Trilogy Metals Reports First Quarter Fiscal 2017 Financial Results
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News Release
Trilogy Metals Reports First Quarter Fiscal 2017 Financial Results
April 4, 2017 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX, NYSE-MKT:
TMQ) ("Trilogy Metals” or "the Company”) is pleased to report its first quarter results for the
period ended February 28, 2017. Details of the Company's financial results are contained in
the unaudited interim consolidated financial statements and Management's Discussion and
Analysis which will be available on the Company's website at www.trilogymetals.com, on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All amounts are in United States
dollars unless otherwise stated.
First Quarter Fiscal 2017 Highlights:
• Strong working capital position of $12.5 million with cash on hand of $6.4 million.
• Cash flow used in operating activities of $1.4 million for the three months ended
February 28, 2017.
• Loss for the three month period ended February 28, 2017 of $3.0 million, including
an unrealized loss on held for trading investments of $1.2 million.
• Significant milestone reached with the publishing of the Notice of Intent (“NOI”) for
the Ambler Mining District Industrial Access Project (“AMDIAP”) by the Bureau of
Land Management on February 28, 2017. The NOI initiates the permitting process
under the National Environmental Policy Act for the preparation of an
Environmental Impact Statement (“EIS”) on the AMDIAP. This notice initiates the
public scoping process for the EIS with comments due by May 30, 2017.
• Considerable progress on pre-feasibility level engineering studies incorporating
field results from the past two seasons which will form the basis for a pre-feasibility
study announced in March to be completed on the very high-grade polymetallic
volcanogenic massive sulphide (“VMS”) Arctic deposit.
Selected Results
The following selected financial information is prepared in accordance with U.S. GAAP.
in thousands of dollars,
except for per share amounts
Three months ended
Selected expenses February 28,
2017
$
February 29,
2016
$
General and administrative 370 346
Mineral properties expense 639 532
Professional fees 125 136
Salaries 239 213
Salaries – stock-based compensation 395 282
Unrealized loss on held for trading investments 1,239 -
Loss from continuing operations for the period 2,996 1,523
TSX, NYSE-MKT
Symbol: TMQ
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Loss from discontinued operations for the period - 172
Loss and comprehensive loss for the period 2,996 1,695
Basic and diluted loss per common share $0.03 $0.02
For the three months ended February 28, 2017, Trilogy Metals reported a net loss of $3.0
million (or $0.03 basic and diluted loss per common share) compared to a net loss of $1.7
million for the corresponding period in 2016 (or $0.02 basic and diluted loss per common
share). This variance was primarily due to an unrealized loss on investments of $1.2 million
classified as held for trading for which movements in the fair value of the investments are
recorded through the statement of loss. The investments consist of common shares and
warrants in GoldMining Inc. (“GMI”) acquired as consideration for the sale of Sunward
Investments Limited and its Titiribi gold-copper exploration project in Colombia. A gain on the
sale of 410,000 common shares of GMI sold during the period of $3,000 was recognized during
the three months ended February 28, 2017. There are no comparable amounts for the three
months ended February 29, 2016 as the Company acquired the investments in September
2016.
Adjusting for the unrealized loss on held for trading investments, a loss from continued
operations of $1.8 million for the three months ended February 28, 2017 is comparable to the
loss from continued operations of $1.5 million for the three months ended February 29, 2016.
The increase is due to an increase in mineral properties expenses and stock-based
compensation. We incurred $0.6 million in mineral properties expense for the three months
ended February 28, 2017 compared to $0.5 million for the three months ended February 29,
2016. The increase in mineral property expenses in 2017 is attributable to several ongoing
engineering studies, specifically an updated 3D geology model and resource estimate for the
Arctic deposit, metallurgical test programs on the Arctic and Bornite Projects, completion of a
pre-feasibility level slope geotechnical and hydrology study on the Arctic deposit, and a review
of the hydrogeological conditions at the Bornite property. Waste characterization is also
continuing on the Arctic Project which began in 2016. The increase in stock-based
compensation is due to a higher share price contributing to an overall greater fair value for
option grants in the period compared to the prior period. General and administrative
expenses, salaries, and professional fees continue to be at comparable levels in the periods
presented.
Outlook
Our 2017 program has a budget of $7.1 million to be expended during the fiscal year to
advance the Arctic Project to pre-feasibility. The pre-feasibility study (“PFS”) will be supported
by information collected during the 2015 and 2016 field seasons as well as additional
information to be collected during the 2017 summer field program. We will be completing
geotechnical drilling, hydrology installations, and test pits for site facility locations and mine
design, and geophysical ground surveys to evaluate ground conditions. A significantly
expanded environmental baseline program will be underway in 2017 to further the ongoing
baseline data collection at the Arctic Project. Aquatics, avian and large mammal surveys will be
continued and expanded, water balance programs will be expanded, and collection of data
from the existing meteorological station will continue. Surface water quality testing will
continue the programs initiated in earlier years and groundwater quality monitoring will begin.
Previous wetlands delineation information will be analyzed during the year for submission of a
jurisdictional determination application. The completion of the 2017 field program will
complete a staged three-year site investigation program where the first two years focused
almost exclusively on collecting data in and around the proposed Arctic open-pit, and the third
year focuses on infrastructure and mine design.
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The completion of the field program in 2017 will support the prefeasibility study on the Arctic
Project expected to be completed in the first quarter of 2018.
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-prospective known copper-dominant districts located 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 carbonate 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 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 develop the Ambler mining district into a premier North
American copper producer.
Company Contacts
Rick Van Nieuwenhuyse Elaine Sanders
President & Chief Executive Officer Vice President & Chief Financial Officer
[email protected] [email protected]
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 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, statements relating to the future operating or financial
performance of the Company, planned expenditures and the anticipated activity, including with respect to the 2017
field program at the UKMP Projects, and the potential timing and preparation of a PFS on the Arctic deposit, 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 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 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, 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 regulatory 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 assumes no obligation to update the forward-looking statements or beliefs, opinions,
projections, or other factors, should they change, except as required by law.