VANCOUVER, April 4, 2017 /PRNewswire/ - 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
|
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.
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.
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.
SOURCE Trilogy Metals Inc.