Trilogy Metals Files Technical Report for Cobalt Resource Estimate at the Bornite Project
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News Release
Trilogy Metals Files Technical Report for
Cobalt Resource Estimate at the Bornite Project
July 20, 2018 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX/NYSE
American: TMQ) (“Trilogy Metals” or the “Company”) is pleased to announce it has filed a
National Instrument 43 -101 technical report with the Canadian securities regulators relating
to the Bornite Project which supports the resource estimate previously announced on June 5,
2018. The technical report is entitled “NI 43-101 Technical Report on the Bornite Project,
Northwest Alaska, USA” and has been prepared by Bruce Davis, Robert Sim and Jeff Austin,
all of whom are independent “Qualified Persons” under NI 43 -101 (the “Technical Report”).
This Technical Report is available on the Company’s website at www.trilogymetals.com and on
the Company’s profiles at www.sedar.com and www.sec.gov and is consistent with the
disclosure made by the Company in its news release dated June 5, 2018.
Highlights of the Cobalt Resource:
• At a base case 0.50% copper cut -off grade, and within the combined Indicated and
Inferred Cu resource pit shell, the Bornite Project is estimated to contain in-pit Inferred
Resources of 124.6 million tonnes grading 0.017% Co for 45 million pounds of
contained cobalt (see Table 1 for details).
• Below the resource limiting pit shell and at a base case cut -off grade of 1.5% copper,
the Bornite Project is estimated to contain additional Inferred Resources of 57.8 million
tonnes grading 0.025% Co for 32 million pounds of contained cobalt.
• Total Inferred Resources (in-pit and below-pit) of 182.4 million tonnes grading
0.019% Co for 77 million pounds of contained cobalt (see Table 1 for details).
• The current copper resources at the Bornite Project remain unchanged (see Table 2 for
details).
Rick Van Nieuwenhuyse, President and CEO of Trilogy Metals, commented, “Now that we have
filed the new Technical Report for the Bornite Project, the next step is to finish the metallurgical
test work on the cobalt resources, which we expect to be completed by the end of the year.
Having a successful outcome from this metallurgical test program could yield considerable
value for our shareholders. I specifically note the $690 million transaction that Wheaton
Precious Metals Corp. (“WPM”) and Cobalt 27 Capital Corp. (“Cobalt 27”) completed with Vale
S.A. in which WP M and Cobalt 27 combined acquired a 75% cobalt stream from the Voisey’s
Bay underground deposit – a project requiring a $2.1 Billion investment and anticipated to
begin production in 2021. This transaction resulted in WPM and Cobalt 27 jointly adding
approximately 54 million pounds of attributable cobalt reserve to their combined inventory.
Demonstrating the economic viability of the cobalt resources at Bornite could become a game
changer for the Company given our current 77 million pound inferred cobalt resource. I also
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note that we currently have three drill rigs in operation at the Bornite Project continuing with
an in-fill and expansion drill program. Management expects continued success in expanding
the cobalt and copper resources at Bornite to yield additional value to the Company.”
Table 1: Estimate of Cobalt Mineral Resources for the Bornite Deposit
Type Cut-off
(Cu%)
Tonnes
(million)
Average Grade
Co (%)
Contained Metal
Co (Mlbs)
In-Pit 0.5 124.6 0.017 45
Below-Pit 1.5 57.8 0.025 32
Total Inferred 182.4 0.019 77
(1) Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb Cu, mining
costs of US$2.00/tonne, milling costs of US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical
recoveries and an average pit slope of 43 degrees.
(2) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no
certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves.
(3) It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated
mineral resources with additional exploration.
The estimated cobalt mineral resource is presented in Table 1. In addition to the cobalt
resource, Table 2 presents the Bornite Project’s existing copper mineral resource which is also
supported by the Technical Report.
Table 2: Estimate of Copper Mineral Resources for the Bornite Deposit
Type
Cut-off
(Cu%)
Tonnes
(million)
Average Grade
Cu (%)
Contained Metal
Cu (Mlbs)
In-Pit 0.5 40.5 1.02 913
Total Indicated 40.5 1.02 913
In-Pit 0.5 84.1 0.95 1,768
Below-Pit 1.5 57.8 2.89 3,683
Total Inferred 141.9 1.74 5,450
(1) Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb Cu, mining
costs of US$2.00/tonne, milling costs of US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical
recoveries and an average pit slope of 43 degrees.
(2) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no
certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves.
(3) It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated
mineral resources with additional exploration.
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Cobalt Resource Estimate
Open pit resources are contained within a pit shell that was generated based on a 0.5% copper
cut-off grade by AGP Mining Consultants Inc., and the underground resource is material below
the pit shell calculated at a higher cut-off grade of 1.5% copper. Note that although the data
supports estimates of copper resources in both the Indicated and Inferred catego ries, the
volume and distribution of available cobalt sample data is considered insufficient to support
the estimate of cobalt resources in the Indicated category and, as a result, all of the estimated
cobalt resource remains in the Inferred category.
Initial sample data is composited to 2m intervals. Estimates are made into model blocks
measuring 5m x 5m x 5m, using ordinary kriging. The cobalt resource model was validated
using a combination of a visual review and statistical comparisons with models generated using
other estimation methods. Cobalt resources in the Inferred category occur within a maximum
distance of 100m from a drill hole and exhibit reasonable confidence in the grade and continuity
of mineralization.
At a base case 1.5% copper cutoff grade, the Bornite Project is estimated to contain below-pit
Inferred Resources of 57.8 million tonnes at 2.89% copper . Preliminary work shows that
although cobalt is broadly associated with copper mineralization, cobalt does not have a one-
to-one correlation. It mostly occurs as a cloud of cobaltiferous pyrite in and around the copper
mineralization.
Additional information is provided in the Technical Report, a copy of which is available on the
Company’s website at www.trilogymetals.com and under the Company’s profiles on SEDAR at
www.sedar.com and EDGAR at www.sec.gov.
Qualified Person
Andrew W. West, a Certified Professional Geologist , and the Exploration Manager for Trilogy
Metals Inc., is a Qualified Person as defined by National Instrument 43 -101. Mr. West has
reviewed and verified the technical information in this news release and approves t he
disclosure contained herein.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration and development 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 located in one of the safest geopolitical
jurisdictions in the world. It hosts world -class polymetallic volcanogenic massive sulphide
(“VMS”) deposits that contain copper, zinc, lead, gold and silver, and ca rbonate replacement
deposits which have been found to host high grade copper mineralization. Exploration efforts
have been focused on two deposits in the Ambler mining district - the Arctic VMS deposit and
the Bornite carbonate replacement deposit. Both de posits 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 potent ial development 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 Contact
Patrick Donnelly
Vice President, Corporate Communications & Development
604-630-3569
604-638-8088 or 1-855-638-8088
# # #
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain "forward -looking information” and "forward -looking
statements” (collectively "forward -looking statements”) within the meaning of applicable
Canadian and United States securities legislation including the United States Private Securities
Litigation Reform Act of 1995. All statements, other than statements of historical fact, included
herein, including, without limitation, future demand for and price of cobalt, the future price of
copper, the estimation of mineral reserves and mineral resources, the realization of mineral
reserve and mineral resource estimates, the timing and amount of estimated future production,
costs of production, capital expenditures, costs and timing of the development of projects, the
potential future development of the Bornite Project, the future operating or financial
performance of the Company, planned expenditures and the anticipated activity at the UKMP
Projects, 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; exploration 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 various 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 i nvolving success of exploration,
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; capital estimates; prices for energy inputs, labour, materials, supplies and services the
interpretation 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 grades or
recovery rates; unexpected cost increases, which could include significant increases in
estimated capital and operating costs; fluctuations in metal prices and currency exchange
rates; and other risks and uncertainties disclosed in the Company’s Annual Report on Form
10-K for the year ended November 30, 201 7 filed with Canadian securities regulatory
authorities and with the United States Securiti es and Exchange Commission and in other
Company reports and documents filed with applicable securities regulatory authorities from
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time to time. The Company 's forward -looking statements reflect the beliefs, opinions and
projections on the date the statemen ts are made. The Company assumes no obligation to
update the forward -looking statements or beliefs, opinions, projections, or other factors,
should they change, except as required by law.
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 Rese rves,
adopted by the CIM Council, as amended ( “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 standards, 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
resources” or other descriptions of the amount of mineralization in mineral deposits that do
not constitute "reserves ” by U.S. standards in documents filed with the SEC. Inves tors are
cautioned not to assume that all or any part of “measured” or “indicated resources” will ever
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-feasibility 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 tonnage 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 reported by Trilogy Metals in compliance with NI
43-101 may not qualify as "reserves ” under SEC 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.