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Item 1. Business

2024-02-09 compared with 2023-02-14 · 26 added, 54 removed, 146 unchanged (35% of the section changed)

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

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

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

and (ii) Bornite Project, which contains a carbonate-hosted copper - cobalt deposit (“Bornite Project”).

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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 unless otherwise noted.

See “ Significant Developments in 2020 ”.

Business Cycle

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Our business strategy is focused on creating value for stakeholders through our ownership and advancement of the Arctic Project and exploration and advancement of the Bornite Project with our joint venture partner, South32, and through the pursuit of similarly attractive mining projects.

● advance the Arctic Project towards development with key activities including increased definition of the NI 43-101 mineral resources and reserves contained in the Arctic FS, additional metallurgical and geotechnical studies and the advancement of baseline environmental studies;

● advance the Arctic Project towards development with key activities including increased definition of the NI 43-101 and S-K 1300 mineral resources and reserves contained in the Arctic FS, additional metallurgical and geotechnical studies and the advancement of baseline environmental studies;

● advance exploration in the Ambler Mining District and, in particular, at the Bornite Project, pursuant to the NANA Agreement (as more particularly described under “ History of Trilogy – Agreement with NANA Regional Corporation ”) through resource development and initial technical studies;

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Significant Developments in 2023

● On January 11, 2022, the Company announced the 2022 program and budget of approximately $28.5 million for the advancement of the Upper Kobuk Mineral Projects (“UKMP”) located in Northwestern Alaska.

The budget is 100% funded by Ambler Metals.

● On January 25, 2023, the Company announced the second set of drilling results from the 2022 field season at the Upper Kobuk Mineral Projects and on February 27, 2023, the Company announced the third set of drilling results from the 2022 field season at the UKMP.

● On February 14, 2023, the Company announced an updated feasibility study technical report for the Arctic Project and an updated resource for the Bornite Project, and filed NI 43-101 technical reports for both projects with the Canadian securities regulators.

In addition, the Company announced technical report summaries for both projects prepared in accordance with S-K 1300 and which were filed as exhibits with the annual report on Form 10-K.

● On April 25, 2023, the Company completed non-brokered private placement of 5,854,545 Common Shares at a price of $0.55 per Common Share for gross proceeds of $3.2 million.

After legal and stock exchange fees, the Company received net proceeds of $3.1 million.

● On September 11, 2023 the Company provided an update on the activities at the UKMP with the Bornite camp opening.

● On October 19, 2023, the Company announced that the United States Bureau of Land Management’s (“BLM”) had filed the draft Supplemental Environmental Impact Statement (“SEIS”) on its website https://eplanning.blm.gov/eplanning-ui/project/57323/570 and anticipated being in the federal register on October 20, 2023.

The draft SEIS was open for a 60-day public comment period, until December 19, 2023.

The BLM reconfirmed they anticipate a final SEIS is expected in the first quarter of 2024, and a Record of Decision within the second quarter of 2024.

Significant Developments in 2022

● On January 11, 2022, the Company announced the 2022 program and budget of approximately $28.5 million for the advancement of the UKMP located in Northwestern Alaska.

The budget was 100% funded by Ambler Metals.

● On January 20, 2022, the Company announced an updated mineral resource for the Bornite Project.

● On February 7, 2022, the Company announced that the AIDEA had formally approved the proposed plan and budget for the 2022 summer field season activities and services of up to $30.8 million for the Ambler Access Project.

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

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

● On February 23, 2022, the Company announced that the United States Department of the Interior (“DOI”) filed a motion to remand the Final Environmental Impact Statement (“FEIS”) and suspend the right-of-way permits issued to AIDEA for the Ambler Access Project.

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The motion also indicated that the DOI has requested that the lawsuits filed against the DOI by a coalition of national and Alaska environmental non-government organizations be suspended.

The lawsuits had been filed in response to the United States Bureau of Land Management’s (“BLM”) issuance of the Joint Record of Decision (“JROD”), that authorized a right-of-way across federally managed lands for AIDEA and the AAP.

The lawsuits had been filed in response to the BLM issuance of the Joint Record of Decision (“JROD”), that authorized a right-of-way across federally managed lands for AIDEA and the AAP.

● On June 8, 2022, the Company announced that Ambler Metals had commenced mobilization for the upcoming exploration field program at the UKMP.

● On September 21, 2022, the Company announced that the BLM had published in the Federal Register a Notice of Intent (“NOI”) that it will prepare a Supplemental Environmental Impact Statement (“SEIS”) for the proposed Ambler Mining District Industrial Access Road.

● On September 21, 2022, the Company announced that the BLM had published in the Federal Register a Notice of Intent (“NOI”) that it will prepare the SEIS for the proposed Ambler Mining District Industrial Access Road.

The NOI indicates that:

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The site camp opened on June 1, 2021.

Significant Developments in 2020

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

(together with South32 Operations, “South32”).

The South32 Option Agreement granted to South32 a three-year option to form a 50/50 joint venture with respect to Trilogy’s Alaskan assets which includes the Upper Kobuk Mineral Projects.

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

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

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

In order to exercise its option to form the Joint Venture, South32 was required to contribute a minimum of $150 million, plus (i) any amounts Trilogy spent on matched parallel funding to a maximum of $16 million over the three year period and (ii) $10 million, less the amount of the Initial Funding contributed by South32.

On December 19, 2019, we

announced in a press release that South32 had exercised its option to acquire a 50% interest in a joint venture company to be named “Ambler Metals LLC” which now owns the UKMP Projects.

● On February 11, 2020, we announced that the formation of Ambler Metals had completed, with the Company contributing its assets associated with the UKMP Projects, and South32 contributing a subscription price payment of US$145 million, to the joint venture.

● In a press release dated February 26, 2020, the Company announced that Ambler Metals had approved a 2020 program budget of $22.8 million for the advancement of the UKMP Projects.

The budget was to be 100% funded by Ambler Metals.

The 2020 program budget included 10,000 meters of drilling at the Arctic Project, 2,500 meters of drilling within the Ambler VMS belt and geological mapping and geochemical soil sampling at the Bornite Project.

● Subsequent to the approval of the 2020 program budget, the Company and its joint venture partner, South32, decided not to proceed with the 2020 exploration program after assessing the coronavirus (COVID-19) environment.

Ambler Metals gave due consideration to the merits of carrying out an abridged work program at the UKMP Projects.

However, given the continued uncertainty resulting from COVID-19, ongoing safety concerns (despite added safety protocols including physical distancing, protective equipment and testing) and the fact that, due to COVID-19, the planned field season had already been delayed to the point at which any field season would provide limited critical path benefits, the decision was made not to proceed with a 2020 field season.

● On April 20, 2020, we issued a press release announcing the appointment of Tony Giardini as President and Chief Executive Officer effective June 1, 2020.

Giardini has been a director of the Company since 2012 when the Company was formed and will continue to be an executive director.

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

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

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

● In a press release dated August 20, 2020, the Company announced the positive results of its feasibility study for the Arctic Project (the “2020 Arctic FS”).

The 2020 Arctic FS was prepared on a 100% ownership basis, of which Trilogy’s share is 50%.

The 2020 Arctic FS describes the technical and economic viability of establishing a conventional open-pit copper-zinc-lead-silver-gold mine and mill complex for a 10,000 tonne per day operation for a minimum 12-year mine life.

See the 2020 Arctic Report (as defined below) and “ Properties ” for additional information.

● On August 25, 2020, we issued a press release to announce that the board of Ambler Metals had appointed Ramzi Fawaz as President and Chief Executive Officer of Ambler Metals effective as of September 1, 2020.

Mr Fawaz joined Ambler Metals from Newmont Corporation (“Newmont”) where he was Senior Vice President Projects from February 2011 to October 2019, with responsibility for the development and execution of Newmont’s major gold and copper projects globally.

● On September 3, 2020, we issued a press release announcing that the Company had hired Richard Gosse as Vice President Exploration of the Company with immediate effect.

● On October 2, 2020, we filed the technical report for the Company’s Arctic Project entitled “Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report"

with an effective date of August 20, 2020, prepared by Ausenco Engineering Canada Inc., Wood Canada Limited and SRK Consulting (Canada) Inc.

(the “2020 Arctic Report”).

The technical report describes the 2020 Arctic FS on the Arctic Project as discussed above.

The 2020 Arctic Report has been superseded by the Company’s NI 43-101 Arctic Report (as defined below).

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

The budget will be 100% funded by Ambler Metals.

History of Trilogy

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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 from such project (following the recoupment by Ambler Metals of all costs incurred, including operating, capital and carrying costs).

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

and (ii) $40 million (subject to

incurred prior to the date of the NANA Agreement together with interest on the costs;

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

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

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We strive to meet or exceed environmental standards at the UKMP Projects.

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

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

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

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

Alaskan groups.

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

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

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Risk Factors , and Item 2 Properties, Environmental, Permitting, Social and Closure Considerations below .

As of November 30, 2022, we had 5 full-time employees, all of whom were employed at our executive office in Vancouver, BC.

As of November 30, 2023, we had 5 full-time employees, all except our CEO, were employed at our executive office in Vancouver, BC.

We have entered into executive employment agreements with the CEO and CFO (each as defined herein).

In the past, the number of individuals we employed fluctuated throughout the year depending on the season;

however, during 2020, we contributed the UKMP Projects to Ambler Metals and no longer directly employ any seasonal staff.

Information About Our Executive Officers

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Tony Giardini

British Columbia, Canada

Director, President and Chief Executive Officer

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Available Information

We make available, free of charge, on or through our website, at www.trilogymetals.com our Annual Report on Form 10-K, which includes our audited financial statements, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

The SEC maintains a website that contains reports, proxy and information statements, and other information at www.sec.gov.

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

What changed 10-K

Item 1. Business