VANCOUVER, BC, April 6,
2022 /PRNewswire/ - Trilogy Metals Inc. (TSX:
TMQ) (NYSE American: TMQ) ("Trilogy Metals" or "the Company")
announces its financial results for the first quarter ended
February 28, 2022. Details of
the Company's financial results are contained in the interim
unaudited consolidated financial statements and Management's
Discussion and Analysis which will be available on the Company's
website at www.trilogymetals.com, on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov. All amounts are in United States dollars unless otherwise
stated.
Selected Results
The following selected financial information is prepared in
accordance with U.S. GAAP.
|
|
in thousands of
dollars,
|
|
|
|
|
except for per share amounts
|
|
|
Three months
ended
|
Selected
expenses
|
February 28,
2022
$
|
February 28,
2021
$
|
General and
administrative
|
397
|
401
|
Investor
relations
|
99
|
154
|
Professional
fees
|
245
|
229
|
Salaries
|
414
|
439
|
Salaries and directors
expense – stock-based
compensation
|
1,922
|
2,148
|
Total
Expenses
|
3,115
|
3,423
|
Share of loss on equity
investment
|
1,910
|
1,120
|
Comprehensive loss for
the period
|
(5,023)
|
(4,516)
|
Basic and diluted loss
per common share
|
(0.03)
|
(0.03)
|
For the three-month period ended February
28, 2022, overall cash costs related to general and
administrative expenses, investor relations, professional fees and
salaries were primarily tracking to budget. For the three-months
period ended February 28, 2022,
Trilogy reported a net loss of $5.0
million (or $0.03 basic and
diluted loss per common share). For the comparable period in 2021,
we reported a net loss of $4.5
million (or $0.03 basic and
diluted loss per common share). This difference is primarily due to
the Company's equity pickup of Ambler Metals' comprehensive loss,
offset by a reduction in stock-based compensation. Our 50% pro rata
share of Ambler Metals' comprehensive loss increased by
$0.8 million when compared to the
prior year comparative as the current quarter includes
pre-development costs for the Ambler Access Project for which there
are no prior year comparatives. Salaries and directors expense -
stock based-compensation decreased by $0.2
million in comparison to the prior year comparative mainly
due to a reduction of 0.9 million units in overall stock-based
awards granted during the current quarter.
Ambler Access Project
("AAP")
In a press release dated February 23,
2022, the Company announced that the United States
Department of the Interior ("DOI") filed a motion on February 22, 2022 to remand the Final
Environmental Impact Statement ("FEIS") and suspend the
right-of-way permits issued to the Alaska Industrial Development
and Export Authority ("AIDEA") for the Ambler Access Project. The
DOI stated that the suspension of the road permits will allow it to
carry out additional supplemental work on the FEIS. The motion also
indicated that the DOI has requested that the lawsuits filed in
2021 against the DOI by a coalition of national and Alaska environmental non-government
organizations be suspended. The lawsuits had been filed in response
to the United States Bureau of Land Management's ("BLM") issuance
of the Joint Record of Decision ("JROD"), that authorized a
right-of-way across federally managed lands for AIDEA and the
Ambler Access Project.
The Company has commenced discussions with its partners,
including NANA Regional Corporation, Inc. ("NANA"), AIDEA, the
Northwest Arctic Borough, the State of
Alaska and South32 Limited to understand the potential
impact of the above decision by the DOI on AIDEA's proposed plan
and budget for the 2022 summer field season activities that were
previously announced.
In mid-March 2022, the BLM and the
DOI suspended the right-of-way grant and the right-of-way permit
("ROW permits") to AIDEA relating to the Ambler Access Project over
federal land while the DOI conducts further analysis and
consultation. While the suspension decisions are in place: AIDEA
may not conduct any activities that rely on the authority of the
ROW permits; the terms and conditions of the ROW permits are
tolled; and all rental fee obligations are suspended. The
suspension does not preclude AIDEA from applying for special use
permits to conduct activities on the lands subject to the ROW
permits or granted pursuant to applicable law or authority other
than the suspended ROW permits.
On March 22, 2022, the Intervenor
Defendants (the State of Alaska,
NANA, AIDEA, and Ambler Metals LLC ("Ambler Metals")) filed briefs
in opposition to the DOI's motion for a voluntary remand. In
its brief, Ambler Metals stated that it does not oppose the
voluntary remand motion subject to the following conditions: (i) no
vacatur or termination of the permits; (ii) the remand must be
completed within nine months; (iii) that there must be status
updates to the court every 60 days during the remand period; and
(iv) the federal defendants (DOI) must lodge the administrative
record within 30 days of issuing any new decision. Also on
March 22, 2022, the plaintiffs filed
a motion asking the court to deny the motion for voluntary remand
without vacatur of the permits and either allow merits briefing to
proceed or simply vacate the Federal Defendants reviews and
decisions.
On April 5, 2022, the Federal
Defendants responded to the plaintiffs' arguments against voluntary
remand and argued that vacatur of the decisions was not
appropriate. Federal Defendants also argued that the court should
retain jurisdiction, but disagreed with arguments requesting a
court-imposed schedule. The Federal Defendants propose filing a
status report every 90 days.
Liquidity and Capital
Resources
We expended $1.5 million on
operating activities during the first quarter of 2022 which is
consistent with the prior year comparative. The majority of
cash spent on operating activities during the quarter was on
corporate salaries, annual fees paid to the Toronto Stock Exchange
and the NYSE American Exchange and professional fees related to our
annual regulatory filings with the American and Canadian securities
commissions.
At February 28, 2022, we had
$4.8 million in cash and cash
equivalents and working capital of $4.3
million. The Company continues to manage its cash
expenditures through its working capital. Management has begun a
review of the fiscal 2022 budget for cash preservation
opportunities and has reduced cash expenditures where feasible,
including but not limited to, reductions in marketing and investor
conferences and office expenses. The Company's Board of
Directors are considering taking of the cash component of their
fees in shares of the Company in an effort to preserve cash and
increase share ownership. The Company's senior management team are
also considering taking a portion of their base salaries in shares
or other equity based compensation of the Company to preserve
cash. Management believes that these cost reduction efforts
will result in sufficient cash to fund the Company's operations for
the next twelve months.
All project related costs are funded by the joint venture. Amber
Metals is well funded to advance the UKMP with $58.2 million in cash and a $53.2 million loan receivable from South32 as at
February 28, 2022. There is
sufficient funds at the joint venture to fund the previously
announced budgets for the UKMP of $28.5
million and the Ambler Access Project of $15.4 million for fiscal 2022. Trilogy does
not anticipate having to fund the activities of Ambler Metals until
the initial contribution of $145
million is expended.
Qualified Persons
Richard Gosse, P.Geo., Vice
President Exploration for Trilogy Metals Inc., is a Qualified
Person as defined by National Instrument 43-101. Mr. Gosse
has reviewed the technical information in this news release and
approves the disclosure contained herein.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration and development
company which holds a 50 percent interest in Ambler Metals LLC
which has a 100 percent interest in the UKMP in northwestern
Alaska. The UKMP is located within
the Ambler Mining District which is one of the richest and
most-prospective known copper-dominant districts. It hosts
world-class polymetallic volcanogenic massive sulphide ("VMS")
deposits that contain copper, zinc, lead, gold and silver, and
carbonate replacement deposits which have been found to host
high-grade copper and cobalt mineralization. Exploration efforts
have been focused on two deposits in the Ambler mining district -
the Arctic VMS deposit and the Bornite carbonate replacement
deposit. Both deposits are located within land package that spans
approximately 172,636 hectares. The Company has an agreement with
NANA Regional Corporation, Inc., a Regional Alaska Native
Corporation that provides a framework for the exploration and
potential development of the Ambler mining district in cooperation
with local communities. Our vision is to develop the Ambler mining
district into a premier North American copper producer.
Cautionary Note Regarding
Forward-Looking Statements
This press release includes certain "forward-looking
information" and "forward-looking statements" (collectively
"forward-looking statements") within the meaning of applicable
Canadian and United States
securities legislation including the United States Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical fact, included herein, including,
without limitation, perceived merit of properties, expectations
regarding the 2022 field seasons and budgets for the UKMP and
Ambler Access Project, the Company's intention
to provide updates on the Ambler Access
Project permitting situation and the timing
thereof, potential outcomes of discussions between
Ambler Access Project stakeholders and the DOI, the willingness of
the Company's director and executives to receive their compensation
in equity, the Company's plans to look for opportunities to reduce
its cash spend for the year, Management's expectations regarding
the effects of cash conservation efforts and the sufficiency of
cash for the next twelve months and the Company's plans to provide
further updates and the timing thereof are
forward-looking statements. Forward-looking statements are
frequently, but not always, identified by words such as "expects",
"anticipates", "believes", "intends", "estimates", "potential",
"possible", and similar expressions, or statements that events,
conditions, or results "will", "may", "could", or "should" occur or
be achieved. Forward-looking statements involve various risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company's expectations include the
uncertainties involving our assumptions with respect to the impact
of the novel coronavirus (COVID-19) and other risks and
uncertainties disclosed in the Company's Annual Report on Form 10-K
for the year ended November 30, 2021
filed with Canadian securities regulatory authorities and with the
United States Securities and Exchange Commission and in other
Company reports and documents filed with applicable securities
regulatory authorities from time to time. The Company's
forward-looking statements reflect the beliefs, opinions and
projections on the date the statements are made. The Company
assumes no obligation to update the forward-looking statements or
beliefs, opinions, projections, or other factors, should they
change, except as required by law.
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SOURCE Trilogy Metals Inc.