Trilogy Metals Closes $28.7 Million Bought Deal Financing
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News Release
Trilogy Metals Closes $28.7 Million Bought Deal Financing
April 20, 2018 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX/NYSE
American: TMQ) ("Trilogy Metals" or "the Company") is pleased to announce that it has
closed its previously announced bought deal financing of 24,784,482 common shares,
including the exercise in full by the underwriters of the over-allotment option, at a price of
$1.16 per share for aggregate gross proceed s of approximately $28.7 million (the
“Offering”). All amounts are in US dollars.
Certain large shareholders partic ipated in the Offering with South32 Limited
(ASX/JSE/LSE: S32) (“South32”) taking approximately 40% or $11.5 million, Electrum
Strategic Opportunities Fund L.P. taking approximately 20% or $5.8 million, The
Baupost Group LLC taking approximately 10% or $2.8 million, and Selz Capital LLC
taking approximately 4% or $1.2 million. South32’s involvement in this financing
represented their maximum allocation of th eir participation rights in the Company’s
financings to participate to a minimum of 20% to a maximum of 40% in future financings,
private or public, to a maximum ownership of 19.9% in the Company.
Trilogy Metals intends to use the net proceeds from the Offering for an anticipated period
of three years (i) to finance advancing the Arctic Project towards feasibility and permitting,
(ii) for exploration in the Ambler mining district, and (iii) for general corporate purposes.
“We are very pleased with the support we have received from our shareholders. The funds
raised puts the Company in a strong positi on to advance the Arctic Project towards
feasibility and permitting over the next three years. This keeps us aligned with the expected
progress on advancing the Ambler Mining Dist rict access road through permitting and a
construction decision. Addition al funds could be used to explore the Ambler VMS belt to
look for additional polymetallic resources which could potentially extend the mine life at
Arctic. Any of this work would be in addi tion to completing the $10 million exploration
program at Bornite this year that has been fully funded by South32”, said Rick Van
Nieuwenhuyse, President and CEO of Trilogy Metals.
The Offering was made through a syndicate of underwriters led by Cantor Fitzgerald Canada
Corporation as sole bookrunner and included Cormark Securities Inc., BMO Capital Markets
and Roth Capital Partners, LLC.
The Offering was completed by way of a final prospectus supplement (the “Supplement”)
in both Canada and the United States to th e Company’s Canadian short form base shelf
prospectus (the “Canadian Base Prospectus”) dated November 21, 2017 and its U.S. shelf
registration statement on Form S-3 (the “R egistration Statement”) that was declared
effective on November 21, 2017. Before investing, you should read the Supplement and
the risk factors set out therein, the Canadian Base Prospectus as well as the Registration
Statement and other documents the Company has filed with the United States Securities
and Exchange Commission and the Canadian se curities regulators for more complete
information about the Company and the Offering. Copies of the Supplement, Underwriting
Agreement, the Canadian Base Prospectus and the Registration Statement are available for
free by visiting the Company’s profiles on SEDAR at www.sedar.com or EDGAR at
TSX/NYSE American
Symbol: TMQ
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www.sec.gov/edgar.shtml, as applicable. Alternatively, investors may ask the Underwriters
or the Company to send them the Supplement , the Canadian Base Prospectus and/or the
base prospectus contained in the Registration Statement by contacting Cantor Fitzgerald
Canada Corporation, attention: Equity Capital Markets, 181 University Avenue, Suite 1500,
Toronto, ON, M5H 3M7, email: ecmcanada@ca ntor.com or Cantor Fitzgerald & Co.,
Attention: Equity Capital Markets, 499 Park Avenue, 6th Floor, New York, New York, 10022
or by email at [email protected].
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor
shall there be any sale of Offered Shares in any state, province or other jurisdiction in which
such offer, solicitation or sale would be unlawful, prior to registration or qualification under
the securities laws of any such state, province, or other jurisdiction.
Early Warning Disclosure for South32
Pursuant to the Offering South32 Internatio nal Investment Holdings Pty Ltd. (“South32
Holdings”), an affiliate of South32, acquired 9,913,793 common shares at an issue price of
$1.16 per share for a total purchase price of $11.5 million (or C$14.5 using an exchange
rate of 1.26).
Prior to the closing of the Offering, South32 Holdings held 6,499,700 common shares of
Trilogy Metals representing 6.1% of the outstanding common shares of Trilogy. Following
its participation in the Offering, South32 Holdings now holds 16,413,493 common shares
of Trilogy Metals representing approximately 12.5% of the outstanding common shares of
Trilogy Metals.
Trilogy Metals has been advised by South32 that the common shares acquired pursuant to
the Offering were acquired for investment purposes. Subject to the terms of its investment
agreement with Trilogy Metals, South32 may, depending on market and other conditions,
or as future circumstances may dictate, from time to time, increase or dispose of some or
all of the existing or additional securities it holds or will hold, or may continue to hold its
current position.
A copy of South32 Holding's early warning report will appear with Trilogy Metal’s documents
on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com
and may also be obtained by contacting South32's Company Secretary at +61 8 9324 9000.
South32 Holding's address is South32 International Investment Holdings Pty Ltd, Level 35,
108 St Georges Terrace, Perth WA 6000 Australia.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration company focused on exploring and developing
the Ambler mining district located in northwestern Alaska. It is one of the richest and most-
prospective known copper-dominant districts lo cated in one of the safest geopolitical
jurisdictions in the world. It hosts world- class polymetallic VMS deposits that contain
copper, zinc, lead, gold and silver, and carb onate replacement deposits which have been
found to host high grade copper mineralizati on. Exploration efforts have been focused on
two deposits in the Ambler mining distri ct - the Arctic VMS deposit and the Bornite
carbonate replacement deposit. Both deposi ts are located within the Company's land
package that spans approximately 143,000 hectares. The Company has an agreement with
NANA Regional Corporation, Inc., a Regional Alaska Native Corporation that provides a
framework for the exploration and potential deve lopment of the Ambler mining district in
cooperation with local communities. Our vision is to develop the Ambler mining district into
a premier North American copper producer.
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Company Contacts and Head Office Address
Rick Van Nieuwenhuyse Elaine Sanders
President & Chief Executive Officer Vice President & Chief Financial Officer
Suite 1150 – 609 Granville Street
Vancouver, British Columbia, V7Y 1G5Canada
604-638-8088 or 1-855-638-8088
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Cautionary Note Regarding Forward-Looking Statements
This press release includes certain "forward -looking information" and "forward-looking
statements" (collectively "forward-looking stat ements") within the meaning of applicable
Canadian and United States securities legi slation including the United States Private
Securities Litigation Reform Act of 1995. All statements, other than statements of historical
fact, included herein, including, without limitation, statements with respect to the use of
proceeds from the Offering, the Company’s fu ture activities and any future investment
decisions of our shareholders are forward-looking statements. Forward-looking statements
are frequently, but not always, identified by words such as "expects", "anticipates",
"believes", "intends", "estimates", "potential", "possible", and similar expressions, or
statements that events, conditions, or results "will", "may", "could", or "should" occur or
be achieved. These forward-looking statements may include statements regarding
perceived merit of properties; exploratio n plans and budgets; mineral reserves and
resource estimates; work programs; capital expenditures; timelines; strategic plans;
market prices for precious and base metals; or other statements that are not statements
of fact. Forward-looking statements involve va rious risks and uncertainties. There can be
no assurance that such statements will prove to be accurate, and actual results and future
events could differ materially from those anticipated in such statements. Important factors
that could cause actual results to differ materially from the Company's expectations include
the uncertainties involving success of explor ation, development and mining activities,
permitting timelines, requirements for additional capital, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses; mineral reserve and
resource estimates and the assumptions upon which they are based; assumptions and
discount rates being appropriately applied to the PFS; our assumptions with respect to the
likelihood and timing of the AMDIAP; capital es timates; prices for en ergy inputs, labour,
materials, supplies and services the interpretati on of drill results, the need for additional
financing to explore and develop properties and availability of financing in the debt and
capital markets; uncertainties involved in the interpretation of drilling results and geological
tests and the estimation of reserves and resources; the need for cooperation of government
agencies and native groups in the development and operation of properties as well as the
construction of the access road; the need to obtain permits and governmental approvals;
risks of construction and mining projects such as accidents, equipment breakdowns, bad
weather, non-compliance with environmental and permit requirements, unanticipated
variation in geological structures, metal gr ades or recovery rates; unexpected cost
increases, which could include significant in creases in estimated capital and operating
costs; fluctuations in metal prices and currency exchange rates; and other risks and
uncertainties disclosed in the Supplement, the Canadian Base Prospectus, the Registration
Statement and the documents incorporated therein by reference, and in other Company
reports and documents filed with applicable secu rities regulatory authorities from time to
time. The Company's forward-looking statem ents reflect the beliefs, opinions and
projections on the date the statements are made. The Company assumes no obligation to
update the forward-looking statements or belief s, opinions, projections, or other factors,
should they change, except as required by law.
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Cautionary Note to United States Investors
This press release has been prepared in accordance with the requirements of the securities
laws in effect in Canada, which differ from the requirements of U.S. securities laws. Unless
otherwise indicated, all resource and reserve estimates included in this press release have
been prepared in accordance with Canadian National Instrument 43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101" ) and the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM)-CIM Definition Standards on Mineral Resources and Mineral
Reserves, adopted by the CIM Council, as am ended ("CIM Definition Standards"). NI 43-
101 is a rule developed by the Canadian Securities Administrators which establishes
standards for all public disclosure an issuer makes of scientific and technical information
concerning mineral projects. Canadian standard s, including NI 43-101, differ significantly
from the requirements of the United States Securities and Exchange Commission (SEC),
and resource and reserve information contained herein may not be comparable to similar
information disclosed by U.S. companies. In particular, and without limiting the generality
of the foregoing, the term "resource" does not equate to the term "reserves". Under U.S.
standards, mineralization may not be classified as a "reserve" unless the determination has
been made that the mineralization could be economically and legally produced or extracted
at the time the reserve determination is made. The SEC's disclosure standards normally do
not permit the inclusion of information concerning "measured mineral resources", "indicated
mineral resources" or "inferred mineral resour ces" or other descriptions of the amount of
mineralization in mineral deposits that do no t constitute "reserves" by U.S. standards in
documents filed with the SEC. Investors are cautioned not to assume that all or any part of
"measured" or "indicated resources" will ev er be converted into "reserves". Investors
should also understand that "inferred mineral resources" have a great amount of
uncertainty as to their existence and great uncertainty as to their economic and legal
feasibility. Under Canadian rules, estimated "inferred mineral resources" may not form the
basis of feasibility or pre-feas ibility studies except in rare cases. Disclosure of "contained
ounces" in a resource is permitted disclosure under Canadian regulations; however, the
SEC normally only permits issuers to report mineralization that does not constitute
"reserves" by SEC standards as in-place to nnage and grade without reference to unit
measures. The requirements of NI 43-101 for identification of "reserves" are also not the
same as those of the SEC, and reserves report ed by Trilogy Metals in compliance with NI
43-101 may not qualify as "reserves" under SE C standards. Arctic does not have known
reserves, as defined under SEC Industry Guide 7. Accordingly, information concerning
mineral deposits set forth herein may not be comparable with information made public by
companies that report in accordance with U.S. standards.