Core Viewpoint - Trilogy Metals Inc. has entered into a binding letter of intent with South32 Limited and Ambler Metals LLC for a significant investment from the U.S. Department of War to advance the exploration and development of the Upper Kobuk Mineral Projects in Alaska, highlighting the strategic importance of these projects for U.S. national security and critical mineral supply [2][9]. Investment Details - The U.S. Department of War will invest approximately $35.6 million in the development of critical mineral resources at the Upper Kobuk Mineral Projects, acquiring about 10% of Trilogy Metals [3]. - The investment includes approximately $17.8 million for 8,215,570 units at a price of $2.17 per unit, with each unit comprising one common share and 3/4 of a 10-year warrant [3]. - An additional $17.8 million will be paid to South32 for common shares of Trilogy Metals and a call option to acquire more shares at a price of $0.01 per share [4]. Use of Funds - Trilogy Metals and South32 will utilize the funds to advance exploration and development efforts at the Upper Kobuk Mineral Projects [5]. - The U.S. Department of War will have the right to appoint one independent director to Trilogy Metals' board for three years and will restrict Trilogy from incurring third-party debt exceeding $1 billion without prior approval [5]. Project Development - The transaction includes discussions for a framework agreement to permit, finance, and construct the Ambler Road, which is essential for the development of mineral projects in the region [6]. - The Ambler Road is a proposed 211-mile road that will facilitate exploration and development in the Ambler Mining District [8]. Strategic Importance - The partnership with the U.S. Government is seen as a milestone for Trilogy Metals, emphasizing the importance of the Upper Kobuk Mineral Projects in supporting U.S. energy, technology, and national security priorities [9][10]. Regulatory Considerations - The transaction is subject to regulatory and stock exchange approvals, with expectations to close following the reauthorization of the Defense Production Act and completion of a Foreign Ownership review [7].

Core Insights - The Trump administration is shifting from traditional subsidies to direct equity stakes in companies to secure U.S. supply chains for critical minerals and semiconductors, aiming to reduce reliance on China [1] Group 1: Trilogy Metals Inc. - A 10% stake in Trilogy Metals Inc. was acquired as part of a $35.6 million investment to secure critical energy and mining projects in Alaska [2] - Trilogy Metals stock increased over 200% in premarket trading following the announcement [2] - The investment is linked to the Upper Kobuk Mineral Projects (UKMP) in Alaska, a joint venture with Australian miner South32 [2][3] Group 2: Critical Metals - Discussions are ongoing regarding an approximately 8% stake in Critical Metals, focusing on the Tanbreez rare earths deposit in Greenland [4] - This project is significant as it represents the largest rare earths project in Greenland [4] Group 3: Lithium Americas - A 5% stake was acquired in Lithium Americas, including a 5% stake in the Thacker Pass joint venture with General Motors [5] - The Thacker Pass lithium mine in Nevada is crucial for building a domestic supply chain for lithium, essential for electric vehicle batteries [5] Group 4: MP Materials - A stake of about 15% was acquired in MP Materials, which operates the only U.S. rare earths mine located in California [6] - The U.S. Department of Defense will become the largest shareholder in MP Materials, marking a significant investment in the critical minerals sector [7]

[Company Overview & Report Details](index=1&type=section&id=Company%20Overview%20%26%20Report%20Details) Trilogy Metals Inc. announced its Q3 FY2025 financial results, available on company platforms and regulatory filings [Report Announcement](index=1&type=section&id=Report%20Announcement) Trilogy Metals Inc. announced its Q3 FY2025 financial results, with details available on the company website, SEDAR+, and EDGAR - Trilogy Metals Inc. (NYSE American / TSX: TMQ) announced its **third fiscal quarter financial results** for the period ended **August 31, 2025**[3](index=3&type=chunk) - Detailed financial results are available on the company's website (www.trilogymetals.com), SEDAR+ (www.sedarplus.ca), and EDGAR (www.sec.gov)[3](index=3&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) This section details the company's net losses for Q3 and the first nine months of FY2025, highlighting increased expenses [Selected Financial Results](index=1&type=section&id=Selected%20Financial%20Results) The company reported increased net losses for Q3 and the first nine months of FY2025, driven by Ambler Metals LLC activities and higher regulatory costs Selected Expenses (USD thousands) | Selected expenses | Three months ended August 31, 2025 (USD) | Three months ended August 31, 2024 (USD) | Nine months ended August 31, 2025 (USD) | Nine months ended August 31, 2024 (USD) | | :------------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------ | :------------------------------------ | | General and administrative | 214 | 293 | 910 | 1,027 | | Investor relations | 38 | 15 | 72 | 46 | | Professional fees | 246 | 138 | 1,305 | 530 | | Salaries | 251 | 158 | 774 | 527 | | Salaries and directors expense – stock based compensation | 374 | 506 | 2,971 | 3,014 | | Share of loss on equity investment | 891 | 624 | 2,236 | 2,019 | | Comprehensive loss for the period | (1,747) | (1,591) | (7,547) | (6,951) | - Net loss for **Q3 2025** was **$1.7 million**, compared to **$1.6 million** in Q3 2024, primarily due to increased field activities by Ambler Metals LLC (environmental baseline work and core re-boxing program)[5](index=5&type=chunk) - Net loss for the **first nine months of 2025** was **$7.5 million**, up from **$7.0 million** in the same period of 2024, driven by higher regulatory and legal fees related to the base shelf prospectus and ATM Program, and Ambler Metals' environmental baseline and core re-boxing programs, partially offset by lower office expenses and increased interest income[6](index=6&type=chunk) [Operational Activities](index=1&type=section&id=Operational%20Activities) This section details Ambler Metals LLC's successful completion of summer field programs and the initiation of a core re-boxing plan [Project Update: Ambler Metals LLC](index=1&type=section&id=Project%20Update%3A%20Ambler%20Metals%20LLC) Ambler Metals LLC completed summer maintenance and environmental baseline programs, initiated a core re-boxing plan, and maintained a **$3.7 million** cash position - In **July 2025**, Ambler Metals completed its summer maintenance field program at the Bornite camp and conducted an environmental baseline program to support future mining permit applications[7](index=7&type=chunk)[8](index=8&type=chunk) - Ambler Metals initiated a **multi-year core re-boxing program** to ensure the long-term preservation of stored drill core[8](index=8&type=chunk) Ambler Metals LLC Financial Position | Metric | Amount (million USD) | | :------------------- | :-------------- | | Cash position at Q3 end | 3.7 | | Annual expenditure level (near budget) | 4.5 | [Liquidity and Capital Resources](index=2&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong cash position and has established financing mechanisms to ensure future liquidity and operational funding [Cash Position and Future Funding](index=2&type=section&id=Cash%20Position%20and%20Future%20Funding) The company holds **$23.4 million** in cash and working capital, sufficient for 12 months, with **$50 million** and **$25 million** financing options available - As of **August 31, 2025**, the company held **$23.4 million** in cash and cash equivalents and **$23.4 million** in working capital[10](index=10&type=chunk) - The company believes its current cash position is sufficient to meet working capital requirements for the **next 12 months**[12](index=12&type=chunk) - To ensure future liquidity, the company has an effective base shelf prospectus allowing for future issuance of up to **$50 million** in securities and an ATM Program for up to **$25 million** in common shares, which remained undrawn as of **October 2, 2025**[11](index=11&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides details on the company's qualified persons, its business focus, and key contact information [Qualified Persons](index=2&type=section&id=Qualified%20Persons) Richard Gosse, VP of Exploration for Trilogy Metals Inc., is the qualified person responsible for reviewing and approving technical information - Richard Gosse (P.Geo.), Vice President of Exploration for Trilogy Metals Inc., is a **Qualified Person** as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects, and has reviewed and approved the scientific and technical information in this news release[13](index=13&type=chunk) [About Trilogy Metals](index=2&type=section&id=About%20Trilogy%20Metals) Trilogy Metals Inc. is a metal exploration and development company holding a **50%** interest in Ambler Metals LLC, focusing on the Upper Kobuk Mineral Project - Trilogy Metals Inc. is a metal exploration and development company holding a **50% interest** in Ambler Metals LLC, which owns **100%** of the Upper Kobuk Mineral Project (UKMP) in Northwest Alaska[14](index=14&type=chunk) - The UKMP is located in the Ambler Mining District, one of the world's richest and most prospective copper-dominant districts, featuring world-class polymetallic volcanogenic massive sulphide (VMS) and carbonate replacement deposits[14](index=14&type=chunk)[15](index=15&type=chunk) - Trilogy's vision is to develop the Ambler Mining District into a **major North American copper producer** while protecting and respecting local livelihoods[15](index=15&type=chunk) [Company Contacts](index=3&type=section&id=Company%20Contacts) Contact information for President & CEO Tony Giardini and VP & CFO Elaine Sanders is provided - Contacts include President & CEO **Tony Giardini** and VP & CFO **Elaine Sanders**, reachable at **604-638-8088**[16](index=16&type=chunk) [Legal Disclosures](index=3&type=section&id=Legal%20Disclosures) This section provides cautionary notes regarding forward-looking statements, highlighting inherent risks and the company's limited obligation to update them [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This news release contains forward-looking statements about the ATM Program, asset values, and future cash sufficiency, subject to risks and uncertainties - This news release contains **'forward-looking information'** and **'forward-looking statements'** concerning the ATM Program, perceived value of assets, cash sufficiency for the next twelve months, and plans and timing for further updates[17](index=17&type=chunk) - Forward-looking statements involve various risks and uncertainties, and there can be **no assurance** that such statements will prove accurate, as actual results and future events could differ materially from those anticipated[17](index=17&type=chunk) - The company undertakes **no obligation** to update forward-looking statements or beliefs, opinions, projections, or other factors, except as required by law[17](index=17&type=chunk)

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents Trilogy Metals Inc.'s unaudited condensed interim consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed interim consolidated financial statements for Trilogy Metals Inc., including the balance sheets, statements of loss and comprehensive loss, statements of changes in shareholders' equity, and statements of cash flows, along with their accompanying notes. These statements provide a snapshot of the company's financial position, performance, and cash flows for the period ended August 31, 2025 [Condensed Interim Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific dates Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | **Assets** | | | | | | Total current assets | 23,733 | 26,045 | (2,312) | -8.88% | | Investment in Ambler Metals LLC | 105,261 | 107,497 | (2,236) | -2.08% | | Total assets | 129,120 | 133,697 | (4,577) | -3.42% | | **Liabilities** | | | | | | Total current liabilities | 373 | 793 | (420) | -53.00% | | Total liabilities | 455 | 903 | (448) | -49.61% | | **Shareholders' Equity** | | | | | | Total shareholders' equity | 128,665 | 132,794 | (4,129) | -3.11% | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) This statement details the company's revenues, expenses, and net loss over specific reporting periods Metric Summary | Metric | Three months ended Aug 31, 2025 ($ thousands) | Three months ended Aug 31, 2024 ($ thousands) | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Total expenses | 1,165 | 1,141 | 6,063 | 5,179 | | Interest income and other income | (311) | (152) | (741) | (200) | | Share of loss on equity investment | 891 | 624 | 2,236 | 2,019 | | Loss and comprehensive loss for the period | (1,747) | (1,591) | (7,547) | (6,951) | | Basic loss per common share | (0.01) | (0.01) | (0.05) | (0.04) | - The company reported an increased net loss for both the three-month period (**$1.7 million** vs **$1.6 million** YoY) and the nine-month period (**$7.5 million** vs **$7.0 million** YoY) ended August 31, 2025[11](index=11&type=chunk) [Condensed Interim Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This statement outlines changes in the company's equity components, including share capital and deficit, over time Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | Share capital | 192,898 | 190,503 | 2,395 | 1.26% | | Contributed surplus – options | 29,712 | 28,801 | 911 | 3.16% | | Contributed surplus – units | 3,884 | 3,772 | 112 | 2.97% | | Deficit | (97,947) | (90,400) | (7,547) | 8.35% | | Total shareholders' equity | 128,665 | 132,794 | (4,129) | -3.11% | - The deficit increased by **$7.5 million** from November 30, 2024, to August 31, 2025, reflecting the loss for the period[13](index=13&type=chunk) [Condensed Interim Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Cash Flow Activity Summary | Cash Flow Activity | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | Change ($ thousands) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | | Cash flows used in operating activities | (2,690) | (1,854) | (836) | | Cash flows from financing activities | 224 | — | 224 | | Cash flows from investing activities | — | 25,000 | (25,000) | | Change in cash | (2,466) | 23,146 | (25,612) | | Cash – end of the period | 23,372 | 25,738 | (2,366) | - The company experienced a significant decrease in cash from investing activities, primarily due to a **$25 million** return of capital from Ambler Metals LLC in the prior year period that did not recur in the current period[15](index=15&type=chunk) [Notes to the Condensed Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information for the condensed interim consolidated financial statements, covering the company's operations, accounting policies, investment in Ambler Metals LLC, lease arrangements, share capital, and other financial commitments and events [Note 1) Nature of operations](index=9&type=section&id=Note%201)%20Nature%20of%20operations) This note describes Trilogy Metals Inc.'s primary business activities, focusing on mineral exploration and development through its joint venture - Trilogy Metals Inc. is engaged in the exploration and development of mineral properties, primarily through its 50/50 joint venture, Ambler Metals LLC, focusing on the Upper Kobuk Mineral Projects (UKMP) in Northwest Alaska, US, including the Arctic and Bornite Projects[16](index=16&type=chunk) [Note 2) Summary of significant accounting policies](index=9&type=section&id=Note%202)%20Summary%20of%20significant%20accounting%20policies) This note outlines the key accounting principles and estimates used in preparing the financial statements - The financial statements are prepared using U.S. GAAP and include Trilogy and its wholly-owned subsidiaries, with intercompany transactions eliminated. The equity method is used for variable interest entities where Trilogy is not the primary beneficiary, such as Ambler Metals LLC[17](index=17&type=chunk) - Management makes significant estimates for income taxes and stock-based compensation, and assesses impairment of its equity investment in Ambler Metals LLC based on recoverability and changes in development plans[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company is evaluating the impact of new FASB ASUs on reportable segment disclosures (ASU 2023-07, effective FY2025) and income tax disclosures (ASU 2023-09, effective FY2026)[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 3) Investment in Ambler Metals LLC](index=11&type=section&id=Note%203)%20Investment%20in%20Ambler%20Metals%20LLC) This note details Trilogy Metals Inc.'s equity method investment in its 50/50 joint venture, Ambler Metals LLC - Trilogy Metals formed a 50/50 joint venture, Ambler Metals LLC, with South32 Limited on February 11, 2020, contributing its UKMP assets while South32 contributed **$145.0 million** cash[27](index=27&type=chunk) - Trilogy uses the equity method for its investment in Ambler Metals, as it has significant influence but is not the primary beneficiary. Its maximum exposure to loss is limited to the carrying amount of its investment[28](index=28&type=chunk) Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | Investment in Ambler Metals LLC | 105,261 | 107,497 | (2,236) | -2.08% | | Share of loss on equity investment (9-month period) | (2,236) | (2,019) | (217) | 10.75% | Ambler Metals LLC Balances (100% basis) Summary | Ambler Metals LLC Balances (100% basis) | August 31, 2025 ($ thousands) | | :-------------------------------------- | :---------------------------- | | Cash and cash equivalents | 3,749 | | Mineral properties | 30,899 | | Total assets | 35,414 | | Total liabilities | 685 | | Members' equity | 34,729 | Ambler Metals LLC Loss (100% basis) Summary | Ambler Metals LLC Loss (100% basis) | Nine months ended Aug 31, 2025 ($ thousands) | | :---------------------------------- | :------------------------------------------- | | Corporate salaries and wages | 209 | | General and administrative | 379 | | Mineral property expense - exclude Ambler Access Project | 2,126 | | Professional fees | 1,124 | | Ambler Access Project | 710 | | Depreciation | 88 | | Foreign exchange (gain)/loss | 1 | | Interest and other income | (166) | | Comprehensive loss | 4,471 | - Trilogy charged Ambler Metals **$102,250** for administrative and accounting services during the nine-month period ended August 31, 2025, an increase from **$47,000** in the prior year[37](index=37&type=chunk) [Note 4) Accounts payable and accrued liabilities](index=13&type=section&id=Note%204)%20Accounts%20payable%20and%20accrued%20liabilities) This note provides a breakdown of the company's short-term financial obligations to vendors and for accrued expenses Metric Summary | Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------- | :--------- | | Trade accounts payable | 141 | 196 | (55) | -28.06% | | Accrued liabilities | 112 | 62 | 50 | 80.65% | | Accrued salaries and vacation | 80 | 498 | (418) | -83.94% | | Total accounts payable and accrued liabilities | 333 | 756 | (423) | -55.95% | [Note 5) Leases](index=13&type=section&id=Note%205)%20Leases) This note describes the company's lease arrangements, including right-of-use assets and lease liabilities Lease Metric Summary | Lease Metric | August 31, 2025 ($ thousands) | November 30, 2024 ($ thousands) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Right-of-use asset | 126 | 155 | | Current portion of lease liability | 40 | 37 | | Long-term portion of lease liability | 82 | 110 | | Total lease liability | 122 | 147 | - The company entered a new four-year operating lease for its corporate office on July 1, 2024, expiring in June 2028, with current monthly payments of approximately **CDN$9,500**[40](index=40&type=chunk) Lease Expense Summary | Lease Expense | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | :--------- | | Operating lease costs | 38 | 122 | (84) | -68.85% | | Variable lease costs | 13 | 103 | (90) | -87.38% | | Total lease expense | 51 | 225 | (174) | -77.33% | [Note 6) Share capital](index=14&type=section&id=Note%206)%20Share%20capital) This note details the company's share capital activities, including common shares, stock options, and unit plans Share Capital Activity Summary | Share Capital Activity | Number of shares (thousands) | Value ($ thousands) | | :-------------------------------- | :--------------------------- | :------------------ | | Balance – November 30, 2024 | 161,085 | 190,503 | | Exercise of options | 400 | 337 | | Shares issued from Restricted Share Units | 2,768 | 2,008 | | Services settled by common shares | 38 | 50 | | Balance – August 31, 2025 | 164,291 | 192,898 | - The company has an effective Base Shelf Prospectus allowing for future issuance of up to **$50 million** in securities and established an At-The-Market (ATM) equity program to sell up to **$25 million** of common shares, neither of which has been utilized as of August 31, 2025[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) Stock Option Activity (9-month period) Summary | Stock Option Activity (9-month period) | Number of options | Weighted average exercise price (CDN$) | | :------------------------------------- | :---------------- | :------------------------------------- | | Balance – beginning of the year | 13,630,234 | 1.77 | | Granted | 2,125,000 | 1.52 | | Exercised | (400,000) | 0.79 | | Expired | (3,640,000) | 2.75 | | Balance – end of the period | 11,715,234 | 1.45 | - For the nine-month period ended August 31, 2025, Trilogy recognized a stock-based compensation charge of **$1.0 million** for stock options and **$2.0 million** for RSUs and DSUs[45](index=45&type=chunk)[53](index=53&type=chunk) Unit Plan Activity (9-month period) Summary | Unit Plan Activity (9-month period) | Number of RSUs | Number of DSUs | Number of Fixed DSUs | | :---------------------------------- | :------------- | :------------- | :------------------- | | Balance – beginning of the year | 2,793,339 | 3,133,412 | — | | Granted | 1,811,096 | 72,943 | 304,605 | | Settled in common shares | (2,806,097) | — | — | | Balance – end of the period | 1,798,338 | 3,206,355 | 304,605 | [Note 7) Fair value accounting](index=17&type=section&id=Note%207)%20Fair%20value%20accounting) This note explains the fair value measurement of the company's financial instruments - The fair value of the company's financial instruments (cash, receivables, payables) approximates their carrying value due to their short-term nature[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 8) Commitment](index=18&type=section&id=Note%208)%20Commitment) This note outlines the company's significant contractual obligations and future financial commitments - The company has commitments related to its office lease, with future minimum lease payments detailed in Note 5(b)[57](index=57&type=chunk) [Note 9) Supplemental cash flow information](index=18&type=section&id=Note%209)%20Supplemental%20cash%20flow%20information) This note provides additional details on specific non-cash transactions and other cash flow items Metric Summary | Metric | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | Change ($ thousands) | Change (%) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | :--------- | | Interest received | 741 | 200 | 541 | 270.50% | [Note 10) Subsequent events](index=18&type=section&id=Note%2010)%20Subsequent%20events) This note discloses significant events that occurred after the reporting period but before the financial statements were issued - On September 2, 2025, the Board of Directors were granted **49,343** DSUs in settlement of approximately **$82,000** of director fees[59](index=59&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Trilogy Metals Inc.'s financial condition and operational results for the quarter ended August 31, 2025, discussing key financial metrics, corporate activities, liquidity, and critical accounting estimates, alongside cautionary notes regarding forward-looking statements and associated risks [Cautionary Notes and Forward-Looking Statements](index=19&type=section&id=Cautionary%20notes) This section highlights the inherent risks and uncertainties associated with forward-looking statements in the report - The MD&A contains forward-looking statements regarding work programs, budgets, funding, mineral estimates, timelines, and market prices, which are based on management's beliefs and expectations but are subject to significant risks and uncertainties[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Key risks include the ability to achieve production, financing development, obtaining permits for the Ambler Access Project, commodity price fluctuations, and regulatory changes[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [General Information and Business Description](index=24&type=section&id=General) This section provides an overview of Trilogy Metals Inc.'s business, including its focus on mineral exploration and stock listings - Trilogy Metals Inc. is a base metals exploration company focused on the Ambler mining district in Alaska, USA, operating through its 50/50 joint venture, Ambler Metals LLC, which includes the Arctic and Bornite Projects[76](index=76&type=chunk) - The company's shares are listed on the TSX and NYSE American under the symbol "TMQ"[75](index=75&type=chunk) [Corporate and Project Activities](index=25&type=section&id=Corporate%20and%20project%20activities) This section details the company's recent corporate initiatives and project-related expenditures - Trilogy filed a Base Shelf Prospectus allowing for the future issuance of up to **$50 million** in securities and established an At-The-Market (ATM) equity program to sell up to **$25 million** of common shares, with anticipated proceeds for UKMP development and general corporate purposes. Neither program has been utilized as of August 31, 2025[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) Budget Category Summary | Budget Category | 2025 Fiscal Year Budget ($ millions) | 9-month period ended Aug 31, 2025 Actual Spend ($ millions) | Variance ($ millions) | | :-------------------------------- | :----------------------------------- | :---------------------------------------------------------- | :-------------------- | | Trilogy Corporate Budget | 3.1 | 3.1 | 0.0 | | Ambler Metals LLC Initial Budget | 5.8 | 3.8 | (2.0) | | Ambler Access Project Supplemental Budget | 0.8 | 0.7 | (0.1) | - Ambler Metals LLC's expenditures for the nine-month period were **$0.2 million** under budget, mainly due to delayed hiring and lower general administrative expenses[81](index=81&type=chunk) [Summary of Results](index=26&type=section&id=Summary%20of%20results) This section provides a concise overview of the company's financial performance for the reporting periods Metric Summary | Metric | Three months ended Aug 31, 2025 ($ thousands) | Three months ended Aug 31, 2024 ($ thousands) | Nine months ended Aug 31, 2025 ($ thousands) | Nine months ended Aug 31, 2024 ($ thousands) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | Comprehensive loss for the period | (1,747) | (1,591) | (7,547) | (6,951) | | Basic and diluted loss per common share | (0.01) | (0.01) | (0.05) | (0.04) | - The increase in comprehensive loss for the three-month period was primarily due to Ambler Metals' site activities for environmental baseline work and a core re-boxing program[85](index=85&type=chunk) - The increase in net loss for the nine-month period was driven by higher regulatory expenses and legal fees related to the Base Shelf Prospectus and ATM Program, and increased share of losses from Ambler Metals, partially offset by lower office expenses and higher interest income[86](index=86&type=chunk)[87](index=87&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20capital%20resources) This section discusses the company's cash position, working capital, and ability to meet its short-term and long-term financial obligations Metric Summary | Metric | August 31, 2025 ($ millions) | | :-------------------------------- | :--------------------------- | | Cash and cash equivalents | 23.4 | | Working capital | 23.4 | - The company used **$2.7 million** in operating activities during the nine-month period, primarily for corporate salaries, professional fees, and regulatory costs related to the Base Shelf Prospectus and ATM Program[88](index=88&type=chunk) - Management believes current cash is sufficient for the next 12 months, but additional funds may be needed beyond that to support operations and contributions to Ambler Metals[91](index=91&type=chunk) [Outstanding Share Data](index=28&type=section&id=Outstanding%20share%20data) This section provides a summary of the company's issued and outstanding equity securities Security Type Summary | Security Type | As of September 30, 2025 | | :-------------------------------- | :----------------------- | | Common shares issued and outstanding | 164,311,410 | | Stock options outstanding | 11,695,234 | | DSUs outstanding | 3,206,355 | | Fixed DSUs outstanding | 353,948 | | RSUs outstanding | 1,798,338 | | NovaGold DSUs | 5,144 | | Total common shares upon exercise of convertible securities | 17,054,734 | [New Accounting Pronouncements](index=28&type=section&id=New%20accounting%20pronouncements) This section outlines the impact of recently issued accounting standards on the company's financial reporting - The company is evaluating the impact of ASU 2023-07 (Segment Reporting) effective for FY2025 and ASU 2023-09 (Income Tax Disclosures) effective for FY2026[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Critical Accounting Estimates](index=29&type=section&id=Critical%20accounting%20estimates) This section describes the accounting estimates that require significant management judgment and can materially affect financial results - Critical accounting estimates include the recoverability of the equity method investment in Ambler Metals, income taxes, and the valuation of stock-based compensation, all requiring significant management judgment[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of August 31, 2025, and reported no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of August 31, 2025[104](index=104&type=chunk) - There were no material changes in internal controls over financial reporting during the fiscal quarter ended August 31, 2025[106](index=106&type=chunk) [PART II - OTHER INFORMATION](index=31&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material current, pending, or threatened litigation, beyond routine proceedings that are part of its ordinary course of business - The company is not aware of any material current, pending, or threatened litigation[109](index=109&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.Risk%20Factors) This section refers to the risk factors outlined in the company's Form 10-K, with an additional emphasis on the potential adverse impact of changes in U.S. laws and policies regulating international trade, such as tariffs, on revenues, costs, and mineral resource estimates - No material changes to risk factors from the Form 10-K, except for the addition of risks related to changes in U.S. laws and policies regulating international trade[110](index=110&type=chunk)[111](index=111&type=chunk) - Potential impacts of trade policy changes include increases or decreases in revenues due to metal prices, increased costs, and uncertainty over mineral resources and reserve estimates[112](index=112&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds were reported[113](index=113&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[114](index=114&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to Trilogy Metals Inc - Mine safety disclosures are not applicable to the company[115](index=115&type=chunk) [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) This section confirms that no director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended August 31, 2025[117](index=117&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, certifications from the CEO and CFO, and interactive data files in XBRL format - The report includes various exhibits such as corporate organizational documents, CEO and CFO certifications (Rule 13a-14(a) and 18 U.S.C. Section 1350), and Interactive Data Files in XBRL format[118](index=118&type=chunk)

Core Viewpoint - Trilogy Metals Inc. reported its financial results for the third quarter ended August 31, 2025, highlighting a net loss of $1.7 million, an increase from the $1.6 million loss in the same quarter of 2024, primarily due to increased site activities related to its joint venture with South32 [1][3][4]. Financial Performance - For the three-month period ended August 31, 2025, the company incurred a comprehensive loss of $1.7 million compared to a loss of $1.6 million in the same period of 2024 [3]. - For the nine-month period ended August 31, 2025, the net loss was $7.5 million, up from $7.0 million in the same period of 2024, driven by higher regulatory expenses and legal fees [4]. - General and administrative expenses decreased from $293,000 in Q3 2024 to $214,000 in Q3 2025, while professional fees increased significantly from $138,000 to $246,000 in the same period [3]. Project Update - Ambler Metals completed a summer maintenance field program at the Bornite camp site, including an environmental baseline program to support mine permitting applications [5]. - The cash position of Ambler Metals at the end of the third fiscal quarter was approximately $3.7 million, with expenditures tracking close to the budget of $4.5 million for the year [5]. Liquidity and Capital Resources - As of August 31, 2025, the company had cash and cash equivalents of $23.4 million, sufficient to fund its initial fiscal 2025 budget of $3.1 million [8]. - The company has an effective base shelf prospectus allowing for the future issuance of up to $50 million in securities and an ATM Program for selling common shares up to $25 million [9]. Future Outlook - The company believes its current cash position is adequate to meet working capital requirements for the next 12 months, but future cash needs may vary significantly [10].

Group 1 - The company is responsible for the development of transcript-related projects [1] - The company publishes thousands of quarterly earnings calls per quarter [1] - The company is continuing to grow and expand its coverage [1]

[Introduction](index=1&type=section&id=Introduction) Trilogy Metals Inc. announced its Q2 2025 financial results and updated cash position, with full details available on official platforms [News Release Overview](index=1&type=section&id=News%20Release%20Overview) Trilogy Metals Inc. reported its financial results for the second quarter ended May 31, 2025, with all amounts stated in United States dollars - Trilogy Metals Inc. reported financial results for the second quarter ended May 31, 2025[3](index=3&type=chunk) - All amounts are stated in United States dollars[3](index=3&type=chunk) [Quarterly Highlights](index=1&type=section&id=Quarterly%20Highlights) Corporate activities included AGM and new equity programs, while the financial snapshot shows a strong cash and working capital position [Corporate Activities](index=1&type=section&id=Corporate%20Activities) The company held its Annual General Meeting (AGM) where all nominated directors were re-elected, and established a Base Shelf Prospectus and an At-The-Market (ATM) Program for future equity issuance - The Annual General Meeting (AGM) was held on May 13, 2025, with all nominated directors re-elected by shareholders (over **94% of votes cast**)[4](index=4&type=chunk)[6](index=6&type=chunk) - A final short form base shelf prospectus was filed, allowing for future issuance of up to **US$50 million** in various securities, effective April 14, 2025[5](index=5&type=chunk)[6](index=6&type=chunk) - An At-The-Market (ATM) Program was established on May 27, 2025, to sell up to **US$25 million** of Common Shares for project funding and general corporate purposes[6](index=6&type=chunk)[7](index=7&type=chunk) [Financial Position Snapshot](index=1&type=section&id=Financial%20Position%20Snapshot) As of May 31, 2025, Trilogy Metals reported a cash balance of $24.6 million and working capital of $23.8 million Key Financial Position as of May 31, 2025 | Metric | Amount (US$ millions) | | :----------------- | :-------------------- | | Cash on hand | 24.6 | | Working capital | 23.8 | [Selected Financial Results](index=2&type=section&id=Selected%20Financial%20Results) Comprehensive loss increased for both quarterly and year-to-date periods, driven by higher regulatory, legal, and executive compensation costs, partially offset by interest income [Summary of Expenses and Loss](index=2&type=section&id=Summary%20of%20Expenses%20and%20Loss) The company reported an increased comprehensive loss for both the three-month and six-month periods ended May 31, 2025, with basic and diluted loss per common share remaining at $(0.01) for the quarter and increasing to $(0.04) for the six-month period Selected Expenses and Loss (in thousands of US dollars, except per share amounts) | Selected expenses | Three months ended May 31, 2025 | Three months ended May 31, 2024 | Six months ended May 31, 2025 | Six months ended May 31, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | General and administrative | 353 | 319 | 696 | 734 | | Investor relations | 18 | 19 | 34 | 31 | | Professional fees | 612 | 192 | 1,059 | 392 | | Salaries | 316 | 178 | 523 | 369 | | Salaries and directors expense – stock based compensation | 367 | 509 | 2,597 | 2,508 | | Share of loss on equity investment | 764 | 602 | 1,345 | 1,395 | | Comprehensive loss for the period | (2,177) | (1,759) | (5,800) | (5,360) | | Basic and diluted loss per common share | (0.01) | (0.01) | (0.04) | (0.03) | [Analysis of Performance (Q2 2025 vs Q2 2024)](index=2&type=section&id=Analysis%20of%20Performance%20(Q2%202025%20vs%20Q2%202024)) For the three-month period, net loss increased to $2.2 million from $1.8 million, primarily due to higher regulatory and legal fees and increased cash salaries for executives, partially offset by decreased stock-based compensation - Net loss for Q2 2025 was **$2.2 million**, an increase from **$1.8 million** in Q2 2024[10](index=10&type=chunk) - The increase in comprehensive loss was primarily driven by higher regulatory expenses and legal fees related to the Base Shelf Prospectus and ATM Program[10](index=10&type=chunk) - Salaries increased due to executives receiving **100% cash compensation** starting March 1, 2025, offsetting a decrease in stock-based compensation[10](index=10&type=chunk) - Share of loss from Ambler Metals increased due to higher professional consulting fees for engineering activities, partially offset by reduced activities at the Ambler Access Project[10](index=10&type=chunk) [Analysis of Performance (YTD 2025 vs YTD 2024)](index=2&type=section&id=Analysis%20of%20Performance%20(YTD%202025%20vs%20YTD%202024)) For the six-month period, net loss increased to $5.8 million from $5.4 million, mainly due to higher regulatory and legal fees for the Base Shelf Prospectus and ATM Program ($0.7 million), and fees for the Bornite preliminary economic assessment study ($0.2 million), partially offset by $0.4 million in interest income - Net loss for the six-month period ended May 31, 2025, was **$5.8 million**, up from **$5.4 million** in the same period of 2024[11](index=11&type=chunk) - Key drivers for the increase include **$0.7 million** in regulatory and legal fees for the Base Shelf Prospectus and ATM Program, and **$0.2 million** for the Bornite preliminary economic assessment study[11](index=11&type=chunk) - Salaries increased due to executives receiving **100% cash compensation**, similar to the quarterly trend[12](index=12&type=chunk) - Overall corporate costs were partially offset by **$0.4 million** in interest income earned[12](index=12&type=chunk) [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital%20Resources) The company utilized $1.4 million in operating activities, maintains a strong cash position of $24.6 million, and has access to significant future funding through shelf prospectus and ATM programs [Cash Flow and Usage](index=3&type=section&id=Cash%20Flow%20and%20Usage) During the six-month period, Trilogy Metals used $1.4 million for operating activities, primarily for corporate salaries, professional fees for the Bornite PEA, and costs associated with the Shelf Base Prospectus and ATM Program, partially offset by interest income - Used **$1.4 million** for operating activities during the six-month period ending May 31, 2025[13](index=13&type=chunk) - Funds were primarily spent on corporate salaries, professional fees for the Bornite PEA, and establishment of the Shelf Base Prospectus and ATM Program, along with related regulatory filing fees[13](index=13&type=chunk) - These outflows were partially offset by **$0.4 million** in interest income[13](index=13&type=chunk) [Current Financial Position and Outlook](index=3&type=section&id=Current%20Financial%20Position%20and%20Outlook) As of May 31, 2025, the company held $24.6 million in cash and cash equivalents and $23.8 million in working capital, which is deemed sufficient to meet working capital requirements for the next 12 months Liquidity Position as of May 31, 2025 | Metric | Amount (US$ millions) | | :------------------------ | :-------------------- | | Cash and cash equivalents | 24.6 | | Working capital | 23.8 | - Current cash on hand is sufficient to fund the approved fiscal 2025 cash budget of **$3.1 million**[14](index=14&type=chunk) - The company believes its current cash position is sufficient to meet working capital requirements for the next 12 months and has access to capital markets for future funding needs[16](index=16&type=chunk) [Future Funding Initiatives](index=3&type=section&id=Future%20Funding%20Initiatives) To ensure future liquidity, Trilogy Metals has an effective Base Shelf Prospectus allowing for the issuance of up to US$50.0 million in securities and an ATM Program for up to US$25.0 million in common shares, neither of which has been utilized as of July 10, 2025 - Base Shelf Prospectus allows for future issuance of up to **US$50.0 million** in Securities[15](index=15&type=chunk) - ATM Program allows for the sale of Common Shares with an aggregate gross sales price of up to **US$25.0 million**[15](index=15&type=chunk) - As of July 10, 2025, the ATM Program has not been utilized[15](index=15&type=chunk) [Company Profile and Disclosures](index=3&type=section&id=Company%20Profile%20and%20Disclosures) Richard Gosse serves as the Qualified Person for technical information, while Trilogy Metals operates as a metal exploration company with a 50% interest in the Upper Kobuk Mineral Projects in Alaska [Qualified Person](index=3&type=section&id=Qualified%20Person) Richard Gosse, P.Geo., Vice President Exploration for Trilogy Metals, is identified as the Qualified Person responsible for reviewing and approving the technical information in the news release - Richard Gosse, P.Geo., Vice President Exploration for Trilogy Metals, is the Qualified Person[17](index=17&type=chunk) - Mr. Gosse has reviewed and approved the technical information in this news release[17](index=17&type=chunk) [About Trilogy Metals](index=3&type=section&id=About%20Trilogy%20Metals) Trilogy Metals Inc. is a metal exploration and development company holding a 50% interest in Ambler Metals LLC, which owns the Upper Kobuk Mineral Projects (UKMP) in northwestern Alaska, focusing on VMS and carbonate replacement deposits - Trilogy Metals Inc. is a metal exploration and development company[18](index=18&type=chunk) - Holds a **50% interest** in Ambler Metals LLC, which has a **100% interest** in the Upper Kobuk Mineral Projects (UKMP) in northwestern Alaska[18](index=18&type=chunk) - The Ambler Mining District hosts world-class polymetallic volcanogenic massive sulphide (VMS) deposits (copper, zinc, lead, gold, silver) and carbonate replacement deposits (high-grade copper and cobalt)[18](index=18&type=chunk) - Exploration efforts are focused on the Arctic VMS deposit and the Bornite carbonate replacement deposit within a **190,929-hectare** land package[18](index=18&type=chunk) - Ambler Metals has an agreement with NANA Regional Corporation, Inc. for exploration and potential development in cooperation with local communities[19](index=19&type=chunk) - Trilogy's vision is to develop the Ambler Mining District into a premier North American copper producer while protecting subsistence livelihoods[19](index=19&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) This section provides company contact details and a cautionary note regarding forward-looking statements, emphasizing inherent risks and no obligation to update [Company Contacts](index=4&type=section&id=Company%20Contacts) Contact information for Trilogy Metals' President & CEO, Tony Giardini, and Vice President & CFO, Elaine Sanders, is provided - Tony Giardini is President & Chief Executive Officer[20](index=20&type=chunk) - Elaine Sanders is Vice President & Chief Financial Officer[20](index=20&type=chunk) - Contact number: **604-638-8088**[20](index=20&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a standard cautionary note regarding forward-looking statements, defining them, listing examples, and highlighting inherent risks and uncertainties, with no obligation to update unless required by law - The news release includes 'forward-looking information' and 'forward-looking statements' as defined by Canadian and United States securities legislation[20](index=20&type=chunk) - Forward-looking statements involve various risks and uncertainties, and actual results could differ materially from those anticipated[20](index=20&type=chunk) - The company assumes no obligation to update forward-looking statements or beliefs, opinions, projections, or other factors, should they change, except as required by law[20](index=20&type=chunk)

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited interim financial statements show a slight asset decrease and a higher net loss compared to the prior year [Condensed Interim Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Interim%20Consolidated%20Balance%20Sheets) Total assets decreased slightly to $131.0 million, primarily due to the company's share of loss from its Ambler Metals LLC investment Condensed Balance Sheet Data (in thousands of US dollars) | | May 31, 2025 | November 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $24,616 | $25,834 | | Investment in Ambler Metals LLC | $106,152 | $107,497 | | **Total Assets** | **$130,983** | **$133,697** | | **Liabilities & Equity** | | | | Total Liabilities | $967 | $903 | | Total Shareholders' Equity | $130,016 | $132,794 | | **Total Liabilities and Shareholders' Equity** | **$130,983** | **$133,697** | [Condensed Interim Consolidated Statements of Loss and Comprehensive Loss](index=4&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss) The net loss increased for both the three and six-month periods, driven by higher professional fees and equity investment losses Statement of Loss Highlights (in thousands of US dollars) | | Three Months Ended May 31 | Six Months Ended May 31 | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | Total expenses | $1,666 | $1,218 | $4,898 | $4,038 | | Share of loss on equity investment | $764 | $602 | $1,345 | $1,395 | | **Loss and comprehensive loss** | **($2,177)** | **($1,759)** | **($5,800)** | **($5,360)** | | Basic and diluted loss per share | ($0.01) | ($0.01) | ($0.04) | ($0.03) | [Condensed Interim Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Interim%20Consolidated%20Statements%20of%20Cash%20Flows) Cash used in operations was $1.4 million, and the cash balance decreased by $1.2 million to $24.6 million for the six-month period Cash Flow Summary (in thousands of US dollars) | | Six Months Ended May 31, 2025 | Six Months Ended May 31, 2024 | | :--- | :--- | :--- | | Cash flows used in operating activities | ($1,425) | ($1,069) | | Cash flows from financing activities | $202 | $— | | Cash flows from investing activities | $— | $12,500 | | **Change in cash** | **($1,223)** | **$11,431** | | **Cash – end of the period** | **$24,616** | **$14,022** | [Notes to the Condensed Interim Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Consolidated%20Financial%20Statements) Notes detail the company's 50/50 joint venture, share capital activities, a new Base Shelf Prospectus, and stock-based compensation - The company's primary business is mineral exploration through its **50% equity investment** in Ambler Metals LLC, which holds the UKMP in Alaska[15](index=15&type=chunk)[26](index=26&type=chunk) - The investment in Ambler Metals is accounted for using the equity method, with a carrying value of **$106.2 million** as of May 31, 2025[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The company established a Base Shelf Prospectus to issue up to **US$50 million** in securities and an At-The-Market (ATM) program to sell up to **US$25 million** of common shares[38](index=38&type=chunk)[39](index=39&type=chunk) Stock Option Activity (Six months ended May 31, 2025) | | Number of options | Weighted average exercise price (CDN$) | | :--- | :--- | :--- | | Balance – beginning of the year | 13,630,234 | $1.77 | | Granted | 2,125,000 | $1.52 | | Exercised | (350,000) | $0.82 | | Expired | (3,390,000) | $2.75 | | **Balance – end of the period** | **12,015,234** | **$1.48** | [Management's Discussion and Analysis (MD&A)](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses increased net losses due to financing-related costs, while maintaining a sufficient cash position for the next year [Corporate and Project Activities](index=20&type=section&id=Corporate%20and%20project%20activities) Key activities include filing a US$50 million Base Shelf Prospectus and announcing positive results from the Bornite PEA - A Base Shelf Prospectus was made effective on April 14, 2025, allowing for the issuance of up to **US$50 million** in securities[72](index=72&type=chunk) - An At-The-Market (ATM) equity program was established to sell up to **US$25 million** in common shares for UKMP development and corporate purposes[73](index=73&type=chunk)[74](index=74&type=chunk) - The Bornite PEA shows a 17-year mine life with an after-tax **NPV8% of $394.0 million** and an **IRR of 20.0%**[75](index=75&type=chunk)[79](index=79&type=chunk) - The Ambler Metals JV approved a **$5.8 million** budget for 2025 activities, plus a supplemental **$0.6 million** for the Ambler Access Project[77](index=77&type=chunk)[78](index=78&type=chunk) [Summary of Results](index=23&type=section&id=Summary%20of%20results) Net loss increased in Q2 and the first six months, primarily due to higher professional and regulatory fees for new financing programs Comparison of Selected Expenses (in thousands of US dollars) | | Three months ended May 31 | Six months ended May 31 | | :--- | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | Professional fees | $612 | $192 | $1,059 | $392 | | Share of loss on equity investment | $764 | $602 | $1,345 | $1,395 | | **Comprehensive loss** | **($2,177)** | **($1,759)** | **($5,800)** | **($5,360)** | - The increase in comprehensive loss was mainly driven by **higher regulatory and legal fees** for the Company's Base Shelf Prospectus and ATM Program[82](index=82&type=chunk)[83](index=83&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20capital%20resources) The company holds $24.6 million in cash, sufficient for the next 12 months, with access to further capital via established financing programs - The company has **$24.6 million in cash** and cash equivalents and working capital of **$23.8 million** as of May 31, 2025[85](index=85&type=chunk) - Management believes the current cash position is sufficient for the next 12 months, supported by the **US$50 million** Base Shelf Prospectus and **US$25 million** ATM Program[86](index=86&type=chunk)[87](index=87&type=chunk) - During the six-month period, the company used **$1.4 million** in operating activities, primarily for corporate salaries and professional fees[84](index=84&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable to the company for this reporting period - The company has stated that quantitative and qualitative disclosures about market risk are **not applicable**[97](index=97&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures were **effective** as of May 31, 2025[98](index=98&type=chunk) - **No material changes** in internal controls over financial reporting occurred during the quarter[100](index=100&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any material current, pending, or threatened litigation - The company reports that it is **not a party to any material litigation** and is not aware of any pending or threatened litigation[102](index=102&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.Risk%20Factors) A new risk factor concerning U.S. international trade policies has been added since the last annual report - A new risk factor has been added regarding potential changes in **U.S. laws and policies on international trade**, which could adversely impact the company[104](index=104&type=chunk)[105](index=105&type=chunk) [Other Information](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The report confirms no unregistered sales of equity securities or new director and officer trading arrangements - There were **no unregistered sales of equity securities** or use of proceeds during the period[106](index=106&type=chunk) - **No director or officer** adopted or terminated any Rule 10b5-1 trading arrangement during the quarter[108](index=108&type=chunk)

Core Viewpoint - Trilogy Metals Inc. reported its financial results for the second quarter ended May 31, 2025, highlighting a net loss and ongoing corporate activities, including the establishment of a Base Shelf Prospectus and an ATM Program for future capital raising [1][5][12]. Financial Results - For the three-month period ended May 31, 2025, the company reported a net loss of $2.2 million, an increase from a net loss of $1.8 million for the same period in 2024, primarily due to higher regulatory expenses and legal fees [8][9]. - For the six-month period ended May 31, 2025, the net loss was $5.8 million, compared to $5.4 million for the same period in 2024, driven by increased regulatory expenses and legal fees [9]. Corporate Activities - The Annual General Meeting (AGM) was held on May 13, 2025, where all nominated directors were elected with over 94% of votes in favor [2]. - The company established a Base Shelf Prospectus allowing for the future issuance of up to $50 million in securities and an ATM Program for selling up to $25 million in common shares [3][4]. Liquidity and Capital Resources - As of May 31, 2025, the company had cash on hand of $24.6 million and working capital of $23.8 million, sufficient to fund its approved fiscal 2025 cash budget of $3.1 million [11][12]. - The company utilized $1.4 million for operating activities during the six-month period, mainly for corporate salaries and professional fees [10]. Shareholder Engagement - The shareholders voted in favor of continuing the company's Restricted Share Unit Plan and Deferred Share Unit Plan during the AGM [2]. Exploration and Development - Trilogy Metals holds a 50% interest in Ambler Metals LLC, which has a 100% interest in the Upper Kobuk Mineral Projects in Alaska, focusing on copper-dominant mineral exploration [15][16].

Core Viewpoint - Trilogy Metals Inc. has initiated an at-the-market equity program allowing the distribution of up to US$25 million in common shares to fund the development of its Upper Kobuk Mineral Projects and for general corporate purposes [2][3]. Group 1: Equity Distribution Agreement - The company has entered into a distribution agreement with BMO Nesbitt Burns Inc. and Cantor Fitzgerald Canada Corporation for the ATM program [1]. - The Offered Shares will be sold at the prevailing market price at the time of sale, with no obligation for the company to sell any shares [2][3]. - The agreement will terminate either on May 14, 2027, or when the total gross sales reach US$25 million [3]. Group 2: Agents and Marketplaces - The U.S. Agents are restricted to selling shares only in the United States and cannot solicit offers in Canada, while Canadian Agents will operate solely in Canada [4]. - The ATM program is being conducted under a prospectus supplement filed with Canadian and U.S. securities commissions [5]. Group 3: Company Overview - Trilogy Metals holds a 50% interest in Ambler Metals LLC, which owns the Upper Kobuk Mineral Projects in Alaska, known for its rich copper-dominant deposits [8][9]. - The company aims to develop the Ambler Mining District into a leading North American copper producer while respecting local communities [9].