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Trilogy Metals Inc.

Company Data | Introduction | Projects in Hand | Management
News Update
| Chinese

Address :  Suite 1150 –609 Granville Street
Vancouver, BC
Canada V7Y 1G5
Tel No.: (604) 638-8088
Fax No.: (604) 638-0644
Toll Free No.: 1-855-638-8088
Web Site: www.trilogymetals.com
E-mail: info@trilogymetals.com
Contact Person: Patrick Donnelly
Position: VP Corporate Communications & Development


Company Data

Traded Market: TSX / NYSE
Traded Symbol: TMQ
Outstanding Shares: 131.5 million
Market Cap: $450 million
52 Week High: $ 3.48
52 Week Low: $ 1.32
Present Price: Click Here


Introduction

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Trilogy Metals Inc. is a metals exploration and development company. Trilogy's principal assets, the Upper Kobuk Mineral Projects (UKMP), are located in the Ambler mining district 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 replacement deposits which have been found to host high-grade copper and cobalt mineralization.

Trilogy's exploration efforts have been focused on two deposits in the Ambler mining district – the Arctic VMS (volcanogenic massive sulphide) 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. Trilogy's vision is to develop the Ambler mining district into a premier North American copper producer.


Projects in Hand

(1) Arctic Project

Arctic is one of the highest-grade copper deposits known in the world with an average grade of 5% copper equivalent.

The Arctic deposit is a polymetallic volcanogenic massive sulphide deposit located approximately 470 kilometers northwest of the City of Fairbanks, Alaska. Arctic is at Pre-Feasibility Stage and current activities are focused on advancing Arctic to feasibility and permitting.

The 2018 Pre-Feasibility Study (PFS) for the Arctic Project describes the potential technical and economic viability of establishing a conventional open-pit copper-zinc-lead-silver-gold mine-and-mill complex for a 10,000 tonne-per-day operation.

Highlights of the 2018 Arctic Project Pre-Feasibility Study are as follows:

  • Initial capital expenditure of $779.6 million and sustaining capital of US$65.9 million for total estimated capital expenditures of US$845.5 million over the estimated 12-year mine life. In addition, closure and reclamation costs are estimated at US$65.3 million.
  • Pre-tax Net Present Value (NPV), at an 8% discount rate, of US$1,935.2 million calculated at the beginning of the three-year construction period and an Internal Rate of Return ("IRR") of 38.0% for the base case.
  • After-tax NPV8% of US$1,412.7 million and after-tax IRR of 33.4% for the base case.
  • Estimated pre-tax and after-tax payback of initial capital within 2 years for the base case at US$3.00/lb copper. At US$2.00/lb copper, pre-tax and after-tax payback of initial capital is 3 years.
  • Minimum 12-year mine life supporting a maximum 10,000 tonne-per-day conventional grinding mill-and-flotation circuit to produce copper, zinc and lead concentrates containing significant gold and silver by-products.
  • Life-of-mine strip ratio of 6.9 to 1.
  • Average annual payable production projected to be more than 159 million pounds of copper, 199 million pounds of zinc, 33 million pounds of lead, 30,600 ounces of gold and 3.3 million ounces of silver for life of mine.
  • A capital intensity ratio on initial capital of approximately US$6,200 per tonne of average annual copper equivalent produced.
  • Estimated cash costs of US$0.15/lb of payable copper (C1 cash costs include on-site mining and processing costs, road tolls and maintenance, transport, royalties, and is net of by-product credits).
  • Total "all-in" cash costs (initial/sustaining capital, operating, transportation, treatment and refining charges, road toll, and by-product metal credits) estimated at US$0.63/lb of payable copper.
  • Management believes economic indicators justify moving forward with permitting and a feasibility study.

Probable Mineral Reserves: 43,038,000 tonnes at 5% Copper Equivalent, with average grades of 2.32% Cu, 3.24% Zn, 0.57% Pb, 0.49 g/t Au and 36.0 g/t Ag.

Inferred Resources: 3.5 million tonnes, with average grades of 1.71% Cu, 2.72% Zn, 0.60% Pb, 0.36 g/t Au and 28.69 g/t Ag.

Trilogy will continue to advance engineering and environmental work in 2019 in support of completing a feasibility study and preparing the Arctic project for permitting. The total budgeted amount for these activities is estimated to be $7.0-million.

(2) Bornite Project

The Bornite deposit located near Kobuk, Alaska, is approximately 25 kilometers southwest of the Company's Arctic deposit.

A National Instrument 43-101 Technical Report outlining Indicated Resources of 900 million pounds of copper and Inferred Resources of 5.5 billion pounds of copper and 77 million pounds of cobalt was released in 2018.

Initial metallurgical test results continue to demonstrate that conventional processing technology is expected to produce a clean, very high-quality copper concentrate over a wide range of typical open-pit and underground copper grades. Further optimization work is planned.

The project has the potential to further enhance the long-term economics of the Ambler mining district. The 2019 program and budget of $9.2-million for Bornite will be mainly directed at:

  • Approximately 10,000 metres or 12 holes of infill and expansion drilling in the deposit;
  • Additional metallurgical work to optimize copper recoveries and the determination of next steps for the recovery of cobalt; and
  • Initial engineering studies to prepare Bornite for a preliminary economic assessment once the work from the 2019 work programs are completed, including drill results, metallurgical program updates, a resource update and continuing environmental baseline data collection.

Investment Highlights

8 billion pounds of Copper, 3 billion pounds of Zinc and over 1 million ounces of Gold Equivalent Precious Metals. And now with 77 million pounds of Cobalt.

  • High-grade Copper with significant Cobalt, Zinc and precious metals – 100% owned
  • Located in Alaska: a safe and mining friendly jurisdiction
  • Ambler Mining District – Significant exploration upside
  • Two Projects:
    1. Bornite Project: excellent exploration upside
    2. Arctic Project: highest grade open pit VMS deposit in the world; Low Capex + Low Opex – High quality asset
  • Well funded to complete Permitting and Feasibility Study at Arctic while South32 funds Bornite Exploration
  • Strong, supportive shareholder base includes: Electrum, South32 Limited, Baupost and Paulson
  • Strong business relationship with an Alaska Native corporation NANA, and strong community relationships
  • Partnership with State of Alaska – AIDEA to build road infrastructure
  • Management team with track record of major discoveries and project development


Management

Management and Directors

Rick Van Nieuwenhuyse, MSc (Geology), President, CEO and Director

Mr. Nieuwenhuyse has more than 40 years of experience in the natural resource sector. He was Founder, President, and CEO of NovaGold and Vice President of Exploration of Placer Dome Inc. Mr. Nieuwenhuyse brings years of working experience in and knowledge of Alaska to the Company. He received the Thayer Lindsley award in 2009 for his role in the Donlin Gold discovery and the Collin Spence award in 2016 for his role in the Bornite discovery.

Elaine M. Sanders, CA, Chief Financial Officer and Corporate Secretary

Ms. Sanders has more than 20 years of experience in audit, finance, and accounting with public and private companies. She has been involved with numerous financings and acquisitions, and has listed companies on both the TSX and AMEX.

Andrew West, Exploration Manager

Mr. West has more than 20 years of experience in underground and surface mineral exploration. He is responsible for all aspects of exploration and overseeing resource estimations.

Robert (Bob) Jacko, VP Projects

Mr. Jacko is a mining engineer with more than 35 years of experience in both underground and open pit operations within North America. In the past eight years, Mr. Jacko has focused on engineering oversight working on a variety of preliminary economic assessments, pre-feasibility studies and feasibilities studies for mining projects.

Patrick Donnelly, VP Corporate Communications & Development

Mr. Donnelly has almost 25 years of experience in mineral exploration, capital markets, corporate development and investor relations, He is formerly a Project Geologist and has explored for precious and base metals and diamonds in western and northern Canada. He was recently President and Co-Founder of First Mining Gold Corp.

Cal Craig, Director of Environment & Permitting

Mr. Craig has experience with baseline data collection and management. He has knowledge of environmental permitting and compliance. He worked at several advanced stage exploration projects in Alaska.

Board

Gerald J. McConnell, Q.C., Chairman

Mr. McConnell has over 30 years of experience in the resource sector.

Rick Van Nieuwenhuyse, MSc (Geology), President, CEO and Director

Mr. Van Nieuwenhuyse was former CEO of NovaGold from 1991 to 2012.

Tony S. Giardini, CA, CPA, Director

Mr. Giardini is currently CFO at Kinross Gold Corporation.

William Hayden, Director

Mr. Hayden is a Director at Ivanhoe and has been involved with Ivanhoe Mines since 1998.

William Hensley, Director

Mr. Hayden is a Director at Ivanhoe and has been involved with Ivanhoe Mines since 1998.

William Hensley, Director

Mr. Hensley is the Distinguished Visiting Professor in the Department of Business and Public Policy at the University of Alaska.

Gregory A. Lang, Director

Mr. Lang is currently CEO at NovaGold.

Kalidas V. Madhavpeddi, Director

Mr. Madhavpeddi is currently International CEO of China Molybdenum Co.

Janice Stairs, LLB, MBA, Director

Ms. Stairs is currently General Counsel and Corporate Secretary of Nambia Rare Earths Inc.

Diana Walters, Director

Ms. Walters was former CEO of Liberty Metals and Mining.


News Update

On July 9, 2019, Trilogy Metals Inc. has provided its financial results for the second quarter ended May 31, 2019. Details of the Company's financial results are contained in the interim unaudited consolidated financial statements and management's discussion and analysis which will be available on the Company's website, on SEDAR and on EDGAR. All amounts are in United States dollars unless otherwise stated.

Highlights

  • Strong working capital position of $26.0-million and cash on hand of $25.8-million;
  • Additional $9.9-million received subsequent to the quarter-end from the exercise of warrants;
  • Regional exploration program started with district-wide airborne geophysical surveys completed this spring along the entire 100-kilometre-long belt hosting known polymetallic deposits;
  • Exploration program at Bornite commenced at the beginning of June with more than 2,000 metres of drilling completed;
  • Feasibility-level studies started for the Arctic project with the goal of completing the feasibility study in the first half of 2020.

On May 23, 2019, Trilogy Metals Inc.'s shareholders voted in favour of all items of business before the annual meeting of the shareholders held in Vancouver yesterday, and the nominees listed in the management proxy circular for the meeting were all elected as directors.

On April 09, 2019, Trilogy Metals Inc. has released its financial results for the first quarter ended Feb. 28, 2019. Details of the company's financial results are contained in the interim unaudited consolidated financial statements and management's discussion and analysis which will be available on the company's website, on SEDAR and on EDGAR. All amounts are in U.S. dollars unless otherwise stated. Highlights: 1. Strong working capital position of $29.8-million and cash on hand of $30.0-million; 2. South32 Ltd. having financed $31.0-million over the three-year option period and has until January, 2020, to exercise the option to form the joint venture; 3. 2019 budgets totalling $18.2-million for the Arctic project, the Bornite project, and regional or district exploration.

On April 01, 2019, Trilogy Metals Inc. reported that the company will hold the company's 2019 annual meeting of the shareholders (AGM) on Wednesday, May 22, 2019, at 10 a.m. Pacific Time at the offices of Blake, Cassels & Graydon LLP, Suite 2600, 595 Burrard St., Vancouver, B.C.

On March 19, 2019, Trilogy Metals Inc. provided an update on its project activities.

Preparations are already underway to prepare the Bornite camp to accommodate the 2019 field programs on the Company's 100%-owned Upper Kobuk Mineral Projects located in Northwestern Alaska.

On March 5, 2019, Trilogy Metals Inc. has released additional copper and cobalt metallurgical results for the Bornite project located in the Ambler mining district of northwestern Alaska.


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