TMQ 10-K & 10-Q changes, risk factors and insider trading
Trilogy Metals Inc. · NYSE · Gold And Silver Ores · CIK 1543418 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The consummation of the transactions contemplated by the binding letter of intent with the U.S. Government and the U.S. Government’s ownership of significant equity interests in the Company may subject the Company and it stockholders to a number of additional risks and uncertainties, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations or adversely impact the interests of our other shareholders.”
New heading “Changes in U.S. laws and policies regulating international trade may adversely impact the Company.”
Largest changes
see in full comparisonU.S. Holders (as defined below under “Certain U.S. Federal Income Tax Considerations – U.S. Holders”) should be aware thatIf webelieve we were not a passive foreign investment company (“PFIC”) for the tax years ending November 30, 2020 and 2021, but we believe we wereare a PFIC fortheany taxyearsyearendingduringNovemberwhich30,a2018,U.S.2019,Holder2022,holds2023CommonandShares,2024certainandadverse U.S. federal income tax consequences maybeapplyatoPFICsuchinU.S.future tax years.Holder. If we are a PFIC for any year during a U.S. Holder’s holding period, then such U.S. Holder generally will be required to treat any gain realized upon a disposition of Common Shares and any so-called “excess distribution” received on its Common Shares as ordinary income, and to pay an interest charge on a portion of such gain ordistributions, unless the U.S. Holder makes a timely and effective “QEF Election” or a “Mark-to-Market Election” (each as defined below under “Certain U.S. Federal Income Tax Considerations – Default PFIC Rules under Section 1291 of the Code”).distributions. In certain circumstances, the sum of the tax and the interest charge may exceed the total amount of proceeds realized on the disposition, or the amount of excess distribution received, by the U.S. Holder. Subject to certain limitations, these tax consequences may be altered if a U.S. Holder makes a timely and effective QEF Election or a Mark-to-Market Election (each as defined below under the heading “Certain U.S. Federal Income Taxation Considerations – Default PFIC Rules under Section 1291 of the Code”). A U.S. Holder who makes a QEF Election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute anyamountsamount to our shareholders. We will make available to U.S. Holders, upon their written request, information as to our status as a PFIC, as reasonably determined by us, and will provide to a U.S. Holder all information and documentation that a U.S. Holder making a QEF Election with respect to us that is required to obtain for U.S. federal income tax purposes in the event we are a PFIC. We may provide such information on our website. A U.S. Holder who makes the Mark-to-Market Election generally must include as ordinary income each year the excess of the fair market value of the Common Shares over the U.S. Holder’s tax basis therein. This paragraph is qualified in its entirety by the discussion below under the heading “Certain U.S. Federal IncomeTaxTaxation Considerations.” Each U.S.shareholderHolder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of their Common Shares.
“U.S. Holders (as defined below under “Certain U.S. Federal Income Tax Considerations – U.S. Holders”) should be aware that we believe that we were a “passive foreign investment company” (a “PFIC”) within the meaning of Section 1297(a) of the Internal Revenue Code of 1986, as amended, for our most recently completed tax year, and based on current business plans and financial expectations, we may be a PFIC in the current tax year and future tax years. …”see in full comparison
“The consummation of the transactions contemplated by the binding letter of intent with the U.S. Government and the U.S. Government’s ownership of significant equity interests in the Company may subject the Company and it stockholders to a number of additional risks and uncertainties, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations or adversely impact the interests of our other shareholders.”see in full comparison
“The binding letter of intent entered into on October 6, 2025 with the DOW, led by the Office of the Undersecretary of Defense for Acquisitions and Sustainment (OUSD (A&S)) and the Office of Strategic Capital (OSC), for the Strategic Investment, which provides that the DOW will purchase from the Company 8,215,570 units at a price of $2.17 per unit for an aggregate purchase price of approximately $17.8 million. Each unit is comprised of one common share of Trilogy and 3/4 of a 10-year Trilogy Warrant. …”see in full comparison
“Changes in U.S. laws and policies regulating international trade may adversely impact the Company.”see in full comparison
“The activities of the current administration in the United States may result in legislative and regulatory changes that could have a material adverse effect on the Company and its financial condition. In particular, there is uncertainty regarding U.S. tariffs and support for existing treaty and trade relationships, including with Canada. …”see in full comparison
Full comparison: every changed paragraph (18)
We have limited financial resources. We currently generate no mining operating revenue and must primarily finance exploration activity and the development of mineral projects by other means. Once our share of the funding originally contributed by South32 to Ambler Metals (part of which was returned to us in 2024) has been expended, ourOur ability to continue exploration, development and production activities, if any, will depend on our ability to obtain additional external financing. Any unexpected costs, problems or delays could severely impact our ability to continue exploration and development activities. The failure to meet ongoing obligations on a timely basis could result in a loss or a substantial dilution of our interests in projects.
As the Upper Kobuk Mineral Projects are located in a remote area, exploration, development and production activities may be limited and delayed by inclement weather and a shortened exploration season. The exploration of the UKMP Projects haswas also been impacted by COVID-19.COVID-19 and any future pandemic events may have a similar impact on the UKMP Projects.
We cannot provide assurance that title to our properties will not be challenged. We (through our interest in Ambler Metals) indirectly own mineral claims which constitute our property holdings. We may not have, or may not be able to obtain, all necessary surface rights to develop a property. Title insurance is generally not available for mineral properties and our ability to ensure that we have obtained a secure claim to individual mining properties may be severely constrained. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. We have not conducted surveys of all of the claims in which we hold direct or indirect interests. A successful claim contesting our title to a property will cause us to lose our rights to explore and, if warranted, develop that property or undertake or continue production thereon. This could result in our not being compensated for our prior expenditures relating to the property. In addition, our ability to continue to explore and develop the property may be subject to agreements with other third parties including agreements with native corporations and first nations groups, for instance, the lands at the Upper Kobuk Mineral Projects are subject to the NANA Agreement (as more particularly described under "History of Trilogy - Agreement with NANA Regional Corporation").
NANA Agreement (as more particularly described under "History of Trilogy - Agreement with NANA Regional Corporation").
Most exploration projects do not result in the discovery of commercially mineable ore deposits, and no assurance can be given that any anticipated level of recovery of ore reserves, if any, will be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited. Estimates of mineral reserves, mineral resources, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, the metallurgy of the mineralization forming the mineral deposit, unusual or unexpected geological formations and work interruptions. If current exploration programs do not result in the discovery of commercial ore, we may need to write-off part or all of our investment in our existing exploration stage properties and may need to acquire additional properties.
Estimates of mineral reserves, mineral resources, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, the metallurgy of the mineralization forming the mineral deposit, unusual or unexpected geological formations and work interruptions. If current exploration programs do not result in the discovery of commercial ore, we may need to write-off part or all of our investment in our existing exploration stage properties and may need to acquire additional properties.
Certain of our directors and officers also serve as directors or officers, in other companies involved in natural resource exploration and development or mining-related activities, including, in particular, NovaGold.activities. To the extent that such other companies may participate in ventures in which we may participate in, or in ventures which we may seek to participate in, our directors and officers may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In all cases where our directors and officers have an interest in other companies, such other companies may also compete with us for the acquisition of mineral property investments. Any decision made by any of these directors and officers involving Trilogy will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of Trilogy and its shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter in which these directors may have a conflict of interest in accordance with the procedures set forth in the Business Corporations Act (British Columbia) and other applicable laws. In appropriate cases, the Company will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. Nonetheless, as a result of these conflicts of interest, the Company may not have an opportunity to participate in certain transactions, which may have a material adverse effect on the Company’s business, financial condition, results of operation and prospects.
The consummation of the transactions contemplated by the binding letter of intent with the U.S. Government and the U.S. Government’s ownership of significant equity interests in the Company may subject the Company and it stockholders to a number of additional risks and uncertainties, any of which could have a material adverse effect on the Company’s business, financial condition and results of operations or adversely impact the interests of our other shareholders.
The binding letter of intent entered into on October 6, 2025 with the DOW, led by the Office of the Undersecretary of Defense for Acquisitions and Sustainment (OUSD (A&S)) and the Office of Strategic Capital (OSC), for the Strategic Investment, which provides that the DOW will purchase from the Company 8,215,570 units at a price of $2.17 per unit for an aggregate purchase price of approximately $17.8 million. Each unit is comprised of one common share of Trilogy and 3/4 of a 10-year Trilogy Warrant. Each Trilogy Warrant will be exercisable following completion of construction of the Ambler Road at an exercise price of $0.01 to acquire one common share of Trilogy. Additionally, the DOW will purchase from South32, the Company’s joint venture partner at Ambler Metals, at a price of approximately $17.8 million 8,215,570 common shares of Trilogy that South32 currently holds and a 10-year call option to acquire an additional 6,161,678 common shares of Trilogy from South32 at a price of $0.01 per share, exercisable following completion of construction of the Ambler Road. The aggregate 16,431,140 shares to be issued and/or transferred to the DOW pursuant to the transactions above represents approximately 10% of the Company’s then issued and outstanding common shares. The Company and South32 will reinvest the entire proceeds from the Strategic Investment in Ambler Metals to advance the exploration and development of the UKMP. Unitl October 6, 2028, the DOW shall have a three-year right to appoint one independent third-party director with relevant corporate governance experience to the board of directors of Trilogy, subject to the approval of the Trilogy board of directors, not to be unreasonably withheld. Finally, the letter of intent contains covenants to act in good faith regarding (i) a framework agreement among interested parties to establish the basis on which the Ambler Road can be permitted, financed and constructed, (ii) the DOW’s help to facilitate financing required for the construction of the Ambler Road in coordination with the State of Alaska, and (iii) certain permitting matters. Finally, the binding letter of intent provides for limits on the Company’s incurrence of indebtedness for the next three years in excess of $1 billion. The transaction is expected to close following the reauthorization of the Defense Production Act by the United States Congress and the completion by the U.S. government of its Foreign Ownership, Control, or Influence (FOCI) review; provided however, that if these conditions have not occurred prior to March 31, 2026 the letter of intent will terminate.
The closing of the Strategic Investment and the associated receipt of funds depends on the availability of appropriations from the legislative branch of the U.S. government and the ability of the executive branch of the U.S. government to obtain the funding and support contemplated by the transaction. The legislative, judicial or executive branches of the U.S. government could determine in the future that all or a portion of the transactions were unauthorized, void or voidable. The issuance of common shares to the U.S. government at a discount to the current market price is dilutive to existing shareholders, and shareholders may suffer significant additional dilution if the conditions to the Trilogy Warrant are triggered and the Trilogy Warrant is exercised. In addition, enforcement against a government counterparty is inherently uncertain given the defenses available to the U.S. government. The transactions contemplated by the letter of intent and the Strategic Investment may result in the U.S. government becoming one of the Company’s larger shareholders. The U.S. government’s interests in the Company may not be the same as those of other shareholders, and the presence of an additional large shareholder may dilute the voting power of existing or future shareholders. The contractual debt limitation may adversely impact the Company’s ability to raise capital. The existence of a significant U.S. government equity interest in the Company, and the U.S. government’s substantial additional powers with respect to the laws and regulations impacting the Company, may impact the Company's ability to pursue potential future strategic transactions that may be beneficial to shareholders.
We may be a “passive foreign investment company” infor our current and future periods,tax years, which may have adverse U.S. federal income tax consequences for U.S. Holders.
U.S. Holders (as defined below under “Certain U.S. Federal Income Tax Considerations – U.S. Holders”) should be aware that we believe that we were a “passive foreign investment company” (a “PFIC”) within the meaning of Section 1297(a) of the Internal Revenue Code of 1986, as amended, for our most recently completed tax year, and based on current business plans and financial expectations, we may be a PFIC in the current tax year and future tax years. PFIC status depends on the composition of a company’s income and assets and the fair market of its assets (including goodwill) calculated on a yearly basis after the close of the taxable year, as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations. There can be no assurance that we will not be treated as a PFIC for any taxable year.
U.S. Holders (as defined below under “Certain U.S. Federal Income Tax Considerations – U.S. Holders”) should be aware thatIf we believe we were not a passive foreign investment company (“PFIC”) for the tax years ending November 30, 2020 and 2021, but we believe we wereare a PFIC for theany tax yearsyear endingduring Novemberwhich 30,a 2018,U.S. 2019,Holder 2022,holds 2023Common andShares, 2024certain andadverse U.S. federal income tax consequences may beapply ato PFICsuch inU.S. future tax years.Holder. If we are a PFIC for any year during a U.S. Holder’s holding period, then such U.S. Holder generally will be required to treat any gain realized upon a disposition of Common Shares and any so-called “excess distribution” received on its Common Shares as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the U.S. Holder makes a timely and effective “QEF Election” or a “Mark-to-Market Election” (each as defined below under “Certain U.S. Federal Income Tax Considerations – Default PFIC Rules under Section 1291 of the Code”).distributions. In certain circumstances, the sum of the tax and the interest charge may exceed the total amount of proceeds realized on the disposition, or the amount of excess distribution received, by the U.S. Holder. Subject to certain limitations, these tax consequences may be altered if a U.S. Holder makes a timely and effective QEF Election or a Mark-to-Market Election (each as defined below under the heading “Certain U.S. Federal Income Taxation Considerations – Default PFIC Rules under Section 1291 of the Code”). A U.S. Holder who makes a QEF Election generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amountsamount to our shareholders. We will make available to U.S. Holders, upon their written request, information as to our status as a PFIC, as reasonably determined by us, and will provide to a U.S. Holder all information and documentation that a U.S. Holder making a QEF Election with respect to us that is required to obtain for U.S. federal income tax purposes in the event we are a PFIC. We may provide such information on our website. A U.S. Holder who makes the Mark-to-Market Election generally must include as ordinary income each year the excess of the fair market value of the Common Shares over the U.S. Holder’s tax basis therein. This paragraph is qualified in its entirety by the discussion below under the heading “Certain U.S. Federal Income TaxTaxation Considerations.” Each U.S. shareholderHolder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of their Common Shares.
Proposed legislation in the U.S. Congress, including changes in U.S. tax law may adversely impact the Companyus and the value of our Common Shares.
Changes to U.S. tax laws (which changes may have retroactive application) could adversely affect the Companyus or holders of our Common Shares. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and additional changes to U.S. federal income tax laws are likely to continue to occur in the future.
The U.S. Congress is currently considering numerous items of legislation which may be enacted prospectively or with retroactive effect, which legislation could adversely impact the Company’sour financial performance and the value of our Common Shares. Additionally, U.S. states in which we operate or own assets may impose new or increased taxes. If enacted, most of the proposals would be effective for the current or later years. The proposed legislation remains subject to change, and its impact on the Companyus and purchasers of our Common Shares is uncertain.
Changes in U.S. laws and policies regulating international trade may adversely impact the Company.
The activities of the current administration in the United States may result in legislative and regulatory changes that could have a material adverse effect on the Company and its financial condition. In particular, there is uncertainty regarding U.S. tariffs and support for existing treaty and trade relationships, including with Canada. Although discussions continue between the United States and other countries, there remains significant uncertainty over whether tariffs or other restrictive trade measures or countermeasures will be implemented and, if so, the scope, impact and duration of any such measures. A trade war or new tariffs barriers may potentially lead to increases or decreases in revenues due to higher or lower metal prices, but the overall effect would depend on changes in demand, production strategies, and operational costs. Further, a trade war or new tariff barriers may potentially lead to increased costs and may result in uncertainty over mineral resources and reserve estimates in its technical reports. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for development and other costs have become increasingly difficult, if not impossible, to project.
Management's Discussion & Analysis (MD&A)
New heading “Base Shelf Prospectus”
New heading “At-The-Market Offering”
New heading “U.S. Government Support”
New heading “Fair value accounting”
New heading “Recently Adopted Accounting Standards”
New heading “Issued and Not Effective”
New heading “Fair Value Measurement of Derivative Liability”
Removed heading “Selected financial data”
Removed heading “Annual information”
Removed heading “Quarterly information”
Removed heading “Financial instruments”
Removed heading “Updates to Reportable Segment Disclosures”
Removed heading “Updates to Income Tax Disclosure”
Removed heading “Disclosure controls and procedures”
Removed heading “Internal control over financial reporting”
Removed heading “development of mineral properties, and related cost increases;”
Removed heading “shares, diluting voting power and reducing future earnings per share;”
Largest changes
“We must make estimates and judgments in determining the provision for income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits including interest and penalties. We are subject to income tax law in the United States and Canada. The evaluation of tax liabilities involving uncertainties in the application of complex tax regulation is based on factors such as changes in facts or circumstances, changes in tax law, new audit activity, and effectively settled issues. …”see in full comparison
“shares, diluting voting power and reducing future earnings per share;”see in full comparison
“development of mineral properties, and related cost increases;”see in full comparison
“The Company filed a final short form base shelf prospectus base shelf prospectus with the securities commissions in each of the provinces and territories of Canada (the “Canadian Base Shelf Prospectus”), and a corresponding shelf registration statement on Form S-3 (the “Registration Statement”, and together with the Canadian Base Shelf Prospectus, the (“Base Shelf Prospectus”) with the United States Securities and Exchange Commission (“SEC”) allowing for the future issuance, from time to time, of up to $50 million in common shares of the Company (the “Common Shares”), warrants to purchase …”see in full comparison
“Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted by the Company under U.S. and Canadian securities legislation is recorded, processed, summarized and reported within the time periods specified in those rules, including providing reasonable assurance that material information is gathered and reported to senior management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to permit timely decisions regarding public disclosure. …”see in full comparison
Full comparison: every changed paragraph (82)
This Management’s Discussion and Analysis (“MD&A”) of Trilogy Metals Inc. (“Trilogy”, “the Company”, “us” or “we”) is dated February 13,16, 20252026 and provides an analysis of our audited financial results for the year ended November 30, 20242025 compared to the year ended November 30, 2023.2024. A discussion of our year ended November 30, 20242025 compared to November 30, 20232024 is contained in ourthis report on Form 10-K for the year ended November 30, 2024.2025.
Trilogy’s shares are listed on the Toronto Stock Exchange (“TSX”) and the NYSE American LLC (the “NYSE American”) under the symbol “TMQ”. Additional information related to Trilogy, including our annual report on Form 10-K, is available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov.
Corporate developmentsactivities
Base Shelf Prospectus
The Company filed a final short form base shelf prospectus base shelf prospectus with the securities commissions in each of the provinces and territories of Canada (the “Canadian Base Shelf Prospectus”), and a corresponding shelf registration statement on Form S-3 (the “Registration Statement”, and together with the Canadian Base Shelf Prospectus, the (“Base Shelf Prospectus”) with the United States Securities and Exchange Commission (“SEC”) allowing for the future issuance, from time to time, of up to $50 million in common shares of the Company (the “Common Shares”), warrants to purchase Common Shares, share purchase contracts of the Company, subscription receipts and units comprised of some or all of the foregoing securities (collectively, the “Securities”). Any amounts, prices and terms will be determined based on market conditions at the time of an offering and will be set out in an accompanying prospectus supplement. The final Base Shelf Prospectus became effective on April 14, 2025. The Canadian Base Shelf Prospectus will remain effective for 25 months, while the Registration Statement will remain effective for three years.
At-The-Market Offering
On May 27, 2025, the Company entered into an equity distribution agreement (the “May Distribution Agreement”) with BMO Nesbitt Burns Inc., Cantor Fitzgerald Canada Corporation, BMO Capital Markets Corp. and Cantor Fitzgerald & Co. for an at-the-market equity program (“May ATM Program”). On the same date, the Company filed a prospectus supplement (the “May Prospectus Supplement”) to the Canadian Base Shelf Prospectus and the US shelf registration statement on Form S-3 qualifying the distribution of the Common Shares under the May ATM Program. Under the May ATM Program and pursuant to the May Distribution Agreement and the May Prospectus Supplement, the Company could sell up to $25 million of Common Shares. The Common Shares sold under the May ATM Program were to be sold at the prevailing market price at the time of sale. The net proceeds of any such sales under the May ATM Program are anticipated to be used for continued development of the UKMP and for general corporate purposes. In October 2025, pursuant to the May ATM Program the Company sold 3,513,495 shares of common stock at an average price of $7.12 per share for gross proceeds of $25.0 million and net proceeds of $24.3 million after commissions paid under the May Distribution Agreement. The May ATM Program was terminated upon completion of these sales.
On October 31, 2025, the Company filed a prospectus as part of its automatic shelf registration statement on Form S-3 with the SEC. This registration allows the Company to issue, from time to time, various securities including Common Shares, warrants to purchase Common Shares (the “Warrants”), share purchase contracts, subscription receipts, and units comprised of some or all of the foregoing securities (collectively, the “Securities”) or any combination thereof in one or more transactions under this shelf prospectus (the “US Prospectus”). Securities may be offered separately or together, at times, in amounts, at prices and on terms to be determined based on market conditions at or prior to the time of each offering and set forth in an accompanying shelf prospectus supplement.
On November 7, 2025, the Company entered into an equity distribution agreement with Cantor Fitzgerald & Co. and BMO Capital Markets Corp., as lead agents (the “Lead Agents”), and Canaccord Genuity LLC, National Bank of Canada Financial Inc. and Raymond James (USA) Ltd., for an at-the-market equity program pursuant to which the Company may offer and issue up to $200 million of Common Shares from time to time through the Lead Agents (“Nov ATM Program”). The Offering is being made in the United States under the terms of the Company’s registration statement on Form S-3 filed with the SEC (“November Prospectus Supplement”). No sales of Common Shares under this November Prospectus Supplement will be made in Canada, to anyone known by the Agents to be a resident of Canada or over or through the facilities of the TSX or any other exchange or market in Canada. No sales were made under the Nov ATM Program in the fourth quarter of 2025.
U.S. Government Support
On October 6, 2025, the Company, South32 and Ambler Metals entered into a binding letter of intent with the U.S. Department of War (“DOW”) for an investment to advance exploration and development of the Company’s UKMP. The DOW will invest approximately $17.8 million in Trilogy Metals in exchange for 8,215,570 units at a price of $2.17 per unit, with each unit comprising of one common share of Trilogy Metals and 3/4 of a 10-year warrant. Each full warrant would be exercisable to acquire up to 6,161,678 common shares of Trilogy Metals at a price of $0.01 per share (“Trilogy Warrant”). Concurrently, the DOW will pay approximately $17.8 million to South32 in exchange for 8,215,570 common shares of Trilogy Metals that South32 currently holds and a 10-year call option to acquire an additional 6,161,678 shares of Trilogy Metals from South32 at a price of $0.01 per share (“South32 Warrant”). The Trilogy Warrant and the South32 Warrant are exercisable following completion of construction of the Ambler Road. The entire proceeds of approximately $35.6 million from the transactions with the DOW will be reinvested in Ambler Metals.
The Company had a 2024 fiscal year cash budget totaling $2.8 million. For the fiscal year ended November 30, 2024, we used $2.7 million in operating activities mainly for personnel costs, professional fees, regulatory and office expenses.
On October 19, 2011, NANA Regional Corporation, Inc. (“NANA”),NANA, an Alaska Native Corporation headquartered in Kotzebue, Alaska, and Trilogy Metals US entered an Exploration Agreement and Option Agreement (as amended, the “NANA Agreement”) for the cooperative development of NANA’s respective resource interests in the Ambler Mining District of Northwest Alaska. Upon the formation of Ambler Metals, the Company assigned its rights and obligations under the NANA Agreement to Ambler Metals. The NANA Agreement consolidates Ambler Metals’ and NANA’s land holdings into an approximately 142,831-hectare land package and provides a framework for the exploration and any future development of this high-grade and prospective poly-metallic belt.
The Ambler lands, which host a number of deposits, includinginclude the high-grade copper-zinc-lead-gold-silver Arctic Project, and other mineralized occurrences within a 100-kilometer-long volcanogenic massive sulfide (“VMS”) belt. The Ambler lands are located in Northwestern Alaska and consist of 185,805 acres (75,192 hectares) of Federal patented mining claims which hosts the Arctic deposit and State of Alaska mining claims which weAmbler areMetals is actively exploring, within which VMS mineralization has been found.
Prior to the formation of the Joint Venture on February 11, 2020, we had recorded the Ambler lands as a mineral property with acquisition costs capitalized and exploration costs expensed in accordance with our accounting policies.
On January 15, 2025, the Company announced the positive results of its Preliminary Economic Assessment Study/Initial Assessment (“Bornite PEA”) for the Bornite copper project. Highlights of the Bornite PEA include the following:
The Bornite PEA describes the technical and economic viability of establishing an underground mining operation for a 6,000 tonne-per-day operation with a 17-year mine life. The Bornite PEA assumes re-purposing the infrastructure described in the Arctic Feasibility Study for the use with the Bornite Project once the Arctic deposit has been depleted.
Prior to the formation of the Joint Venture on February 11, 2020, we had accounted for the Bornite property as a mineral property with acquisition costs capitalized and exploration costs expensed in accordance with our accounting policies.
The board of Ambler Metals approved a 20242025 fiscal year budget totaling $5.5$5.8 million to support external and community affairs, to maintain the State of Alaska mineral claims in good standing, and for the maintenance of physical assets. During the fiscal year ended November 30, 2024,2025, Ambler Metals expendedspent $4.6$5.6 million onin expenses primarily related to salaries and wages, professional fees, engineering, and project support costs and mineral property expenses, excluding the Ambler Access Project (the “AAP”) costs.support.
TheIn addition, the board of Ambler Metals also approved asupplement 2024 fiscal year budgetbudgets totaling $2.5$1.2 million to support the AAP. During the fiscal year ended November 30, 2024,2025, Ambler Metals fundedincurred $1.7$1.0 million related to the AlaskaAmbler IndustrialAccess DevelopmentProject andcosts, Exportprimarily Authority (“AIDEA”) in supportconsisting of thecontinuity AAP.engagement activities.
During the second and third quarter of 2024, Trilogy and South32 agreed to return excess cash held by Ambler Metals to the owners for ease of cash management. Ambler Metals returned $50 million to the owners, of which Trilogy received a total of $25 million in the months of May and June.
On October 6, 2025, President Trump issued a decision under Section 1106 of the Alaska National Interest Lands Conservation Act (“ANILCA”), granting the permits for the Ambler Access Project (or “Ambler Road”). The decision approved an appeal by the Alaska Industrial Development and Export Authority (“AIDEA”), a public corporation of the State of Alaska, to reverse the Biden Administration’s decision in June 2024 to select the “No Action Alternative” and terminate the previously issued right-of-way grant for the Ambler Road. President Trump directed relevant agencies to promptly reinstate, grant and finalize all necessary permits and authorizations with terms necessary to assure adequate and feasible access for economic and other purposes, such as mining and use of the road for industrial and commercial access. All federal right-of-way permits were subsequently issued and are currently in place.
On April 22, 2024, the Company announced that the United States Bureau of Land Management (“BLM”) had filed the final Supplemental Environmental Impact Statement (“SEIS”) for the AAP on its website. The final SEIS identifies “No Action” as the BLM’s preferred alternative. The proponent for the AAP is AIDEA which is a public corporation of the State of Alaska. AIDEA’s purpose is to promote, develop, and advance general prosperity and economic welfare of the people of Alaska. AIDEA strongly objected to both the process used by the BLM to reach a “No Build” decision and the effect of the decision which AIDEA believes illegally blocks access to statehood lands, minerals, and federally patented mining claims. On May 8, 2024, NANA announced its withdrawal from further involvement with the AAP and stated its intentions to not renew the surface access permit with AIDEA upon the permit’s expiry during the year.
On June 28, 2024, the BLM issued the Record of Decision confirming their selection of the No Action alternative and thus denied AIDEA’s application for a right-of-way grant (“ROW Grant”) across BLM-managed lands which terminated the BLM ROW Grant issued to AIDEA on January 5, 2021.
On January 20, 2025, President Trump signed the executive order “Unleashing Alaska’s Extraordinary Resource Potential,” which included a direction to various federal agencies to take steps to (i) “place a temporary moratorium on all activities and privileges granted pursuant” to the record of decision issued on June 28, 2024 “in order to review such record of decision in light of alleged legal deficiencies and for consideration of relevant public interests and, environmental impacts . . . and, as appropriate, conduct a new, comprehensive analysis of such deficiencies, interests, and environmental impacts;” and (ii) “reinstate the record of decision signed on July 23, 2020, by the Bureau of Land Management and United States Army Corps of Engineers entitled ‘Ambler Road Environmental Impact Statement Joint Record of Decision.’” The July 2020 record of decision approved the development of the northern or “Alternative A” route of the proposed 211-mile-long gravel private access road in the southern Brooks Range foothills to provide industrial access to the Ambler Mining District. Trilogy is monitoring the impact of the executive order.
The Company has approved its 2026 corporate budget of approximately $5.0 million for public company compliance activities and oversight of Ambler Metals. In January 2026, the Company added capacity to the senior management team to support strategic initiatives and technical expertise to support the advancement of the UKMP.
The Company has also approved a budget for Ambler Metals for fiscal 2026 in the amount of approximately $35 million of which our share is $17.5 million. The activities at Ambler Metals will focus on re-staffing, initiating the permitting process for the Arctic Project and progressing technical work necessary to support long-term development.
The Company has approved a budget for Ambler Metals for fiscal 2025 in the amount of $5.8 million (2024 - $5.5 million). Ambler Metals had $7.5 million of cash as at the fiscal year end on November 30, 2024. The main focus of this year’s budget is to support external and community affairs, maintain the State of Alaska mineral claims in good standing and the maintenance of physical assets.
The Company has approved a 2025 cash budget for corporate, head office, activities of approximately $3.1 million (2024 - $2.8 million). The corporate budget consists of personnel and related costs of $0.7 million (2024 - $0.7 million), professional fees of $1.1 million (2024 - $0.6 million), investor relations and marketing costs of $0.2 million ( 2024 - $0.1 million), office related costs of $0.2 million (2024 - $0.4 million), insurance costs of $0.5 million (2024 - $0.6 million), regulatory costs of $0.3 million (2024 - $0.3 million) and exploration activities of $0.1 million (2024 - $0.1 million). Trilogy had $25.8 million of cash at the fiscal year end on November 30, 2024. The Company has sufficient cash on hand to fund the approved fiscal 2025 budget.
For the year ended November 30, 2025, we reported a net loss of $42.2 million (or $0.26 basic and diluted loss per common share) compared to a net loss of $8.6 million (or $0.05 basic and diluted loss per common share) in fiscal 2024. The increase in comprehensive loss in the current year was primarily driven by the initial recognition of a derivative liability and the corresponding expense of $8.1 million related to the U.S. government’s proposed collaboration agreement and the fair value adjustment of $22.6 million at the fiscal year end. Additionally, the increase in loss reflects higher salaries paid in cash during 2025, whereas in 2024 a significant portion of executive compensation as settled in common shares of the Company, as part of multi-year cash preservation effort. The increase in the current year loss was also attributable to higher professional fees, including legal and regulatory costs related to the Company’s preparation of base shelf prospectuses, the May ATM Program and the Nov ATM Program. These increases were partially offset by higher interest earned during the year.
For the year ended November 30, 2024, we reported a net loss of $8.6 million (or $0.05 basic and diluted loss per common share) compared to a net loss of $15.0 million (or $0.10 basic and diluted loss per common share) in fiscal 2023. The $6.4 million decrease in comprehensive loss in the current year, when compared to fiscal 2023, is due to the decrease in our share of losses of Ambler Metals of $5.2 million, overall decrease of $0.5 million in general and administrative expenses, professional fee and salaries and directors expense – stock-based compensation and partially offset by the increase in interest income of $0.6 million. The decrease in our share of losses of Ambler Metals of $5.2 million is mainly due to the decrease in corporate wages due to a reduction in staffing and a reduction in mineral property expenses due to a reduction in project activities which was partially offset by the increase in professional fees related to part-time contractors engaged to assist with management of Ambler Metals, along with consultants engaged in government and external affairs.
For the fourth quarter of 2025, we incurred a net loss of $34.7 million compared to a net loss of $1.6 million in the fourth quarter of 2024. The increase in net loss is primarily driven by our share of loss from the equity investment in Ambler Metals and the loss on the derivative related to the U.S. government’s proposed strategic investment for shares and warrants carried at fair market value. The increase in comprehensive loss in the current year also reflects higher regulatory expenses and legal fees related to the Company’s preparation of base shelf prospectuses and at-the-market programs and the payment of executive compensation in cash instead of settling the compensation in common shares of the Company.
For the fourth quarter of 2024, there was a $1.4 million reduction in expenses compared to the fourth quarter of 2023. When comparing the fourth quarter of 2024 with the fourth quarter of 2023, professional fees increased by $0.2 million due to additional costs related to our Bornite preliminary economic assessment reports in the fourth quarter of 2024. The decrease in our share of losses of Ambler Metals of $1.2 million is mainly due to the decrease in mineral property expenses over the comparative quarter in the prior year were from a reduction in activities both at the project level and at the AAP.
Selected financial data
Annual information
The following annual information is prepared in accordance with U.S. GAAP.
Quarterly information
Factors that can cause fluctuations in our quarterly results include the length of the exploration field season at the properties, the type of program conducted, and stock-based compensation expense. Subsequent to the formation of the Joint Venture, project related costs may cause fluctuations in our quarterly results through our 50% share of the Joint Venture’s net operating loss.
For the fourth quarter of 2024, we reported a comprehensive loss of $1.6 million, which consisted of $1.5 million in operating expenses and $0.6 million for Trilogy's 50% share of Ambler Metals’ operating loss, partially offset with interest earned of $0.5 million. Operating expenses for the fourth quarter of 2024 consisted of corporate salaries, professional fees, general and administrative expenses, director expenses and stock-based compensation.
For the third quarter of 2024, we reported a net loss of $1.6 million compared to a net loss of $4.1 million for the third quarter of 2023. The decrease in comprehensive loss in the third quarter of 2024 compared to the same quarter in 2023 is primarily due to the decrease in our share of loss of Ambler Metals. The decrease of our share of losses of Ambler Metals is mainly due to the decrease in corporate wages and in mineral property expenses partially offset from the increase in professional fees. The primary drivers in decrease in mineral property expenses over the comparative quarter in the prior year were from a reduction in activities both at the project level and at the AAP.
For the second quarter of 2024, we reported a net loss of $1.8 million compared to a net loss of $2.8 million for the second quarter of 2023. The decrease in comprehensive loss in the second quarter of 2024 compared to the same quarter in 2023 is due to the decrease in general and administrative, professional fees, our share of loss of Ambler Metals, and stock-based compensation and salaries. The decrease of our share of losses of Ambler Metals is mainly due to the decrease in corporate wages and in mineral property expenses partially offset from the increase in professional fees. The primary drivers in decrease in mineral property expenses over the comparative quarter in the prior year were from a reduction in activities both at the project level and at the AAP.
For the first quarter of 2024, we reported a net loss of $3.6 million compared to a net loss of $5.1 million for the first quarter of 2023. The decrease in comprehensive loss in the first quarter of 2024 compared to the same quarter in 2023 is due to the decrease in our share of loss of Ambler Metals, and stock-based compensation and salaries. The decrease of our share of losses of Ambler Metals is mainly due to the decrease corporate wages and in mineral property expenses. The primary drivers in decrease in mineral property expenses over the comparative quarter in the prior year were from the decrease in project support costs and cost at the AAP.
During the year ended November 30, 2025, we spent $3.2 million in operating activities, spent $1.0 million in investing activities, and raised $30.0 million in financing activities. Operating expenditures were driven primarily by corporate salaries, professional fees to complete the Bornite PEA, and the preparation of base shelf prospectuses, at-the-market programs, including regulatory filing fees with the U.S. and Canadian securities commissions. In addition, the Company contributed $1.0 million for our share of funding to Ambler Metals. These cash outflows were offset by $30.0 million in proceeds from financing activities, primarily from the May ATM Program and exercise of stock options.
We expended $1.8 million on operating activities during the 2024 fiscal year with the majority of cash spent on corporate salaries, professional fees related to our annual regulatory filings, annual insurance renewal, annual fees paid to the Toronto Stock Exchange and the NYSE American Exchange and with the American and Canadian securities commissions.
At November 30, 2024,2025, we had $25.8cash of $51.6 million in cash and working capital (of $49.6 million, which are current assets less current liabilities) of $25.3 million. Duringexcluding the fiscalnon-cash yearderivative of 2024, Trilogy received a total of $25.0 million from Ambler Metals as a return of excess cash to the owners.liability. There is sufficient cash on hand to fund the approvedCompany’s fiscal 20252026 budget of $3.1$5.0 million and our share of Ambler Metas’ fiscal 2026 budget of $17.5 million.
All project related costs are funded by the Joint Venture. Ambler Metals had cash and working capital of $7.5 million as at November 30, 2024. There are sufficient funds at the Joint Venture to fund an operating budget of $5.8 million for fiscal 2025.
At February 13,17, 2025,2026, we had 163,941,185172,545,639 common shares issued and outstanding. At February 13,17, 2025,2026, we had 14,218,5679,935,250 stock options outstanding with a weighted-average exercise price of CDN$1.63CDN$1.99 and 3,386,3563,206,355 Deferred Share Units, 373,692 Fixed Deferred Share Units (“DSUs”) and 1,798,338951,670 Restricted Share Units (“RSUs”) outstanding. At February 13, 2025 we had 5,144 NovaGold Resources Inc. (“NovaGold”) DSUs for which the NovaGold director is entitled to receive one common share of Trilogy for every six NovaGold shares to be received upon their retirement from the NovaGold board. A total of 859 common shares will be issued upon redemption of the NovaGold DSUs. For additional information on NovaGold DSUs, please refer to note 6 in our November 30, 2024 audited consolidated financial statements. Upon the exercise of all the forgoing convertible securities, the Company would be required to issue an aggregate of 19,404,12014,466,967 common shares.
Fair value accounting
Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 – Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
Financial instruments
OurThe Company’s financial instruments consist of cash,cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities. The fair value of the Company’s financial instruments approximates their carrying value due to the short-term nature of their maturity. OurThe Company’s financial instruments initially measured at fair value and then held at amortized cost include cash,cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities. The majority of the Company’s cash and cash equivalents is held at two large Canadian financial institutions and is largely uninsured as at November 30, 2025.
The derivative liability is carried at fair value on a recurring basis. The fair value of the derivative liability is valued on the basis of Level 3 inputs. The estimated fair value is based on the Company’s common stock price of $4.28 at November 30, 2025 ($2.09 on October 7, 2025), volatility of 79%, a risk-free rate of 3.53% and management’s estimate of the equal probability of completion and non-completion of the Ambler Access Project, which is beyond the control of the Company. A 10% change in the Company’s stock price affects the gain or loss on the derivative liability by approximately $4.8 million at November 30, 2025. A 10% change in management’s estimate of the likelihood of completion affects the gain or loss on the derivative liability by approximately $1.3 million at November 30, 2025.
(a) Currency risk
Currency risk is the risk of a fluctuation in financial asset and liability settlement amounts due to a change in foreign exchange rates. The Company operates in the United States and Canada. The Company’s exposure to currency risk at November 30, 2024 is limited to Canadian dollar balances consisting of cash of CDN$116,000, accounts receivable of CDN$23,000 and certain trade payables and accrued personnel costs CDN$548,000. 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 $29,000.
(b) Credit risk
Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company holds cash with Canadian chartered financial institutions. The Company’s only significant exposure to credit risk is equal to the balance of cash as recorded in the financial statements. The majority of the Company’s cash held at November 30, 2024 is uninsured. The Company does not consider any of its financial assets to be impaired as of November 30, 2024.
(c) Liquidity risk
Liquidity risk is the risk that we will encounter difficulties raising funds to meet our financial obligations as they fall due. We are in the exploration stage and do not have cash inflows from operations; therefore, we manage liquidity risk through the management of our capital structure and financial leverage. Future sources of liquidity may arise from equity financing, debt financing, convertible debt, or other means.
What changed in the latest 10-Q
Risk Factors
New heading “The DOW Transaction Documents contain covenants that may restrict our ability and the ability of our subsidiaries to take actions management believes are important to our long-term strategy, and therefore could have a material adverse effect on our business, prospects, financial condition, or results of operations.”
New heading “The United States Department of War’s ownership interest may create additional governance, regulatory and geopolitical considerations for the Company.”
Largest changes
“The DOW Transaction Documents contain covenants that may restrict our ability and the ability of our subsidiaries to take actions management believes are important to our long-term strategy, and therefore could have a material adverse effect on our business, prospects, financial condition, or results of operations.”see in full comparison
“The United States Department of War’s ownership interest may create additional governance, regulatory and geopolitical considerations for the Company.”see in full comparison
“The DOW Transaction Documents contain covenants requiring us to take certain actions or restricting our ability to take certain actions. …”see in full comparison
“Compliance with the covenants contained in the DOW Transaction Documents could restrict our ability to take actions that management believes are important to our long-term strategy. If strategic transactions we wish to undertake are prohibited by the DOW Transaction Documents, our ability to execute our long-term strategy could be materially adversely affected.”see in full comparison
“The Company may be subject to restrictions or additional compliance requirements regarding its dealings or relationships with certain entities, including entities that are designated or otherwise considered restricted under applicable U.S. government laws, regulations or policies. These requirements could limit the Company’s ability to enter into relationships with prospective investors, suppliers, contractors, customers, financing sources or strategic partners and may require the Company to undertake additional diligence and compliance procedures. …”see in full comparison
“Changes in U.S. government policies, administrations, national security priorities or critical minerals strategies could also affect the DOW’s relationship with the Company or its investment objectives. The DOW’s involvement may result in additional regulatory, compliance, reputational or geopolitical considerations for the Company. Compliance with applicable restrictions, or changes to those restrictions, could increase costs, restrict potential business or financing opportunities, or adversely affect relationships with existing or prospective counterparties. …”see in full comparison
Full comparison: every changed paragraph (7)
The DOW Transaction Documents contain covenants that may restrict our ability and the ability of our subsidiaries to take actions management believes are important to our long-term strategy, and therefore could have a material adverse effect on our business, prospects, financial condition, or results of operations.
The DOW Transaction Documents contain covenants requiring us to take certain actions or restricting our ability to take certain actions. The covenants in the DOW Transaction Documents restrict us with respect to, among other things, (i) incurring borrowed debt in excess of $1,000,000,000 in the aggregate until the earlier of January 1, 2029 or a change of control, without DOW prior written approval, and (ii) for so long as the DOW meets certain beneficial ownership percentages of the Company and the current owners of Ambler Metals continue to beneficially own at least 25% of the voting and/or economic ownership interests of Ambler Metals, we are bound by certain “Restricted Entity Event” covenants, including providing the DOW with notice of certain acquisitions by “Restricted Entities,” including when a Restricted Entity beneficially owns five percent or more of the outstanding voting securities of the Company or South32, or gains the right to appoint a director to those boards or obtain material commercial rights with Ambler Metals. Further, the parties will not agree, and will revise Ambler Metals’ organizational documents to prohibit, specified investments without DOW consent in Ambler Metals, or the owners of Ambler Metals by Restricted Persons, or the direct or indirect sale or transfer of material assets or products of Ambler Metals to any Restricted Entity.
Compliance with the covenants contained in the DOW Transaction Documents could restrict our ability to take actions that management believes are important to our long-term strategy. If strategic transactions we wish to undertake are prohibited by the DOW Transaction Documents, our ability to execute our long-term strategy could be materially adversely affected.
The United States Department of War’s ownership interest may create additional governance, regulatory and geopolitical considerations for the Company.
The DOW ownership interest and Board observer right may result in increased governmental engagement with, or perceived influence over, the Company. Shareholders, business partners, regulators, foreign governments or other stakeholders may perceive the DOW as having influence over certain aspects of the Company’s business or strategic direction. Such perceptions could affect the Company’s relationships with investors, strategic partners, governments and other stakeholders.
The Company may be subject to restrictions or additional compliance requirements regarding its dealings or relationships with certain entities, including entities that are designated or otherwise considered restricted under applicable U.S. government laws, regulations or policies. These requirements could limit the Company’s ability to enter into relationships with prospective investors, suppliers, contractors, customers, financing sources or strategic partners and may require the Company to undertake additional diligence and compliance procedures. The scope and application of such restrictions may also change over time as U.S. government laws, regulations, policies and national security priorities evolve.
Changes in U.S. government policies, administrations, national security priorities or critical minerals strategies could also affect the DOW’s relationship with the Company or its investment objectives. The DOW’s involvement may result in additional regulatory, compliance, reputational or geopolitical considerations for the Company. Compliance with applicable restrictions, or changes to those restrictions, could increase costs, restrict potential business or financing opportunities, or adversely affect relationships with existing or prospective counterparties. Any such developments could affect the Company’s business relationships, strategic opportunities, access to capital or the market price of its common shares.
Management's Discussion & Analysis (MD&A)
Removed heading “Trilogy Annual General Meeting”
Largest changes
“The Company received gross proceeds of approximately $17.8 million upon closing of the Strategic Investment. The proceeds are specifically designated to fund an additional cash capital contribution to Ambler Metals and, therefore, do not represent additional liquidity available to fund the Company’s general corporate activities. South32 will make a corresponding contribution on a pro-rata basis, such that the Company’s 50% ownership interest in Ambler Metals will remain unchanged.”see in full comparison
“On August 28, 2026, the Company entered into the Investment Agreement (the “Investment Agreement”) with the United States Department of War (the “DOW”), relating to the DOW’s strategic investment in the Company (the “Strategic Investment”). On September 11, 2026, the Company completed the Strategic Investment by the DOW, pursuant to the Binding Letter of Intent entered on October 6, 2025. At closing, the Company issued 8,215,570 units to the DOW at a price of $2.17 per unit for gross proceeds of approximately $17.8 million. …”see in full comparison
“The closing also resulted in the settlement of the derivative liability previously recognized in connection with the Company’s obligation to issue common shares and warrants to the DOW. Upon settlement, the Company recognized a gain of approximately $3.9 million, representing the change in the derivative liability through the closing date. The derivative liability was extinguished upon issuance of the underlying securities, and the applicable amounts were reclassified to share capital and contributed surplus. …”see in full comparison
For thesee in full comparisonsix-monthnine-month period endedMayAugust 31, 2026, we reported a net loss of$13.4$13.2 million, compared to a net loss of$5.8$7.5 million for the same period in 2025. The increase in net loss was primarily driven by two non-cash items: i)the mark-to-market fair value adjustment for the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War; and ii)stock-based compensation expense related to our annual grant with higher Black-Scholes values in the current year compared to the prioryear.year;Theandnetii)loss was also impacted by an increase inincreased activity related to budgeted exploration activities at Ambler Metals which resulted in a larger amount for our share of loss on equity investment and an increase in personnel costs due to the addition of senior staff. This was offset by a mark-to-market gain arising from the change in fair value of the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War.
“In connection with closing, the Company, through its wholly-owned subsidiary Trilogy Metals US, and the DOW, among other parties, also entered into a Cooperation Agreement (the “Cooperation Agreement”, and together with the Investment Agreement and other ancillary agreements, the “DOW Transaction Documents”) pursuant to which the DOW is entitled to (i) designate one independent third-party nominee for appointment to the Company’s Board of Directors, and (ii) appoint a representative to attend meetings of the Company’s Board of Directors in an observer capacity.”see in full comparison
Full comparison: every changed paragraph (23)
This Management’s Discussion and Analysis (“MD&A”) contains “forward-looking information” and “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable securities laws. These forward-looking statements may include statements regarding the Company’s (as defined below) work programs and budgets; the aggregate value of common shares that may be issued pursuant to the Company’s at-the-market equity program (the “Nov ATM Program”) and the anticipated use of net proceeds; perceived merit of properties; exploration results and budgets; the Company and Ambler Metals’ funding requirements; mineral reserves and resource estimates; work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project; timelines, strategic plans, statements regarding Ambler Metals’ plans and expectations relating to its Upper Kobuk Mineral Projects (the “UKMP”, as defined below); sufficiency of the Ambler Metals’ cash to fund the UKMP; statements regarding timing and planned undertakings of the 2026 field program; the anticipated timing of permitting at the UKMP, including predicted outcomes and benefits of the FAST-41 program; timingsuccessful implementation of the transactionstrategic equity investment with the U.S. Department of War; market prices for precious and base metals; statements regarding the Ambler Access Project (also known as the Ambler Mining District Industrial Access Project, “AMDIAP”); or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if the property is developed.
This MD&A of Trilogy Metals Inc. (“Trilogy”, “Trilogy Metals”, the “Company” or “we”) is dated JulyOctober 8,2, 2026 and provides an analysis of our unaudited condensed interim consolidated financial results for the quarter ended MayAugust 31, 2026 compared to the quarter ended MayAugust 31, 2025.
The following information should be read in conjunction with our MayAugust 31, 2026 unaudited condensed interim consolidated financial statements and related notes which were prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The MD&A should also be read in conjunction with our audited consolidated financial statements and related notes for the year ended November 30, 2025. A summary of the U.S. GAAP accounting policies is outlined in note 2 of the audited consolidated financial statements. All amounts are in United States dollars unless otherwise stated. References to “Canadian dollars” and “CDN$” are to the currency of Canada and references to “U.S. dollars”, “$” or “US$” are to the currency of the United States.States of America.
Trilogy Annual General Meeting
The Annual General Meeting of shareholders was held on May 13, 2026. All directors nominated by the Company were elected by shareholders of the Company, with each director receiving greater than 85% of votes cast.
The Company has a 2026 fiscal budget of $5.0 million.million for corporate expenditures. For the three-month period ended MayAugust 31, 2026, the Company recorded a net lossincome of $6.3$0.2 million, compared with a budgeted loss of $3.5$9.7 million. The $2.8$9.9 million variance was primarily driven by a $2.3$11.6 million mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to the United States Department of War and the remainder due to stock-based compensation expense associated with the current fiscal year’s annual equity grant. These two non-cash expensesamounts were not included in the budget.
For the six-monthnine-month period ended MayAugust 31, 2026, the Company recorded a net loss of $13.4$13.2 million, compared with a budgeted loss of $8.4$18.0 million. The $5.0$4.8 million variance was primarily driven by non-cash expenses of $3.8$7.8 million mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to the United States Department of War, stock-based compensation expense related to the current fiscal year’s annual equity grant that were not in the budget, partially offset by lower than planned expenditures from Ambler Metals.
ExtensionClosing of BindingStrategic LetterEquity ofInvestment Intent withfrom the United States Department of War
On August 28, 2026, the Company entered into the Investment Agreement (the “Investment Agreement”) with the United States Department of War (the “DOW”), relating to the DOW’s strategic investment in the Company (the “Strategic Investment”). On September 11, 2026, the Company completed the Strategic Investment by the DOW, pursuant to the Binding Letter of Intent entered on October 6, 2025. At closing, the Company issued 8,215,570 units to the DOW at a price of $2.17 per unit for gross proceeds of approximately $17.8 million. Each unit consisted of one common share and three-quarters of one warrant, resulting in the issuance of warrants to acquire up to 6,161,678 additional common shares at an exercise price of $0.01 per share. The warrants have a ten-year term and become exercisable upon the earlier of the completion of Phase 1 of the Ambler Access Project, the achievement of certain specified usage milestones for the Ambler Access Project and a change of control of the Company.
The Company received gross proceeds of approximately $17.8 million upon closing of the Strategic Investment. The proceeds are specifically designated to fund an additional cash capital contribution to Ambler Metals and, therefore, do not represent additional liquidity available to fund the Company’s general corporate activities. South32 will make a corresponding contribution on a pro-rata basis, such that the Company’s 50% ownership interest in Ambler Metals will remain unchanged.
In connection with closing, the Company, through its wholly-owned subsidiary Trilogy Metals US, and the DOW, among other parties, also entered into a Cooperation Agreement (the “Cooperation Agreement”, and together with the Investment Agreement and other ancillary agreements, the “DOW Transaction Documents”) pursuant to which the DOW is entitled to (i) designate one independent third-party nominee for appointment to the Company’s Board of Directors, and (ii) appoint a representative to attend meetings of the Company’s Board of Directors in an observer capacity.
The closing also resulted in the settlement of the derivative liability previously recognized in connection with the Company’s obligation to issue common shares and warrants to the DOW. Upon settlement, the Company recognized a gain of approximately $3.9 million, representing the change in the derivative liability through the closing date. The derivative liability was extinguished upon issuance of the underlying securities, and the applicable amounts were reclassified to share capital and contributed surplus. As a result, subsequent changes in the value of the Company’s common shares will no longer result in fair value adjustments associated with this derivative liability. The gain recognized on settlement is non-cash in nature and therefore does not affect the Company’s cash flows.
The Strategic Investment represents a significant source of funding for the Company’s investment in Ambler Metals while maintaining the Company’s 50% ownership interest in the joint venture. Future exercise of the warrants could result in future dilution of share capital, although such exercise is subject to the specified conditions described above.
On May 30, 2026, the Company, South32, Ambler Metals and the United States Department of War agreed to a second amendment to the binding letter of intent (“LOI”) dated October 6, 2025. The second amendment extends the deadline for the completion of the transaction from May 31, 2026 to July 31, 2026.
On April 21, 2026, the Company announced that Ambler Metals had commenced the permitting process for the Arctic Project, part of the Upper Kobuk Mineral Projects (“UKMP”)UKMP, and on May 15, 2026, the Company announced that the Arctic Project was added to the U.S. FAST-41 permitting program. This program is intended to improve coordination and transparency in the federal permitting process as the project moves into environmental review.
In a press release dated June 9, 2026, the Company announced the start of the 2026 summer field program at the Upper Kobuk Mineral Projects,UKMP, with crews mobilizing to site and drilling activities expected to commence in mid-June. The program includes drilling and technical work to support mine planning, permitting, and future development decisions at the Arctic Project, as well as site readiness activities at Bornite and regional exploration target assessments.
In line with the June 9, 2026 press release, exploration was undertaken during summer 2026. Expenses were incurred over the summer to advance planned exploration, permitting, engineering, environmental, and site activities while seasonal field conditions allowed the work to proceed. Overall spending remained in line with expectations and reflected the planned timing and allocation of resources required to support the exploration program.
For the three-month period ended MayAugust 31, 2026, we reported a net lossincome of $6.3$0.2 million compared to a net loss of $2.2$1.7 million for the three-month period ended MayAugust 31, 2025. The increase in net lossincome was primarily driven by a mark-to-market gain arising from the change in fair value adjustment forof the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War, asthis wellwas asoffset by an increase in our share of loss from Ambler Metals. The increase in our share of loss from Ambler Metals was primarily driven by higherbudgeted mineralexploration propertyactivities expenditures.undertaken during the period.
For the six-monthnine-month period ended MayAugust 31, 2026, we reported a net loss of $13.4$13.2 million, compared to a net loss of $5.8$7.5 million for the same period in 2025. The increase in net loss was primarily driven by two non-cash items: i) the mark-to-market fair value adjustment for the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War; and ii) stock-based compensation expense related to our annual grant with higher Black-Scholes values in the current year compared to the prior year.year; Theand netii) loss was also impacted by an increase inincreased activity related to budgeted exploration activities at Ambler Metals which resulted in a larger amount for our share of loss on equity investment and an increase in personnel costs due to the addition of senior staff. This was offset by a mark-to-market gain arising from the change in fair value of the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War.
During the six-monthnine-month period ended MayAugust 31, 2026, we used $3.8$4.9 million in operating activities, used $10.5$17.0 million in investing activities, and raised $1.4 million in financing activities. Operating expenditures were driven primarily by corporate salaries, professional fees and annual regulatory filing fees with the U.S. and Canadian securities commissions. In addition, the Company contributed $10.5$17.0 million for our share of funding to Ambler Metals. These cash outflows were offset by $1.4 million in proceeds from financing activities, primarily from the Company’s at-the-market equity program through which the Company may offer and issue up to $200 million of common shares of the Company from time to time pursuant to an equity distribution agreement dated November 7, 2025, and from the exercise of stock options.
As at MayAugust 31, 2026, we had cash and cash equivalents of $38.8$31.2 million and adjusted working capital of $38.3$30.3 million, which are current assets less current liabilities excluding the derivative liability which will be settled by way of the issuance of shares and warrants. There is sufficient cash on hand for the next twelve months from the end of our most recent fiscal quarter, including funding the Company’s remaining fiscal 2026 corporate budget of $5.0$1.1 million. Our share of Ambler Metals’ fiscal 2026 budget is $17.5 million, of which $10.5$17.0 million had been funded as at MayAugust 31, 2026. Subsequent to May 31, 2026, the Company funded an additional $6.5 million to Ambler Metals, bringing total funding to $17.0 million as of the date of this MD&A.
As at JulyOctober 7,2, 2026, we had 172,745,639181,361,209 common shares issued and outstanding. As at JulyOctober 7,2, 2026, we had 9,835,250 stock options outstanding with a weighted-average exercise price of CDN$2.01, 3,581,6533,582,604 deferred share units and 851,670451,670 restricted share units outstanding. Upon the exercise of all convertible securities, the Company would be required to issue an aggregate of 14,268,57313,869,524 common shares.
The most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our equity method investment in Ambler Metals LLC, fair value measurement of the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War (settled post quarter end) and valuation of stock‐based compensation.
TMQ insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 2 filings (2 insiders, 2 trade dates, 8,265,570 shares, about $18.0M). Net open-market shares: -8,265,570 (purchases minus sales); net value about -$18.0M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-28 | South32 International Investment Holdings Proprietary Ltd |
Open-market sale | 8,215,570 | $2.17 | $17.8M |
| 2026-05-08 | Hensley William L. Iggiagruk |
Open-market sale | 50,000 | $4.44 | $222.0K |
| 2026-05-08 | Hensley William L. Iggiagruk |
Option exercise | 50,000 | $0.57 | $28.5K |
| 2026-04-23 | Walters Diana J |
Option exercise | 50,000 | $1.61 | $80.5K |
Well-known investors holding TMQ (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 877,834 | $3.1M | 0.0% | Added 156% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 796,695 | $2.8M | 0.0% | Added 158% |
| Two Sigma Investments | 2026-06-30 | 244,070 | $856.7K | 0.0% | Reduced 55% |
| Millennium Management (Israel Englander) | 2026-06-30 | 104,205 | $374.5K | — | Sold out |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 66,877 | $234.7K | 0.0% | Added 114% |