Trilogy Metals Reports Maiden Inferred Cobalt Resource Estimate Containing 77 Million Pounds of Cobalt at the Bornite Project, Alaska, USA
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News Release
Trilogy Metals Reports Maiden Inferred Cobalt Resource
Estimate Containing 77 Million Pounds of Cobalt
at the Bornite Project, Alaska, USA
June 5, 2018 - Vancouver, British Columbia – Trilogy Metals Inc. (TSX/NYSE
American: TMQ) (“Trilogy Metals” or the “Company”) is pleased to announce the release of a
maiden cobalt resource of 77 million pounds of inferred resources (see highlights below) for
the Bornite Project. The resource estimate utilized assay data from drill holes completed by
the Company between 2011 and 2013 and re -sampled historic holes Kennecott drilled in the
1960s and 1970s. The 2017 drill holes drilled by the Company last year were spaced too far
apart for an inferred resource and thus no updates have yet been made to the copper resource
for the Bornite deposit at this time. Results from our on-going metallurgical studies indicate
that cobalt occurs predominantly as cobaltiferous pyrite which preferentially reports to the
copper tailing s. As a result of this test work , the Company has determined that a cobalt
product may be produced on site and therefore justifies reporting an init ial cobalt resource in
addition to the already existing copper resource at Bornite. The 77 million pounds of contained
cobalt in inferred resources at Bornite reported below is one of the largest cobalt resources in
North America. Further work will focus on developing a flowsheet for cobalt recovery from a
pyrite concentrate made from the copper tailings product.
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).
This mineral resource estimate was prepared for Trilogy Metals Inc. by Bruce M. Davis,
FAusIMM, BD Resource Consulting Inc. (“BDRC”) and Robert Sim, P.Geo., Sim Geological Inc.
(“SGI”) who are both independent Qualified Persons as set forth by National Instrument 43 -
101. An updated Technical Report on the Bornite Project will be filed within 45 days of this
news release.
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
supported by the technical report titled, “Amended NI 43-101 Technical Report on the Bornite
Project, Northwest Alaska, USA” with a release date of October 12, 2017 and an effective date
TSX/NYSE American
Symbol: TMQ
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of April 1 9, 2016. The technical report is available on the Compa ny’s website at
www.trilogymetals.com and on the Company’s profiles at www.sedar.com and www.sec.gov.
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.
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.
Pursuant to Executive Order 13817, c obalt was recently identified by the United States
Department of the Interior as 1 of 35 critical minerals deemed essential for the economic and
national security of the United States . The Executive Order can be found at
https://www.federalregister.gov/documents/2017/12/26/2017-27899/a-federal-strategy-to-
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ensure-secure-and-reliable-supplies-of-critical-minerals and a list of the critical minerals can
be found at https://www.federalregister.gov/documents/2018/02/16/2018-03219/draft-list-
of-critical-minerals.
Rick Van Nieuwenhuyse, President and CEO of Trilogy Metals commented, “We are very pleased
to report an initial 77 million pound† cobalt resource for our Bornite Project. The metallurgical
test work completed to date indicates that ~80% to 90% of the cobalt reports to the copper
tails as cobaltiferous pyrite. This is great because forming a pyrite concentrate from the copper
tails should be relatively straight forward using flotation or dense media separation . In the
next few months we will complete flotation test work to concentrate cobalt into a pyrite-rich
product that can be considered for further upgrading and recovery of cobalt metal at the
Bornite site.”
Mr. Van Nieuwenhuyse continued, “With the market interest in finding cobalt resources outside
of the Congo – where child labor and worker exploitation have been highlighted by Amnesty
International and others as problematic for the Auto and Electric Battery Industries, defining
a large, North American cobalt resource has become a priority for the Company. Based on
market comparable (see Figure 1) we believe cobalt adds significant value for our shareholders.
Furthermore, we expect to continue to grow both the copper and the cobalt resources with an
8,000 to 10,000 meter drill program of in -fill and resource expansion drilling about to get
underway during the summer field program in Alaska. We look forward to reporting an updated
copper and cobalt resource, along with results of further metallurgical test work, once the work
has been completed.”
Figure 1: Select Cobalt Market Comparisons
† See Highlights section for further information on the cobalt resource.
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Cobalt Resource Estimate
The Cobalt resources presented here are with the copper resources that were contained in the
October 12, 2017 amended NI 43-101 Technical Report that has an effective date of April 19,
2016. 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 categories, 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 r esource 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.
As previously announced by the Company on April 19, 2016, a NI 43 -101 compliant resource
was filed for the Bornite deposit. At a base case 0.5% copper cutoff grade, the Bornite Project
is estimated to contain in -pit Indicated Resources of 40.5 million tonnes at 1.02% Cu and
Inferred Resources of 84.1 million tonnes at 0.95% copper. 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.
Examples of Cobalt Intercepts in Drilling
Cobalt composites using a 100ppm (.010%) cut-off grade include 6.79m of 0.42% Co in drill
hole RC11-0184 and 18.44m of 0.35% Co in drill hole RC -34 within the in -pit resource area
(see Table 3). Cobalt composites from the below pit resource area include 36.85m of 0.1%
Co from drill hole RC11 -0185 and 21.23m of 0.23% Co from drill hole RC12 -0198 (see Table
4). We will continue to work on understanding the controls of the higher grade cobalt zones.
Figure 2 highlights the locations of these cobalt intercepts.
Table 3: Co Intercepts Within Pit
Drill hole
From (m) To (m) Length (m) Co% Cu%
RC11-0184 327.43 334.22 6.79 0.42 28.98
RC-34 292 310.44 18.44 0.35 26.81
RC11-0185 182.88 191.84 8.96 0.09 3.32
RC13-0219 442.5 468.48 25.98 0.06 1.82
RC11-0182 212.01 230.9 18.89 0.19 3.433
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Table 4: Co Intercepts Below Pit
Drill hole From (m) To (m) Length (m) Co% Cu%
RC11-0187 458.79 495.64 36.85 0.10 12.07
RC12-0198 631.65 652.88 21.23 0.23 3.86
RC12-0200 572.46 595.57 23.11 0.21 2.67
RC12-0213 347.45 349.27 1.82 0.38 3.36
RC13-0227 321.02 374.86 53.84 0.03 1.69
RC13-0224 653.03 721.94 68.91 0.02 2.15
Figure 2: Significant Bornite Cobalt Intercepts
QAQC Program
The drill program and sampling protocol is managed by qualified persons employed by Trilogy
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Metals. The diamond drill holes are typically collared at HQ diameter drill core and reduced to
NQ diameter during the drilling process. Samples are collected using a 0.2 -meter minimum
length and a 2.5 -meter maximum length. Three quality control samples (one blank, one
standard and one duplicate) are inserted into each batch of 20 samples. The drill core is sawn,
with half sent to ALS Minerals in Fairbanks for sample preparation and the sample pulps
forwarded to ALS's North Vancouver facility for analysis. ALS Minerals, North Vancouver, B .C.
Canada facility is certified as ISO 9001:2008 and accredited to ISO / IEC 17025:2005 from
the Standards Council of Canada. A third party has completed a QAQC review on all historic
(where data was present) and recent cobalt analytical work. The analyt ical method for cobalt
quantification is multi -element ICP with mass spectroscopy. The QAQC review shows overall
very strong precision and accuracy for cobalt results for the 2011 to 2017 Bornite assay results.
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 carbonate replaceme nt
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 locate d 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 o f 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
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
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reserve and mineral resource estimates, the timing and amount of estimated future production,
the filing and timing of an updated Technical Report on the Bornite Project, costs of production,
capital expend itures, costs and timing of the development of projects, the potential future
development of Bornite, 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 involving
success of exploration, development and mining activities, permitting timelines, requirements
for additional capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses; minera l 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 agencie s
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 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.
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 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 Comm ission (SEC), and resource and reserve
information contained herein may not be comparable to similar information disclosed by U.S.
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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 deposi ts that do
not 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 ever
be converted into “reserves”. Investors should also understa nd 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.