TRILOGY
METALS Inc.
(Exact name of registrant as specified
in its charter)
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British Columbia
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98-1006991
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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Suite 1150, 609 Granville Street
Vancouver, British Columbia
Canada, V7Y 1G5
(604) 638-8088
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(Address, including zip code, and telephone number, including area code of registrant’s principal executive offices)
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DL Services, Inc.
Columbia Center
701 Fifth Avenue, Suite 6100
Seattle, Washington 98104-7043
(206) 903-8800
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copies to:
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Kimberley R. Anderson
Dorsey & Whitney LLP
701 5th Avenue, Suite 6100
Seattle, Washington 98104
(206) 903-8800
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Trisha Robertson
595 Burrard Street
Suite 2600, Three Bentall Centre
Vancouver, British Columbia, Canada
V7X 1L3
(604) 631-3300
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Riccardo Leofanti
Skadden, Arps, Slate, Meagher & Flom
LLP
222 Bay Street, Suite 1750
Toronto, Ontario, Canada
M5K 1J5
(416) 777-4703
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From time to time after the effective date of this Registration Statement
(Approximate date of commencement of proposed sale to the public)
If the only securities
being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following
box. ¨
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following
box. x
If this Form is
filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ¨
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration statement
pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission
pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ¨
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Accelerated filer x
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Non-accelerated filer ¨
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Smaller reporting company x
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Emerging growth company ¨
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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 7(a)(2)(B) of Securities Act. ¨
CALCULATION OF REGISTRATION FEE
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Title of Each Class of
Securities To Be Registered(1)
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Amount to be
Registered(1) (2)
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Proposed
Maximum
Aggregate Price
Per Unit(2)
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Proposed
Maximum
Aggregate Offering
Price (2) (3)
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Amount of
Registration Fee
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Common Shares, no par value
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Warrants to Purchase Common Shares
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Share Purchase Contracts
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Subscription Receipts
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Units
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Total
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$
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100,000,000
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$
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12,980
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1.
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There are being registered hereunder such indeterminate number of Common Shares, such indeterminate
number of Warrants to purchase Common Shares, such indeterminate amount of Share Purchase Contracts, such indeterminate number
of Subscription Receipts and such indeterminate amount of Units as will have an aggregate initial offering price not to exceed
$100,000,000. Any securities registered hereunder may be sold separately or together with other securities registered
hereunder, at times, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set
forth in an accompanying prospectus supplement. The securities registered also include such indeterminate amounts and numbers of
shares of common stock as may be issued upon exercise of warrants or pursuant to anti-dilution provisions of any such securities.
The securities registered also include, pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities
Act”), such additional number of shares of common shares that may become issuable as a result of any stock split, stock dividends
or similar event.
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2.
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Not applicable pursuant to Form S-3 General Instruction II.D.
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3.
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The Registrant is hereby registering an indeterminate amount and number of each identified class
of the identified securities up to a proposed maximum aggregate offering price of $100,000,000, which may be offered from time
to time at indeterminate prices, including securities that may be purchased by underwriters. The Registrant has estimated
the proposed maximum aggregate offering price solely for the purpose of calculating the registration fee pursuant to Rule 457(o)
under the Securities Act.
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The registrant hereby
amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall
file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This registration statement
contains a prospectus relating to an offering of our securities in the United States, together with separate prospectus pages relating
to an offering of securities in Canada. The U.S. prospectus and the Canadian prospectus will be substantially identical except
for the cover page and the table of contents, and except that the Canadian prospectus includes certain disclosure required by Canadian
securities laws and a “Certificate of the Company”. The complete U.S. prospectus is included herein and is followed
by those alternate and additional pages to be used solely in the Canadian prospectus. Each of the alternate pages for the Canadian
prospectus included in this registration statement has been labeled "[Alternate Page for Canadian Prospectus]". Each
of the additional pages for the Canadian prospectus included in this registration statement has been labeled “[Additional
Page for Canadian Prospectus]”.
The information in this prospectus is not complete and may be changed. We may not sell these securities or accept an offer to buy
these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities, and it is not soliciting offers to buy these securities in any state where such offer
or sale is not permitted.
SUBJECT
TO COMPLETION, DATED OCTOBER 10, 2019
$100,000,000
Common Shares
Warrants to Purchase Common Shares
Share Purchase Contracts
Subscription Receipts
Units
We may offer and issue from time to
time common shares (the “Common Shares”), warrants to purchase Common Shares (the “Warrants”), Share
Purchase Contracts (as defined herein), Subscription Receipts (as defined herein) and units comprised of some or all of the
other securities described above (“Units”) (all of the foregoing, collectively, the “Securities”) or
any combination thereof up to an aggregate initial offering price of $100,000,000 in one or more transactions under
this shelf prospectus (which we refer to as the “Prospectus”). Securities may be offered separately or together,
at times, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth
in an accompanying shelf prospectus supplement (a “Prospectus Supplement”).
This Prospectus provides you with a general
description of the Securities that we may offer. Each time we offer Securities, we will provide you with a Prospectus Supplement
that describes specific information about the particular Securities being offered and may add, update or change information contained
or incorporated by reference in this Prospectus. You should read both this Prospectus and the Prospectus Supplement, together with
the additional information which is incorporated by reference into this Prospectus and the Prospectus Supplement.
Our outstanding Common Shares are
listed and posted for trading on the Toronto Stock Exchange (“TSX”) and the NYSE American LLC (“NYSE
American”), under the symbol “TMQ”. On October 9, 2019, the last reported sale price of the Common Shares
on the NYSE American was $1.53 per Common Share and on the TSX was Cdn$2.05 per Common Share. Unless otherwise specified in
the applicable Prospectus Supplement, Securities other than the Common Shares will not be listed on any securities exchange. There
is currently no market through which the Securities, other than the Common Shares, may be sold and you may not be able to
resell such Securities purchased under this Prospectus and any applicable Prospectus Supplement. This may affect the pricing
of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of the
Securities, and the extent of issuer regulation. The offering of Securities hereunder is subject to approval of certain
legal matters on our behalf by Blake, Cassels & Graydon LLP, with respect to Canadian legal matters, and Dorsey &
Whitney LLP, with respect to U.S. legal matters and, except as otherwise set forth in any Prospectus Supplement, on behalf of
any underwriters or agents by Skadden, Arps, Slate, Meagher & Flom LLP with respect to U.S. legal matters.
Investing in our securities
involves a high degree of risk. You should carefully read the ‘‘Risk Factors’’ section
beginning on page 3 of this Prospectus and carefully consider the discussion of risks and uncertainties under the heading
“Risk Factors” contained in any applicable Prospectus Supplement and in the documents that are
incorporated by reference.
These Securities have not been approved
or disapproved by the U.S. Securities and Exchange Commission (“SEC”) or any state securities commission nor has the
SEC or any state securities commission passed upon the accuracy or adequacy of this Prospectus or any applicable Prospectus Supplement. Any
representation to the contrary is a criminal offense.
The date of this Prospectus is , 2019.
TABLE OF CONTENTS
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You should rely only on the information
contained in or incorporated by reference into this Prospectus and any Prospectus Supplement. We have not authorized anyone to
provide you with different information. We are not making an offer of these Securities in any jurisdiction where the offer is not
permitted. You should not assume that the information contained in this Prospectus and any Prospectus Supplement is accurate as
of any date other than the date on the front of those documents.
In this Prospectus and in any Prospectus
Supplement unless the context otherwise requires, references to “Trilogy” or the “Company”, “we”,
“us”, and “our” refer to Trilogy Metals Inc., either alone or together with our subsidiaries, as the context
requires.
Unless stated otherwise or as the context
otherwise requires, all references to dollar amounts in this Prospectus and any Prospectus Supplement are references to United
States dollars. References to “$” or “US$” are to United States dollars and references to “Cdn$”
or “C$” are to Canadian dollars. See “Exchange Rate Information”. The Company’s financial
statements that are incorporated by reference into this Prospectus and any Prospectus Supplement have been prepared in accordance
with accounting principles generally accepted in the United States.
ABOUT
THIS PROSPECTUS
This Prospectus is a part of a registration
statement that we have filed with the SEC utilizing a “shelf” registration process. Under this shelf registration
process, we may sell any combination of the Securities described in this Prospectus in one or more offerings up to an aggregate
initial offering price of $100,000,000. The specific terms of the Securities with respect to a particular offering will be set
out in the applicable Prospectus Supplement and may include, where applicable: (i) in the case of Common Shares, the number of
Common Shares offered, the issue price, and any other terms specific to the Common Shares being offered; (ii) in the case of Warrants,
the designation, terms, number of Common Shares issuable upon exercise of the Warrants, any procedures that will result in the
adjustment of these numbers, the exercise price, dates and periods of exercise, the currency in which the Warrants are issued and
any other specific terms; (iii) in the case of Share Purchase Contracts, the designation, number and terms of the Common Shares
to be purchased under the Share Purchase Contract, any procedures that will result in the adjustment of these numbers, the purchase
price and purchase date or dates of the Common Shares, any requirements of the purchaser to secure its obligations under the Share
Purchase Contract and any other specific terms; (iv) in the case of Subscription Receipts, the number of Subscription Receipts
offered, the issue price, the currency, the terms, conditions and procedures for the conversion or exercise of such Subscription
Receipts into or for Common Shares or other securities or pursuant to which the holders thereof will become entitled to receive
Common Shares or such other securities, and any other terms specific to the Subscription Receipts being offered; and (v) in the
case of Units, the number of Units offered, the terms of the Units, the offering price, the number of Common Shares, Warrants or
other Securities included in each Unit and any other specific terms. Where required by statute, regulation or policy, and where
Securities are offered in currencies other than Canadian dollars, appropriate disclosure of foreign exchange rates applicable to
such Securities will be included in the Prospectus Supplement describing such Securities.
We may offer and sell Securities to or
through underwriting syndicates or dealers, through agents or directly to purchasers. The Prospectus Supplement for each offering
of Securities will describe in detail the plan of distribution for that offering.
In connection with any offering of the
Securities (unless otherwise specified in a Prospectus Supplement), the underwriters or agents may over-allot or effect transactions
which stabilize or maintain the market price of the Securities offered at a higher level than that which might exist in the open
market. Such transactions, if commenced, may be interrupted or discontinued at any time. See “Plan of Distribution”.
Please carefully read both this Prospectus
and any Prospectus Supplement together with the documents incorporated herein by reference under “Documents Incorporated
by Reference” and the additional information described below under “Additional Information”.
Prospective investors should be aware
that all mineral resource estimates, and any future reserve estimates, included or incorporated by reference in this Prospectus
and any accompanying Prospectus Supplement have been and will be prepared in accordance with applicable Canadian standards, which
differ from U.S. standards. See “Cautionary Note to United States Investors”. This Prospectus and the documents
incorporated by reference in this Prospectus contain forward-looking statements and forward-looking information within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. See “Cautionary
Statement Regarding Forward-Looking Statements”.
Prospective investors should be aware
that the acquisition of the Securities described herein may have tax consequences. You should read the tax discussion contained
in the applicable Prospectus Supplement and consult your tax advisor with respect to your own particular circumstances.
You should rely only on the information
contained or incorporated by reference in this Prospectus and any Prospectus Supplement. We have not authorized anyone
to provide you with different information. The distribution or possession of this Prospectus in or from certain jurisdictions
may be restricted by law. This Prospectus is not an offer to sell these Securities and is not soliciting an offer to
buy these Securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale
is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained
in this Prospectus is accurate only as of the date of this Prospectus and any information incorporated by reference is accurate
as of the date of the applicable document incorporated by reference, regardless of the time of delivery of this Prospectus or of
any sale of the Securities. Our business, financial condition, results of operations and prospects may have changed
since that date.
In this Prospectus and in any Prospectus
Supplement, unless the context otherwise requires, references to “Trilogy”, the “Company”, “we”,
“us” and “our” refer to Trilogy Metals Inc., either alone or together with our subsidiaries as the context
requires.
Unless stated otherwise or as the context
otherwise requires, all references to dollar amounts in this Prospectus and any Prospectus Supplement are references to United
States dollars. References to “$” or “US$” are to United States dollars and references to “Cdn$”
or “C$” are to Canadian dollars. See “Exchange Rate Information”. Our financial statements that
are incorporated by reference into this Prospectus and any Prospectus Supplement have been prepared in accordance with accounting
principles generally accepted in the United States.
risk
factors
Investing in the Securities is speculative
and involves a high degree of risk due to the nature of our business and the present stage of exploration of our mineral properties.
The following risk factors, as well as risks currently unknown to us, could materially adversely affect our future business, operations
and financial condition and could cause them to differ materially from the estimates described in forward-looking information relating
to Trilogy, or our business, property or financial results, each of which could cause purchasers of Securities to lose all or part
of their investments. The risks set out below are not the only risks we face; risks and uncertainties not currently known to us
or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, results
of operations and prospectus. Before deciding to invest in any Securities, investors should consider carefully the risks included
herein and incorporated by reference in this Prospectus (including subsequently filed documents incorporated by reference) and
those described in any Prospectus Supplement.
Risks
Related to Our Securities
Future sales or issuances of
equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power and reduce our earnings
per share.
We may sell additional equity securities
(including through the sale of securities convertible into Common Shares) and may issue additional equity securities to finance
our operations, exploration, development, acquisitions or other projects. We are authorized to issue an unlimited number of Common
Shares. We cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales
and issuances of equity securities will have on the market price of the Common Shares. Sales or issuances of a substantial number
of equity securities, or the perception that such sales could occur, may adversely affect prevailing market prices for the Common
Shares. With any additional sale or issuance of equity securities, investors will suffer dilution of their voting power and may
experience dilution in our earnings per share.
Our Common Shares are subject
to various factors that have historically made share prices volatile.
The market price of our Common Shares may
be subject to large fluctuations, which may result in losses to investors. The market price of the Common Shares may increase or
decrease in response to a number of events and factors, including: our operating performance and the performance of competitors
and other similar companies; volatility in metal prices; the arrival or departure of key personnel; the number of Common Shares
to be publicly traded after an offering pursuant to any Prospectus Supplement; the public’s reaction to our press releases,
material change reports, other public announcements and our filings with the various securities regulatory authorities; changes
in earnings estimates or recommendations by research analysts who track the Common Shares or the shares of other companies in the
resource sector; changes in general economic and/or political conditions; acquisitions, strategic alliances or joint ventures involving
us or our competitors; and the factors listed under the heading “Cautionary Statement Regarding Forward-Looking Statements”.
The market price of the Common Shares may
be affected by many other variables which are not directly related to our success and are, therefore, not within our control, including
other developments that affect the market for all resource sector securities, the breadth of the public market for the Common Shares
and the attractiveness of alternative investments.
We will have broad discretion
over the use of proceeds.
While detailed information regarding the
use of proceeds from the sale of our Securities will be described in the applicable Prospectus Supplement, we will have broad discretion
over the use of the net proceeds from an offering of our Securities. Because of the number and variability of factors that will
determine our use of such proceeds, the Company’s ultimate use might vary substantially from its planned use. You may not
agree with how we allocate or spend the proceeds from an offering of our Securities. We may pursue acquisitions, collaborations
or other opportunities that do not result in an increase in the market value of our Securities, including the market value of our
Common Shares, and that may increase our losses.
We do not intend to pay any
cash dividends in the foreseeable future.
We have not declared or paid
any dividends on our Common Shares. Our current business plan requires that for the foreseeable future, any future earnings
be reinvested to finance the growth and development of our business. We do not intend to pay cash dividends on the Common
Shares in the foreseeable future. We will not declare or pay any dividends until such time as our cash flow exceeds our
capital requirements and will depend upon, among other things, conditions then existing including earnings, financial
condition, restrictions in financing arrangements, business opportunities and conditions and other factors, or our board of
directors (the “Board”) determines that our shareholders could make better use of the cash.
There is no market for certain of
our offered securities.
There is no market through which Share
Purchase Contracts, Warrants to purchase Common Shares, Subscription Receipts or Units may be sold. There can be no assurance that
an active trading market will develop for the aforementioned securities, or if developed, that such a market will be sustained
at the price level at which it was offered. The liquidity of the trading market in those securities, and the market price quoted
of those securities, may be adversely affected, by among other things:
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changes in the overall market for those securities;
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changes in our financial performance or prospects;
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changes or perceived changes in our creditworthiness;
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the prospects for companies in the industry generally;
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the number of holders of those securities;
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the interest of securities dealers in making a market for those securities; and
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prevailing interest rates.
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There can be no assurance that fluctuations
in the trading price will not materially adversely impact our ability to raise equity funding without significant dilution to our
existing shareholders, or at all.
We may be a “passive foreign
investment company” in future periods, which may have adverse U.S. federal income tax consequences for U.S. shareholders.
U.S. investors in our Common Shares should
be aware that we believe we were not a passive foreign investment company (“PFIC”) for the years ending November 30,
2015, 2016 and 2017 but we believe we were a PFIC for the year ending November 30, 2018 and may be a PFIC in future tax years.
If we are a PFIC for any year during a U.S. taxpayer’s holding period, then such holder generally will be required to treat
any gain realized upon a disposition of Common Shares and any so-called “excess distribution” received on its Common
Shares as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes
a timely and effective “QEF election” or a “mark-to-market election. A U.S. taxpayer who makes a QEF election
generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are
a PFIC, whether or not we distribute any amounts to our shareholders. A U.S. taxpayer who makes the mark-to-market election generally
must include as ordinary income each year the excess of the fair market value of the Common Shares over the U.S. taxpayer’s
tax basis therein. Information regarding material U.S. federal income tax consequences to persons investing in the Securities
offered by this Prospectus will be set forth in an applicable Prospectus Supplement. You should consult its own tax advisor regarding
the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of our Securities.
CAUTIONARY
NOTE TO UNITED STATES INVESTORS
Unless otherwise indicated, all resource
estimates, and any future reserve estimates, included or incorporated by reference in this Prospectus and any Prospectus Supplement
have been, and will be, 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 Definition Standards for
Mineral Resources and Mineral Reserves (“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. NI 43-101 permits the disclosure of an historical estimate made prior to the adoption of NI 43-101
that does not comply with NI 43-101 to be disclosed using the historical terminology if the disclosure: (a) identifies the source
and date of the historical estimate; (b) comments on the relevance and reliability of the historical estimate; (c) to the extent
known, provides the key assumptions, parameters and methods used to prepare the historical estimate; (d) states whether the historical
estimate uses categories other than those prescribed by NI 43-101; and (e) includes any more recent estimates or data available.
Canadian standards,
including NI 43-101, differ significantly from the current requirements of the United States Securities and Exchange Commission
(“SEC”) under SEC Industry Guide 7, and reserve and resource information contained or incorporated by reference into
this Prospectus and any Prospectus Supplement 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 SEC Industry Guide 7, 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. SEC Industry Guide 7 does not define and the SEC’s current 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,
existing SEC rules normally only permit 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 contained in this Prospectus and the documents incorporated by reference herein that describes the Company’s
mineral deposits may not be comparable 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.
Cautionary
Statement Regarding Forward-Looking Statements
The information discussed
in this Prospectus and the documents incorporated by reference into this Prospectus includes “forward-looking information”
and “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities laws. These forward-looking statements may include statements regarding perceived merit of properties,
exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, operating costs,
cash flow estimates, production estimates and similar statements relating to the economic viability of a project, timelines, strategic
plans, statements relating anticipated activity with respect to the Ambler Mining District Industrial Access Project (“AMDIAP”),
the Company’s plans and expectations relating to the Arctic and Bornite projects (the “Upper Kobuk Mineral Projects”),
completion of transactions, market prices for precious and base metals, or other statements that are not statements of fact. These
statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet
determinable and assumptions of management.
Statements concerning
mineral resource and reserve estimates may also be deemed to constitute “forward-looking statements” to the extent
that they involve estimates of the mineralization that will be encountered if the property is developed and, in the case of mineral
reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically and
legally exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such
as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”,
“estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”,
“potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results
“may”, “could”, “would”, “should”, “might” or “will” be
taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact
and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties
and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including,
without limitation:
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none of the Company’s mineral properties are in production or are under development;
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risks related to our ability to finance the development of our mineral properties through external
financing, strategic alliances, the sale of property interests or otherwise;
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uncertainty as to whether there will ever be production at the Company’s mineral exploration
and development properties;
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risks related to inability to define proven and probable reserves;
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risks related to lack of infrastructure including but not limited to the risk whether or not the
AMDIAP will receive the requisite permits and, if it does, whether the Alaska Industrial Development and Export Authority will
build the AMDIAP;
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risks related to inclement weather which may delay or hinder exploration activities at the
Company’s mineral properties;
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risks related to our ability to commence production and generate material revenues or obtain adequate
financing for our planned exploration and development activities;
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commodity price fluctuations;
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our history of losses and expectation of future losses;
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uncertainties relating to the assumptions underlying our resource and reserve estimates, such as
metal pricing, metallurgy, mineability, marketability, operating and capital costs, production and economic returns;
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uncertainty related to inferred mineral resources;
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mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns,
labor disputes or other unanticipated difficulties with or interruptions in development, construction or production;
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risks related to market events and general economic conditions;
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risks and uncertainties relating to the interpretation of drill results, the geology, grade and
continuity of our mineral deposits;
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risks related to governmental regulation and permits, including environmental regulation, including
the risk that more stringent requirements or standards may be adopted or applied due to circumstances unrelated to the Company
and outside of its control;
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the risk that permits and governmental approvals necessary to develop and operate mines at our
mineral properties will not be available on a timely basis or at all;
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risks related to the need for reclamation activities on our properties and uncertainty of cost
estimates related thereto;
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uncertainty related to title to our mineral properties;
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risks related to the acquisition and integration of operations or projects;
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risks related to increases in demand for equipment, skilled labor and services needed for exploration
and development of mineral properties, and related cost increases;
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our need to attract and retain qualified management and technical personnel;
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risks related to conflicts of interests of some of our directors and officers;
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risks related to potential future litigation;
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risks related to the voting power of our major shareholders and the impact that a sale by such
shareholders may have on our share price;
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risks related to global climate change;
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risks related to adverse publicity from non-governmental organizations;
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uncertainty as to our ability to maintain the adequacy of internal control over financial reporting
as per the requirements of Section 404 of the Sarbanes-Oxley Act (“SOX”);
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increased regulatory compliance costs, associated with rules and regulations promulgated by the
SEC, Canadian Securities Administrators, the NYSE American, the TSX, and the Financial Accounting Standards Boards, and more specifically,
our efforts to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”);
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adverse federal income tax consequences for U.S. shareholders should the Company be a passive foreign
investment company;
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risks related to future sales or issuances of equity securities decreasing the value of our
Common Shares, diluting voting power and reducing future earnings per share;
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uncertainty as to the volatility in the price of the Company’s shares;
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risks related to the Company’s use of proceeds from the sale of its Securities;
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the Company’s expectation of not paying dividends; and
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risks related to the market for the Company’s Securities.
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This list is not exhaustive
of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about the future
and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation,
those referred to in this Prospectus under the heading “Risk Factors” and in the documents incorporated by reference
in this Prospectus. All forward-looking statements contained in this Prospectus or in the documents incorporated by reference herein
are qualified by these cautionary statements.
Our forward-looking statements
are based on the beliefs, expectations and opinions of management on the date the statements are made. In connection with the forward-looking
statements contained in this Prospectus and the documents incorporated, or deemed to be incorporated, by reference, we have made
certain assumptions about our business, including about:
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our ability to achieve production at our Arctic and Bornite Projects;
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the accuracy of our mineral resource and reserve estimates;
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the results, costs and timing of future exploration drilling and engineering;
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timing and receipt of approvals, consents and permits under applicable legislation;
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the adequacy of our financial resources;
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the receipt of third party contractual, regulatory and governmental approvals for the exploration,
development, construction and production of our properties;
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our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable;
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there being no significant disruptions affecting operations, whether relating to labor, supply,
power, damage to equipment or other matter;
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expected trends and specific assumptions regarding metal prices and currency exchange rates; and
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prices for and availability of fuel, electricity, parts and equipment and other key supplies remaining
consistent with current levels.
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We have also assumed
that no significant events will occur outside of our normal course of business. Although we have attempted to identify important
factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. We believe that
the assumptions inherent in the forward-looking statements are reasonable as of the date of this Prospectus. However, forward-looking
statements are not guarantees of future performance and, accordingly, undue reliance should not be put on such statements due to
the inherent uncertainty therein.
We do not assume any
obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should
change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking
statements.
Exchange
Rate Information
The following table sets forth (i) the
rate of exchange for the U.S. dollar, expressed in Canadian dollars, in effect at the end of the periods indicated; (ii) the average
exchange rates for the U.S. dollar, expressed in Canadian dollars, in effect during such periods; and (iii) the high and low exchange
rates for the U.S. dollar, expressed in Canadian dollars, during such periods, each based on the Bank of Canada rate in effect
on each trading day for the relevant period, for conversion of U.S. dollars into Canadian dollars:
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Fiscal Year Ended
November 30
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Nine Months Ended
August 31, 2019
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2018
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2017
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2016
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High for period
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1.3310
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1.3742
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1.4593
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1.3642
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Low for period
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1.2288
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1.2126
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1.2526
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1.3038
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Average for period
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1.2907
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1.3030
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1.3285
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1.3312
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Rate at end of period
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1.3301
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1.2889
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1.3439
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1.3295
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On October 9, 2019, the exchange rate
for the U.S. dollar, as expressed in Canadian dollars based on the Bank of Canada average daily rate, was $1.00 per CDN$1.3324.
The Company
The following description of the Company
is, in some instances, derived from selected information about us contained in the documents incorporated by reference into this
Prospectus. This description does not contain all of the information about us and our properties and business that you should consider
before investing in any Securities. You should carefully read the entire Prospectus and the applicable Prospectus Supplement, including
the section titled “Risk Factors” that immediately follows this description of the Company, as well as the documents
incorporated by reference into this Prospectus and the applicable Prospectus Supplement, before making an investment decision.
Corporate Structure
Name, address and incorporation
Trilogy Metals Inc. was incorporated on
April 27, 2011 under the name NovaCopper Inc. pursuant to the terms of the Business Corporations Act (British Columbia). NovaCopper Inc. changed its name to Trilogy Metals Inc. on September 1, 2016 to better reflect its diversified
metals resource base. Our registered office is located at Suite 2600, Three Bentall Centre, 595 Burrard Street, Vancouver, British
Columbia, and our head office is located at Suite 1150, 609 Granville Street, Vancouver, British Columbia.
Intercorporate relationships
The following chart depicts our corporate
structure together with the jurisdiction of incorporation of our subsidiary. All ownership is 100%.
Description of the Business
Our principal business is the
exploration and development of our Upper Kobuk Mineral Projects located in the Ambler mining district in Northwest Alaska,
United States, comprising the (i) Arctic Project, which contains a high-grade polymetallic volcanogenic massive sulfide
deposit (“Arctic Project”); and (ii) Bornite Project, which contains a carbonate-hosted copper deposit
(“Bornite Project”). Our goals include expanding mineral resources and advancing our projects through technical,
engineering and feasibility studies so that production decisions can be made on those projects. Our Upper Kobuk Mineral
Projects are held by our wholly-owned subsidiary, NovaCopper US Inc. (dba Trilogy Metals US), which is registered to
do business in the State of Alaska.
Use of Proceeds
Specific information about the use of proceeds
from the specific issuance of any Securities will be set forth in the applicable Prospectus Supplement.
We had negative operating cash flow for
the financial year ended November 30, 2018. We anticipate that we will continue to have negative cash flow until such time, if
ever, that commercial production is achieved at the Upper Kobuk Mineral Projects. To the extent that we have negative operating
cash flows in future periods we may need to allocate a portion of our existing working capital to fund such negative cash flow.
See “Risk Factors”.
Dividend
Policy
We have not declared or paid any
dividends on our Common Shares since the date of our incorporation. We intend to retain our earnings, if any, to finance the
growth and development of our business and do not expect to pay dividends or to make any other distributions in the near
future. Our Board will review this policy from time to time having regard to our financing requirements, financial condition
and other factors considered to be relevant.
Consolidated
Capitalization
There have been no material changes in
our capital structure since August 31, 2019, the date of our financial statements for the most recently completed financial period.
prior sales
Information in respect of our Common Shares
that were issued within the previous twelve-month period, including Common Shares that were issued upon the vesting of restricted
share units or deferred share units, and in respect of the grant of restricted share units and deferred share units to acquire
our Common Shares will be provided as required in any applicable Prospectus Supplement.
trading
price and volume
The Common Shares are listed and posted
for trading on the TSX and the NYSE American under the symbol “TMQ”. Trading price and volume of the Company’s
securities will be provided as required for our Common Shares in each Prospectus Supplement to this Prospectus.
Description
of Share Capital
Our
authorized share capital consists of an unlimited number of Common Shares without par value. As at the close of business on October
9, 2019 we had 138,905,097 Common Shares outstanding.
Common Shares
All of the Common Shares rank equally as
to voting rights, participation in a distribution of our assets on a liquidation, dissolution or winding-up of the Company and
the entitlement to dividends. The holders of the Common Shares are entitled to receive notice of all meetings of shareholders and
to attend and vote the shares at the meetings. Each Common Share carries with it the right to one vote.
In the event of the liquidation, dissolution
or winding-up of the Company or other distribution of its assets, the holders of the Common Shares will be entitled to receive,
on a pro rata basis, all of the assets remaining after we have paid out our liabilities. Distributions in the form of dividends,
if any, will be set by the Board. See “Dividend Policy”.
Provisions as to the modification, amendment
or variation of the rights attached to the Common Shares are contained in our articles and the Business Corporations Act (British
Columbia). Generally speaking, substantive changes to the share capital require the approval of the shareholders by special resolution
(at least two-thirds of the votes cast).
Trading of Our Common Shares
Our Common Shares are traded on the TSX
and the NYSE American, in both cases under the symbol “TMQ”. On October 9, 2019, the last reported sale price of our
Common Shares on the TSX was Cdn$2.05 per Common Share and on the NYSE American was US$1.53 per Common Share.
DESCRIPTION
OF WARRANTS
This section describes the general terms
that will apply to any Warrants for the purchase of Common Shares.
Warrants may be offered separately or together
with other Securities, as the case may be. Each series of Warrants will be issued under a separate Warrant indenture to be entered
into between us and one or more banks or trust companies acting as Warrant agent. The applicable Prospectus Supplement will include
details of the Warrant agreements covering the Warrants being offered. The Warrant agent will act solely as the agent of the Company
and will not assume a relationship of agency with any holders of Warrant certificates or beneficial owners of Warrants. The following
sets forth certain general terms and provisions of the Warrants offered under this Prospectus.
The particular terms of each issue of Warrants
will be described in the related Prospectus Supplement. This description will include, where applicable:
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the designation and aggregate number of Warrants;
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the price at which the Warrants will be offered;
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the currency or currencies in which the Warrants will be offered;
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·
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the designation and terms of the Common Shares purchasable upon exercise of the Warrants;
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·
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the date on which the right to exercise the Warrants will commence and the date on which the right
will expire;
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·
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the number of Common Shares that may be purchased upon exercise of each Warrant and the price at
which and currency or currencies in which the Common Shares may be purchased upon exercise of each Warrant;
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·
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the designation and terms of any securities with which the Warrants will be offered, if any, and
the number of the Warrants that will be offered with each Security;
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the date or dates, if any, on or after which the Warrants and the related securities will be transferable
separately;
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·
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whether the Warrants will be subject to redemption or call and, if so, the terms of such redemption
or call provisions;
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material United States and Canadian tax consequences of owning the Warrants; and
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any other material terms or conditions of the Warrants.
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DESCRIPTION
OF SHARE PURCHASE CONTRACTS
We may issue Share Purchase Contracts,
including contracts obligating holders to purchase from us, and for us to sell to the holders, a specified number of Common Shares,
at a future date or dates, or similar contracts issued on a “prepaid” basis (in each case, “Share Purchase Contracts”).
The price per Common Share and the number of Common Shares may be fixed at the time the Share Purchase Contracts are issued or
may be determined by reference to a specific formula set forth in the Share Purchase Contracts. The Share Purchase Contracts will
require either the share purchase price be paid at the time the Share Purchase Contracts are issued or that payment be made at
a specified future date. The Share Purchase Contracts may require holders to secure their obligations thereunder in a specified
manner. Any Share Purchase Contracts we issue will be physically settled by delivery of our Common Shares.
The applicable Prospectus Supplement will
describe the terms of the Share Purchase Contracts. The description in the Prospectus Supplement will not necessarily be complete,
and reference will be made to the Share Purchase Contracts, and, if applicable, collateral, depositary or custodial arrangements,
relating to the Share Purchase Contracts. Material United States and Canadian federal income tax considerations applicable to the
holders of the Share Purchase Contracts will also be discussed in the applicable Prospectus Supplement.
DESCRIPTION
OF SUBSCRIPTION RECEIPTS
We may issue Subscription Receipts, which
will entitle holders thereof to receive, upon satisfaction of certain release conditions and for no additional consideration, Common
Shares, Warrants or any combination of securities as is specified in the applicable Prospectus Supplement. Subscription Receipts
will be issued pursuant to one or more Subscription Receipt agreements (each, a “Subscription Receipt Agreement”),
each to be entered into between the Company and an escrow agent (the “Escrow Agent”) that will be named in the applicable
Prospectus Supplement. Each Escrow Agent will be a financial institution organized under the laws of Canada or a province thereof
and authorized to carry on business as a trustee. If underwriters or agents are used in the sale of any Subscription Receipts,
one or more of such underwriters or agents may also be a party to the subscription agreement governing the Subscription Receipts
sold to or through such underwriter or agent.
The following description sets forth certain
general terms and provisions of Subscription Receipts that may be issued hereunder and is not intended to be complete. The statements
made in this prospectus relating to any Subscription Receipt Agreement and Subscription Receipts to be issued thereunder are summaries
of certain anticipated provisions thereof and are subject to, and are qualified in their entirety by reference to, all provisions
of the applicable Subscription Receipt Agreement. Prospective investors should refer to the Subscription Receipt Agreement relating
to the specific Subscription Receipts being offered for the complete terms of the Subscription Receipts. We will file a copy of
any Subscription Receipt Agreement relating to an offering of Subscription Receipts with the securities regulatory authorities
in Canada and the United States after we have entered into it.
The applicable Prospectus Supplement and
the Subscription Receipt Agreement for any Subscription Receipts that we may offer will describe the specific terms of the Subscription
Receipts offered. This description may include, but may not be limited to, any of the following, if applicable:
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the designation and aggregate number of Subscription Receipts being offered;
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the price at which the Subscription Receipts will be offered;
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the designation, number and terms of the Common Shares, Warrants or a combination of securities
to be received by the holders of Subscription Receipts upon satisfaction of the release conditions, and any procedures that will
result in the adjustment of those numbers;
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the conditions (the “Release Conditions”) that must be met in order for holders of
Subscription Receipts to receive, for no additional consideration, the Common Shares, Warrants or a combination of securities;
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the procedures for the issuance and delivery of the Common Shares, Warrants or a combination of
securities to holders of Subscription Receipts upon satisfaction of the Release Conditions;
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whether any payments will be made to holders of Subscription Receipts upon delivery of the Common
Shares, Warrants or a combination of securities upon satisfaction of the Release Conditions;
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the identity of the Escrow Agent;
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the terms and conditions under which the Escrow Agent will hold all or a portion of the gross proceeds
from the sale of Subscription Receipts, together with interest and income earned thereon (collectively, the “Escrowed Funds”),
pending satisfaction of the Release Conditions;
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the terms and conditions pursuant to which the Escrow Agent will hold Common Shares, Warrants or
a combination of securities pending satisfaction of the Release Conditions;
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the terms and conditions under which the Escrow Agent will release all or a portion of the Escrowed
Funds to the Company upon satisfaction of the Release Conditions;
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if the Subscription Receipts are sold to or through underwriters or agents, the terms and conditions
under which the Escrow Agent will release a portion of the Escrowed Funds to such underwriters or agents in payment of all or a
portion of their fees or commissions in connection with the sale of the Subscription Receipts;
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procedures for the refund by the Escrow Agent to holders of Subscription Receipts of all or a portion
of the subscription price of their Subscription Receipts, plus any pro rata entitlement to interest earned or income generated
on such amount, if the Release Conditions are not satisfied;
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any contractual right of rescission to be granted to initial purchasers of Subscription Receipts
in the event that this prospectus, the Prospectus Supplement under which Subscription Receipts are issued or any amendment hereto
or thereto contains a misrepresentation;
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any entitlement of the Company to purchase the Subscription Receipts in the open market by private
agreement or otherwise;
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whether the Company will issue the Subscription Receipts as global securities and, if so, the identity
of the depository for the global securities;
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whether the Company will issue the Subscription Receipts as bearer securities, as registered securities
or both;
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provisions as to modification, amendment or variation of the Subscription Receipt Agreement or
any rights or terms of the Subscription Receipts, including upon any subdivision, consolidation, reclassification or other material
change of the Common Shares, Warrants or other securities, any other reorganization, amalgamation, merger or sale of all or substantially
all of the Company’s assets or any distribution of property or rights to all or substantially all of the holders of Common
Shares;
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whether the Company will apply to list the Subscription Receipts on any exchange;
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material U.S. and Canadian federal income tax consequences of owning the Subscription Receipts;
and
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any other material terms or conditions of the Subscription Receipts.
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DESCRIPTION
OF UNITS
We may issue Units, which may consist of
one or more Common Shares, Warrants or any combination of Securities as is specified in the applicable Prospectus Supplement. In
addition, the applicable Prospectus Supplement relating to an offering of Units will describe all material terms of any Units offered,
including, as applicable:
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the designation and aggregate number of Units being offered;
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the price at which the Units will be offered;
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the designation, number and terms of the Securities comprising the Units and any agreement governing
the Units;
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the date or dates, if any, on or after which the Securities comprising the Units will be transferable
separately;
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whether the Company will apply to list the Units on a securities exchange or automated interdealer
quotation system;
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material U.S. and Canadian federal income tax consequences of owning the Units, including how the
purchase price paid for the Units will be allocated among the Securities comprising the Units; and
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any other material terms or conditions of the Units.
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PLAN OF
DISTRIBUTION
We may sell the Securities to or through
underwriters or dealers, and also may sell Securities to one or more other purchasers directly or through agents, including sales
pursuant to ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers or may issue Securities
in whole or in partial payment of the purchase price of assets acquired by us or our subsidiaries. Each Prospectus Supplement will
set forth the terms of the offering or issue, including the name or names of any underwriters or agents, the purchase price or
prices of the Securities and the proceeds to us from the sale of the Securities.
The Securities may be sold, from time to
time in one or more transactions at a fixed price or prices which may be changed or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated prices, including sales in transactions that are deemed
to be “at-the-market distributions” as defined in Canadian National Instrument 44-102 Shelf Distributions and in accordance
with Rule 415(a)(4) under the Securities Act, including sales made directly on the TSX, NYSE American or other existing
trading markets for the Securities. The prices at which the Securities may be offered may vary as between purchasers and during
the period of distribution. If, in connection with the offering of Securities at a fixed price or prices, the underwriters have
made a bona fide effort to sell all of the Securities at the initial offering price fixed in the applicable Prospectus Supplement,
the public offering price may be decreased and thereafter further changed, from time to time, to an amount not greater than the
initial public offering price fixed in such Prospectus Supplement, in which case the compensation realized by the underwriters
will be decreased by the amount that the aggregate price paid by purchasers for the Securities is less than the gross proceeds
paid by the underwriters to us.
Underwriters, dealers and agents who participate
in the distribution of the Securities may be entitled to, under agreements to be entered into with us, indemnification by us against
certain liabilities, including liabilities under the Securities Act, and Canadian securities legislation, or to contribution with
respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers
and agents may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
In connection with any offering of Securities,
other than an “at-the-market distribution”, the underwriters may over-allot or effect transactions which stabilize
or maintain the market price of the Securities offered at a level above that which might otherwise prevail in the open market.
Such transactions, if commenced, may be discontinued at any time.
In compliance with the guidelines of the
Financial Industry Regulatory Authority (the “FINRA”), the aggregate maximum discount, commission or agency fees or
other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer will not exceed
8% of any offering pursuant to this Prospectus and any applicable Prospectus Supplement or pricing supplement, as the case may
be; however, it is anticipated that the maximum commission or discount to be received in any particular offering of Securities
will be less than this amount.
CERTAIN
CANADIAN and U.S. Federal Income Tax Considerations
Information regarding material Canadian
and U.S. federal income tax consequences to persons investing in the Securities offered by this Prospectus will be set forth in
an applicable Prospectus Supplement. You are urged to consult your own tax advisors prior to any acquisition of our Securities.
Legal Matters
Certain legal matters in connection with
the Securities offered hereby will be passed upon on behalf of the Company by Blake, Cassels & Graydon LLP with respect to
Canadian legal matters, and by Dorsey & Whitney LLP with respect to U.S. legal matters and, except as otherwise set forth in
any Prospectus Supplement, on behalf of any underwriters or agents by Skadden, Arps, Slate, Meagher & Flom LLP with respect
to U.S. legal matters.
As at the date of this Prospectus,
the partners and associates of Blake, Cassels & Graydon LLP beneficially own, directly or indirectly, less than 1% of any
class of securities of the Company.
AUDITORS,
Transfer Agent and Registrar
The auditors of the Company are PricewaterhouseCoopers
LLP, Chartered Professional Accountants, of Vancouver, British Columbia.
Our registrar and transfer agent for our
Common Shares is Computershare Investor Services Inc., located at 510 Burrard Street, Vancouver, British Columbia Canada V5K 1A1.
The co-transfer agent and registrar for the Common Shares in the United States is Computershare Trust Company, N.A., at its office
at 3200 Cherry Creek Drive South, Denver, CO, 80209.
Interest
of Experts
Certain of the scientific and technical
information relating to our mineral projects in this Prospectus and the documents incorporated by reference herein has been derived
from technical reports prepared by the experts listed below and has been included in reliance on such person’s expertise.
Copies of the technical reports can be accessed online on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov).
Paul Staples, P.Eng. and Justin Hannon,
P.Eng. of Ausenco Engineering Canada Inc.; Antonio Peralta Romero, PhD, P.Eng. of Wood Canada Limited (formerly Amec Foster Wheeler
Americas Ltd.); Bruce Davis, FAusIMM of BD Resource Consulting, Inc.; John Joseph DiMarchi, CPG of Core Geoscience Inc.; Jeff Austin,
P.Eng. of International Metallurgical & Environmental Inc.; Robert Sim, P.Geo. of SIM Geological Inc.; Calvin Boese, P.Eng.,
M.Sc, Bruce Murphy, P.Eng. and Tom Sharp, PhD, P.Eng. of SRK Consulting (Canada) Inc., prepared the technical report for the Company’s
Arctic Project entitled “Arctic Project, Northwest Alaska, USA, NI 43-101 Technical Report on Pre-Feasibility Study”
with an effective date of February 20, 2018 (the “2018 Arctic Report”) incorporated by reference herein.
BD Resource Consulting, Inc., SIM Geological
Inc., and International Metallurgical & Environmental Inc. are named in the Form 10-K (as defined herein) as having prepared
the technical report for the Company’s Bornite Project entitled “NI 43-101 Technical Report on the Bornite Project,
Northwest Alaska, USA” with an effective date of June 5, 2018 (the “2018 Bornite Report”).
Bruce Davis, FAusIMM of BD Resource Consulting,
Inc. and Robert Sim, P.Geo. of SIM Geological Inc. are named in the Form 10-K (as defined herein) as having prepared certain portions
of the 2018 Bornite Report
The aforementioned companies, and their
directors, officers, employees and partners, as applicable, as a group, beneficially own, directly or indirectly, less than one
percent of our outstanding securities.
Andrew W. West, Certified Professional
Geologist, and employee and Exploration Manager of the Company and a “Qualified Person” under NI 43-101 has reviewed
and approved the scientific and technical disclosure contained in the Form 10-K, Annual MD&A (as defined herein) and Interim
MD&A (as defined herein). Mr. West owns, directly or indirectly, less than one percent of the outstanding securities of the
Company.
PricewaterhouseCoopers LLP are the
auditors of the Company and have advised that they are independent with respect to the Company within the meaning of the Code
of Professional Conduct of the Chartered Professional Accountants of British Columbia and the rules of the Public Company
Accounting Oversight Board. The consolidated financial statements of Trilogy for the year ended November 30, 2018 have been
audited by PricewaterhouseCoopers LLP, independent registered public accounting firm, as set forth in their report thereon,
included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
None of the aforementioned persons was
employed on a contingency basis, or had, or is to receive, in connection with any offering under this Prospectus, a substantial
interest, direct or indirect, in the Company, nor was any such person connected with the Company as a promoter, managing or principal
underwriter, voting trustee, director, officer, or, except as disclosed herein, an employee.
Documents
Incorporated by Reference
The SEC allows us to “incorporate
by reference” information we file with the SEC. This means that we can disclose important information to you by referring
you to those documents. Any information we reference in this manner is considered part of this Prospectus, except for any information
superseded by information contained directly in this Prospectus, any accompanying Prospectus Supplement or any subsequently filed
document deemed to be incorporated by reference. Copies of the documents incorporated by reference in this Prospectus may be obtained
on written or oral request without charge from the Secretary of the Company at Suite 1150, 609 Granville Street, Vancouver, British
Columbia, Canada, V7Y 1G5, telephone: (604) 638-8088. Our website is www.trilogymetals.com. Information contained in or accessible
through our website does not constitute a part of this Prospectus.
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. Filings are available at the SEC’s website at www.sec.gov.
We incorporate by reference the documents
listed below and future filings we make with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding,
unless otherwise provided therein or herein, documents not deemed “filed” with the SEC and information furnished pursuant
to Item 2.02 and Item 7.01 on any Current Report on Form 8-K or certain exhibits furnished pursuant to Item 9.01 of Form 8-K) after
the date of the initial filing of this registration statement on Form S-3 to which this Prospectus relates until the termination
of the offering under this Prospectus or such time as all Securities offered by this Prospectus have been sold and all conditions
to the consummation of such sales have been satisfied.
|
|
(b)
|
quarterly reports on Form 10-Q for the quarterly periods ended February 28, 2019, May 31,
2019 and August 31, 2019, filed with the SEC on April
9, 2019, July
9, 2019 and October 9, 2019, respectively;
|
|
|
(c)
|
current reports on Form 8-K, filed
with the SEC on May
23, 2019, June
28, 2019, July
5, 2019, July
9, 2019, August
26, 2019, August
27, 2019, September
6, 2019;
|
|
|
(e)
|
all other documents filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act, after November 30, 2018 but before the end of the offering of the Securities made by this Prospectus; and
|
Notwithstanding the statements in the preceding
paragraphs, no document, report or exhibit (or portion of any of the foregoing) or any other information that we have “furnished”
or may in the future “furnish” to the SEC pursuant to the Exchange Act shall be incorporated by reference into this
prospectus.
additional
information
On October 10, 2019, we filed a short
form base shelf prospectus with Canadian securities regulatory authorities which will permit us to offer and sell the Securities
for gross proceeds of $100,000,000. The aggregate gross proceeds from the Securities that may be sold in the provinces of Canada
other than Quebec, together with the Securities that we may sell in the United States pursuant to this Prospectus, will not exceed
$100,000,000.
You may read and download any public document
that the Company has filed with the Canadian securities regulatory authorities at www.sedar.com.
Enforceability
of Civil Liabilities
We are a corporation existing under the
Business Corporations Act (British Columbia). Many of our directors and officers, and some of the experts named in this
Prospectus, are residents of Canada or otherwise reside outside the United States, and all or a substantial portion of their assets,
and a substantial portion our assets, are located outside the United States. We have appointed an agent for service of process
in the United States, but it may be difficult for holders of Common Shares who reside in the United States to effect service within
the United States upon those directors, officers and experts who are not residents of the United States. It may also be difficult
for holders of Common Shares who reside in the United States to realize in the United States upon judgments of courts of the United
States predicated upon our civil liability and the civil liability of our directors, officers and experts under the U.S. federal
securities laws. We have been advised by our Canadian counsel, Blake, Cassels & Graydon LLP, that a judgment of a U.S. court
predicated solely upon civil liability under U.S. federal securities laws or the securities or ‘‘blue sky’’
laws of any state within the United States, would probably be enforceable in Canada if the U.S. court in which the judgment was
obtained has a basis for jurisdiction in the matter that would be recognized by a Canadian court for the same purposes. We have
also been advised by Blake, Cassels & Graydon LLP, however, that there is substantial doubt whether an action could be brought
in Canada in the first instance on the basis of liability predicated solely upon U.S. federal securities laws.
[Alternate Page
for Canadian Prospectus]
A copy of this preliminary
short form prospectus has been filed with the securities regulatory authorities in each of the provinces of Canada, other than
Québec, but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary
short form prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the short
form prospectus is obtained from the securities regulatory authorities.
This preliminary short form
prospectus is a base shelf prospectus. This preliminary short form prospectus has been filed under legislation in each of the provinces
of Canada other than Québec that permits certain information about these securities to be determined after this prospectus
has become final and that permits the omission from this prospectus of that information. The legislation requires the delivery
to purchasers of a prospectus supplement containing the omitted information within a specified period of time after agreeing to
purchase any of these securities.
Information has been incorporated
by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada.
Copies of the documents incorporated by reference may be obtained on request without charge from the Corporate Secretary of Trilogy
Metals Inc. at Suite 1150, 609 Granville Street, Vancouver, British Columbia, Canada, V7Y 1G5, telephone: (604) 638-8088 and are
available electronically at www.sedar.com.
No securities regulatory authority
has expressed an opinion about these securities and it is an offence to claim otherwise. This short form base shelf
prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for
sale and therein only by persons permitted to sell such securities.
PRELIMINARY SHORT
FORM BASE SHELF PROSPECTUS
|
New Issue
|
October
10, 2019
|
US$100,000,000
Common Shares
Warrants to Purchase Common Shares
Share Purchase Contracts
Subscription Receipts
Units
Trilogy Metals Inc. (“we”,
“Trilogy” or the “Company”) may offer and issue from time to time common shares (the “Common Shares”),
warrants to purchase Common Shares (the “Warrants”), Share Purchase Contracts (as defined herein), subscription receipts
exercisable for equity securities and/or other securities (“Subscription Receipts”) and units comprised of some or
all of the other securities described above (“Units”) (all of the foregoing, collectively, the “Securities”)
or any combination thereof up to an aggregate initial offering price of US$100,000,000 during the 25-month period that this prospectus
(the “Prospectus”), including any amendments hereto, remains effective. The Securities may be offered separately or
together, in amounts, at prices and on terms to be determined based on market conditions at the time of sale and set forth in an
accompanying prospectus supplement (a “Prospectus Supplement”).
Our outstanding Common Shares are listed
and posted for trading on the Toronto Stock Exchange (“TSX”) and the NYSE American LLC (“NYSE American”),
under the symbol “TMQ”. Unless otherwise specified in the applicable Prospectus Supplement, Securities other than the
Common Shares will not be listed on any securities exchange. There is currently no market through which the Securities, other
than the Common Shares, may be sold and you may not be able to resell such Securities purchased under this Prospectus and any applicable
Prospectus Supplement. This may affect the pricing of such Securities in the secondary market, the transparency and availability
of trading prices, the liquidity of the securities, and the extent of issuer regulation. See “Risk Factors”.
Investing in our securities involves
a high degree of risk. You should carefully read the “Risk Factors” section contained elsewhere in this
Prospectus and carefully consider the discussion of risks and uncertainties under the heading “Risk Factors” contained
in any applicable Prospectus Supplement and in the documents that are incorporated by reference.
[Alternate Page
for Canadian Prospectus]
Prospective investors should be aware
that the acquisition of the Securities described herein may have tax consequences. You should read the tax discussion contained
in the applicable Prospectus Supplement and consult your tax advisor with respect to your own particular circumstances. See “Certain
Canadian and U.S. Federal Income Tax Considerations” in this Prospectus.
All shelf information permitted under applicable
laws to be omitted from this Prospectus will be contained in one or more Prospectus Supplements that will be delivered to purchasers
together with this Prospectus. Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes
of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities
to which the Prospectus Supplement pertains.
The specific terms of the Securities with
respect to a particular offering will be set out in the applicable Prospectus Supplement and may include, where applicable: (i)
in the case of Common Shares, the number of Common Shares offered, the issue price and any other terms specific to the Common Shares
being offered; (ii) in the case of Warrants, the designation, terms, number of Common Shares issuable upon exercise of the Warrants,
any procedures that will result in the adjustment of these numbers, the exercise price, dates and periods of exercise, the currency
in which the Warrants are issued and any other specific terms; (iii) in the case of Share Purchase Contracts, the designation,
number and terms of the Common Shares to be purchased under the Share Purchase Contract, any procedures that will result in the
adjustment of these numbers, the purchase price and purchase date or dates of the Common Shares, any requirements of the purchaser
to secure its obligations under the Share Purchase Contract and any other specific terms; (iv) in the case of Subscription Receipts,
the number of Subscription Receipts offered, the issue price, the currency, the terms, conditions and procedures for the conversion
or exercise of such Subscription Receipts into or for Common Shares or other securities or pursuant to which the holders thereof
will become entitled to receive Common Shares or such other securities, and any other terms specific to the Subscription Receipts
being offered; and (v) in the case of Units, the number of Units offered, the terms of the Units, the offering price, the number
of Common Shares, Warrants or other Securities included in each Unit and any other specific terms. Where required by statute, regulation
or policy, and where Securities are offered in currencies other than Canadian dollars, appropriate disclosure of foreign exchange
rates applicable to such Securities will be included in the Prospectus Supplement describing such Securities.
This Prospectus constitutes a public offering
of these Securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted
to sell such Securities. The Company may offer and sell Securities to, or through, underwriters or dealers and also may offer and
sell certain Securities directly to other purchasers or through agents pursuant to exemptions from registration or qualification
under applicable securities laws. A Prospectus Supplement relating to each issue of Securities offered thereby will set forth the
names of any underwriters, dealers or agents involved in the offering and sale of such Securities and will set forth the terms
of the offering of such Securities, the method of distribution of such Securities including, to the extent applicable, the proceeds
to the Company and any fees, discounts or any other compensation payable to underwriters, dealers or agents and any other material
terms of the plan of distribution.
In connection with any offering of the
Securities, unless otherwise specified in a Prospectus Supplement, the underwriters or agents may over-allot or effect transactions
which stabilize or maintain the market price of the Securities offered at a higher level than that which might exist in the open
market. Such transactions, if commenced, may be interrupted or discontinued at any time. See “Plan of Distribution”.
Please carefully read both this Prospectus
and any Prospectus Supplement together with the documents incorporated herein by reference under “Documents Incorporated
by Reference” and the additional information described below under “Additional Information”.
The Company’s head office is located
at Suite 1150, 609 Granville Street, Vancouver, British Columbia, Canada, V7Y 1G5. The Company’s registered office is
located at Suite 2600, 595 Burrard Street, Vancouver, British Columbia, Canada, V7X 1L3.
Gregory Lang, William Hayden, William Hensley,
Kalidas Madhavpeddi and Diana Walters are each directors of the Company and reside outside of Canada. Although Messrs. Lang, Hayden,
Hensley, Madhavpeddi and Mme. Walters have appointed Blake, Cassels & Graydon LLP as agent for service of process in each province
of Canada in which the Securities are to be distributed, it may not be possible for investors to enforce against Messrs. Lang,
Hayden, Hensley, Madhavpeddi and Mme. Walters judgments obtained in Canadian courts predicated upon the civil liability provisions
of applicable securities laws in Canada.
[Alternate Page
for Canadian Prospectus]
TABLE OF CONTENTS
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CAUTIONARY NOTE TO UNITED STATES INVESTORS
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5
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Cautionary Statement Regarding Forward-Looking Statements
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5
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Exchange Rate Information
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9
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The Company
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9
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risk factors
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10
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Use of Proceeds
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12
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Dividend Policy
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12
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Consolidated Capitalization
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12
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prior sales
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13
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trading price and volume
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13
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Description of Share Capital
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13
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DESCRIPTION OF WARRANTS
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13
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DESCRIPTION OF SHARE PURCHASE CONTRACTS
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14
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DESCRIPTION OF SUBSCRIPTION RECEIPTS
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15
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DESCRIPTION OF UNITS
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16
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PLAN OF DISTRIBUTION
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17
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CERTAIN CANADIAN and U.S. Federal Income Tax Considerations
|
18
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Legal Matters
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18
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AUDITORS, Transfer Agent and Registrar
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18
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Interest of Experts
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18
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Documents Incorporated by Reference
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19
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additional information
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20
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Enforceability of Civil Liabilities
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20
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Statutory Rights of Withdrawal and Rescission
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21
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CERTIFICATE OF
TRILOGY METALS INC.
|
C-1
|
_______________
You should rely only on the information
contained in or incorporated by reference into this Prospectus and any Prospectus Supplement. We have not authorized anyone to
provide you with different information. We are not making an offer of these Securities in any jurisdiction where the offer is not
permitted. You should not assume that the information contained in this Prospectus and any Prospectus Supplement is accurate as
of any date other than the date on the front of those documents.
In this Prospectus and in any Prospectus
Supplement unless the context otherwise requires, references to “Trilogy” or the “Company”, “we”,
“us”, and “our” refer to Trilogy Metals Inc., either alone or together with our subsidiaries, as the context
requires.
Unless stated otherwise or as the context
otherwise requires, all references to dollar amounts in this Prospectus and any Prospectus Supplement are references to United
States dollars. References to “$” or “US$” are to United States dollars and references to “Cdn$”
or “C$” are to Canadian dollars. See “Exchange Rate Information”. The Company’s financial
statements that are incorporated by reference into this Prospectus and any Prospectus Supplement have been prepared in accordance
with accounting principles generally accepted in the United States.
[Alternate Page
for Canadian Prospectus]
Documents
Incorporated by Reference
Information has been incorporated by
reference in this Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of
the documents incorporated herein by reference may be obtained on request without charge from the Secretary of the Company at
Suite 1150, 609 Granville Street, Vancouver, British Columbia, Canada, V7Y 1G4, telephone: 604-638-8088. These documents are also
available through the internet on SEDAR, which can be accessed on line at www.sedar.com, and on EDGAR, which can be accessed
at www.sec.gov. The following documents filed with the securities commissions or similar authorities in Canada are specifically
incorporated by reference into, and form an integral part of this Prospectus:
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(c)
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unaudited interim consolidated financial statements for the three and nine months ended August
31, 2019 and 2018 and the related management discussion and analysis (“Interim MD&A”);
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(e)
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the 2018 Arctic Report;
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[Alternate Page
for Canadian Prospectus]
Any annual information form, material
change reports (excluding confidential material change reports), any interim and annual consolidated financial statements and related
management discussion and analysis, information circulars (excluding those portions that, pursuant to National Instrument 44-101
of the Canadian Securities Administrators, are not required to be incorporated by reference herein), any business acquisition reports,
any news releases or public communications containing financial information about the Company for a financial period more recent
than the periods for which financial statements are incorporated herein by reference, and any other disclosure documents required
to be filed pursuant to an undertaking to a provincial or territorial securities regulatory authority that are filed by the Company
with various securities commissions or similar authorities in Canada after the date of this Prospectus and prior to the termination
of the offering under any Prospectus Supplement, shall be deemed to be incorporated by reference in this Prospectus.
Any statement contained in this Prospectus
or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement
need not state that it has modified or superseded a prior statement or include any other information set forth in the document
it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes
that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or
an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light
of the circumstances in which it was made. Any statement so modified or superseded shall not constitute a part of this Prospectus,
except as so modified or superseded.
A Prospectus Supplement containing the
specific terms of an offering of Securities, and other information relating to the Securities, will be delivered to prospective
purchasers of such Securities together with this Prospectus and the applicable Prospectus Supplement and will be deemed to be incorporated
into this Prospectus as of the date of such Prospectus Supplement only for the purpose of the offering of the Securities covered
by that Prospectus Supplement.
Upon a new annual information form and
the related annual financial statements being filed by the Company with, and, where required, accepted by, the applicable securities
commissions or similar regulatory authorities during the currency of this Prospectus, the previous annual information form, the
previous annual financial statements and all quarterly financial statements, material change reports and information circulars
filed prior to the commencement of the Company’s financial year in which the new annual information form is filed shall be
deemed no longer to be incorporated into this Prospectus for purposes of further offers and sales of Securities hereunder.
additional
information
You may read any document that the Company
has filed with the SEC at the SEC’s public reference room in Washington, D.C. You may also obtain copies of those documents
from the public reference room of the SEC at 100 F Street, N.E., Washington, D.C. 20549 by paying a fee. You should call the SEC
at 1-800-SEC-0330 or access its website at www.sec.gov for further information about the public reference room. You may
read and download the documents the Company has filed with the SEC’s Electronic Data Gathering and Retrieval system at www.sec.gov.
You may also read and download any public
document we file with or furnish to the securities commissions and regulatory authorities in the provinces of Canada other than
Québec, on our SEDAR profile at www.sedar.com.
[Additional Page for Canadian Prospectus]
Statutory
Rights of Withdrawal and Rescission
Unless provided otherwise in a Prospectus
Supplement, the following is a description of a purchaser’s statutory rights. Securities legislation in certain of the provinces
of Canada provides purchasers with the right to withdraw from an agreement to purchase Securities. This right may be exercised
within two business days after receipt or deemed receipt of a prospectus or a prospectus supplement (including a pricing supplement)
relating to the Securities purchased by a purchaser and any amendments thereto. In several of the provinces, the securities legislation
further provides a purchaser with remedies for rescission or, in some jurisdictions, damages, if the prospectus or prospectus supplement
relating to the Securities purchased by a purchaser and any amendments thereto contain a misrepresentation or is not delivered
to the purchaser, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed
by the securities legislation of the purchaser’s province. The purchaser should refer to any applicable provisions of the
securities legislation of the purchaser’s province for the particulars of these rights or consult with a legal adviser. Rights
and remedies also may be available to purchasers under U.S. law; purchasers may wish to consult with a U.S. lawyer for particulars
of these rights.
Original purchasers are advised that in
certain provinces the statutory right of action for damages in connection with a prospectus misrepresentation is limited to the
amount paid for the convertible, exchangeable or exercisable security that was purchased under a prospectus, and therefore a further
payment at the time of conversion, exchange or exercise may not be recoverable in a statutory action for damages. The purchaser
should refer to any applicable provisions of the securities legislation of the purchaser’s province for the particulars of
these rights, or consult with a legal advisor.
[Additional Page for
Canadian Prospectus]
CERTIFICATE OF TRILOGY METALS INC.
This short form prospectus, together with
the documents incorporated in this prospectus by reference, constitutes full, true and plain disclosure of all material facts relating
to the securities offered by this prospectus as required by the securities legislation in each of the provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.
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(Signed) James Gowans
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(Signed) Elaine Sanders
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Director and Interim President and
Chief Executive Officer
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Chief Financial Officer and Corporate Secretary
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ON BEHALF OF THE BOARD OF DIRECTORS
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(Signed)
Kalidas V. Madhavpeddi
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(Signed)
Janice Stairs
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Director
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Director
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated
costs and expenses, other than underwriting discounts and commissions, payable by the registrant in connection with the offering
of the securities being registered. All the amounts shown are estimates, except for the SEC registration fee.
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SEC registration fee
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$
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12,980
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Accounting fees and expenses*
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30,000
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Legal fees and expenses*
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100,000
|
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FINRA fees*
|
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8,000
|
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Transfer Agent and Registrar Fees and Expenses*
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0
|
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Printing fees*
|
|
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0
|
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Miscellaneous expenses*
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|
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10,000
|
|
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Total*
|
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$
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160,980
|
|
* Estimated for purposes of completing
the information required pursuant to this item 14.
Item 15. Indemnification of Officers and Directors
The Business Corporations Act (British Columbia) provides
that a company may:
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·
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indemnify an eligible party against all judgments, penalties or fines awarded or imposed in, or
amounts paid in settlement of, an eligible proceeding, to which the eligible party is or may be liable; and
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·
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after the final disposition of an eligible proceeding, pay the “expenses” (which includes
costs, charges and expenses (including legal fees) but excludes judgments, penalties, fines or amounts paid in settlement of a
proceeding) actually and reasonably incurred by an eligible party in respect of that proceeding.
|
However, after the final disposition of an eligible proceeding,
a company must pay expenses actually and reasonably incurred by an eligible party in respect of that proceeding if the eligible
party (i) has not been reimbursed for those expenses, and (ii) is wholly successful, on the merits or otherwise, or is substantially
successful on the merits, in the outcome of the proceeding. The BCBCA also provides that a company may pay the expenses as they
are incurred in advance of the final disposition of an eligible proceeding if the company first receives from the eligible party
a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited under the BCBCA, the eligible
party will repay the amounts advanced.
For the purpose of the BCBCA, an “eligible
party”, in relation to a company, means an individual who:
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|
·
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is or was a director or officer of the company;
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·
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is or was a director or officer of another corporation
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·
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at a time when the corporation is or was an affiliate of the company, or
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·
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at the request of the company; or
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·
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at the request of the company, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity,
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and includes, with some exceptions, the heirs and personal or
other legal representatives of that individual.
An “eligible proceeding” under the BCBCA is a proceeding
in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of
the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a
director or officer of, the company or an associated corporation (i) is or may be joined as a party, or (ii) is or may be liable
for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding. A “proceeding” includes
any legal proceeding or investigative action, whether current, threatened, pending or completed.
Notwithstanding the foregoing, the BCBCA prohibits indemnifying
an eligible party or paying the expenses of an eligible party if any of the following conditions apply:
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|
·
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if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and,
at the time that such agreement was made, the company was prohibited from giving the indemnity or paying the expenses by its memorandum
or articles;
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·
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if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay
expenses and, at the time that the indemnity or payment is made, the company is prohibited from giving the indemnity or paying
the expenses by its memorandum or articles;
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·
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if, in relation to the subject matter of the eligible proceeding, the eligible party did not act
honestly and in good faith with a view to the best interests of the company or the associated corporation, or as the case may be;
or
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|
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·
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in the case of an eligible proceeding other than a civil proceeding, if the eligible party did
not have reasonable grounds for believing that the eligible party’s conduct in respect of which the proceeding was brought
was lawful.
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Additionally, if an eligible proceeding is brought against an
eligible party by or on behalf of the company or by or on behalf of an associated corporation, the company must not (i) indemnify
the eligible party in respect of the proceeding; or (ii) pay the expenses of the eligible party in respect of the proceeding.
Whether or not payment of expenses or indemnification has been
sought, authorized or declined under the BCBCA, on the application of a company or an eligible party, the Supreme Court of British
Columbia may do one or more of the following:
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|
·
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order a company to indemnify an eligible party against any liability incurred by the eligible party
in respect of an eligible proceeding;
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·
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order a company to pay some or all of the expenses incurred by an eligible party in respect of
an eligible proceeding;
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·
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order the enforcement of, or any payment under, an agreement of indemnification entered into by
a company;
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·
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order a company to pay some or all of the expenses actually and reasonably incurred by any person
in obtaining an order under this section; or
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·
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make any other order the court considers appropriate.
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The BCBCA provides that a company may purchase and maintain
insurance for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against
any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or
having held a position equivalent to that of a director or officer of, the company or an associated corporation.
Articles of the Registrant
The Registrant’s articles provide that, subject to the
BCBCA, the Registrant must indemnify a director or former director and his or her heirs and legal personal representatives against
all eligible penalties to which such person is or may be liable. Pursuant to the Registrant’s articles, each director is
deemed to have contracted with the Registrant on the aforementioned terms.
The Registrant’s articles further provide that the Registrant
may indemnify any person, subject to any restrictions in the BCBCA, and that the failure of a director or officer of the Registrant
to comply with the BCBCA or the Registrant’s articles does not invalidate any indemnity to which he or she is entitled under
the Registrant’s articles.
The Registrant is authorized by its articles to purchase and
maintain insurance for the benefit of any eligible person.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions,
the Registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the
Securities Act, and is therefore unenforceable.
The Registrant maintains directors’ and officers’
liability insurance for its directors. This insurance provides coverage for indemnity payments made by the Registrant to its directors
and officers as required or permitted by law for losses, including legal costs, incurred by officers and directors in their capacity
as such. This policy also provides coverage directly to individual directors and officers if they are not indemnified by the Registrant.
The insurance coverage for directors and officers has customary exclusions, including libel and slander, and those acts determined
to be uninsurable under law, or deliberately fraudulent or dishonest or to have resulted in personal profit or advantage.
Item 16. Exhibits and Financial Statement Schedules
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Exhibit Number
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Description of Document
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1.1
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Form of Underwriting Agreement**
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3.1
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Certificate of Incorporation (incorporated by reference to Exhibit 99.2 to the Registration Statement on Form 40-F as filed on March 1, 2012, file no. 001-35447)
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3.2
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Articles of Trilogy Metals Inc., effective April 27, 2011, as altered March 20, 2011 (incorporated by reference to Exhibit 99.3 to Amendment No. 1 to the Registration Statement on Form 40-F as filed on April 19, 2012, file no. 001-35447)
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3.3
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Notice of Articles and Certificate of Name Change, dated September 1, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated September 8, 2016)
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4.1
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Form of Warrant Certificate**
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4.2
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Form of Share Purchase Contract**
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4.3
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Form of Unit Agreement**
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4.4
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Form of Subscription Receipt Agreement**
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5.1
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Opinion and Consent of Blake, Cassels & Graydon LLP*
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23.1
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Consent of PricewaterhouseCoopers LLP
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23.2
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Consent of Blake, Cassels & Graydon LLP (included in Exhibit 5.1)*
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23.3
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Consent of Ausenco Engineering Canada Inc.*
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23.4
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Consent of BD Resource Consulting Inc.*
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23.5
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Consent of SIM Geological Inc.*
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23.5
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Consent of International Metallurgical & Environmental Inc.*
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23.7
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Consent of Antonio Peralta Romero*
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23.8
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Consent of John Joseph DiMarchi*
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23.8
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Consent of Calvin Boese*
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23.9
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Consent of Bruce Murphy*
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23.10
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Consent of Tom Sharp*
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24.1
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Power of Attorney (included on signature page)
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*
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To be filed by amendment or as an exhibit to a report pursuant to Section 13(a) or 15(d)
of the Exchange Act and incorporated herein by reference.
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**
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To be filed by post-effective amendment or as an exhibit to a report pursuant to Section
13(a) or 15(d) of the Exchange Act and incorporated herein by reference.
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Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii) To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that the undertakings
set forth in paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the registration statement is on Form S-1, Form S-3,
Form SF-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained
in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement, or, as to a registration statement on Form S-3,
Form SF-3 or Form F-3, is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
(2) That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That,
for the purpose of determining liability under the Securities Act to any purchaser:
(i) If
the Registrant is relying on Rule 430B:
(A) Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract
of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made
in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to
a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement or made in any such document immediately prior
to such effective date; or
(ii) If
the Registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such date of first use.
(5) That,
for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution
of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if
the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant
will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) any preliminary
prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred
to by the undersigned Registrant; (iii) the portion of any other free writing prospectus relating to the offering containing material
information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and (iv)
any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(7) Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act, and will be governed
by the final adjudication of such issue.
(8) That:
(i) for
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the
time it was declared effective.
(ii) for
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Vancouver, British Columbia, Canada, on this 10th day of October, 2019.
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TRILOGY METALS INC.
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By:
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/s/ James Gowans
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Name:
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James Gowans
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Title:
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Interim President and Interim Chief Executive Officer
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POWERS
OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that
each person whose signature appears below hereby constitutes and appoints James Gowans and Elaine Sanders, and each of them, his
or her true and lawful attorneys-in-fact and agents, each acting alone, with the powers of substitution and revocation, for him
or her and in his or her name, place and stead, in any and all capacities, to sign this registration statement on Form S-3, and
any and all amendments (including post-effective amendments) thereto, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorneys-in-fact and agents,
and each of them, full power and authority to do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming
that all such attorneys-in-fact and agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities indicated below
on the dates indicated.
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Signature
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Title
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Date
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/s/ James Gowans
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Director, Interim President and Interim Chief
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October 10, 2019
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James Gowans
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Executive Officer of the Company
(Principal Executive Officer)
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/s/ Elaine Sanders
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Vice President, Chief Financial Officer and
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October 10, 2019
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Elaine Sanders
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Corporate Secretary of the Company
(Principal Financial Officer and Accounting Officer)
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/s/ Tony Giardini
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Director
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October 10, 2019
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Tony Giardini
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Director
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William Hayden
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/s/ William Hensley
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Director
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October 10, 2019
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William Hensley
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/s/ Gregory Lang
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Director
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October 10, 2019
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Gregory Lang
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/s/ Kalidas Madhavpeddi
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Director
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October 10, 2019
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Kalidas Madhavpeddi
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/s/ Janice Stairs
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Director
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October 10, 2019
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Janice Stairs
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/s/ Diana Walters
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Director
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October 10, 2019
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Diana Walters
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AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a)
of the Securities Act of 1933, as amended, the undersigned has signed this registration statement, solely in the capacity of director
of Trilogy Metals Inc. and the duly authorized representative of Trilogy Metals Inc. in the United States, on October 10, 2019.
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By:
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/s/ Kalidas V. Madhavpeddi
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Name: Kalidas V. Madhavpeddi
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Title: Director and Authorized US Representative
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