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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 7, 2021
_______________________
Trilogy Metals Inc.
(Exact name of registrant as specified in its
charter)
_______________________
| British Columbia |
001-35447 |
98-1006991 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
Suite 1150, 609 Granville Street
Vancouver, British Columbia
Canada, V7Y 1G5
(Address of principal executive offices, including
zip code)
(604) 638-8088
(Registrant’s telephone number, including
area code)
N/A
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
☐ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.24d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.23e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
| Common Shares |
|
TMQ |
|
NYSE American
Toronto Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☐
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
On July 7, 2021, Trilogy Metals Inc. (the “Company”)
issued a press release reporting financial results for the second quarter ended May 31, 2021. A copy of the press release is furnished
as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form
8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liability
of that section, and shall not be incorporated by reference into any registration statement or other document filed under Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 7.01 | Regulation FD Disclosure |
On July 7, 2021, the Company issued a press release reporting financial
results for the second quarter ended May 31, 2021.
A copy of the press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall
not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement
or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| |
TRILOGY METALS INC. |
| |
|
|
| |
|
|
| Dated: July 7, 2021 |
By: |
/s/ Elaine Sanders |
| |
|
Elaine Sanders, Chief Financial Officer |
Exhibit 99.1
Trilogy Metals Reports Second Quarter Fiscal
2021 Financial Results
VANCOUVER, BC, July 7, 2021 /CNW/ - Trilogy
Metals Inc. (TSX: TMQ) (NYSE American: TMQ) ("Trilogy", "Trilogy Metals" or "the Company") announces
its financial results for the second quarter ended May 31, 2021. 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 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.
Highlights
- Strong working capital position of $8.1 million and cash on hand
of $8.4 million.
- Ambler Access Project budget for 2021 field season totalling $13
million approved by AIDEA and Ambler Metals LLC.
- Summer exploration program at the Upper Kobuk Mineral Projects
has commenced.
Ambler Access Project – 2021 Budget Approved
In a press release dated April 19, 2021, the Company
announced that the Alaska Industrial Development and Export Authority ("AIDEA") had formally approved the proposed plan and
budget for the 2021 summer field season activities, detailed engineering and environmental and field work of up to $13 million for the
Ambler Access Project ("AAP"). The cost will be shared 50/50 by AIDEA and the Company's 50% owned joint venture, Ambler Metals
LLC ("Ambler Metals"). The Board of AIDEA has authorized up to $6.5 million for field season activities. These funds will be
matched by up to another $6.5 million from Ambler Metals under the terms of the Ambler Access Development Agreement that was approved
by the AIDEA Board on February 10, 2021 and subsequently executed by both parties, resulting in a total budget for 2021 of up to $13 million.
The AAP is a proposed 211-mile, east-west running controlled industrial access road that would provide industrial access to the Ambler
Mining District in northwestern Alaska.
2021 Exploration Season for the Upper Kobuk Mineral
Projects
In a press release dated May 17, 2021, the Company
announced that Ambler Metals had finalized the details of the 2021 exploration field program at the UKMP for the previously approved $27
million exploration budget. The exploration program is aligned with a strategy developed by the Company and our joint venture partner,
South32 Limited ("South32") which prioritizes the exploration budget within the UKMP. The strategy defines a program that advances
the highest priority projects and exploration targets, both volcanogenic Massive Sulphide ("VMS") and Carbonate-Hosted Copper
("CHC"), ranging from early-stage geophysical anomalies that were identified during the 2019 airborne Versatile Time Domain
Electromagnetic ("VTEM") survey to advanced VMS and CHC prospects with historical resources.
The UKMP project camp opened on June 1, 2021 following
stringent COVID-19 safety protocols. Mandatory COVID-19 testing is conducted with negative tests required both prior to traveling
to the site and prior to departure from the site. Upon arrival all personnel must follow safety protocols, including additional
protocols implemented in response to the pandemic. Drilling has commenced with three drill rigs deployed.
Annual General Meeting of Shareholders
The Annual General Meeting of shareholders was held
on May 19, 2021. At the Annual General Meeting, all directors nominated by the Company and standing for election were elected by shareholders
of the Company, with each director receiving no less than 99.77% of the votes cast.
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 |
Six months ended |
| Selected expenses |
May 31,
2021
$ |
May 31,
2020
$ |
May 31,
2021
$ |
May 31,
2020
$ |
| General and administrative |
306 |
407 |
669 |
998 |
| Mineral properties and feasibility study expenses |
- |
- |
- |
1,545 |
| Professional fees |
275 |
198 |
504 |
866 |
| Salaries |
407 |
226 |
845 |
450 |
| Salaries – stock-based compensation |
524 |
770 |
2,672 |
1,966 |
| Investor relations |
116 |
101 |
270 |
227 |
| Gain on derecognition of assets contributed to joint venture |
- |
- |
- |
(175,770) |
| Share of loss on equity investment |
1,700 |
561 |
2,820 |
739 |
| Comprehensive (loss) earnings for the period |
(3,413) |
(3,002) |
(7,929) |
168,177 |
| Basic (loss) earnings per common share |
(0.02) |
(0.02) |
(0.05) |
1.20 |
| Diluted (loss) earnings per common share |
(0.02) |
(0.02) |
(0.05) |
1.13 |
For the three-month period ended May 31, 2021, Trilogy
reported a net loss of $3.4 million (or $0.02 basic and diluted loss per common share). For the comparable period in 2020, we reported
a net loss of $3.0 million (or $0.02 basic and diluted loss per common share). This second quarter difference is primarily due to a $1.1
million increase in our 50% pro rata share of Ambler Metals' comprehensive loss. This was offset by a one-time amount of $0.7 million
in feasibility study costs incurred during the second quarter of 2020. The share of loss in equity investment is higher versus the comparative
period as the current quarter includes costs incurred to ready the camp for the 2021 field season. These set up costs were not incurred
in the comparative period as the 2020 field season had been cancelled due to the COVID-19 pandemic.
Other variances noted for the comparable period were:
i) a decrease in general and administrative expenses of $0.10 million primarily due to recruiting fees incurred in the comparative period
for which there are no current period costs as well as the elimination of travel costs due to COVID-19 travel restrictions; ii) an increase
of $0.07 million in professional fees primarily driven by an increase of $0.12 million for geological consulting, offset by $0.04 million
in savings for auditing and legal services as the comparative period included charges for new accounting standard implementation and joint
venture set up; iii) an increase of $0.18 million in salaries as the current period cost reflects additions to the executive team during
the third quarter of 2020 for which there are no prior year second quarter comparatives; and iv) a decrease of $0.30 million in stock-based
compensation driven primarily by RSUs that vested during the second quarter of 2020, for which there are no current quarter comparatives.
For the six-month period ended May 31, 2021, Trilogy
reported a net a loss of $7.9 million (or $0.05 basic and diluted loss per common share). For the comparable period in 2020, we reported
net earnings of $168 million (or $1.20 basic and $1.13 diluted earnings per common share). The difference for the six-month period ended
May 31, 2021, when compared to the same period in 2020, is primarily due to the $176 million gain on derecognition of mineral property
assets contributed to Ambler Metals upon formation of the joint venture on February 11, 2020. This variance is offset by $1.5 million
of mineral property expenses and $0.7 million of feasibility study cost incurred during the comparable prior period for which there are
no current period comparatives. Furthermore, our share of loss on equity investment was $2 million higher for the six-month period ended
May 31, 2021, and reflects costs incurred by Ambler Metals to ready the project site for the 2021 field season. These set up costs were
not incurred by Ambler Metals in 2020 as the field season was cancelled due to the COVID-19 pandemic.
Liquidity and Capital Resources
As of May 31, 2021, we had $8.4 million in cash and
working capital of $8.1 million, which is sufficient to fund our ongoing operations for at least the next 12 months. The projects are
fully funded by Ambler Metals and we do not anticipate needing to fund our 50% share of future expenditures to advance the projects until
the subscription price paid by South32 into Ambler Metals of $145 million is spent.
Qualified Persons
Richard Gosse, P.Geo., Vice President Exploration
for Trilogy Metals Inc., is a Qualified Person as defined by National Instrument 43-101. Mr. Gosse has reviewed the technical information
in this news release and approves the disclosure contained herein.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration and development
company which holds a 50 percent interest in Ambler Metals LLC which has a 100 percent interest in the UKMP in northwestern Alaska. The
UKMP is located within the Ambler Mining District which 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. 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 land package that spans approximately 172,636
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.
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 planned expenditures and the anticipated drilling, the Company's ability to fund its operations, the requirement for additional funding
at Ambler Metals and the perceived merit of the Company's properties 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. 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 activities, permitting timelines, requirements for additional capital, risks
pertaining to the outbreak of the coronavirus (COVID-19), government regulation of mining operations, environmental risks, prices for
energy inputs, labour, materials, supplies and services, uncertainties involved in the interpretation of drilling results and geological
tests, unexpected cost increases and other risks and uncertainties disclosed in the Company's Annual Report on Form 10-K for the year
ended November 30, 2020 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.
View original content:https://www.prnewswire.com/news-releases/trilogy-metals-reports-second-quarter-fiscal-2021-financial-results-301326365.html
SOURCE Trilogy Metals Inc.
View original content: http://www.newswire.ca/en/releases/archive/July2021/07/c1904.html
%CIK: 0001543418
For further information: Company Contacts: Elaine Sanders, Vice President
& Chief Financial Officer; Patrick Donnelly Vice President Corporate Communications & Development, 604-638-8088 or 1-855-638-8088
CO: Trilogy Metals Inc.
CNW 06:30e 07-JUL-21
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This regulatory filing also includes additional resources:
ex991.pdf
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