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): October 5, 2018
_______________________
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))
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 |
The information set forth in Item 7.01 below
and in Exhibit 99.1 hereto is, to the extent required, incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure |
On October 5, 2018, Trilogy
Metals Inc. (the “Registrant”) issued a press release announcing its financial results for the third quarter ended
August 31, 2018. 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: October 5, 2018 |
By: |
/s/
Elaine Sanders |
|
|
Elaine Sanders, Chief Financial Officer |
Exhibit 99.1
Trilogy Metals Reports Third Quarter Fiscal
2018 Financial Results
VANCOUVER, Oct. 5, 2018 /CNW/ - Trilogy
Metals Inc. (TSX / NYSE American: TMQ) ("Trilogy", "Trilogy Metals" or "the Company") is pleased
to report its third quarter results for the period ended August 31, 2018. 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.
Third Quarter 2018 Highlights:
- Strong cash position of $30.5 million and working capital
of $27.2 million.
- On June 5, 2018 the Company announced a maiden cobalt
resource of 182.4 million tonnes grading 0.019% Co for 77 million pounds of inferred resources (see Table 1 for details).
- On July 20, 2018 the Company announced the filing of
an updated technical report for the Bornite Project incorporating the cobalt resource and updates from the 2017 drill program at
the Bornite Project.
- On August 23, 2018 the Company announced an expansion
of the Bornite drilling program, with its partner, South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) ("South32"), funding
an additional $800,000 for the Company to add two drill rigs, which have subsequently completely four holes totaling approximately
2,170 meters.
The 2018 program and budget at the Bornite
Project which was originally $10 million, includes in-fill and off-set drilling to better define and expand the high-grade copper
resources at Bornite, was increased during the quarter to $10.8 million with a focus on adding additional drilling towards the
end of the field program. Camp opened during mid-May and a seismic program was completed in early June. Results from
the seismic program have now been received and the technical teams at the Company and South32 intend to meet later this year to
review and analyze the information collected.
Three drill rigs started up in June to complete
a planned field program of approximately 8,000 meters of drilling. Two drill rigs were added towards the end of the field
season for an additional 2,170 meters of drilling. Initial assay results from hole RC18-0247 were released in a press
release dated August 23, 2018 with results from the remainder of the drilling program anticipated to be released throughout the
fall. Drilling at the Bornite Project completed on September 19, 2018.
The 2018 program and budget at the Arctic Project
of $6.7 million includes the work performed to date on the Arctic PFS and work to advance the Arctic Project towards feasibility
and permitting. In May 2018, the Company completed an ore sorting test at the Steinert facility in Walton, Kentucky
and a summary report has been received from Steinert. The Company and Ausenco are reviewing operating and capital cost implications
of incorporating ore sorting into the overall design to decide if ore sorting will be included into the final feasibility design
or not. Results from this review are expected by the end of the year. One drill started up in June at Arctic to collect
feasibility level geotechnical and hydrological data for the tailings dam and waste storage facility sites identified in the Arctic
PFS. Approximately 695 meters of geotechnical and hydrological drilling was completed. Engineering studies are planned
to include additional metallurgical, tailings and waste dump design, water treatment and water balance studies to support permitting
and the feasibility study. In addition, we continue to collect baseline environmental data on hydrology, meteorology and
archeology. We are preparing for the submission of permits for the Arctic mine in 2019.
We will be continuing to work closely with
The Alaska Industrial Development and Export Authority ("AIDEA") (the proponent for the Ambler Mining District Industrial
Access Project ("AMDIAP")) to advance the permitting process on the AMDIAP throughout 2018. On April 30, 2018 the
Bureau of Land Management ("BLM") released the Ambler Road Environmental Impact Statement Scoping Summary Report.
Permitting of the AMDIAP under the National Environmental Policy Act's Environmental Impact Statement ("EIS") process
has now concluded the "Scoping Phase" of permitting and has moved to the "Draft EIS Phase". Per the BLM's
website, the Draft EIS is scheduled to be released for public comment by the end of March 2019.
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 |
Nine months ended |
Selected expenses |
August 31,
2018
$ |
August 31,
2017
$ |
August 31,
2018
$ |
August 31,
2017
$ |
General and administrative |
376 |
273 |
1,175 |
1,050 |
Mineral properties expense |
9,051 |
8,471 |
12,657 |
10,407 |
Professional fees |
13 |
86 |
286 |
404 |
Salaries |
286 |
218 |
738 |
683 |
Salaries – stock-based compensation |
204 |
104 |
1,277 |
603 |
Investor relations |
59 |
107 |
261 |
263 |
Loss and comprehensive loss for the period |
9,920 |
8,992 |
16,530 |
14,378 |
Basic and diluted loss per common share |
$0.08 |
$0.09 |
$0.14 |
$0.14 |
For the three months ended August 31, 2018,
Trilogy reported a net loss of $9.9 million (or $0.08 basic and diluted loss per common share) compared to a net loss of $9.0 million
for the corresponding period in 2017 (or $0.09 basic and diluted loss per common share). This variance was primarily due
to the difference in mineral properties expense due to the size and timing of the field programs. An increase of $0.6 million of
mineral property expenses occurred during the three months ended August 31, 2018 compared to the three months ended August 31,
2017.
Other differences noted for the comparable
periods were i) an increase in general and administrative expenses to support the increased field program at the UKMP; ii) a slight
decrease in professional fees as legal fees associated with an equity financing in the second quarter have all been capitalized
under share issue costs; iii) an increase in salaries and stock-based compensation due to new hires in the quarter as well as the
granting of additional stock options; and iv) a decrease in investor relations expenses as costs associated with the analyst tours
of the projects have been captured under general and administrative expenses.
The basic and diluted loss per common share
of $0.08 for the three months ended August 31, 2018 has decreased from the basic and diluted loss per common share of $0.09 for
the three months ended August 31, 2017 due primarily by the activities affecting the loss for the period as described above, offset
by an increase in the weighted average number of shares outstanding for the three months ended August 31, 2018.
For the nine months ended August 31, 2018,
Trilogy reported a net loss of $16.5 million (or $0.14 basic and diluted loss per common share) compared to a net loss of $14.4
million for the corresponding period in 2017 (or $0.14 basic and diluted loss per common share). This variance was primarily
due to the increased activity level at our projects which are recorded as mineral properties expense. An increase of $2.3
million of mineral property expenses occurred during the nine months ended August 31, 2018 compared to the nine months ended August
31, 2017 due to the work performed for the Arctic PFS in 2018 with no comparable activity in 2017. Similar to the activity
levels for the three months ended August 31, 2018, other differences noted relate to i) a small increase in general and administrative
expenses; ii) a decrease in professional fees as legal costs related to the financing completed on April 20, 2018 are recorded
as issuance costs in shareholders equity; iii) and a slight increase in salaries due to new hires as well as a significant increase
in stock based compensation due to the accelerated amortization of new options that were granted during the nine month period ended
August 31, 2018.
The basic and diluted loss per common share
of $0.14 for the nine months ended August 31, 2018 is consistent with the basic and diluted loss per common share of $0.14 for
the nine months ended August 31, 2017. The operating activities increasing the loss as described above have been offset by the
dilutive effect of an increase in the weighted average number of shares outstanding for the nine months ended August 31, 2018.
Bornite Project
On June 5, 2018 the Company announced a maiden
cobalt resource with the following highlights:
- 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).
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. |
(4) |
See "Cautionary Note to United States Investors". |
Qualified Persons
Andrew W. West, Certified Professional Geologist,
Exploration Manager for Trilogy Metals Inc., is a Qualified Person as defined by National Instrument 43-101. Mr. West 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
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, the estimation of mineral reserves and mineral resources, the realization of mineral reserve
and mineral resource estimates, the timing and amount of estimated future production, the future price of copper, costs of production,
capital expenditures, costs and timing of the development of projects, the likelihood and timing of the AMDIAP, the potential future
development of the Bornite and Arctic Projects (the "UKMP Projects"), 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; mineral reserve and resource estimates and the assumptions upon which they are based; assumptions and discount rates
being appropriately applied to the PFS; our assumptions with respect to the likelihood and timing of the AMDIAP; 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 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, 2017 filed with Canadian securities regulatory authorities and with the United
States Securities and Exchange Commission (the "SEC") 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.
Non-GAAP Performance Measures
Some of the financial measures referenced in this press release are non-GAAP performance measures. We have not reconciled
forward-looking full year non-GAAP performance measures contained in this news release to their most directly comparable GAAP measures,
as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts at this time to
estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related
to future production costs, realized sales prices and the timing of such sales, timing and amounts of capital expenditures, metal
recoveries, and corporate general and administrative amounts and timing, or others that may arise during the year. These components
and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly
from their non-GAAP counterparts.
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 SEC, and resource and reserve information contained herein may not be comparable to similar information
disclosed by U.S. 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. Guide 7 does not define and 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 deposits that do not constitute "reserves"
by U.S. standards in documents filed with the SEC. U.S. investors should also understand that "inferred mineral resources"
have a great amount of uncertainty as to their economic and legal feasibility. Under Canadian rules, subject to certain exceptions,
estimated "inferred mineral resources" may not form the basis of feasibility or pre-feasibility studies. Investors are
cautioned not to assume that all or any part of an "inferred mineral resource" exists or is economically or legally mineable.
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 any reserves reported by us in the future in compliance with NI 43-101 may not qualify as
"reserves" under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable
to information made public by companies that report in accordance with United States standards. Accordingly, information concerning
mineral deposits set forth herein may not be to similar information made public by United States companies subject to reporting
and disclosure requirements under United States federal securities laws and the rules and regulations thereunder.
View original content:http://www.prnewswire.com/news-releases/trilogy-metals-reports-third-quarter-fiscal-2018-financial-results-300725023.html
SOURCE Trilogy Metals Inc.
View original content: http://www.newswire.ca/en/releases/archive/October2018/05/c7113.html
%CIK: 0001543418
For further information: Patrick Donnelly, Vice President,
Corporate Communications & Development, patrick.donnelly@trilogymetals.com, 604-630-3569, info@trilogymetals.com, 604-638-8088
or 1-855-638-8088
CO: Trilogy Metals Inc.
CNW 06:30e 05-OCT-18
This regulatory filing also includes additional resources:
ex991.pdf
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