2020 - $ 3.7 million).

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

Trilogy recognized, based on its 50 % ownership interest in Ambler Metals, an equity loss equivalent to its pro rata share of Ambler Metals’ comprehensive loss of $ 3.8 million for the three-month period ending February 28, 2022 (2021 - $ 2.2 million).

During the three-month period ended February 28, 2022, Trilogy made a $ 51,000 equity contribution to Ambler Metals through the issuance of 31,469 common shares of the Company as part of the long-term incentive compensation for an Ambler Metals executive.

Likewise, South32 made an equivalent equity contribution to Ambler Metals for $ 51,000 in cash for their 50 % share.

The carrying value of Trilogy’s 50 % investment in Ambler Metals as at February 28, 2022 is summarized on the following table.

in thousands of dollars

November 30, 2020, investment in Ambler Metals LLC

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

August 31, 2021, investment in Ambler Metals LLC

November 30, 2021, Investment in Ambler Metals

Joint venture equity contribution

Share of loss on equity investment for the three-month period ending February 28, 2022

February 28, 2022, Investment in Ambler Metals

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

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

The following table summarizes Ambler Metals’ Balance Sheet as at February 28, 2022.

in thousands of dollars

August 31, 2021

February 28, 2022

November 30, 2021

Current assets:

Cash, deposits and prepaid expenses

Non - current assets:

Property, equipment and mineral properties

Loan receivable from South32

Current liabilities:

Loan receivable from South32 (current and long-term)

Mineral properties

Total liabilities

Accounts payable and accrued liabilities

Non - current liabilities:

Lease obligation

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

Members' equity (total assets less total liabilities)

The loan receivable from South32 is repaid through a quarterly demand notice prepared by Ambler Metals, thirty days prior to the beginning of the following calendar quarter.

The demand notice amount is based on Ambler Metals’ expected expenditures, pursuant to their approved program and operating budget (South32’s 50 % share) for the applicable calendar quarter.

During the three-month period ended February 28, 2022, Ambler Metals received $ 2.4 million in loan repayments from South32, consisting of $ 0.3 million in interest and $ 2.1 million in principal.

(d) The following table summarizes Ambler Metals' loss for the three-month period ending February 28, 2022.

in thousands of dollars

For the three months ended

For the nine months ended

August 31, 2021

August 31, 2020

August 31, 2021

August 31, 2020

Mineral properties expense

General and administrative expense

February 28, 2022

February 28, 2021

Corporate salaries and wages

General and administrative

Mineral property expense

Professional fees

Foreign exchange (gain)/loss

Interest income

Comprehensive loss

Related party transactions - services agreement income

During the three-month period ending February 28, 2021, the Company charged $ 22,151 of expenses related to technical services, including geological, engineering, environmental and human resources, and accounting services in connection with the Services Agreement.

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

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

4) Accounts payable and accrued liabilities

in thousands of dollars

August 31, 2021

February 28, 2022

November 30, 2021

4 unchanged sentences

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

2 unchanged sentences

in thousands of dollars

ASC transition as at December 1, 2019

Net amortization

Derecognition of Fairbanks warehouse lease

Balance as at November 30, 2021

Net amortization

Previously classified in fixed assets

Balance as at August 31, 2021

Balance as at February 28, 2022

(b) Lease liabilities

3 unchanged sentences

in thousands of dollars

Nine months ended

August 31, 2021

August 31, 2020

Three months ended

February 28, 2022

February 28, 2021

Operating lease costs

2 unchanged sentences

Variable lease costs consist primarily of the Company’s portion of operating costs associated with the office space lease as the Company elected to apply the practical expedient not to separate lease and non-lease components.

As of August 31, 2021, the weighted-average remaining lease term is 2.75 years and the weighted-average discount rate is 8 % .

As of February 28, 2022, the weighted-average remaining lease term is 2.25 years and the weighted-average discount rate is 8 % .

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

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

Supplemental cash and non-cash information relating to our leases during the three months ended February 28, 2022 are as follows:

● Cash paid for amounts included in the measurement of lease liabilities was $ 50,992 .

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

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

Future minimum payments relating to the lease recognized in our balance sheet as of February 28, 2022 are as follows:

in thousands of dollars

August 31, 2021

February 28, 2022

Total undiscounted lease payments

1 unchanged sentence

Present value of lease payments recognized as lease liability

Trilogy Metals Inc.

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

6) Share capital

6 unchanged sentences

Restricted Share Units

November 30, 2020

Exercise of options

August 31, 2021, issued and outstanding

Joint venture equity contribution (note 3(b))

February 28, 2022, issued and outstanding

Stock options

During the nine-month period ended August 31, 2021, the Company granted 3,374,150 options (2020 – 4,095,000 options) at a weighted-average exercise price of $ 2.00 (2020 - $ 2.14 ) to employees, consultants and directors exercisable for a period of five years with various vesting terms from immediate vesting to vesting over a two-year period.

The weighted-average fair value attributable to options granted in the period was $ 0.84 (2020 - $ 0.90 ).

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

For the nine-month period ended August 31, 2021, Trilogy recognized a stock-based compensation charge of $ 2.98 million (2020 – $ 2.60 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

During the three-month period ended February 28, 2022, the Company made an annual grant of 1,734,500 stock options (2021 - 3,374,150 stock options) at an exercise price of CDN$ 2.21 (2021 - CDN$ 2.52 ) to employees, consultants and directors exercisable for a period of five years with various vesting terms from immediate vesting to vesting over a two-year period.

The fair value attributable to options granted in the period was CDN$ 0.90 (2021 - CDN$ 1.07 ).

For the three-month period ended February 28, 2022, Trilogy recognized a stock-based compensation charge of $ 0.86 million (2021 - $ 2.1 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model.

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

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

August 31, 2021

Assumptions used in the pricing model for the three-month period ended February 28, 2022 are as provided below.

February 28, 2022

Risk-free interest rates

3 unchanged sentences

Expected dividends

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

As of February 28, 2022, there were 2,317,838 non-vested options outstanding with a weighted average exercise price of CDN$ 2.43 ;

the non-vested stock option expense not yet recognized was $ 0.83 million.

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

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

August 31, 2021

This expense is expected to be recognized over the next year.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

A summary of the Company’s stock option plan and changes during the three-month period ended February 28, 2022 is as follows:

February 28, 2022

Weighted average

1 unchanged sentence

Number of options

Balance – beginning of the year

Balance – beginning of the period

Balance – end of the period

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

During the three-month period ended February 28, 2022, the Company received net proceeds of $ 17,640 upon the exercise of 31,674 options.

The following table summarizes information about the stock options outstanding at February 28, 2022.

average years

1 unchanged sentence

exercise price

Range of exercise price

Range of exercise price (CDN$)

$ 0.50 to $ 1.00

3 unchanged sentences

$ 3.01 to $ 3.41

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

The aggregate intrinsic value of vested share options (the market value less the exercise price) at February 28, 2022 was $ 0.15 million (2021 - $ 3.3 million) and the aggregate intrinsic value of exercised options for the three months ended February 28, 2022 was $ 0.03 million (2021 - $ 0.17 million).

Restricted Share Units and Deferred Share Units

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

Awards under the RSU Plan and DSU Plan may be settled in cash and/or common shares of the Company at the Company’s election with each restricted share unit

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

(“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company or equivalent value.

The Company has a Restricted Share Unit Plan (“RSU Plan”) to provide long-term incentives to employees and consultants and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to offset cash payments for fees to directors.

Awards under the RSU Plan and DSU Plan have been settled in common shares of the Company with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company.

All units are accounted for as equity-settled awards.

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

A summary of the Company’s unit plans and changes during the three-month period ended February 28, 2022 is as follows:

Number of RSUs

Number of DSUs

Balance – beginning of the year

Balance – beginning of the period

Balance – end of the period

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

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

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

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

For the three-month period ended February 28, 2022, Trilogy recognized a stock-based compensation charge of $ 1.0 million (2021 - $ 0.04 million), net of estimated forfeitures.

Trilogy Metals Inc.

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

7) Financial instruments

9 unchanged sentences

The Company operates in the United States and Canada.

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

The Company’s exposure to currency risk at February 28, 2022 is limited to the Canadian dollar balances consisting of cash of approximately CDN$ 491,000 , accounts receivable of approximately CDN$ 22,000 and accounts payable of approximately CDN$ 480,000 .

Based on a 10 % change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change by approximately $ 3,000 .

3 unchanged sentences

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

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

Liquidity risk

2 unchanged sentences

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

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

Contractually obligated undiscounted cash flow requirements as at February 28, 2022 are as follows:

in thousands of dollars

2 unchanged sentences

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

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

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

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

Trilogy Metals Inc.

For the Quarter Ended February 28, 2022

Trilogy Metals Inc.

Notes to the Interim Consolidated Financial Statements

and cash equivalents.

Based on balances as at February 28, 2022, a 1 % change in interest rates would result in a negligible change in net loss, assuming all other variables remain constant.

As we are currently in the exploration phase none of our financial instruments are exposed to commodity price risk;

however, our ability to obtain long-term financing and its economic viability could be affected by commodity price volatility.

8) Commitment

1 unchanged sentence

Trilogy Metals Inc.

For the Quarter Ended August 31, 2021

For the Quarter Ended February 28, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements