Trilogy Metals Grants South32 an Option to Form a 50/50 Joint Venture in the UKMP for a Minimum Investment of US$150 Million

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News Release

Trilogy Metals Grants South32 an Option to Form a 50/50 Joint

Venture in the UKMP for a Minimum Investment of US$150 Million

April 10, 2017 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX, NYSE-MKT:

TMQ) ("Trilogy” or “Trilogy Metals”) is pleased to announce that it has signed an agreement

with South32 Limited (ASX/JSE/LSE: S32) (“ South32”) whereby Trilogy has granted

South32 an option to form a 50/50 joint ventur e with respect to Trilogy’s Alaskan assets,

known collectively as the Upper Kobuk Mineral Projects (“UKMP”), which includes the Arctic

and Bornite Projects, the Explor ation and Option to Lease Ag reement with NANA Regional

Corporation, Inc. (“NANA”), and the remainder of Trilogy’s state mining claims along the

100km volcanogenic massive sulphide belt (“ UKMP Assets”). South32 must contribute a

minimum of $10 million each year, for a maximum of 3 years, to keep the option in good

standing (“Initial Funding”). South32 may exercise its option at any time to form the 50/50

joint venture (“JV”). To subscribe for 50% of the JV, South32 will contribute a minimum of

$150 million, plus any amounts Trilogy spends at the Arctic Project over the next three years

to a maximum of $5 million per year (the “Subscription Price”), less an amount of the Initial

Funding contributed by South32. All amounts are in US dollars.

Trilogy will host a conference call today at 1:30pm PT. See conference details below.

Highlights of the agreement and an updated $17 million 2017 field program:

 South32 to fund $10 million per year, for a maximum of 3 years.

 South32 may elect at any time to form a 50/50 joint venture for min. $150M.

 Bornite Exploration: South32’s Initial Funding of $10 million this year will be

spent on exploration at the Bornite Pr oject during the 2017 field season to

test the extension of high-grade copper at the Bornite deposit. The drill

program will be off-setting previously drilled diamond drill holes, including

RC13-0224 which intersected 236 meters of continuous mineralization

averaging 1.9% copper last drilled during the 2013 field program.

 Arctic Pre-Feasibility Study: Trilogy previously announced spending of $7.1

million mainly at the Arctic Project during 2017 in preparation for a pre-

feasibility study anticipated to be released in Q1 2018.

 Trilogy will continue to work closely with the Alaska Industrial Development

and Export Authority (“AIDEA”) and NANA to advance the Environmental

Impact Study (“EIS”) permitting process for the Ambler Access Road.

TSX, NYSE-MKT

Symbol: TMQ

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Conference Call & Webcast Details

Trilogy’s conference call and webcast to discuss this transaction will take place on April 10,

2017 at 1:30pm PT (4:30pm ET). The webcast and conference call-in details are provided

below. The webcast will be archived on Trilogy’s website for two weeks.

Webcast http://event.on24.com/wcc/r/1405849-1/E5EEF42CA2215B384927A08301DDEECB

North American callers: 1-888-390-0546

International callers: 1-416-764-8688

Conference ID: 68372321

Agreements

Trilogy and South32 have entered into an ag reement whereby Trilogy has granted South32

an option to subscribe for a 50% interest in a joint venture which will hold the UKMP Assets.

To maintain the option in good standing South32 must contribute the Initial Funding which

will be used to test the extension of the high-grade copper resource identified at the Bornite

deposit. South32 can exercise the option at any time over the next 3 years. Once the option

is exercised, Trilogy will transfer the UKMP Assets to a newly created limited liability company

(the “LLC”) in which Trilogy and South32 will be equal partners. Advancing the projects

towards a production decision will be funded by the Subscription Price.

2017 Project Plans

South32 and Trilogy Metals have agreed in principal on the 2017 exploration program at

Bornite. The parties will drill a minimum of 7 drill holes up to 1,400 meters deep to test the

northern extension of the Bornite mineralization. The drilling will evaluate an area

approximately one kilometer east-west by 400 meters north-south.

Trilogy Metals also intends to conduct a $7.1 million program at the Arctic Project, focused

on geotechnical drilling to identify, test, and evaluate potential locations for all mine-related

facilities, including: the ore processing facility (crushing and milling); the waste rock and

tailings disposal area(s); water storage ponds; and supporting road infrastructure. This work

is being done in support of completing a pre-feasibility level of study for the Arctic Project in

the first quarter of 2018. In addition, the Company will continue to work closely with AIDEA

and NANA to advance the EIS permitting process for the Ambler Access Road, also known as

the Ambler Mining District Industrial Access Project (“AMDIAP”).

Trilogy will manage both the Arctic and Bornite programs.

Rick Van Nieuwenhuyse, President and CEO of Trilogy Metals said, “This is a terrific

opportunity for Trilogy sharehol ders. South32 is a global di versified metals and mining

company who will bring a wealth of operational experience to the project. Along with our

Alaska Native Corporation partner, NANA and their experience as the land owner and co-

owner of the Red Dog Mine, one of the largest zinc mines in the world, we have a strong team

that will be invaluable as the UKMP progresses towards development.”

Rick Van Nieuwenhuyse continued, “We believe this deal recognizes the quality of our assets.

By offering to fund at a 150% premium to the investment made by Trilogy, the terms

recognize the high-quality asset base that Trilo gy has assembled at the UKMP. In terms of

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the option, South32 will invest up to $30 million to explore, expand and advance the already

sizeable metal endowment identified to date. The immediate exploration focus will be to

expand the known copper mineralization along the northern frontier of the Bornite deposit.

With only three field seasons of exploration drillling at Bornite, we have already identified a

resource in excess of 6 billion pounds of copper1. During our last year of drilling at Bornite in

2013, five of the last holes drilled for explorat ion intercepted significant copper intervals.

Mineralization remains open along an approximately 1-kilometer strike length, including drill

hole RC13-224 which intersected 236 meters gr ading 1.9% copper. The copper grades and

thick intervals of mineralization found at Bornite warrant further exploration to fully

understand the potential of this project.”

Wayne Westlake, President and CEO of NANA Regional Corporation added, “NANA looks

forward to partnering with Trilogy and South32 on this new phase of exploration. Our region

has benefited from responsible resource development, and we value working with companies

that advance our land’s mineral potential and create shareholder value while respecting our

traditional subsistence lifestyle.”

Option Funding Phase

South32 will contribute a minimum of $10 million each year, for up to 3 years, to fund

exploration expenditure at Bornite. Provided that all the exploration data and information has

been made available to South32 by no later than December 31 of each year, South32 must

decide by the end of January of the following year whether; (i) to fund a further tranche of a

minimum of $10 million, or (ii) to withdraw and not provide any further annual funding. If

the election to fund a further tranche is not made in January, South32 has until the end of

March to exercise the option to form the LLC and make the subscription payment. If South32

elects to exercise the option, the Subscription Price less certain deductions for Initial Funding

shall be paid in one tranche within 45 business days. Should South32 elect to withdraw the

option will lapse and South32 will have no claim to ownership or the funds it had already

spent.

Subscription Funding Phase

At any time during the Option Funding Phase of the agreement South32 may elect to subscribe

for a 50% interest in a newly formed LLC which will take transfer of, and hold, the UKMP

Assets. The Subscription Price is based on a 1.5 times multiple of Trilogy’s historical

expenditures on the projects of approximately $100 million. As part of the Subscription Price,

South32 will match any spending Trilogy makes at the Arctic Project over the next 3 years,

to a maximum of $15 million. Depending on when the option is exercised, certain amounts of

the Initial Funding will be deducted from the Subscription Price.

Trilogy estimates that the Subscription Price will fund the Arctic and Bornite Projects through

feasibility and the permitting of the first mine to be developed in the Ambler mining district.

Once the full amount of the subscription payment of approximately $150 million is expended,

the parties will contribute f unding pro rata, as contemplated by the operating agreement

which will govern the LLC (the “LLC Agreement”). The LLC Agreement anticipates a General

1 Indicated in-pit resources at the Born ite deposit at a 0.50% Cu cutoff are 40.5 million tonnes at 1.02% Cu. An

additional Inferred in-pit resources at the Bornite depo sit at a 0.50% Cu cutoff measures 84.1 million tonnes at

0.95% Cu. In addition to the in-pit re sources, Inferred below pit resources at the Bornite deposit are reported (at

1.5% Cu cutoff) as 57.8 million tonnes at 2.89% Cu.

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Manager, Chief Financial Officer and Chief Operating and Technical Officer (“ LLC

Management Team ”) to be appointed by the LLC’ s Board, which will have equal

representation from Trilogy and South32.

Qualified Persons

Erin Workman, P.Geo., Director of Technical Services and an employee of Trilogy Metals, is a

Qualified Person as defined by National Instrument 43-101. Ms. Workman has reviewed the

scientific and technical information in this news release and approves the disclosure contained

herein.

Advisors

Blake, Cassels & Graydon LLP and Dorsey & Whitney LLP acted as legal advisors and Deloitte

LLP acted as tax advisors to Trilogy Metals.

About South32

South32 is a globally diversified metals and mining company with high-quality and well

maintained operations which mine and produce bauxite, alumina, aluminum, energy and

metallurgical coal, manganese, nickel, silver, lead and zinc in Australia, Southern Africa and

South America.

More information about South32 is avai lable on their comp any’s website at

www.south32.net.

About Trilogy Metals

Trilogy Metals Inc., formerly NovaCopper 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-prospec tive known copper-dominant dist ricts located in one of the

safest geopolitical jurisdictions in the world. It hosts world-class poly metallic VMS deposits

that contain copper, zinc, lead, gold and silv er, and carbonate replac ement deposits which

have been found to host high grade copper mi neralization. Exploration efforts have been

focused on two deposits in the Ambler mining district - the Arctic VMS deposit and the Bornite

carbonate replacement deposit. Both deposits 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 development of the Ambler mining district in cooperation

with local communities. Our vision is to develo p the Ambler mining di strict into a premier

North American copper, zinc and precious metals producer.

Company Contacts

Rick Van Nieuwenhuyse Elaine Sanders

President & Chief Executive Officer Vice President & Chief Financial Officer

[email protected] el [email protected]

1-604-638-8088 or 1-855-638-8088

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Cautionary Note Regarding Forward-Looking Statements

This press release includes certain "forward-looking info rmation” and "forward-looking statements” (collectively

"forward-looking statements”) within the meaning of applic able Canadian and United St ates 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, statements relating to the future operating or financial

performance of the Company, planned expenditures and the anticipated activity at the UKMP Projects, the potential

timing and preparation of a PFS on the Arctic deposit, and anticipated activity with respect to the AMDIAP, are

forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as

"expects”, "anticipates”, "believes”, "i ntends”, "estimates”, "potential”, "p ossible”, 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 estimate s; 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 antici pated in such stat ements. Important

factors that could cause actual results to differ materially from the Company's expectations include the uncertainties

involving 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 cooper ation 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 mi ning projects such as accidents, equipment breakdowns,

bad weather, non-compliance with environmental and perm it 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, 2016 filed

with Canadian securities regulatory authorities and with the United States Securities and Exchange Commission and

in other Company reports and documents filed with applicable securities regu latory authorities from time to time.

The Company's forward-looking statements reflect the beliefs, opinions and projections on the date the statements

are made. The Company assume s 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

The Arctic Preliminary Economic Assessment and the Bornit e Technical Report have 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 National Instrume nt 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101”) and the

Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral

Reserves. NI 43-101 is a rule developed by the Canadian Se curities 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 containe d therein 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 "res erves”. 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 "m easured 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. Investors are cautioned not to assume that

any part or all of mineral deposits in these categories will ever be converted into reserves. U.S. 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. It cannot be assumed that all or any part of an "inferred mineral

resource” will ever be upgraded to a higher category. Under Canadian rules, estimated "inferred mineral resources”

may not form the basis of feasibility or pre-feasibility stud ies except in rare cases. Investors are cautioned not to

assume that all or any part of an "inferred mineral resource” exists or is economically or legally mineable. 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 the Company in compliance with NI 43-101 may not

qualify as "reserves” under SEC standards. Accordingly, in formation concerning mineral deposits set forth in this

press release or the Bornite Technical Report may not be comparable with information made public by companies

that report in accordance with U.S. standards.