Trilogy Metals Inc.
Annual Report 2020

Plain-text annual report

Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K☒☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended November 30, 2020OR☐☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Transition Period from toCommission File Number: 1-35447TRILOGY METALS INC.(Exact Name of Registrant as Specified in Its Charter)British Columbia98-1006991(State or Other Jurisdiction of(I.R.S. EmployerIncorporation or Organization)Identification No.)Suite 1150, 609 Granville StreetVancouver, British ColumbiaCanadaV7Y 1G5(Address of Principal Executive Offices)(Zip Code)(604) 638-8088(Registrant’s Telephone Number, Including Area Code)Title of Each Class Trading Symbol Name of Each Exchange on Which RegisteredCommon Shares, no par valueTMQNYSE AMERICANSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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.Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer ☐Smaller reporting company ☒Emerging growth company ☐If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 13(a) of the Exchange Act. ☐Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒As at May 31, 2020, the aggregate market value of the registrant’s Common Shares held by non-affiliates was approximately $173 million. As of February 12, 2021, the registrant had 144,185,729 CommonShares, no par value, outstanding.DOCUMENTS INCORPORATED BY REFERENCECertain portions of the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than March 30, 2021, in connection withthe registrant’s 2021 annual meeting of shareholders, are incorporated herein by reference into Part III of this Annual Report on Form 10-K.Table of Contents2TRILOGY METALS INC.TABLE OF CONTENTSPageCURRENCY3 FORWARD-LOOKING STATEMENTS3 CAUTIONARY NOTE TO UNITED STATES INVESTORS6 GLOSSARY7PART I10 Item 1.BUSINESS10Item 1A.RISK FACTORS18Item 1B.UNRESOLVED STAFF COMMENTS31Item 2.PROPERTIES31Item 3.LEGAL PROCEEDINGS74Item 4.MINE SAFETY DISCLOSURES74 PART II75 Item 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES75Item 6.SELECTED FINANCIAL DATA85Item 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS86Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA100Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE125Item 9A.CONTROLS AND PROCEDURES125Item 9B.OTHER INFORMATION125 PART III126 Item 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE126Item 11.EXECUTIVE COMPENSATION126Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS126Item 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE126Item 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES127 PART IV127 Item 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES127Item 16.FORM 10-K SUMMARY129Table of Contents3Unless the context otherwise requires, the words “we,” “us,” “our,” the “Company” and “Trilogy” refer to Trilogy Metals Inc., formerly NovaCopper Inc.(“Trilogy”), a British Columbia corporation, either alone or together with its subsidiaries as the context requires, as of November 30, 2020.CURRENCYAll dollar amounts are in United States currency unless otherwise stated. References to C$ or CDN$ refer to Canadian currency, and $ or US$ to UnitedStates currency.FORWARD-LOOKING STATEMENTSThe information discussed in this Annual Report on Form 10-K includes “forward-looking information” and “forward-looking statements” within themeaning of Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), and applicable Canadian securities laws. These forward-lookingstatements 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 economicviability of a project, timelines, strategic plans, statements relating anticipated activity with respect to the Ambler Mining District Industrial AccessProject (“AMDIAP”), the Company’s plans and expectations relating to the Upper Kobuk Mineral Projects (as defined herein), completion oftransactions, market prices for precious and base metals, the results of the Arctic FS (as defined herein) or other statements that are not statements offact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yetdeterminable and assumptions of management.Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involveestimates of the mineralization that will be encountered if the property is developed. Any statements that express or involve discussions with respectto predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified bywords 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 ofhistorical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertaintiesand other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, withoutlimitation:●risks related to the COVID-19 pandemic;●risks related to inability to define proven and probable reserves;●risks related to our ability to finance the development of our mineral properties through external financing, strategic alliances, the sale ofproperty interests or otherwise;●uncertainty as to whether there will ever be production at the Company’s mineral exploration and development properties;●risks related to our ability to commence production and generate material revenues or obtain adequate financing for our planned explorationand development activities;●risks related to lack of infrastructure including but not limited to the risk whether or not the AMDIAP will receive the requisite permits and, ifit does, whether the Alaska Industrial Development and Export Authority (“AIDEA”) will build the AMDIAP;Table of Contents4●risks related to inclement weather which may delay or hinder exploration activities at our mineral properties;●risks related to our dependence on a third party for the development of our projects;●none of the Company’s mineral properties are in production or are under development;●commodity price fluctuations;●uncertainty related to title to our mineral properties;●our history of losses and expectation of future losses;●risks related to increases in demand for equipment, skilled labor and services needed forexploration and development of mineral propertiesand related cost increases;●uncertainties relating to the assumptions underlying our resource estimates, such as metal pricing, metallurgy, mineability, marketability andoperating and capital costs;●uncertainty related to inferred , indicated and measured mineral resources;●mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labor disputes or otherunanticipated difficulties with or interruptions in development, construction or production;●risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of our mineral deposits;●risks related to governmental regulation and permits, including environmental regulation, including the risk that more stringent requirementsor standards may be adopted or applied due to circumstances unrelated to the Company and outside of our control;●the risk that permits and governmental approvals necessary to develop and operate mines at our mineral properties will not be available on atimely basis or at all;●risks related to the need for reclamation activities on our properties and uncertainty of cost estimates related thereto;●risks related to the acquisition and integration of operations or projects;●our need to attract and retain qualified management and technical personnel;●risks related to conflicts of interests of some of our directors and officers;●risks related to potential future litigation;●risks related to market events and general economic conditions;●risks related to future sales or issuances of equity securities decreasing the value of existing Trilogy common shares (“Common Shares”),diluting voting power and reducing future earnings per share;●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;●uncertainty as to the volatility in the price of the Company’s Common Shares;Table of Contents5●the Company’s expectation of not paying cash dividends;●adverse federal income tax consequences for U.S. shareholders should the Company be a passive foreign investment company;●risks related to global climate change;●risks related to adverse publicity from non-governmental organizations;●uncertainty as to our ability to maintain the adequacy of internal control over financial reporting as per the requirements of Section 404 ofthe Sarbanes-Oxley Act (“SOX”); and●increased regulatory compliance costs, associated with rules and regulations promulgated by the United States Securities and ExchangeCommission (“SEC”), Canadian Securities Administrators, the NYSE American, the Toronto Stock Exchange (“TSX”), and the FinancialAccounting Standards Boards, and more specifically, our efforts to comply with the Dodd-Frank Wall Street Reform and Consumer ProtectionAct (“Dodd-Frank”).This list is not exhaustive of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about thefuture and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in theforward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this reportunder the heading “Risk Factors” and elsewhere.Our forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made. Inconnection with the forward-looking statements contained herein, we have made certain assumptions about our business, including about:●our ability to achieve production at our Arctic and Bornite Projects (as defined herein);●the accuracy of our mineral resource estimates;●the results, costs and timing of future exploration drilling and engineering;●timing and receipt of approvals, consents and permits under applicable legislation;●the adequacy of our financial resources;●the receipt of third party contractual, regulatory and governmental approvals for the exploration, development, construction and productionof our properties;●our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable;●continued good relationships with South32 (as defined below), local communities and other stakeholders;●there being no significant disruptions affecting operations, whether relating to labor, supply, power, damage to equipment or other matters;●expected trends and specific assumptions regarding metal prices and currency exchange rates; and●prices for and availability of fuel, electricity, parts and equipment and other key supplies remaining consistent with current levels.Table of Contents6We have also assumed that no significant events will occur outside of our normal course of business. Although we have attempted to identifyimportant factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there maybe other factors that cause actions, events or results not to be as anticipated, estimated or intended. We believe that the assumptions inherent in theforward-looking statements are reasonable as of the date hereof. 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 updateforward-looking statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by law. For thereasons set forth above, investors should not place undue reliance on forward-looking statements. All forward-looking statements contained hereinare qualified by these cautionary statements.CAUTIONARY NOTE TO UNITED STATES INVESTORSUnless otherwise indicated, all resource estimates, and any reserve estimates, included or incorporated by reference in this Annual Report on Form 10-K 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 DefinitionStandards”). NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuermakes of scientific and technical information concerning mineral projects. NI 43-101 permits the disclosure of an historical estimate made prior to theadoption 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 sourceand date of the historical estimate; (b) comments on the relevance and reliability of the historical estimate; (c) to the extent known, provides the keyassumptions, parameters and methods used to prepare the historical estimate; (d) states whether the historical estimate uses categories other thanthose 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 requirements of the SEC, and reserve and resource information contained orincorporated by reference into this Annual Report on Form 10-K may not be comparable to similar information disclosed by U.S. companies. Inparticular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserves”. Under SEC Industry Guide7, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically andlegally produced or extracted at the time the reserve determination is made. SEC Industry Guide 7 does not define and the SEC’s disclosure standardsnormally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineralresources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documentsfiled with the SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their economic andlegal feasibility. Under Canadian rules, subject to certain exceptions, estimated “inferred mineral resources” may not form the basis of feasibility orpre-feasibility studies. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legallymineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permitsissuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unitmeasures. 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 incompliance with NI 43-101 may not qualify as “reserves” under SEC standards. We have no known reserves as defined in SEC Industry Guide 7.Accordingly, information concerning mineral deposits set forth herein may not be comparable to similar information made public by United Statescompanies subject to reporting and disclosure requirements under United States federal securities laws and the rules and regulations thereunder.The SEC adopted new mining property disclosure rules ("SK 1300") that will replace SEC Industry Guide 7. SK 1300 will apply to companies beginningwith a company's first fiscal year beginning on or after January 1, 2021, which for us would be the fiscal year beginning December 1, 2021.Table of Contents7GLOSSARYWe estimate and report our resources and reserves according to the definitions set forth in NI 43-101. We will modify and reconcile the reserves asappropriate to conform to SEC Industry Guide 7 for reporting in the U.S. The definitions for each reporting standard are presented below withsupplementary explanation and descriptions of the parallels and differences.For a glossary of certain technical terms used throughout this Form 10-K, see Item 2 Properties, Glossary of Technical Terms.Table of Contents8CIM Definition Standards, adopted by CIM Council on May 10, 2014:“feasibility study” means a comprehensive technical and economic study of the selected development option for a mineral project that includesappropriately detailed assessments of applicable modifying factors together with any other relevant operational factors and detailed financialanalysis that are necessary to demonstrate, at the time of reporting, that the extraction is reasonably justified (economically mineable). Theresults of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance,the development of the project. The confidence level of the study will be higher than that of a pre-feasibility study.“indicated mineral resource” means that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristicsare estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning andevaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, samplingand testing and is sufficient to assume geological and grade or quality continuity between points of observation. An indicated mineralresource has a lower level of confidence than that applying to a measured mineral resource and may only be converted to a probable mineralreserve.“inferred mineral resource” means that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limitedgeological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. Aninferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource and must not be converted to amineral reserve. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resourceswith continued exploration.“measured mineral resource” means that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristicsare estimated with confidence sufficient to allow the application of modifying factors to support detailed mine planning and final evaluationof the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and issufficient to confirm geological and grade or quality continuity between points of observation. A measured mineral resource has a higher levelof confidence than that applying to either an indicated mineral resource or an inferred mineral resource. It may be converted to a provenmineral reserve or to a probable mineral reserve.“mineral reserve” means the economically mineable part of a measured and/or indicated mineral resource. It includes diluting materials andallowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility levelas appropriate that include application of modifying factors. Such studies demonstrate that, at the time of reporting, extraction couldreasonably be justified. The reference point at which mineral reserves are defined, usually the point where the ore is delivered to theprocessing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, aclarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a mineralreserve must be demonstrated by a pre-feasibility or feasibility study.“mineral resource” means a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or qualityand quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity andother geologic characteristics of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge,including sampling.“modifying factors” means the considerations used to convert mineral resources to mineral reserves. These include, but are not restricted to, mining,processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.Table of Contents9“pre-feasibility study (preliminary feasibility study)” means a comprehensive study or a range of options for the technical and economic viability of amineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, inthe case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based onreasonable assumptions on the modifying factors and the evaluation of any other relevant factors which are sufficient for a Qualified Person,acting reasonably, to determine if all or part of the mineral resource many be converted to a mineral reserve at the time of reporting. A pre-feasibility study is at a lower confidence level than a feasibility study.“probable mineral reserve” means the economically mineable part of an indicated, and in some circumstances, a measured mineral resource. Theconfidence in the modifying factors applying to a probable mineral reserve is lower than that applying to a proven mineral reserve.“proven mineral reserve” means the economically mineable part of a measured mineral resource. A proven mineral reserve implies a high degree ofconfidence in the modifying factors.SEC Industry Guide 7 Definitions:“exploration stage” deposit is one which is not in either the development or production stage.“development stage” project is one which is undergoing preparation of an established commercially mineable deposit for its extraction but which isnot yet in production. This stage occurs after completion of a feasibility study.“mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration foreconomic or legal extraction.“probable reserve” refers to reserves for which quantity and grade and/or quality are computed from information similar to that used for proven(measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. Thedegree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.“production stage” project is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal ormineral product.“proven reserve” refers to reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; gradeand/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced soclosely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.“reserve” refers to that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reservedetermination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction.(“Bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the projectto be eligible for external debt financing.) A reserve includes adjustments to the in-situ tonnes and grade to include diluting materials andallowances for losses that might occur when the material is mined.TECHNICAL INFORMATIONRichard Gosse, a Qualified Person under NI 43-101 and an employee and Vice President Exploration of the Company has reviewed and approved thescientific and technical information contained in this Annual Report on Form 10-K.Table of Contents10PART IItem 1. BUSINESSOur principal business is the exploration and development of the Upper Kobuk Mineral Projects (“Upper Kobuk Mineral Projects” or “UKMP Projects”)located in the Ambler mining district in Northwest Alaska, United States. The Upper Kobuk Mineral Projects are held by Ambler Metals LLC (“AmblerMetals”), a limited liability company owned equally by Trilogy and South32 Limited (“South32”) (as defined below), and is comprised of the (i) ArcticProject, which contains a high-grade polymetallic volcanogenic massive sulfide (“VMS”) deposit (“Arctic Project”); and (ii) Bornite Project, whichcontains a carbonate-hosted copper - cobalt deposit (“Bornite Project”). Our goals include expanding mineral resources and advancing the UKMPProjects through technical, engineering and feasibility studies so that production decisions can be made on those projects. Our interest in AmblerMetals is held by a wholly-owned subsidiary, NovaCopper US Inc. (dba Trilogy Metals US) (“Trilogy Metals US”), registered to do business in the State ofAlaska.Name, Address and IncorporationTrilogy Metals Inc. was incorporated on April 27, 2011 under the name NovaCopper Inc. pursuant to the terms of the Business Corporations Act (BritishColumbia). NovaCopper Inc. changed its name to Trilogy Metals Inc. on September 1, 2016 to better reflect its diversified metals resource base. Ourregistered office is located at Suite 2600, Three Bentall Centre, 595 Burrard Street, Vancouver, British Columbia, Canada, and our executive office islocated at Suite 1150, 609 Granville Street, Vancouver, British Columbia, Canada.Table of Contents11Corporate Organization ChartThe following chart depicts our corporate structure together with the jurisdiction of incorporation of our subsidiaries at November 30, 2020. Allownership is 100% unless otherwise stated.On February 11, 2020, the Company’s Upper Kobuk Mineral Projects were transferred to Ambler Metals, a newly incorporated limited liability companyincorporated under the laws of Delaware. Each of Trilogy and South32 hold a 50% interest in Ambler Metals. All mineral resources and mineral reserveestimates with respect to the Arctic Project and Bornite Project that are disclosed in this Annual Report on Form 10-K are reported on a 100% basis.See “Significant Developments in 2020”.Business CycleOur business, at its current exploration phase, is cyclical. Exploration activities are conducted primarily during snow-free months in Alaska. Theoptimum field season at the Upper Kobuk Mineral Projects is from late May to late September. The length of the snow-free season at the Upper KobukMineral Projects varies from about May through November at lower elevations and from July through September at higher elevations.Table of Contents12Trilogy’s StrategyOur business strategy is focused on creating value for stakeholders through our ownership and advancement of the Arctic Project and exploration andadvancement of the Bornite Project with our joint venture partner, South32, and through the pursuit of similarly attractive mining projects. We plan to:●advance the Arctic Project towards development with key activities including increased definition of the NI 43-101 mineral resources andreserves contained in the Arctic FS (as defined below), additional metallurgical and geotechnical studies and the advancement of baselineenvironmental studies;●advance exploration in the Ambler mining district and, in particular, at the Bornite Project, pursuant to the NANA Agreement (as moreparticularly described under “History of Trilogy – Agreement with NANA Regional Corporation”) through resource development and initialtechnical studies; and●pursue project level or corporate transactions that are value accretive.Significant Developments in 2020●On April 10, 2017, we entered into an option agreement, as amended (the “South32 Option Agreement”) with South32 Group Operations PtyLtd (“South32 Operations”), a wholly-owned subsidiary of South32 Limited, which agreement was later assigned by South32 Operations to itsaffiliate, South32 USA Exploration Inc. (together with South32 Operations, “South32”). The South32 Option Agreement granted to South32 athree-year option to form a 50/50 joint venture with respect to Trilogy’s Alaskan assets which includes the Upper Kobuk Mineral Projects.South32 was required to contribute a minimum of $10 million each year, for a maximum of three years, to keep the option in good standing(the “Initial Funding”). If South32 elected to exercise the option, the subscription price less certain deductions for Initial Funding was to bepaid in one tranche within 45 business days. Had South32 not made its annual minimum payment or elected to withdraw, the option wouldlapse and South32 would have no claim to ownership or to the funds it had already spent. In order to exercise its option to form the JointVenture, South32 was required to contribute a minimum of $150 million, plus (i) any amounts Trilogy spent on matched parallel funding to amaximum of $16 million over the three year period and (ii) $10 million, less the amount of the Initial Funding contributed by South32. OnDecember 19, 2019, we announced in a press release that South32 had exercised its option to acquire a 50% interest in a joint venturecompany to be named “Ambler Metals LLC” which now owns the UKMP Projects.●On February 11, 2020, we announced that the formation of Ambler Metals had completed, with the Company contributing its assetsassociated with the UKMP Projects, and South32 contributing a subscription price payment of US$145 million, to the joint venture.●In a press release dated February 26, 2020, the Company announced that Ambler Metals had approved a 2020 program budget of $22.8million for the advancement of the UKMP Projects. The budget was to be 100% funded by Ambler Metals. The 2020 program budget included10,000 meters of drilling at the Arctic Project, 2,500 meters of drilling within the Ambler VMS belt and geological mapping and geochemicalsoil sampling at the Bornite Project.●Subsequent to the approval of the 2020 program budget, the Company and its joint venture partner, South32, decided not to proceed withthe 2020 exploration program after assessing the coronavirus (COVID-19) environment. Ambler Metals gave due consideration to the meritsof carrying out an abridged work program at the UKMP Projects. However, given the continued uncertainty resulting from COVID-19, ongoingsafety concerns (despite added safety protocols including physical distancing, protective equipment and testing) and the fact that, due toCOVID-19, the planned field season had already been delayed to the point at which any field season would provide limited critical pathbenefits, the decision was made not to proceed with a 2020 field season.Table of Contents13●On April 20, 2020, we issued a press release announcing the appointment of Tony Giardini as President and Chief Executive Officer effectiveJune 1, 2020. Mr. Giardini has been a director of the Company since 2012 when the Company was formed and will continue to be an executivedirector. James (Jim) Gowans, the Interim President and Chief Executive Officer, remained in his role as a director of the Company.●In a press release dated July 23, 2020, the Company, along with our joint venture partner, South32, announced the signing of the Record ofDecision by the United States Bureau of Land Management (“BLM”) for the Ambler Mining District Industrial Access Project. The Record ofDecision approves the development of the northern route, which is to be a 211-mile private gravel access road in the southern Brooks Rangefoothills to provide industrial access to the Ambler Mining District.●In a press release dated August 20, 2020, the Company announced the positive results of its feasibility study for the Arctic Project (the “ArcticFS”). The Arctic FS was prepared on a 100% ownership basis, of which Trilogy’s share is 50%. The Arctic FS describes the technical andeconomic viability of establishing a conventional open-pit copper-zinc-lead-silver-gold mine and mill complex for a 10,000 tonne per dayoperation for a minimum 12-year mine life. See the 2020 Arctic Report (as defined below) and “Properties” for additional information.●On August 25, 2020, we issued a press release to announce that the board of Ambler Metals had appointed Ramzi Fawaz as President andChief Executive Officer of Ambler Metals effective as of September 1, 2020. Mr Fawaz joined Ambler Metals from Newmont Corporationwhere he was Senior Vice President Projects from February 2011 to October 2019, with responsibility for the development and execution ofNewmont’s major gold and copper projects globally.●On September 3, 2020, we issued a press release announcing that the Company had hired Richard Gosse as Vice President Exploration of theCompany with immediate effect.●On October 2, 2020, we filed the technical report for the Company’s Arctic Project entitled “Arctic Feasibility Study Alaska, USA NI 43-101Technical Report" with an effective date of August 20, 2020, prepared by Ausenco Engineering Canada Inc., Wood Canada Limited and SRKConsulting (Canada) Inc. (the “2020 Arctic Report”). The technical report describes the Arctic FS on the Arctic Project as discussed above. The2020 Arctic Report supersedes the Company’s 2018 Arctic Report (as defined below).●On November 19, 2020, we issued a press release announcing that Ambler Metals had approved the 2021 program and budget ofapproximately US$27 million for the advancement of the UKMP Projects. The budget will be 100% funded by Ambler Metals.Significant Developments in 2019●On March 5, 2019, we issued a press release to announce additional copper and cobalt metallurgical results for the Bornite Project. Ninemetallurgical composite samples were prepared from materials obtained from drilling at the Bornite Project during 2017 and 2018. Each ofthese test samples were approximately 60 to 120 kilograms in mass and represented approximately 30 to 100 meters of drill core.Mineralogical analysis of each of the nine composites was completed, indicating that a majority of the copper mineralization occurred aschalcopyrite, with minor amounts of bornite and variable pyrite levels within the test samples.●On June 28, 2019, we issued a press release to announce that all the Company’s outstanding warrants had been exercised in advance of theexpiry date. Three of the Company’s largest shareholders exercised 6,521,740 in outstanding warrants. As a result of this warrant exercise, weissued a total of 6,521,740 common shares of the Company and received cash proceeds of approximately $9.9 million.●On August 26, 2019, we issued a press release reporting the public release of the Draft Environmental Impact Statement (“EIS”) Statement bythe BLM for the AMDIAP and the Environmental and Economic Analysis by theTable of Contents14United States National Park Service (“NPS”) for that portion of AMDIAP that traverses the Gates of the Arctic National Park and Preserve. Thepublic comment period of 45 days had commenced with comments on the Draft EIS being accepted through October 15, 2019. On March 27,2020, we issued a press release announcing that the Final EIS had been publicly released.●On September 5, 2019, we issued a press release announcing the resignation of Rick Van Nieuwenhuyse as CEO, President and director ofTrilogy Metals. James Gowans was appointed CEO and President on an interim basis. Mr. Van Nieuwenhuyse remained a consultant to theCompany until February 29, 2020 to assist with transitional matters and with advancing our interests in Alaska.●On October 31, 2019, we filed a final short form base shelf prospectus with the securities commissions in each of the provinces of Canada,other than Québec, and a corresponding registration statement on Form S-3 with the SEC allowing for the future issuance, from time to time,of up to US$100,000,000 in common shares, warrants to purchase common shares, share purchase contracts of the Company, subscriptionreceipts, units or a combination of those securities. The intention of the base shelf prospectus and shelf registration statement is to allow theCompany to more quickly access capital when the capital is needed and as market opportunities permit.Significant Developments in 2018●On February 20, 2018, we issued a press release to announce Pre-Feasibility study (“PFS”) results and reserves for the Arctic Project. The PFSwas based on a conventional 10,000 tonnes per day truck and shovel, single open pit mine and mill design.●On April 6, 2018, we filed the corresponding 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, prepared by Ausenco Engineering CanadaInc. (the “2018 Arctic Report”). The technical report describes the PFS on the Arctic Project as discussed above. The 2018 Arctic Report issuperseded by the 2020 Arctic Report.●On April 20, 2018, we issued a press release to announce the closing of our bought deal financing. The funds raised consisted of 24,784,482Common Shares issued at $1.16 per share resulting in aggregate gross proceeds of approximately $28.7 million.●On June 5, 2018, we issued a press release to announce the release of a maiden inferred cobalt resource of 77 million pounds for the BorniteProject. At a base case of 0.50% copper cut-off grade, the Bornite Project is estimated to contain in-pit inferred resources of 124.6 milliontonnes grading at 0.017% Co, resulting in 45 million pounds of contained cobalt. Below the pit shell and at a base case copper cut-off grade of1.5%, the Bornite Project is estimated to contain an additional inferred resource of 57.8 million tonnes grading 0.025% Co, resulting in anadditional 32 million pounds of contained cobalt.●On July 20, 2018, we filed the corresponding technical report for the Company’s Bornite Project entitled “NI 43-101 Technical Report on theBornite Project, Northwest Alaska, USA” prepared by BD Resource Consulting, Inc., SIM Geological Inc., and International Metallurgical &Environmental Inc. (the “2018 Bornite Report”).●On December 14, 2017, we announced that South32 has committed to fund the $10 million for the 2018 program and budget for the BorniteProject. The funds, which represented the second tranche of $10 million, maintained the South32 Option Agreement in good standing, andwas fully received by Trilogy on January 24, 2018.Table of Contents15History of TrilogySpin-OutWe were formerly a wholly-owned subsidiary of NovaGold Resources Inc. (“NovaGold”). At a special meeting of securityholders of NovaGold held onMarch 28, 2012, the securityholders voted in favour of a special resolution approving the distribution of Common Shares of Trilogy to the shareholdersof NovaGold as a return of capital through a statutory Plan of Arrangement under the Companies Act (Nova Scotia).On April 30, 2012, all of the outstanding Trilogy Common Shares were distributed to shareholders of NovaGold such that each NovaGold shareholder ofrecord at the close of business on April 27, 2012 received one Trilogy Common Share for every six common shares in the capital of NovaGold held atthat time. The Trilogy Common Shares were listed and posted for trading on the TSX and on the NYSE American (formerly the NYSE MKT) under itsprevious symbol, NCQ, and former name, NovaCopper Inc., on April 25, 2012.Name ChangeWe changed our corporate name to Trilogy Metals Inc. from NovaCopper Inc. in 2016 to better reflect the diversity of minerals at our UKMP Projects.On September 8, 2016, upon the opening of the markets our shares began trading on the TSX and the NYSE American under the symbol “TMQ”.Agreement with NANA Regional CorporationOn October 19, 2011, NANA Regional Corporation, Inc. (“NANA”), an Alaska Native Corporation headquartered in Kotzebue, Alaska, and Trilogy MetalsUS entered an Exploration Agreement and Option Agreement (as amended, the “NANA Agreement”) for the cooperative development of NANA’srespective resource interests in the Ambler mining district of Northwest Alaska. Upon the formation of Ambler Metals, the Company assigned its rightsand obligations under the NANA Agreement to Ambler Metals. The NANA Agreement consolidates Ambler Metals’ and NANA’s land holdings into anapproximately 142,831-hectare land package and provides a framework for the exploration and any future development of this high-grade andprospective poly-metallic belt.The NANA Agreement grants Ambler Metals the nonexclusive right to enter on, and the exclusive right to explore, the Bornite lands and the AlaskaNative Claims Settlement Act (“ANCSA”) lands (each as defined in the NANA Agreement) and in connection therewith, to construct and utilizetemporary access roads, camps, airstrips and other incidental works. In consideration for this right, Trilogy Metals US previously paid to NANA $4million in cash. Ambler Metals is also required to make payments to NANA for scholarship purposes in accordance with the terms of the NANAAgreement. Ambler Metals has further agreed to use reasonable commercial efforts to train and employ NANA shareholders to perform work forAmbler Metals in connection with its operations on the Bornite lands, ANCSA lands and Ambler lands (as defined in the NANA Agreement) (collectively,the “Lands”). The NANA Agreement has a term of 20 years, with an option in favour of Ambler Metals to extend the term for an additional 10 years.The NANA Agreement may be terminated by mutual agreement of the parties or by NANA if Ambler Metals does not meet certain expenditurerequirements on the Bornite lands and ANCSA lands.If, following receipt of a feasibility study and the release for public comment of a related draft environmental impact statement, Ambler Metals decidesto proceed with construction of a mine on the Lands, Ambler Metals will notify NANA in writing and NANA will have 120 days to elect to either (a)exercise a non-transferrable back-in-right to acquire an undivided ownership interest between 16% and 25% (as specified by NANA) of that specificproject; or (b) not exercise its back-in-right, and instead receive a net proceeds royalty equal to 15% of the net proceeds realized by Ambler Metalsfrom such project (following the recoupment by Ambler Metals of all costs incurred, including operating, capital and carrying costs). The cost toexercise such back-in-right is equal to the percentage interest in the project multiplied by the difference between (i) all costs incurred by AmblerMetals or its affiliates on the project, including historical costs incurred prior to the date of the NANA Agreement together with interest on the costs;and (ii) $40 million (subject toTable of Contents16exceptions). This amount will be payable by NANA to Ambler Metals in cash at the time the parties enter into a joint venture agreement and in noevent will the amount be less than zero.In the event that NANA elects to exercise its back-in-right, the parties will as soon as reasonably practicable form a joint venture, with NANA’s interestbeing between 16% to 25% and Ambler Metals owning the balance of the interest in the joint venture. Upon formation of the joint venture, the jointventure will assume all of the obligations of Ambler Metals and be entitled to all the benefits of Ambler Metals under the NANA Agreement inconnection with the mine to be developed and the related Lands. A party’s failure to pay its proportionate share of costs in connection with the jointventure will result in dilution of its interest. Each party will have a right of first refusal over any proposed transfer of the other party’s interest in thejoint venture other than to an affiliate or for the purposes of granting security. A transfer by either party of any net proceeds royalty interest in aproject other than for financing purposes will also be subject to a first right of refusal. A transfer of NANA’s net smelter return on the Lands is subjectto a first right of refusal by Ambler Metals.In connection with possible development of a mine on the Bornite lands or ANCSA lands, Ambler Metals and NANA will execute a mining lease to allowAmbler Metals or the joint venture to construct and operate a mine on the Bornite lands or ANCSA lands. These leases will provide NANA a 2% netsmelter royalty as to production from the Bornite lands and a 2.5% net smelter royalty as to production from the ANCSA lands. If Ambler Metalsdecides to proceed with construction of a mine on the Ambler lands, NANA will enter into a surface use agreement with Ambler Metals which willafford Ambler Metals access to the Ambler lands along routes approved by NANA on the Bornite lands or ANCSA lands. In consideration for the grant ofsuch surface use rights, Ambler Metals will grant NANA a 1% net smelter royalty on production and an annual payment of $755 per acre (as adjustedfor inflation each year beginning with the second anniversary of the effective date of the NANA Agreement and for each of the first 400 acres (and$100 for each additional acre) of the lands owned by NANA and used for access which are disturbed and not reclaimed.Ambler Metals has formed an oversight committee with NANA, which consists of four representatives from each of Ambler Metals and NANA (the“Oversight Committee”). The Oversight Committee is responsible for certain planning and oversight matters carried out by us under the NANAAgreement. The planning and oversight matters that are the subject of the NANA Agreement will be determined by majority vote. The representativesof each of Ambler Metals and NANA attending a meeting will have one vote in the aggregate and in the event of a tie, the Ambler Metalsrepresentatives jointly shall have a deciding vote on all matters other than Subsistence Matters, as that term is defined in the NANA Agreement. Thereshall be no deciding vote on Subsistence Matters and Ambler Metals may not proceed with such matters unless approved by majority vote of theOversight Committee or with the consent of NANA, such consent not to be unreasonably withheld or delayed.Principal MarketsWe do not currently have a principal market. Our principal objective is to become a producer of copper.Specialized Skill and KnowledgeAll aspects of our business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, mining and accounting. See“Executive Officers of Trilogy” for details as to the specific skills and knowledge of our directors and management.Environmental ProtectionMining is an extractive industry that impacts the environment. Along with our joint venture partner, South32, our goal is to evaluate ways to minimizethat impact and to develop safe, responsible and profitable operations by developing natural resources for the benefit of our employees, shareholdersand communities and maintain high standards for environmental performance at the UKMP Projects. We strive to meet or exceed environmentalstandards at the UKMP Projects. One way Ambler Metals does this is through collaborations with local communities in Alaska, including Native Alaskangroups. Ambler Metals’ environmental performance will be overseen at the Ambler-board and Trilogy-boardTable of Contents17level and environmental performance is the responsibility of the project manager. All new activities and operations will be managed for compliancewith applicable laws and regulations. In the absence of regulation, best management practices will be applied to manage environmental risk.Furthermore, we will strive to limit releases to the air, land or water and appropriately treat and dispose of waste.For a more detailed discussion of the various government laws and regulations applicable to our operations and potential negative effects of theselaws and regulations, see Item 1A. Risk Factors, and Item 2 Properties, Environmental, Permitting, Social and Closure Considerations below.EmployeesAs of November 30, 2020, we had 8 full-time employees, all of whom were employed at our executive office in Vancouver, BC. We have entered intoexecutive employment agreements with the CEO and CFO (each as defined herein). In the past, the number of individuals we employed fluctuatedthroughout the year depending on the season; however, during 2020, we contributed the UKMP Projects to Ambler Metals and no longer directlyemploy any seasonal staff.Information About Our Executive OfficersAs of November 30, 2020, we had two executive officers, namely Tony Giardini and Elaine Sanders. The following information is presented as ofNovember 30, 2020.Name and Residence Age Held Office Since Business Experience During Past Five YearsTony GiardiniBritish Columbia, CanadaDirector, President and Chief Executive Officer61 June 1, 2020(1)Chief Executive Officer of Trilogy (2020 – present);President of Ivanhoe Mines Ltd. (May 2019 – March 2020);Chief Financial Officer of Kinross Gold Corporation(December 2012 - April 2019)Elaine SandersBritish Columbia, CanadaVP, Chief Financial Officer and Corporate Secretary51 January 30, 2012(2)Vice President and Chief Financial Officer of Trilogy(2012 – present); Corporate Secretary of Trilogy (2011– present)(1)Mr. Giardini was appointed President and Chief Executive Officer on June 1, 2020.(2)Ms. Sanders was appointed Chief Financial Officer on January 30, 2012. She became a full-time employee of the Company on November 13, 2012.Segment InformationThe Company’s reportable segments are based on geographic region for the Company’s operations. Segment information relating to our assets isprovided under the section heading “Item 8. Financial Statements and Supplementary Data” below.Competitive ConditionsThe mineral exploration and development industry is competitive in all phases of exploration, development and production. There is a high degree ofcompetition faced by us in Alaska and elsewhere for skilled management employees, suitable contractors for drilling operations, technical andengineering resources, and necessary exploration and mining equipment, and many of these competitor companies have greater financial resources,operational expertise, and/or more advanced properties than us. Additionally, our operations are in a remote location where skilled resources andsupport services are limited. We have in place experienced management personnel and continue to evaluate the required expertise and skills to carryout our operations. As a result of this competition, we may be unable to achieve our exploration and development in the future on terms we consideracceptable or at all. See “Item 1A. Risk Factors.”Table of Contents18Available InformationWe make available, free of charge, on or through our website, at www.trilogymetals.com our Annual Report on Form 10-K, which includes our auditedfinancial statements, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K and amendments to those reports filed or furnishedpursuant to Section 13(a) or 15(d) of the Exchange Act. The SEC maintains a website that contains reports, proxy and information statements, andother information at www.sec.gov. Our website and the information contained therein or connected thereto are not intended to be, and are notincorporated into this Annual Report on Form 10-K.Item 1A. RISK FACTORSInvesting in our securities is speculative and involves a high degree of risk due to the nature of our business and the present stage of exploration of ourmineral properties. The following risk factors, as well as risks currently unknown to us, could materially adversely affect our future business, operationsand financial condition and could cause them to differ materially from the estimates described in forward-looking information relating to Trilogy, or ourbusiness, property or financial results, each of which could cause purchasers of securities to lose all or part of their investments.Risks Related to the COVID PandemicThe outbreak of the coronavirus (COVID-19) may affect our operations.The Company faces risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt its operationsand may materially and adversely affect its business and financial conditions.The Company’s business could be adversely impacted by the effects of the coronavirus or other epidemics. In December 2019, a novel strain of thecoronavirus (COVID-19) emerged in China and the virus has now spread around the world, including Canada and the U.S. The extent to which COVID-19impacts the Company’s business, including exploration and development activities at Ambler Metals and the market for its securities, will depend onfuture developments, which are uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak and theactions taken to contain or treat the coronavirus outbreak. In particular, the continued spread of the coronavirus and travel and other restrictionsestablished to curb the spread of the COVID-19, has and could continue to materially and adversely impact the Company’s business including withoutlimitation, the planned exploration programs at Ambler Metals (see “Significant Developments in 2020” above), employee health, workforceproductivity, increased insurance premiums, limitations on travel, the availability of industry experts and personnel, the timing to process drill andother metallurgical testing, and other factors that will depend on future developments beyond the Company’s control, which may have a material andadverse effect on the its business, financial condition and results of operations.There can be no assurance that the Company's personnel will not be impacted by these pandemic diseases and ultimately see its workforceproductivity reduced or incur increased medical costs or insurance premiums as a result of these health risks.Risks Related to the Company’s Mineral PropertiesNone of our mineral properties are in production or under development.We have no history of commercially producing precious or base metals and all of our properties are in the exploration stage. There are no proven orprobable reserves on the Upper Kobuk Mineral Projects, as defined in SEC Industry Guide 7. Mineral exploration involves significant risk, since fewproperties that are explored contain bodies of ore that would be commercially economic to develop into producing mines. We cannot assure you thatwe will establish the presence of any measured resources or proven or probable reserves at the Upper Kobuk Mineral Projects, or any other of ourproperties. The failure to establish proven or probable reserves would severely restrict our ability to implement our strategies for long-term growth.See “Cautionary Note to United States Investors”.Table of Contents19We may not have sufficient funds to develop our mineral projects or to complete further exploration programs.We have limited financial resources. We currently generate no mining operating revenue and must primarily finance exploration activity and thedevelopment of mineral projects by other means. Although South32 funded Ambler Metals in the amount of US$145 million upon formation of thejoint venture as discussed above, in the future, once our share of such amount has been expended or we wish to acquire any other properties outsideof Ambler Metals, our ability to continue exploration, development and production activities, if any, will depend on our ability to obtain additionalexternal financing. Any unexpected costs, problems or delays could severely impact our ability to continue exploration and development activities. Thefailure to meet ongoing obligations on a timely basis could result in a loss or a substantial dilution of our interests in projects.The sources of external financing that we may use for these purposes include project or bank financing or public or private offerings of equity and debt.In addition, we may enter into one or more strategic alliances or joint ventures, in addition to our joint venture with South32, sell marketable securitiesheld by the Company, decide to sell certain property interests, or utilize one or a combination of all of these alternatives. The financing alternative wechoose may not be available on acceptable terms, or at all. If additional financing is not available, we may have to postpone further exploration ordevelopment of, or sell our interest in, one or more of our principal properties.Even if one of our mineral projects is determined to be economically viable to develop into a mine, such development may not be successful.If the development of one of our projects is found to be economically feasible and approved by our Board and in the case of the UKMP Projects, by ourjoint venture partner, South32, such development will require obtaining permits and financing, the construction and operation of mines, processingplants and related infrastructure, including road access. As a result, we are and will continue to be subject to all of the risks associated with establishingnew mining operations, including:●the timing and cost, which can be considerable, of the construction of mining and processing facilities and related infrastructure;●the availability and cost of skilled labor and mining equipment;●the availability and cost of appropriate smelting and refining arrangements;●the need to obtain necessary environmental and other governmental approvals and permits and the timing of the receipt of those approvalsand permits;●the availability of funds to finance construction and development activities;●potential opposition from non-governmental organizations, environmental groups or local groups which may delay or prevent developmentactivities; and●potential increases in construction and operating costs due to changes in the cost of fuel, power, materials and supplies.The costs, timing and complexities of developing our projects may be greater than anticipated because our property interests are not located indeveloped areas, and, as a result, our property interests are not currently served by appropriate road access, water and power supply and othersupport infrastructure. Cost estimates may increase significantly as more detailed engineering work is completed on a project. It is common in newmining operations to experience unexpected costs, problems and delays during construction, development and mine start-up. In addition, delays in theearly stages of mineral production often occur. Accordingly, we cannot provide assurance that we will ever achieve, or that our activities will result in,profitable mining operations at the UKMP Projects or any other property that we may acquire.Table of Contents20In addition, there can be no assurance that our mineral exploration activities will result in any discoveries of new mineralization. If furthermineralization is discovered there is also no assurance that the mineralization would be economical for commercial production. Discovery of mineraldeposits is dependent upon a number of factors and significantly influenced by the technical skill of the exploration personnel involved. Thecommercial viability of a mineral deposit is also dependent upon a number of factors which are beyond our control, including the attributes of thedeposit, commodity prices, government policies and regulation and environmental protection.The Upper Kobuk Mineral Projects are located in a remote area of Alaska, and access to them is limited. Exploration and any future development orproduction activities may be limited and delayed by infrastructure challenges, inclement weather and a shortened exploration season.We cannot provide assurances that the proposed AMDIAP that would provide access to the Ambler mining district will be built, that it will be built in atimely manner, that the cost of accessing the proposed road will be reasonable, that it will be built in the manner contemplated, or that it willsufficiently satisfy the requirements of the Upper Kobuk Mineral Projects. In addition, successful development of the Upper Kobuk Mineral Projects willrequire the development of the necessary infrastructure. If adequate infrastructure is not available in a timely manner, there can be no assurance that:●the development of the Upper Kobuk Mineral Projects will be commenced or completed on a timely basis, if at all;●the resulting operations will achieve the anticipated production volume; or●the construction costs and operating costs associated with the development of the Upper Kobuk Mineral Projects will not be higher thananticipated.As the Upper Kobuk Mineral Projects are located in a remote area, exploration, development and production activities may be limited and delayed byinclement weather and a shortened exploration season. The exploration of the UKMP Projects has also been impacted by COVID-19. See “Risks Relatedto COVID-19” above.We are dependent on a third party that participates in exploration and development of our Upper Kobuk Mineral Projects.In December 2019, South32 exercised its option to acquire a 50% interest in Ambler Metals. The formation of Ambler Metals was completed inFebruary 2020 and Ambler Metals now owns the Upper Kobuk Mineral Projects. Our success with respect to the Upper Kobuk Mineral Projectsdepends on the efforts and expertise of South32 with whom we have contracted; we hold a 50% interest and the remaining 50% interest is held bySouth32, who is not under our control or direction. We are dependent on them for the progress and development of the Upper Kobuk MineralProjects. South32 may also have different priorities which could impact the timing and cost of development of the Upper Kobuk Mineral Projects. Thethird party may also be in default of its agreement with us, without our knowledge, which may put the mineral property and related assets at risk. Theexistence or occurrence of one or more of the following circumstances and events could have a material adverse impact on our ability to achieve ourbusiness plan, profitability, or the viability of our interests held with the third party, which could have a material adverse impact on our business, futurecash flows, earnings, results of operations and financial condition: (i) disagreement with our business partner on how to develop and operate theUpper Kobuk Mineral Projects efficiently; (ii) inability to exert influence over certain strategic decisions made in respect of the jointly-held Upper KobukMineral Projects; (iii) inability of our business partner to meet its obligations to the joint business or third parties; and (iv) litigation with our businesspartner regarding joint business matters.We have no history of production and no revenue from mining operations.We have a very limited history of operations and to date have generated no revenue from mining operations. As such, we are subject to many riskscommon to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources andlack of significant revenues. There is no assurance that the UpperTable of Contents21Kobuk Mineral Projects, or any other future projects will be commercially mineable, and we may never generate revenues from our mining operations.Changes in the market price of copper, zinc and other metals, which in the past have fluctuated widely, will affect our ability to finance continuedexploration and development of our projects and affect our operations and financial condition.Our long-term viability will depend, in large part, on the market price of copper, zinc and other metals. The market prices for these metals are volatileand are affected by numerous factors beyond our control, including:●global or regional consumption patterns;●the supply of, and demand for, these metals;●speculative activities;●the availability and costs of metal substitutes;●expectations for inflation; and●political and economic conditions, including interest rates and currency values.We cannot predict the effect of these factors on metal prices. A decrease in the market price of copper, zinc and other metals could affect our ability toraise funds to finance the exploration and development of any of our mineral projects, which would have a material adverse effect on our financialcondition and results of operations. The market price of copper, zinc and other metals may not remain at current levels. In particular, an increase inworldwide supply, and consequent downward pressure on prices, may result over the longer term from increased copper production from minesdeveloped or expanded as a result of current metal price levels. There is no assurance that a profitable market may exist or continue to exist.Title and other rights to our properties may be subject to challenge.We cannot provide assurance that title to our properties will not be challenged. We (through our interest in Ambler Metals) indirectly own mineralclaims which constitute our property holdings. We may not have, or may not be able to obtain, all necessary surface rights to develop a property. Titleinsurance is generally not available for mineral properties and our ability to ensure that we have obtained a secure claim to individual miningproperties may be severely constrained. Our mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may beaffected by, among other things, undetected defects. We have not conducted surveys of all of the claims in which we hold direct or indirect interests. Asuccessful claim contesting our title to a property will cause us to lose our rights to explore and, if warranted, develop that property or undertake orcontinue production thereon. This could result in our not being compensated for our prior expenditures relating to the property. In addition, our abilityto continue to explore and develop the property may be subject to agreements with other third parties including agreements with native corporationsand first nations groups, for instance, the lands at the Upper Kobuk Mineral Projects are subject to the NANA Agreement (as more particularlydescribed under "History of Trilogy - Agreement with NANA Regional Corporation").We will incur losses for the foreseeable future.We expect to incur losses unless and until such time as our mineral projects generate sufficient revenues to fund continuing operations. Theexploration and development of our mineral properties will require the commitment of substantial financial resources that may not be available.Table of Contents22The amount and timing of expenditures will depend on a number of factors, including the progress of ongoing exploration and development, theresults of consultants’ analyses and recommendations, the rate at which operating losses are incurred, the execution of any joint venture agreementswith strategic partners and the acquisition of additional property interests, some of which are beyond our control. We cannot provide assurance thatwe will ever achieve profitability.High metal prices in past years have encouraged increased mining exploration, development and construction activity, which has increased demand for,and cost of, exploration, development and construction services and equipment.The relative strength of metal prices in past years has encouraged increases in mining exploration, development and construction activities around theworld, which has resulted in increased demand for, and cost of, exploration, development and construction services and equipment. Increased demandfor and cost of services and equipment could result in delays if services or equipment cannot be obtained in a timely manner due to inadequateavailability and may cause scheduling difficulties due to the need to coordinate the availability of services or equipment, any of which could materiallyincrease project exploration, development and/or construction costs.Risks Relating to the Mining Industry and Mineral ReservesMineral resource and reserve calculations are only estimates.Any figures presented for mineral resources or reserves in this Form 10-K and in our other filings with securities regulatory authorities and those whichmay be presented in the future are and will only be estimates. There is a degree of uncertainty attributable to the calculation of mineral reserves andmineral resources. Until mineral reserves or mineral resources are actually mined and processed, the quantity of metal and grades must be consideredas estimates only and no assurances can be given that the indicated levels of metals will be produced. In making determinations about whether toadvance any of our projects to development, we must rely upon estimated calculations as to the mineral resources or reserves and grades ofmineralization on our properties.The estimating of mineral reserves and mineral resources is a subjective process that relies on the judgment of the persons preparing the estimates.The process relies on the quantity and quality of available data and is based on knowledge, mining experience, analysis of drilling results and industrypractices. Valid estimates made at a given time may significantly change when new information becomes available. While we believe that the mineralresource estimates included in this Form 10-K for the Upper Kobuk Mineral Projects are well-established and reflect management’s best estimates, bytheir nature mineral resource estimates are imprecise and depend, to a certain extent, upon analysis of drilling results and statistical inferences thatmay ultimately prove to be inaccurate. There can be no assurances that actual results will meet the estimates contained in feasibility studies or pre-feasibility studies. As well, further studies are required.Estimated mineral reserves or mineral resources may have to be recalculated based on changes in metal prices, further exploration or developmentactivity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimatedrecovery rates or other important factors that influence mineral reserve or mineral resource estimates. The extent to which mineral resources mayultimately be reclassified as mineral reserves is dependent upon the demonstration of their profitable recovery. Any material changes in mineralresource estimates and grades of mineralization will affect the economic viability of placing a property into production and a property’s return oncapital. We cannot provide assurance that mineralization can be mined or processed profitably.Our mineral resource estimates have been determined and valued based on assumed future metal prices, cut-off grades and operating costs that mayprove to be inaccurate. Extended declines in market prices for copper, zinc, lead, gold and silver may render portions of our mineralization uneconomicand result in reduced reported mineral resources, which in turn could have a material adverse effect on our results of operations or financial condition.We cannot provide assurance that mineral recovery rates achieved in small scale tests will be duplicated in large scale tests under on-site conditions orin production scale.Table of Contents23A reduction in any mineral reserves that may be estimated by us could have an adverse impact on our future cash flows, earnings, results of operationsand financial condition. No assurances can be given that any mineral resource estimates for the Upper Kobuk Mineral Projects will ultimately bereclassified as mineral reserves. See “Cautionary Note to United States Investors.”Significant uncertainty exists related to inferred mineral resources.There is a risk that inferred mineral resources referred to in this Form 10-K cannot be converted into measured or indicated mineral resources as theremay be limited ability to assess geological continuity. It is reasonably expected that the majority of inferred mineral resources could be upgraded toindicated mineral resources with continued exploration. See “Cautionary Note to United States Investors.”Mining is inherently risky and subject to conditions or events beyond our control.The development and operation of a mine is inherently dangerous and involves many risks that even a combination of experience, knowledge andcareful evaluation may not be able to overcome, including:●unusual or unexpected geological formations;●metallurgical and other processing problems;●metal losses;●environmental hazards;●power outages;●labor disruptions;●industrial accidents;●periodic interruptions due to inclement or hazardous weather conditions;●flooding, explosions, fire, rockbursts, cave-ins and landslides;●mechanical equipment and facility performance problems; and●the availability of materials and equipment.These risks could result in damage to, or destruction of, mineral properties, production facilities or other properties, personal injury or death, includingto our employees, environmental damage, delays in mining, increased production costs, asset write downs, monetary losses and possible legal liability.We may not be able to obtain insurance to cover these risks at economically feasible premiums, or at all. The Company's insurance premiums haveincreased in recent years and in other circumstances the scope of insurance coverage has been reduced. The Company also expects insurancepremiums to increase due to the impacts of COVID-19. Insurance against certain environmental risks, including potential liability for pollution and otherhazards associated with mineral exploration and production, is not generally available to companies within the mining industry. We may suffer amaterial adverse effect on our business if we incur losses related to any significant events that are not covered by our insurance policies.We cannot provide assurance that we will successfully acquire commercially mineable mineral rights.Exploration for and development of copper properties involves significant financial risks which even a combination of careful evaluation, experienceand knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties which are explored areultimately developed into producing mines. Major expensesTable of Contents24may be required to establish reserves by drilling, constructing mining and processing facilities at a site, developing metallurgical processes andextracting metals from ore. We cannot ensure that our current exploration and development programs will result in profitable commercial miningoperations.The economic feasibility of development projects is based upon many factors, including the accuracy of mineral resource estimates; metallurgicalrecoveries; capital and operating costs; government regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting andenvironmental protection; and metal prices, which are highly volatile. Development projects are also subject to the successful completion of feasibilitystudies, issuance of necessary governmental permits and availability of adequate financing.Most exploration projects do not result in the discovery of commercially mineable ore deposits, and no assurance can be given that any anticipatedlevel of recovery of ore reserves, if any, will be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable)ore body which can be legally and economically exploited. Estimates of mineral reserves, mineral resources, mineral deposits and production costs canalso be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technicaldifficulties, the metallurgy of the mineralization forming the mineral deposit, unusual or unexpected geological formations and work interruptions. Ifcurrent exploration programs do not result in the discovery of commercial ore, we may need to write-off part or all of our investment in our existingexploration stage properties and may need to acquire additional properties.Material changes in mineral reserves, if any, grades, stripping ratios or recovery rates may affect the economic viability of any project. Our futuregrowth and productivity will depend, in part, on our ability to develop commercially mineable mineral rights at our existing properties or identify andacquire other commercially mineable mineral rights, and on the costs and results of continued exploration and potential development programs.Mineral exploration is highly speculative in nature and is frequently non-productive. Substantial expenditures are required to:●establish mineral resources and reserves through drilling and metallurgical and other testing techniques;●determine metal content and metallurgical recovery processes to extract metal from the ore; and●construct, renovate or expand mining and processing facilities.In addition, if we discover ore, it would take several years from the initial phases of exploration until production is possible. During this time, theeconomic feasibility of production may change. As a result of these uncertainties, there can be no assurance that we will successfully acquirecommercially mineable (or viable) mineral rights.Risks Relating to Government RegulationWe are subject to significant governmental regulations.Our exploration activities are subject to extensive federal, state, provincial and local laws and regulations governing various matters, including:●environmental protection;●the management and use of toxic substances and explosives;●the management of natural resources;●the exploration and development of mineral properties, including reclamation;●exports;Table of Contents25●price controls;●taxation and mining royalties;●management of tailing and other waste generated by operations;●labor standards and occupational health and safety, including mine safety;●historic and cultural preservation; and●transportation.Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties or enforcement actions, including orders issuedby regulatory or judicial authorities enjoining, curtailing or closing operations or requiring corrective measures, installation of additional equipment orremedial actions, any of which could result in significant expenditures. We may also be required to compensate private parties suffering loss or damageby reason of a breach of such laws, regulations or permitting requirements. It is also possible that future laws and regulations, or more stringentenforcement of current laws and regulations by governmental authorities, could cause us to incur additional expense or capital expenditurerestrictions, suspensions or closing of our activities and delays in the exploration and development of our properties.We require further permits in order to conduct current and anticipated future operations, and delays in obtaining or failure to obtain such permits, or afailure to comply with the terms of any such permits that we have obtained, would adversely affect our business.Our current and anticipated future operations, including further exploration, development and commencement of production on our mineralproperties, require permits from various governmental authorities. Obtaining or renewing governmental permits is a complex and time-consumingprocess. The duration and success of efforts to obtain and renew permits are contingent upon many variables not within our control. Due to thepreliminary stages of the Upper Kobuk Mineral Projects, it is difficult to assess what specific permitting requirements will ultimately apply.Shortage of qualified and experienced personnel in the U.S. federal and Alaskan State agencies to coordinate a federally led joint environmental impactstatement process could result in delays or inefficiencies. Backlog within the permitting agencies could affect the permitting timeline or potential of theUpper Kobuk Mineral Projects, as may negative public perception of mining projects in general due to circumstances unrelated to the Company andoutside of its control. Other factors that could affect the permitting timeline include (i) the number of other large-scale projects currently in a moreadvanced stage of development which could slow down the review process for the Upper Kobuk Mineral Projects and (ii) significant public responseregarding the Upper Kobuk Mineral Projects.We cannot provide assurance that all permits that we require for our operations, including any for construction of mining facilities or conduct ofmining, will be obtainable or renewable on reasonable terms, or at all. Delays or a failure to obtain such required permits, or the expiry, revocation orfailure to comply with the terms of any such permits that we have obtained, would adversely affect our business.Our activities are subject to environmental laws and regulations that may increase our costs and restrict our operations.All of our exploration, potential development and production activities are subject to regulation by governmental agencies under variousenvironmental laws. These laws address emissions into the air, discharges into water, management of waste, management of hazardous substances,protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Environmental legislationis evolving, and the general trend has been towards stricter standards and enforcement, increased fines and penalties for noncompliance, morestringent environmental assessments of proposed projects and increasing responsibility forTable of Contents26companies and their officers, directors and employees. Compliance with environmental laws and regulations may require significant capital outlays onour behalf and may cause material changes or delays in our intended activities.Several regulatory initiatives are currently ongoing within the State of Alaska that have the potential to influence the permitting process for the UpperKobuk Mineral Projects. These include revisions to Alaska's Water Quality Standards regarding mixing zones regulations, which are currently underEnvironmental Protection Agency review, and which revisions may be required in order to authorize a mixing zone for discharge in Subarctic Creek.Future changes in these laws or regulations could have a significant adverse impact on some portion of our business, requiring us to re-evaluate thoseactivities at that time.Environmental hazards may exist on our properties that are unknown to us at the present time and that have been caused by previous owners oroperators or that may have occurred naturally. We may be liable for remediating such damage.Failure to comply with applicable environmental laws, regulations and permitting requirements may result in enforcement actions thereunder,including orders issued by regulatory or judicial authorities, causing operations to cease or to be curtailed, and may include corrective measuresrequiring capital expenditures, installation of additional equipment or remedial actions.Land reclamation requirements for our exploration properties may be burdensome.Land reclamation requirements are generally imposed on mineral exploration companies (as well as companies with mining operations) in order tominimize long term effects of land disturbance. Reclamation may include requirements to:●treat ground and surface water to applicable water quality standards;●control dispersion of potentially deleterious effluents; and●reasonably re-establish pre-disturbance landforms and vegetation.In order to carry out reclamation obligations imposed on us in connection with exploration, potential development and production activities, we mustallocate financial resources that might otherwise be spent on further exploration and development programs. In addition, regulatory changes couldincrease our obligations to perform reclamation and mine closing activities. If we are required to carry out unanticipated reclamation work, ourfinancial position could be adversely affected.Risks Related to the Acquisition of New ProjectsRisks inherent in acquisitions of new properties.We may actively pursue the acquisition of exploration, development and production assets consistent with our acquisition and growth strategy. Fromtime to time, we may also acquire securities of or other interests in companies with respect to which we may enter into acquisitions or othertransactions. Acquisition transactions involve inherent risks, including but not limited to:●accurately assessing the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates;●ability to achieve identified and anticipated operating and financial synergies;●unanticipated costs;●diversion of management attention from existing business;Table of Contents27●potential loss of our key employees or key employees of any business acquired;●unanticipated changes in business, industry or general economic conditions that affect the assumptions underlying the acquisition;●decline in the value of acquired properties, companies or securities;●assimilating the operations of an acquired business or property in a timely and efficient manner;●maintaining our financial and strategic focus while integrating the acquired business or property;●implementing uniform standards, controls, procedures and policies at the acquired business, as appropriate; and●to the extent that we make an acquisition outside of markets in which it has previously operated, conducting and managing operations in anew operating environment.Acquiring additional businesses or properties could place increased pressure on our cash flow if such acquisitions involve a cash consideration. Theintegration of our existing operations with any acquired business will require significant expenditures of time, attention and funds. Achievement of thebenefits expected from consolidation would require us to incur significant costs in connection with, among other things, implementing financial andplanning systems. We may not be able to integrate the operations of a recently acquired business or restructure our previously existing businessoperations without encountering difficulties and delays. In addition, this integration may require significant attention from our management team,which may detract attention from our day-to-day operations. Over the short-term, difficulties associated with integration could have a materialadverse effect on our business, operating results, financial condition and the price of our Common Shares. In addition, the acquisition of mineralproperties may subject us to unforeseen liabilities, including environmental liabilities, which could have a material adverse effect on us. There can beno assurance that any future acquisitions will be successfully integrated into our existing operations.Any one or more of these factors or other risks could cause us not to realize the anticipated benefits of an acquisition of properties or companies andcould have a material adverse effect on our financial condition.We face industry competition in the acquisition of exploration properties and the recruitment and retention of qualified personnel.We compete with other exploration and producing companies, many of which are better capitalized, have greater financial resources, operationalexperience and technical capabilities or are further advanced in their development or are significantly larger and have access to greater mineralreserves, for the acquisition of mineral claims, leases and other mineral interests as well as for the recruitment and retention of qualified employeesand other personnel. If we require and are unsuccessful in acquiring additional mineral properties or in recruiting and retaining qualified personnel, wewill not be able to grow at the rate we desire, or at all.Risks Related to the Company’s Executive Officers and Board of DirectorsWe may experience difficulty attracting and retaining qualified management and technical personnel to grow our business.We are dependent on the services of key executives and other highly skilled and experienced personnel to advance our corporate objectives as well asthe identification of new opportunities for growth and funding. Mr. Giardini and Ms. Sanders are currently our only executive officers. It will benecessary for us to recruit additional skilled and experienced executives. Our inability to do so, or the loss of any of these persons or our inability toattract and retain suitable replacements for them, or additional highly skilled employees required for our activities, would have a material adverseeffect on our business and financial condition.Table of Contents28Some of our directors and officers have conflicts of interest as a result of their involvement with other natural resource companies.Certain of our directors and officers also serve as directors or officers, in other companies involved in natural resource exploration and development ormining-related activities, including, in particular, NovaGold. To the extent that such other companies may participate in ventures in which we mayparticipate in, or in ventures which we may seek to participate in, our directors and officers may have a conflict of interest in negotiating andconcluding terms respecting the extent of such participation. In all cases where our directors and officers have an interest in other companies, suchother companies may also compete with us for the acquisition of mineral property investments. Any decision made by any of these directors andofficers involving Trilogy will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests ofTrilogy and its shareholders. In addition, each of the directors is required to declare and refrain from voting on any matter in which these directors mayhave a conflict of interest in accordance with the procedures set forth in the Business Corporations Act (British Columbia) and other applicable laws. Inappropriate cases, the Company will establish a special committee of independent directors to review a matter in which several directors, ormanagement, may have a conflict. Nonetheless, as a result of these conflicts of interest, the Company may not have an opportunity to participate incertain transactions, which may have a material adverse effect on the Company’s business, financial condition, results of operation and prospects.In the future, we may be subject to legal proceedings.Due to the nature of our business, we may be subject to numerous regulatory investigations, claims, lawsuits and other proceedings in the ordinarycourse of our business. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in litigation, includingthe effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and thepossibility that decisions may be reversed on appeal. There can be no assurances that these matters will not have a material adverse effect on ourbusiness.General Risk FactorsGeneral economic conditions may adversely affect our growth, future profitability and ability to finance.The unprecedented events in global financial markets in the past several years and the current impact of COVID-19 have had a profound impact on theglobal economy. Many industries, including the copper mining industry, are impacted by these market conditions. Some of the key impacts of thecurrent financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations, high volatility in global equity,commodity, foreign exchange and precious metal markets and a lack of market liquidity. A worsening or slowdown in the financial markets or othereconomic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs,consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect our growth andability to finance. Specifically:●the volatility of copper, zinc, lead and other metal prices would impact our estimates of mineral resources, revenues, profits, losses and cashflow, and the feasibility of our projects;●negative economic pressures could adversely impact demand for our future production, if any;●construction related costs could increase and adversely affect the economics of any project;●volatile energy, commodity and consumables prices and currency exchange rates could impact our estimated production costs; and●the devaluation and volatility of global stock markets would impact the valuation of our equity and other securities.Table of Contents29Future sales or issuances of equity securities could decrease the value of any existing Common Shares, dilute investors’ voting power and reduceour earnings per share.We may sell additional equity securities (including through the sale of securities convertible into Common Shares) and may issue additional equitysecurities to finance our operations, exploration, development, acquisitions or other projects. We are authorized to issue an unlimited number ofCommon Shares. We cannot predict the size of future sales and issuances of equity securities or the effect, if any, that future sales and issuances ofequity securities will have on the market price of the Common Shares. Sales or issuances of a substantial number of equity securities, or the perceptionthat such sales could occur, may adversely affect prevailing market prices for the Common Shares. With any additional sale or issuance of equitysecurities, investors will suffer dilution of their voting power and may experience dilution in our earnings per share.Our largest shareholder has significant influence on us and may also affect the market price and liquidity of the securities.Electrum Strategic Opportunities Fund L.P. (“Electrum”) is our single largest shareholder, controlling approximately 20% of the outstanding votingsecurities. Accordingly, Electrum will have significant influence in determining the outcome of any corporate transaction or other matter submitted tothe shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets and other significant corporateactions. Unless significant participation of other shareholders takes place in such shareholder meetings, Electrum may be able to approve such mattersitself. The concentration of ownership of the shares by Electrum may: (i) delay or deter a change of control of the Company; (ii) deprive shareholders ofan opportunity to receive a premium for their shares as part of a sale of the Company; and (iii) affect the market price and liquidity of the shares.Without the consent of Electrum, we could be prevented from entering into transactions that are otherwise beneficial to us. The interests of Electrummay differ from or be adverse to the interests of our other shareholders. The effect of these rights and Electrum’s influence may impact the price thatinvestors are willing to pay for securities. If Electrum sells a substantial number of shares in the public market, the market price of the shares could fall.The perception among the public that these sales will occur could also contribute to a decline in the market price of the shares.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 CommonShares may increase or decrease in response to a number of events and factors, including: our operating performance and the performance ofcompetitors and other similar companies; volatility in metal prices; the arrival or departure of key personnel; the number of Common Shares to bepublicly traded after an offering; the public’s reaction to our press releases, material change reports, other public announcements and our filings withthe various securities regulatory authorities; changes in earnings estimates or recommendations by research analysts who track the Common Shares orthe shares of other companies in the resource sector; changes in general economic and/or political conditions; acquisitions, strategic alliances or jointventures involving us or our competitors; and the factors listed under the heading “Cautionary Statement Regarding Forward-Looking Information.”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, notwithin our control, including other developments that affect the market for all resource sector securities, the breadth of the public market for theCommon Shares and the attractiveness of alternative investments.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 futureearnings be reinvested to finance the growth and development of our business. We do not intend to pay cash dividends on the Common Shares in theforeseeable 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,Table of Contents30conditions then existing including earnings, financial condition, restrictions in financing arrangements, business opportunities and conditions and otherfactors, or our Board determines that our shareholders could make better use of the cash.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 the Company should be aware that we believe we were not a passive foreign investment company (“PFIC”) for the years endingNovember 30, 2015, 2016, 2017 and 2020 but we believe we were a PFIC for the years ending November 30, 2018 and 2019 and may be a PFIC infuture tax years. If we are a PFIC for any year during a U.S. Holder’s (as defined below under Certain U.S. Federal Income Tax Considerations – U.S.Holders”) holding period, then such U.S. 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” (each as defined below under “Certain U.S. FederalIncome Tax Considerations – Default PFIC Rules under Section 1291 of the Code”). A U.S. Holder who makes a QEF Election generally must report on acurrent 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 toour shareholders. A U.S. Holder who makes the Mark-to-Market Election generally must include as ordinary income each year the excess of the fairmarket value of the Common Shares over the U.S. Holder’s tax basis therein. This paragraph is qualified in its entirety by the discussion below theheading “Certain U.S. Federal Income Tax Considerations.” Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and theU.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.Global climate change is an international concern and could impact our ability to conduct future operations.Global climate change is an international issue and receives an enormous amount of publicity. We would expect that the imposition of internationaltreaties or U.S. or Canadian federal, state, provincial or local laws or regulations pertaining to mandatory reductions in energy consumption oremissions of greenhouse gasses could affect the feasibility of our mining projects and increase our operating costs.Adverse publicity from non-governmental organizations could have a material adverse effect on us.There is an increasing level of public concern relating to the effect of mining production on our surroundings, communities and environment. Non-governmental organizations (“NGOs”), some of which oppose resource development, are often vocal critics of the mining industry. While we seek tooperate in a socially responsible manner, adverse publicity generated by such NGOs related to extractive industries, or our operations specifically,could have an adverse effect on our reputation and financial condition or our relationship with the communities in which we operate.We may fail to achieve and maintain the adequacy of our internal control over financial reporting as per the requirements of the Sarbanes-OxleyAct.We are required to document and test our internal control procedures in order to satisfy the requirements of Section 404 of SOX. It requires an annualassessment by management of the effectiveness of our internal control over financial reporting. We may in the future fail to achieve and maintain theadequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, and we maynot be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance withSection 404 of SOX. Our failure to satisfy the requirements of Section 404 of SOX on an ongoing, timely basis could result in the loss of investorconfidence in the reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our CommonShares. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm ouroperating results or cause us to fail to meet our reporting obligations. Future acquisitions of companies may provide us with challenges inimplementing the required processes, procedures and controls in our acquired operations. Acquired companies may not haveTable of Contents31disclosure control and procedures or internal control over financial reporting that are as thorough or effective as those required by securities lawscurrently applicable to us.Our business is subject to evolving corporate governance and public disclosure regulations that have increased both our compliance costs and therisk of noncompliance, which could have an adverse effect on our stock price.We are subject to changing rules and regulations promulgated by a number of United States and Canadian governmental and self-regulatedorganizations, including the SEC, the Canadian Securities Administrators, the NYSE American, the TSX, and the Financial Accounting Standards Board.These rules and regulations continue to evolve in scope and complexity and many new requirements have been created in response to laws enacted bythe United States Congress, making compliance more difficult and uncertain. Our efforts to comply with new rules and regulations, including thosepromulgated under Dodd-Frank, have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversionof management time and attention from revenue-generating activities to compliance activities.Item 1B. UNRESOLVED STAFF COMMENTSNone.Item 2. PROPERTIESThe following descriptions summarize selected information about the Upper Kobuk Mineral Projects, which are located in the Ambler mining district ofAlaska and include the Arctic Project and the Bornite Project. The Arctic Project and the Bornite Project are held by Ambler Metals, of which Trilogyholds a 50% interest. All mineral resources and mineral reserve estimates with respect to the Arctic Project and Bornite Project that are disclosed inthis Annual Report on Form 10-K are reported on a 100% basis. All of the UKMP Projects are without known reserves, as defined under SEC IndustryGuide 7, and all proposed programs for the properties are exploratory in nature. Please also see “Management’s Discussion and Analysis—ProjectActivities” for more information on the development and nature of our interest in the Upper Kobuk Mineral Projects.Arctic ProjectExcept as otherwise stated, the scientific and technical information relating to the Arctic Project contained in this Form 10-K is derived from the 2020Arctic Report titled “Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report” with an effective date of August 20, 2020, prepared for Trilogy byAusenco Engineering Canada Inc., Wood Canada Limited and SRK Consulting (Canada) Inc. The information regarding the Arctic Project is based onassumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the 2020 Arctic Reportwhich has been filed with certain Canadian securities regulatory authorities pursuant to NI 43-101 and is available for review on SEDAR atwww.sedar.com and on EDGAR at www.sec.gov.Arctic Project Description, Location and AccessProject DescriptionNovaGold acquired the Arctic Project from Kennecott Exploration Company and Kennecott Arctic Company (collectively, “Kennecott”) in 2004. In 2011,NovaGold transferred all copper projects to NovaCopper Inc. and spun-out NovaCopper to its then existing shareholders in 2012. NovaCopper Inc.subsequently underwent a name change to Trilogy Metals Inc. in 2016. Under the Kennecott Purchase and Termination Agreement, Kennecott retaineda 1% net smelter return (NSR) royalty that has been subsequently sold by Kennecott. The 1% NSR runs with the lands and is purchasable at any timefrom the royalty holder for a one-time payment of $10 million.Table of Contents32The Arctic Project is directly held by Ambler Metals, a 50/50 joint venture formed between South32 and Trilogy in February 2020. Upon the formationof the joint venture, Trilogy contributed all of its Alaskan assets, including the Arctic Project and the NANA Agreement, to Ambler Metals in exchangefor a 50% membership interest and at the same time, South32 contributed $145 million in cash for a 50% membership interest.Ambler Metals holds approximately 185,805 acres (75,192 ha) of State of Alaska mining claims and US Federal patented mining claims in the KotzebueRecording District. The Arctic Project land tenure consists of 1,851 contiguous State mining claims, including 905 40-acre claims, 946 160-acre claims,and 18 Federal patented claims comprising 271.9 acres (110 ha) held in the name of Ambler Metals.Surface use of the private land held as Federal patented claims is limited only by reservations in the patents and by generally-applicable environmentallaws. Surface use of State claims allows the owner of the mining claim to make such use of the surface as is “necessary for prospecting for, extractionof, or basic processing of minerals.”NANA controls lands granted under the Alaska Native Claims Settlement Act to the south of the Arctic Project boundary. Ambler Metals and NANA areparties to the NANA Agreement that consolidates the parties’ land holdings into an approximately 172,675 ha land package and provides a frameworkfor the exploration and development of the area. The NANA Agreement has a term of 20 years, with an option in favour of Ambler Metals to extendthe term for an additional 10 years. If, following receipt of a feasibility study and the release for public comment of a related draft environmentalimpact statement, a decision is made to proceed with construction of a mine on the lands subject to the NANA Agreement, NANA will have 120 days toelect to either (a) exercise a non-transferrable back-in-right to acquire between 16% and 25% (as specified by NANA) of that specific project; or (b) notexercise its back-in-right, and instead receive a net proceeds royalty equal to 15% of the net proceeds realized from such project. In the event thatNANA elects to exercise its back-in-right, the parties will, as soon as reasonably practicable, form a joint venture with NANA electing to participatebetween 16% to 25%, and Ambler Metals owning the balance of the interest in the joint venture. If Ambler Metals decides to proceed withconstruction of a mine on its own lands subject to the NANA Agreement, NANA will enter into a surface use agreement which will afford Ambler Metalsaccess to the Arctic Project along routes approved by NANA. In consideration for the grant of such surface use rights, NANA will receive a 1% netsmelter royalty on production and provide an annual payment on a per acre basis.Location and AccessThe Arctic Project is located in the Ambler mining district of the southern Brooks Range, in the Northwest Arctic Borough (NWAB) of Alaska. TheProperty is geographically isolated with no current road access or nearby power infrastructure. The Arctic Project is located 270 km east of the town ofKotzebue, 37 km north of the village of Kobuk, and 260 km west of the Dalton Highway, an all-weather state-maintained highway.Primary access to the Arctic Project is by air, using both fixed wing aircraft and helicopters. There are four well-maintained, approximately 1,500 m-longgravel airstrips located near the Arctic Project, capable of accommodating charter fixed wing aircraft. These airstrips are located 64 km west at Ambler,46 km southwest at Shungnak, 37 km southwest at Kobuk, and 34 km southwest at Dahl Creek. There is daily commercial air service from Kotzebue tothe village of Kobuk, the closest community to the Arctic Project. During the summer months, the Dahl Creek Camp airstrip is suitable for largeraircraft, such as a C-130 and DC-6.In addition to the four 1,500 m airstrips, there is a 700 m airstrip located at the Bornite Camp. The airstrip at Bornite is suited to smaller aircraft, whichsupport the Bornite Camp with personnel and supplies. There is also a 450 m airstrip (Arctic airstrip) located at the base of Arctic Ridge that cansupport smaller aircraft.A winter trail and a one-lane dirt track suitable for high-clearance vehicles or construction equipment links the Arctic Project’s main camp located atBornite to the Dahl Creek airstrip southwest of the Arctic deposit. An unimproved gravel track connects the Arctic airstrip with the Arctic deposit.Table of Contents33HistoryProspectors first arrived in the Ambler Mining District around 1900, shortly after the discovery of the Nome and Fairbanks gold districts. Several yearslater, small gold placer deposits were located in the southern Cosmos Hills south of the Arctic deposit and worked intermittently over ensuing decadesfor gold and nephrite. During this time copper mineralization was observed at Ruby Creek in the northern Cosmos Hills; however, no exploration wasundertaken until 1947 when local prospector Rhinehart “Rhiny” Berg located outcropping copper mineralization along Ruby Creek. Berg subsequentlystaked claims over the Ruby Creek showings and constructed an airstrip for access (alaskamininghalloffame.org 2012).Bear Creek Mining Company (“BCMC”), an exploration subsidiary of Kennecott, optioned the property from Berg in 1957. The prospect became knownas Bornite and Kennecott conducted extensive exploration over the next decade, culminating in the discovery of the high-grade No. 1 zone and thesinking of an exploration shaft to conduct underground drilling.In conjunction with the discovery of the Bornite deposit, BCMC greatly expanded their regional reconnaissance exploration in the Cosmos Hills and thesouthern Brooks Range. Stream silt sampling in 1965 revealed a significant copper anomaly in Subarctic Creek roughly 27 km northeast of Bornite. Thearea was subsequently staked and, in 1967, eight core holes were drilled at the Arctic deposit yielding massive sulphide intercepts over an almost 500-m strike length.BCMC conducted intensive exploration on the property until 1977 and then intermittently through 1998. No drilling or additional exploration wasconducted on the Arctic Project between 1999 and 2003.In addition to drilling and exploration at the Arctic deposit, BCMC also conducted exploration at numerous other prospects in the Ambler MiningDistrict (most notably Dead Creek, Sunshine, Cliff, and Horse). The abundance of VMS prospects in the district resulted in a series of competingcompanies in the area, including Sunshine Mining Company, Anaconda Company, Noranda Exploration Company, GCO Minerals Company, ComincoAmerican Resource Inc. (Cominco), Teck Cominco, Resource Associates of Alaska, Watts, Griffis and McOuat Ltd., and Houston Oil and MineralsCompany, culminating into a claim staking war in the district in 1973. Falconbridge and Union Carbide also conducted work later in the district.District exploration by Sunshine Mining Company and Anaconda resulted in two additional significant discoveries in the district; the Sun deposit located60 km east of the Arctic deposit, and the Smucker deposit located 36 km west of the Arctic deposit. These two deposits are outside the current ArcticProject area.District exploration continued until the early 1980s on the four larger deposits in the district (Arctic, Bornite, Smucker and Sun) when the district fellinto a hiatus due to depressed metal prices.In 1987, Cominco acquired the claims covering the Sun and Smucker deposits from Anaconda. Teck Resources Limited, as Cominco’s successorcompany, continues to hold the Smucker deposit. In 2007, Andover Mining Corporation purchased a 100% interest in the Sun deposit for US$13 millionand explored the property through 2013. The Sun deposit and adjacent lands were acquired by Valhalla Metals Inc., a private company, which stakedover the Sun deposit in 2017 after the creditors for the bankrupt Andover Mining Corporation failed to pay the annual rent of the state claims andsubmit the Annual Labour Statement.In 1981 and 1983, Kennecott received three US Mineral Survey patents (MS2245 totaling 240 acres over the Arctic deposit – later amended to includeanother 32 acres; and MS2233 and MS2234 for 25 claims totaling 516.5 acres at Bornite). The Bornite patented claims and surface development weresubsequently sold to NANA Regional Corporation, Inc. in 1986.No production has occurred at the Arctic deposit or at any of the other deposits within the Ambler Mining District.Table of Contents34Prior Ownership and Ownership Changes – Arctic Deposit and the Ambler LandsBCMC initially staked federal mining claims covering the Arctic deposit area beginning in 1966. The success of the 1960’s drill programs defined asignificant high-grade polymetallic resource at the Arctic deposit and, in the early 1970s, Kennecott began the patent process to obtain complete legaltitle to the Arctic deposit. In 1981, Kennecott received US Mineral Survey patent M2245 covering 16 mining claims totaling 240.018 acres. In 1983, USMineral Survey patent M2245 was amended to include two additional claims totaling 31.91 acres.With the passage of the Alaska National Interest Lands Conservation Act in 1980, which expedited native land claims outlined in the ANSCA and Statelands claims under the Alaska Statehood Act, both the State of Alaska and NANA selected significant areas of land within the Ambler Mining District.State selections covered much of the Ambler schist belt, host to the volcanogenic massive sulphide deposits including the Arctic deposit, while NANAselected significant portions of the Ambler Lowlands to the immediate south of the Arctic deposit as well as much of the Cosmos Hills including thearea immediately around Bornite.In 1995, Kennecott renewed exploration in the Ambler schist belt containing the Arctic deposit patented claims by staking an additional 48 state claimsat Nora and 15 state claims at Sunshine Creek. In the fall of 1997, Kennecott staked 2,035 state claims in the belt consolidating their entire landposition and acquiring the majority of the remaining prospective terrain in the VMS belt. Five more claims were subsequently added in 1998. After ashort period of exploration which focused on geophysics and geochemistry combined with limited drilling, exploration work on the Arctic Project againentered a hiatus.On March 22, 2004, Alaska Gold Company, a wholly-owned subsidiary of NovaGold completed an Exploration and Option Agreement with Kennecott toearn an interest in the Ambler land holdings.Previous Exploration and Development Results – Arctic DepositKennecott’s ownership of the Arctic Project saw two periods of intensive work from 1965 to 1985 and from 1993 to 1998, before optioning theproperty to NovaGold in 2004.Though reports, memos, and files exist in Kennecott’s Salt Lake City office, only limited digital compilation of the data exists for the earliest generationof exploration at the Arctic deposit and within the VMS belt. Beginning in 1993, Kennecott initiated a re-evaluation of the Arctic deposit and assembleda computer database of previous work at the Arctic deposit and in the district. A computer-generated block model was constructed in 1995 and anupdated resource estimate was performed using the block model. Subsequently, Kennecott staked a total of 2,035 State of Alaska claims in 1997 and,in 1998 undertook the first field program since 1985.Due to the number of companies and the patchwork exploration that occurred as a result of the 1973 staking war, much of the earliest explorationwork on what now constitutes the Ambler Schist belt was lost during the post-1980 hiatus in district exploration. The following subsections outline thebest documented data at the Arctic deposit as summarized in the 1998 Kennecott exploration report, including the assembled computer database;however, this outline is not considered to be either exhaustive or in-depth.In 1982, geologists with Kennecott, Anaconda and the State of Alaska published the definitive geologic map of the Ambler schist belt (Hitzman et al.1982).Table 6-1 of the 2020 Arctic Report lists known exploration mapping, geochemical, and geophysical programs conducted for VMS targets in the AmblerMining District.Table of Contents35Geological Setting, Mineralization and Deposit TypesRegional Geology – Southern Brooks RangeThe Ambler Mining District occurs along the southern margin of the Brooks Range within an east-west trending zone of Devonian to Jurassic agesubmarine volcanic and sedimentary rocks (Hitzman et al., 1986). The district covers both: 1) VMS-like deposits and prospects hosted in the Devonianage Ambler Sequence (or Ambler Schist belt), a group of metamorphosed bimodal volcanic rocks with interbedded tuffaceous, graphitic and calcareousvolcaniclastic metasediments; and 2) epigenetic carbonate-hosted copper deposits occurring in Silurian to Devonian age carbonate and phyllitic rocksof the Bornite Carbonate Sequence. The Ambler Sequence occurs in the upper part of the Anirak Schist, the thickest member of the Schist belt orColdfoot subterrane (Moore et al., 1994). VMS-like stratabound mineralization can be found along the entire 110 km strike length of the district.Immediately south of the Schist belt, in the Cosmos Hills, a time equivalent section of the Anirak Schist that includes the approximately 1 km thickBornite Carbonate Sequence. Mineralization of both the VMS-like deposits of the Schist belt and the carbonate-hosted deposits of the Cosmos Hills hasbeen dated at 375 to 387 Ma (Selby et al., 2009; McClelland et al., 2006).In addition, the Ambler Mining District is characterized by increasing metamorphic grade north perpendicular to the strike of the east-west trendingunits. The district shows isoclinal folding in the northern portion and thrust faulting to south (Schmidt, 1983). The Devonian to Late Jurassic ageAngayucham basalt and the Triassic to Jurassic age mafic volcanic rocks are in low-angle over thrust contact with various units of the Ambler Schist beltand Bornite Carbonate Sequence along the northern edge of the Ambler Lowlands.Ambler Sequence GeologyRocks that form the Ambler Sequence consist of a lithologically diverse sequence of lower Devonian age carbonate and siliciclastic strata withinterlayered mafic lava flows and sills. The clastic strata, derived from terrigenous continental and volcanic sources, were deposited primarily by mass-gravity flow into the sub-wavebase environment of an extending marginal basin.The Ambler Sequence underwent two periods of intense, penetrative deformation. Sustained upper greenschist-facies metamorphism with coincidentformation of a penetrative schistosity and isoclinal transposition of bedding marks the first deformation period. Pervasive similar-style folds on allscales deform the transposed bedding and schistosity, defining the subsequent event. At least two later non-penetrative compressional events deformthese earlier fabrics. Observations of the structural and metamorphic history of the Ambler Mining District are consistent with current tectonicevolution models for the Schist belt, based on the work of others elsewhere in the southern Brooks Range (Gottschalk and Oldow, 1988; Till et al.,1988; Vogl et al., 2002).Arctic Deposit GeologyPrevious workers at the Arctic deposit (Russell 1995 and Schmidt 1983) describe three mineralized horizons: the Main Sulphide Horizon, the UpperSouth Horizon and the Warm Springs Horizon. The Main Sulphide Horizon was further subdivided into three zones: the southeast zone, the centralzone and the northwest zone. Previous deposit modelling was grade-based resulting in numerous individual mineralized zones representing relativelythin sulphide horizons.Recent work by Trilogy defines the Arctic deposit as two or more discrete horizons of sulphide mineralization contained in a complexly deformedisoclinal fold with an upright upper limb and an overturned lower limb hosting the main mineralization. Nearby drilling suggests that a third uprightlower limb, likely occurs beneath the currently explored stratigraphy.MineralizationMineralization occurs as stratiform semi-massive sulphide (“SMS”) to massive sulphide (“MS”) beds within primarily graphitic schists and fine-grainedquartz mica schists. The sulphide beds average 4 m in thickness but vary from less thanTable of Contents361 m up to as much as 18 m in thickness. The sulphide mineralization occurs within eight modelled zones lying along the upper and lower limbs of theArctic isoclinal anticline. The zones are all within an area of roughly 1 km2 with mineralization extending to a depth of approximately 250 m below thesurface. There are five zones of MS and SMS that occur at specific pseudo-stratigraphic levels which make up the bulk of the Mineral Resourceestimate. The other three zones also occur at specific pseudo-stratigraphic levels, but are too discontinuous.Unlike more typical VMS deposits, mineralization is not characterized by steep metal zonation or massive pyritic zones. Mineralization dominantlyconsists of sheet-like zones of base metal sulphides with variable pyrite and only minor zonation, usually on a small scale.Mineralization is predominately coarse-grained sulphides comprising chalcopyrite, sphalerite, galena, tetrahedrite-tennantite, pyrite, arsenopyrite, andpyrrhotite. Sulphides occur as disseminated (<30%), semi-massive (30 to 50% sulphide) to massive (greater than 50% sulphide) layers. Trace amountsof electrum are also present. Gangue minerals associated with the mineralized horizons include quartz, barite, white mica, chlorite, stilpnomelane, talc,calcite, dolomite and cymrite.Deposit TypesThe mineralization at the Arctic deposit and at several other known occurrences within the Ambler Sequence stratigraphy of the Ambler Mining Districtconsists of Devonian age, polymetallic (zinc-copper-lead-silver-gold) VMS-like occurrences.VMS deposits are formed by and associated with sub-marine volcanic-related hydrothermal events. These events are related to spreading centres suchas fore arc, back arc or mid-ocean ridges. VMS deposits are often stratiform accumulations of sulphide minerals that precipitate from hydrothermalfluids on or below the seafloor. These deposits are found in association with volcanic, volcaniclastic and/or siliciclastic rocks. They are classified by theirdepositional environment and associated proportions of mafic and/or felsic igneous rocks to sedimentary rocks. There are five general classifications(Franklin et al., 2005) based on rock type and depositional environment:●Mafic rock dominated often with ophiolite sequences, often called Cyprus type.●Bimodal-mafic type with up to 25% felsic volcanic rocks.●Mafic-siliciclastic type with approximately equal parts mafic and siliciclastic rocks, which can have minor felsic rocks and are often calledBesshi type.●Felsic-siliciclastic type with abundant felsic rocks, less than 10% mafic rocks and shale rich.●Bimodal-felsic type where felsic rocks are more abundant than mafic rocks with minor sedimentary rocks also referred to as Kuroko type.Prior to any subsequent deformation and/or metamorphism, these deposits are often bowl or mound-shaped with stockworks and stringers ofsulphide minerals found near vent zones. These types of deposit exhibit an idealized zoning pattern as follows:●Pyrite and chalcopyrite near vents.●A halo around the vents consisting of chalcopyrite, sphalerite and pyrite.●A more distal zone of sphalerite and galena and metals such as manganese.●Increasing manganese with oxides such as hematite and chert more distal to the vent.Table of Contents37Alteration halos associated with VMS deposits often contain sericite, ankerite, chlorite, hematite and magnetite close to the VMS with weak sericite,carbonate, zeolite, prehnite and chert more distal. These alteration assemblages and relationships are dependent on the degree of post depositiondeformation and metamorphism. A modern analogue of this type of deposit is found around fumaroles or black smokers in association with rift zones.In the Ambler Mining District, VMS-like mineralization occurs in the Ambler Sequence schists over a strike length of approximately 110 km. Thesedeposits are hosted in volcaniclastic, siliciclastic and calcareous metasedimentary rocks interlayered with mafic and felsic metavolcanic rocks. Sulphidemineralization occurs above the mafic metavolcanic rocks but below the Button schist, a distinctive district wide felsic unit characterized by large K-feldspar porphyroblasts after relic phenocrysts. The presence of the mafic and felsic metavolcanic units is used as evidence to suggest formation in arift-related environment, possibly proximal to a continental margin. Based on these characteristics, the Arctic deposit is similar to Kuroko-type VMSdeposits.Historic interpretation of the genesis of the Ambler Schist belt deposits has called for a syngenetic VMS origin with steep thermal gradients in andaround seafloor hydrothermal vents resulting in metal deposition due to the rapid cooling of chloride-complexed base metals. A variety of VMS typeshave been well documented in the literature (Franklin et al., 2005) with the Ambler Schist belt deposits most similar to deposits associated withbimodal felsic dominant volcanism related to incipient rifting.The majority of field observations broadly support such a scenario at the Arctic deposit and include: 1) the tectonic setting with Devonian volcanism inan evolving continental rift; 2) the geologic setting with bimodal volcanic rocks including pillow basalts and felsic volcanic tuffs; 3) an alterationassemblage with well-defined magnesium-rich footwall alteration and sodium-rich hanging wall alteration; and 4) typical polymetallic base-metalmineralization with massive and semi-massive sulphides.A preserved sulphide-smoker occurrence has been tentatively identified near Dead Creek, northwest of the Arctic deposit and suggests localhydrothermal venting during deposition. However, the lack of stockworks and stringer-type mineralization at the Arctic deposit suggest that thedeposit may not be a proximal vent-type VMS. Although the deposit is stratiform in nature, it exhibits characteristics and textures common toreplacement-style mineralization. At least some of the mineralization may have formed as a diagenetic replacement.A VMS model is considered applicable for use in exploration targeting in the Arctic Project area.ExplorationTable 1 summarizes the exploration work conducted by NovaGold and Trilogy from 2004 to the present. Field exploration was largely conducted duringthe period between 2004 to 2007 with associated engineering and characterization studies between 2008 and the present.Table of Contents38Table 1 - Summary of Overall Metal Recovery – Arctic ProjectWork Completed Year Details Focus Geological Mapping - 2004 - Arctic deposit surface geology- 2005 - Ambler Sequence west of the Arctic deposit- 2006 - COU, Dead Creek, Sunshine, Red- 2015, 2016 SRK Geotechnical Structural Mapping- 2016 - Arctic deposit surface geologyGeophysical Surveys SWIR Spectrometry 2004 2004 drill holes Alteration characterizationTDEM 2005 2 loops Follow-up of Kennecott DIGHEM EM survey 2006 13 loops District targets 2007 6 loops Arctic extensionsDownhole EM 2007 4 drill holes Arctic depositVTEM Plus (Versatile Time Domain Electromagnetic) airborne helicopter geophysical 2019 400m linespacing with200m infillwith tie lines4000m spacing Ambler Mining District and Cosmos Hillswith infill over Arctic, Sunshine and Horse-CliffZTEM (Z-Axis Tipper Electromagnetic) airborne helicopter geophysical 2019 400m linespacing withtie lines 4000mspacing Ambler Mining District and Cosmos Hillswith infill over Arctic, Sunshine and Horse-CliffGeochemistry - 2005 - Stream silts – core area prospects- 2006 - Soils – core area prospects- - Stream silts – core area prospects- 2007 - Soils – Arctic deposit areaSurvey Collar 2004 to2011,2018, 2019 DGPS All 2004 to 2019 NovaCopper drill holes 2004, 2008 Resurveys Historical Kennecott drill holesPhotography/Topography 2010 - Photography/topographyLiDAR Survey 2015, 2016 - LiDAR over Arctic DepositTechnical Studies Geotechnical 2010 BGC Preliminary geotechnical and hazardsML/ARD 2011 SRK Preliminary ML and ARDMetallurgy 2012 SGS Preliminary mineralogy and metallurgyGeotechnical and Hydrology 2012 BGC Preliminary rock mechanics and hydrologyTable of Contents39Note: SWIR = short wave infrared; LiDAR = light detection and ranging; ML = metal leaching; BGC = BGC Engineering Inc.; SGS = SGS Canada; ALS = ALSMetallurgyDrillingDrilling at the Arctic deposit and within the Ambler Mining District has been ongoing since its initial discovery in 1967. Approximately 60,857 m ofdrilling was completed within the Ambler Mining District, including 42,571 m of drilling in 207 drill holes at the Arctic deposit or on potential extensionsin 29 campaigns spanning 52 years. Drill programs were completed by Kennecott and its subsidiaries, Anaconda, and Trilogy and its predecessorcompanies.Core recoveries are acceptable. Geological and geotechnical logging is in line with industry generally-accepted practices. Drill collar and downholesurvey data were collected using industry-recognized instrumentation and methods at the time the data were collected.Between 2004 and 2005, NovaGold conducted a systematic drill core re-logging and re-sampling campaign of Kennecott and BCMC era drill holes.NovaGold either took 1 m to 2 m samples every 10 m, or sampled entire lengths of previously un-sampled core within a minimum of 1 m and amaximum of 3 m intervals. During the Trilogy campaigns, sample intervals were determined by the geological relationships observed in the core andlimited to a 2.5 m to 3 m maximum length and 0.3 m minimum length. An attempt was made to terminate sample intervals at lithological andmineralization boundaries. Sampling was generally continuous from the top to the bottom of the drill hole. When the hole was in un-mineralized rock,the sample length was generally 3 m, whereas in mineralized units, the sample length was shortened to 1 m to 2 m with a maximum of 2.5 m.Gold assays were conducted using fire assay fusion followed by an atomic absorption spectroscopy finish. An additional 49-element suite was assayedby inductively coupled plasma-mass spectroscopy (ICP-MS) methodology, following a four acid (hydrochloric, nitric, hydrofluoric, and perchloric)digestion. The copper, zinc, lead, and silver analyses were completed by AA, following a triple acid digest, in 2004 and 2005, and by inductively coupledplasma-atomic emission spectroscopy following a triple acid digestion from 2006 to 2019, when overlimits occurred with the ICP-MS methodology.Standard reference materials, blanks, duplicates, and check samples have been regularly submitted at a combined level of 20% of sampling submissionsfor all NovaGold/NovaCopper/Trilogy era campaigns. BD Resource Consulting, Inc. reviewed the QA/QC dataset and reports and found the sampleinsertion rate and the timeliness of results received and reviewed meets or exceeds industry best practices.SG measurements were conducted on 4,708 samples in the database and range from a minimum of 1.49 to a maximum of 5.35 and average 3.04. Thedistribution of SG data is considered sufficient to support estimation in the resource model.Current Mineral Resource estimates and geologic models use topography completed in 2010 by PhotoSat Inc. The resolution of the satellite imageryused was at 0.5 m, and a 1 m contour map and digital elevation model were generated. An aerial LiDAR survey was completed to support feasibilitylevel resource estimation, engineering design, environmental studies, and infrastructure layout evaluations. Agreement between surveyed drill holecollar elevations and a LiDAR topographic surface verifies the correctness of the digital topography for use in estimation.It was concluded that the drill database and topographic surface for the Arctic deposit is reliable and sufficient to support the current estimate ofmineral resources.Table of Contents40Sampling, Analysis and Data VerificationSampling and AnalysisThe data for the Arctic deposit were generated over three primary drilling campaigns: 1966 to 1986 when BCMC, a subsidiary of Kennecott was theprimary operator, 1998 when Kennecott resumed work after a long hiatus, and 2004 to present under NovaGold, NovaCopper, and Trilogy.Between 2004 and 2005, NovaGold conducted a systematic drill core re-logging and re-sampling campaign of Kennecott and BCMC era drill holes AR-09to AR-74. NovaGold either took 1 to 2 m samples every 10 m, or sampled entire lengths of previously unsampled core within a minimum of 1 m and amaximum or 3 m intervals. The objective of the sampling was to generate a full ICP geochemistry dataset for the Arctic deposit and ensure continuoussampling throughout the deposit.During NovaGold, NovaCopper, and Trilogy eras, samples were selected based on lithologic contacts, significant mineralization and alteration. Drill corewas sampled at no less than 30 cm and no more than 2.5 m when in un-mineralized material, and 2 m maximum intervals when in mineralizedmaterial. All samples processed at the logging facility at the Bornite Camp were sawn in half with one half being sent to ALS Minerals in Vancouver, BCfor analysis and the other half stored on site at the Bornite Camp. Shipment of core samples from the site occurred on a drill hole by drill hole basis.Rice bags, containing two to four poly-bagged core samples each, were marked and labelled with the ALS Minerals address, project and hole number,bag number, and sample numbers enclosed. Rice bags were secured with a pre-numbered plastic security tie and a twist wire tie and then assembledinto standard fish totes for transport by chartered flights on a commercial airline to Fairbanks, where they were met by a contracted expeditor fordelivery directly to the ALS Minerals preparation facility in Fairbanks. In addition to the core, control samples are inserted into the shipments at theapproximate rate of one standard, one blank and one duplicate per 17 core samples.Samples were logged into a tracking system on arrival at ALS Minerals, and weighed. Samples were then crushed, dried, and a 250 g split pulverized togreater than 85% passing 75 μm.Gold assays were determined using fire assay fusion followed by an atomic absorption spectroscopy finish. The lower detection limit was 0.005 ppmgold; the upper limit was 1,000 ppm gold. An additional 49-element suite was assayed by ICP-MS, following a 4-acid digestion. The copper, zinc, lead,and silver analyses were completed by AA, following a triple acid digest, when over limit results occurred using the ICP-MS assay method.Data VerificationDrill hole collars, topography, core logging, and database verification were completed by third party independent contractors. Quality assurance andquality control measures have been in place on an annual basis since 2011 with full data audits of the NovaGold era assay database including retainingindependent consultant Caroline Vallat, P.Geo. of GeoSpark Consulting Inc. (“GeoSpark”) to: 1) re-load 100% of the historical assay certificates, 2)conduct a QA/QC review of paired historical assays and NovaGold era re-assays; 3) monitor an independent check assay program for the 2004 to 2008and 2011-2019 drill campaigns; and 4) generate QA/QC reports for the NovaGold era 2004 to 2008 and NovaCopper/Trilogy era 2011, 2015, 2016, 2017and 2019 drill campaigns.BDRC reviewed the QA/QC dataset and reports and found the sample insertion rate and the timeliness of results analysis met or exceeded industrybest practices. The QA/QC results indicate that the assay results collected by Trilogy, and previously by NovaGold and NovaCopper, are reliable andsuitable for use in the Arctic FS.Mineral Processing and Metallurgical TestingSince 1970, metallurgical testwork has been conducted to evaluate the ability of the Arctic deposit to produce copper, lead and zinc concentrates. In-general, the samples tested produced similar metallurgical performances and the Arctic Project has seen the development of a robust metal recoveryprocess to support the current operational plans. WorkTable of Contents41conducted included mineralogy and flotation testing, locked cycle tests, comminution tests, copper/lead separation testwork, talc optimizationtestwork, and thickening and filtration testing.Testwork can be broken into three key time periods:1.Historical testwork completed prior to 2012, primarily by Kennecott Research Center in Utah, and Lakefield Research Ltd., Lakefield, Ontario;2.Preliminary Trilogy test work conducted at SGS Mineral Services, Vancouver (“SGS Vancouver”), in 2012 to 2015; and3.Detailed Trilogy test work conducted at ALS Metallurgy in Kamloops, BC (“ALS Metallurgy”) in 2015 to 2019.In 2012, SGS Vancouver conducted a metallurgical test program to further study metallurgical responses of the samples produced from Zones 1, 2, 3,and 5 of the Arctic deposit. The flotation test procedures used talc pre-flotation, conventional copper-lead bulk flotation and zinc flotation, followed bycopper and lead separation. In general, the 2012-2015 test results indicated that the samples responded well to the flowsheet tested. The averageresults of the locked cycle tests (without copper and lead separation) were as follows:●The copper recoveries to the bulk copper-lead concentrates ranged from 89 to 93% excluding the Zone 1 & 2 composite which produced acopper recovery of approximately 84%; the copper grades of the bulk concentrates were 24 to 28%.●Approximately 92 to 94% of the lead was recovered to the bulk copper-lead concentrates containing 9 to 13% lead.●The zinc recovery was 84.2% from Composite Zone 1 & 2, 93.0% from Composite Zone 3 and 90.5% from Composite Zone 5. On average, thezinc grades of the concentrates produced were higher than 55%, excluding the concentrate generated from Composite Zone 1 & 2, whichcontained only 44.5% zinc.●Gold and silver were predominantly recovered into the bulk copper-lead concentrates. Gold recoveries to this concentrate ranged from 65 to80%, and silver recoveries ranged from 80 to 86%.Using an open circuit procedure, the copper and lead separation tests on the bulk copper–lead concentrate produced from the locked cycle testsgenerated reasonable copper and lead separation. The copper concentrates produced contained approximately 28 to 31% copper, while the grades ofthe lead concentrates were in the range of 41% to 67% lead. In this testwork program, it appeared that most of the gold reported to the copperconcentrate and on average the silver was equally recovered into the copper and lead concentrates. Subsequent testwork to better define the copperand lead separation process was conducted in 2017, including a more detailed evaluation of the precious metal deportment in the copper and leadseparation process.Grindability testing was completed during both the SGS Vancouver and ALS Metallurgy testwork programs to support the design and economics ofefficient grinding of the Arctic materials. SAG mill test results included a single JKTech drop-weight test and 19 SAG media competency tests usingvariability samples. Test results show the material is amenable to SAG milling and is relatively soft, with a reported breakage (axb) average value of189.7. Bond ball mill work index (BWi) tests were completed on 44 samples and values ranged from 5.4 to 13.1 kWhr/t with an average BWi of 8.82kWhr/t. Abrasion index (Ai) tests were completed on five samples and values fluctuated from 0.017 to 0.072 g for the measured samples. The dataindicate that the samples are neither resistant nor abrasive to ball mill grinding. The materials are considered to be soft or very soft in terms of grindingrequirements. The grinding testwork was used to support detailed grinding circuit design.In 2017, ALS Metallurgy conducted detailed copper and lead separation flotation testwork using a bulk sample of copper–lead concentrate producedfrom the operation of a pilot plant. This testwork confirmed high lead recoveries in lockedTable of Contents42cycle testing of the copper–lead separation process and confirmed precious metal recoveries into the representative copper and lead concentrates.This testwork indicated a clear tendency of the gold values to follow the lead concentrate, giving it a significant gold grade and value. Detailedmineralogical analysis showed that a majority of gold values were occurring as liberated fine-grained gold particles.The conclusions of testwork conducted both in 2012 and 2017 indicate that the Arctic materials are well-suited to the production of high-qualitycopper and zinc concentrates using flotation techniques which are industry standard. Copper and zinc recovery data were reported in the range of 88to 92%, which reflected the high-grade nature of the deposit as well as the coarse-grained nature of these minerals. Grade variations within the depositwill be observed as indicated by the grade variations observed in variability samples, however mill feed variability is expected to be limited and readilymanageable with good plant operational practices. Lead concentrates have the potential to be of good quality and can also be impacted by zones ofvery high talc. Considerable care will be required to ensure maximum talc recovery to remove talc, which has the potential to dilute lead concentrategrades. The lead concentrate is also shown to be rich in precious metals, which has some advantages in terms of marketability of this material.An overall metallurgical balance for the Arctic Project is summarized in Table 2. The projected metallurgical recoveries are based on an expectedaverage recovery over the life-of-mine (LOM), and results of metallurgical testwork conducted in 2012 and 2017–2019.Table 2 - Summary of Overall Metal Recovery – Arctic Project Concentrate Grade Metal Recoveries MassCuPbZnAuAgCuPbZnAuAg Process stream% % % % g/t g/t% % % % % Process Feed 100.0 2.24 0.54 3.12 0.47 34.69 — — — — —Copper Conc 6.65 30.3 0.66 1.6 0.76 138 89.9 8.1 3.4 10.9 26.4Lead Conc 0.78 6.9 55.0 1.8 37.3 2,806 2.4 79.0 0.4 62.1 63.1Zinc Conc 4.78 1.3 0.25 59.2 0.53 24.5 2.7 2.2 90.6 5.4 3.4Process Tailings 87.8 0.13 0.07 0.20 0.12 2.81 4.95 10.7 5.56 21.6 7.11Ancillary testwork was completed by third party consultants on representative concentrate samples, to provide thickening and filtration data for thevarious concentrates. Settling and filtration rates were observed to be typical for sulphide concentrates and moisture contents in final filter cakes wereobserved to be lower than expected.Metallurgical testwork was completed to provide representative tailings samples for use in detailed solids settling and compaction testwork to providedata for tailings design studies.A detailed study of water treatment chemistry was undertaken to evaluate and confirm the option of destroying cyanide contained in solutions fromthe proposed copper–lead separation process. The use of an SO2/air process in a small-scale pilot plant demonstrated removal of 99% of the containedcyanide and supported the concept of maintaining low cyanide concentrations within the proposed tailings pond solutions.Mineral Resource and Mineral Reserve EstimatesMineral Resource EstimateMineral resource estimates are estimated from a 3D block model based on geostatistical applications using commercial mine planning software(MineSight v11.60-2). The block model has a nominal block size measuring 10 x 10 x 5 m and uses data derived from 152 drill holes in the vicinity of theArctic deposit. The resource estimate was generated using drill hole sample assay results and the interpretation of a geological model which relates tothe spatial distribution of copper, lead, zinc, gold and silver. Interpolation characteristics were defined based on the geology, drill hole spacing, andgeostatistical analysis of the data. The effects of potentially anomalous high-grade sample data, composited to two meter intervals, are controlled bylimiting the distance of influence during block grade interpolation. The grade modelsTable of Contents43have been validated using a combination of visual and statistical methods. The resources were classified according to their proximity to the sampledata locations and are reported using the 2014 CIM Definition Standards. Model blocks estimated by three or more drill holes spaced at a maximumdistance of 100 m are included in the Indicated category. Inferred blocks are within a maximum distance of 150 m from a drill hole.The estimate of Indicated and Inferred Mineral Resources is constrained within a conceptual pit shell derived using the projected technical andeconomic parameters in Table 3.Table 3 - Parameters Used to Generate a Resource-Limiting Pit ShellOptimization ParametersOpen Pit Mining CostUS$3/tMilling + General and Administrative (G&A) Costs US$35/tPit Slope 43 degreesCopper Price US$3.00/lbLead Price US$0.90/lbZinc Price US$1.00/lbGold Price US$1,300/ozSilver Price US$18/ozMetallurgical Recovery: Copper 92%Lead 77%Zinc 88%Gold 63%Silver 56%Note: no adjustments for mining recovery or dilution.The pit shell was generated about copper equivalent (CuEq) grades that incorporate contributions of the five different metals present in the deposit.The formula used to calculate copper equivalent grades is:CuEq%= (Cu% x 0.92) + (Zn% x 0.290) + (Pb% x 0.231) + (Au g/t x 0.398) + (Ag g/t x 0.005)The Mineral Resource estimate is listed in Table 4. Mineral Resources are reported inclusive of those Mineral Resources that were converted to MineralReserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.Table 4 - Mineral Resource Estimate for the Arctic DepositAverage Grade:Contained metal: Class Mtonnes Cu % Pb% Zn% Au g/t Ag g/t Cu Mlbs Pb Mlbs Zn Mlbs Au koz Ag Moz Indicated 36.0 3.07 0.73 4.23 0.63 47.6 2,441 581 3,356 728 55 Inferred 3.5 1.71 0.60 2.72 0.36 28.7 131 47 210 40 3Notes:(1)The Qualified Persons for the estimate are employees of SIM and BDRC. The estimate is reported using the 2014 CIM Definition Standards.The effective date of the Mineral Resource estimate is April 25, 2017. The results of the 2019 drilling supports the current estimate of mineralresources and the inclusion of these nine new drill holes would have no material impact on the estimate of mineral resources for the ArcticProject.(2)Mineral Resources stated are contained within a conceptual pit shell developed using metal prices of US$3.00/lb Cu, US$0.90/lb Pb,US$1.00/lb Zn, US$1,300/oz Au and US$18/oz Ag and metallurgical recoveries of 92% Cu,Table of Contents4477% Pb, 88% Zn, 63% Au and 56% Ag and operating costs of US$3/t mining and US$35/t process and general and administrative costs. Theassumed average pit slope angle is 43º.(3)The base case cut-off grade is 0.5% copper equivalent: CuEq = (Cu% x 0.92) + (Zn% x 0.290) + (Pb% x 0.231) + (Au g/t x 0.398) + (Ag g/t x0.005).(4)The Mineral Resource estimate is reported on a 100% basis without adjustments for metallurgical recoveries. Trilogy holds 50% of AmblerMetals.(5)The Mineral Resource estimate is reported inclusive of those Mineral Resources that were converted to Mineral Reserves. Mineral Resourcesthat are not Mineral Reserves do not have demonstrated economic viability. An inferred mineral resource has a lower level of confidence thanthat applied to an indicated mineral resource and must not be converted to a mineral reserve.Mineral Resources have been rounded.Factors that may affect the Mineral Resource estimates include:●Metal price and exchange rate assumptions.●Changes to the assumptions used to generate the CuEq cut-off grade.●Changes in local interpretations of mineralization geometry and continuity of mineralized zones.●Changes to geological and mineralization shapes, and geological and grade continuity assumptions.●Density and domain assignments.●Changes to geotechnical, mining and metallurgical recovery assumptions.●Change to the input and design parameter assumptions that pertain to the conceptual pit constraining the estimates.●Assumptions as to concentrate marketability, payability and penalty terms.●Assumptions as to the continued ability to access the site, retain mineral and obtain surface rights titles, obtain environment and otherregulatory permits, and maintain the social license to operate.●Assumptions as to future site access.There are no known factors related to environmental, permitting, legal, title, taxation, socioeconomic, marketing, or political issues which couldmaterially affect the Mineral Resource estimate that are not discussed in the 2020 Arctic Report.Mineral Reserve EstimatesMineral Reserves were classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014). OnlyMineral Resources that were classified as Measured and Indicated were given economic attributes in the mine design and when demonstratingeconomic viability. Mineral Reserves for the Arctic deposit incorporate appropriate mining dilution and mining recovery estimations for the open pitmining method.Table of Contents45Table 5 – Optimization InputsParameter Unit Value Metal Prices Copper$/lb 3.00Lead$/lb 1.00Zinc$/lb 1.10Gold$/oz 1,300.00Silver$/oz 18.00Discount Rate% 8Slope Angles Sector 1 (2L-E)degrees 26Sector 2 (2L-W)degrees 40Sector 3 (2U)degrees 42Sector 4 (3)degrees 30Sector 5 (4L)degrees 38Sector 6 (4U)degrees 43Dilution%Estimated in a block-by-blockbasisMine Losses%Taken into account by blockMining Cost Base Elevationm 730Base Cost$/t 2.78Incremental Mining Cost Uphill$/t/5m 0.020Downhill$/t/5m 0.015Process Costs Operating Cost$/t milled 15.09G&A$/t milled 6.55Process Sustaining Capital$/t milled 1.53Road Toll Cost$/t milled 4.70Closure$/t milled 1.52Processing RateKt/d 10Process Recovery Copper% 91.2Lead% 80.0Zinc% 91.0Gold% 58.9Silver% 34.9Treatment & Refining Cost — Variable by concentrate type/metalRoyalties NANA Surface Use%NSR 1.00NANA1%NP 0.00Note:(1)NANA may elect to either (a) exercise a non-transferrable back-in-right to acquire between 16% and 25% (as specified by NANA) of the ArcticProject; or (b) not exercise its back-in-right, and instead receive a net proceeds royalty equal to 15% of the net proceeds realized by AmblerMetals. Upon the direction of Trilogy, the Arctic FSTable of Contents46was evaluated on a 100% basis, of which Trilogy’s share is 50%, and does not include the impact on Ambler Metals of the NANA options,either purchasing an interest in the Arctic Project or receiving a royalty payment.Dilution was applied to the resource model in two steps: planned dilution and contact dilution.As the mining cost varies with depth individual blocks captured within the final pit design were tagged as either ore or waste by applying theparameters shown in Table 5. Using the partial block percentages within the final pit design the ore tonnage and average grades were calculated.The Mineral Reserve estimates are shown in Table 6. Only Probable Mineral Reserves have been classified.Table 6 – Mineral Reserve StatementTonnageGrades Class t x 1000 Cu (%) Zn (%) Pb (%) Au (g/t) Ag (g/t) Proven Mineral Reserves — — — — — —Probable Mineral Reserves 43,443 2.24 3.12 0.54 0.47 34.7Proven & Probable Mineral Reserves 43,443 2.24 3.12 0.54 0.47 34.7Notes:(1)The Qualified Person for the Mineral Reserves estimates is an employee of Wood. Mineral Reserves have an effective date of January 31,2020. Mineral Reserves are reported on a 100% basis. Trilogy has a 50% interest in Ambler Metals.(2)Mineral Reserves estimated assuming open pit mining methods and include a combination of planned and contact dilution. Total dilution isexpected to be between 30% and 35%. Pit slopes vary by sector and range from 26° to 43°. Cut-off grade is variable and ranges fromUS$32.83/t NSR to US$33.96/t NSR. Commodity prices used were US$3.00/lb Cu, US$1.00/lb Pb, US$1.10/lb Zn, US$1,300/oz Au andUS$18/oz Ag. Fixed process recoveries were assumed to be 91.2% Cu, 80.0% Pb, 91.0% Zn, 58.9% Au and 80.0% Ag. Mining costs wereestimated at US$2.78/t incremented at US$0.02/t/5 m and US$0.015/t/5 m below and above 730 m elevation respectively. Processing costswere estimated at US$29.39/t, which includes a process operating cost of US$15.09/t, general and administrative cost of US$6.55/t,sustaining capital cost of US$1.53/t. Closure cost of US$1.52/t, and a road toll cost of US$4.70/t. Treatment costs include US$80/t Cuconcentrate, US$180/t Pb concentrate and US$200/t Zn concentrate. Refining costs were estimated at US$0.08/lb Cu, US$10/oz Au,US$0.80/oz Ag. Transport costs were included as US$270.38/t concentrate. There is a fixed royalty percentage of 1%.Risks that may affect the Mineral Reserve estimates include: commodity price and exchange rate assumptions; changes to the assumptions used togenerate the NSR cut-off grades that constrains the estimate; changes in local interpretations of mineralization geometry and continuity of mineralizedzones; changes to geological and mineralization shapes, and geological and grade continuity assumptions; density and domain assignments; changes togeotechnical and hydrological assumptions, changes to mining and metallurgical recovery assumptions; changes to the input and design parameterassumptions that pertain to the conceptual pit constraining the estimates; assumptions as to concentrate marketability, payability and penalty terms;assumptions as to the continued ability to access the site, retain mineral and obtain surface rights titles, obtain environment and other regulatorypermits, and maintain the social license to operate.There is a risk to the estimate if the Ambler Mining District Industrial Access Project road is not constructed as envisaged, or in the time frameenvisaged, or that the toll charges assumed in the 2020 Arctic Report are not the final charges levied. Other risks include: proper management ofgroundwater will be important to maintaining pit slope stability; the east wall is highly sensitive to several geotechnical parameters, and talc horizonsthat may not have been included in the geological model might also affect its stability; the presence of talc layers in the rock could affect recoveries inthe process plant and therefore could be a risk to the Mineral Reserves.Table of Contents47Mining OperationsThe Arctic Project is designed as a conventional truck–shovel operation assuming 144 t trucks, and 15 m3 shovels. The pit design includes three nestedphases to balance stripping requirements while satisfying the concentrator requirements.The design parameters include a ramp width of 28.5 m, maximum road grades of 10%, bench height of 5 m, targeted mining width of between 70 and100 m, berm interval variable by sector, variable slope angles by sector and a minimum mining width of 30 m.The smoothed final pit design contains approximately 43.4 Mt of ore and 298.3 Mt of waste for a resulting stripping ratio of 6.9:1. Within the 43.4 Mtof ore, the average grades are forecast to be 2.24% Cu, 3.12% Zn, 0.54% Pb, 0.47 g/t Au and 34.7 g/t Ag.The scheduling constraints set the maximum mining capacity at 36 Mt/a and the maximum process capacity at 10 kt/d. The production schedule resultsin a LOM of 12 years. The mine will require three years of pre-production before the start of operations in the processing plant.Processing and Recovery OperationsThe 10,000 t/d process plant design is conventional for the industry and will operate two 12-hour shifts per day, 365 d/a with an overall plantavailability of 92%. The process plant will produce three concentrates: 1) copper concentrate, 2) zinc concentrate, and 3) lead concentrate. Gold andsilver are expected to be payable at a smelter; silver is expected to be payable in the copper and lead concentrates, with gold expected to be payable inthe lead concentrate only.There are several deleterious elements reporting to the concentrates at levels which would incur penalties; however, there are no special processingprovisions required to make a readily saleable concentrate.The mill feed will be hauled from the open pit to a primary crushing facility where the material will be crushed by a jaw crusher to a particle size of 80%passing 80 mm.The crushed material will be ground by two stages of grinding, consisting of one SAG mill and one ball mill in closed circuit with hydrocyclones (SABcircuit). The hydrocyclone overflow with a grind size of approximately 80% passing 70 μm will first undergo talc pre-flotation, and then be processed byconventional bulk flotation (to recover copper, lead, and associated gold and silver), followed by zinc flotation. The bulk rougher concentrate will becleaned and followed by copper and lead separation to produce a lead concentrate and a copper concentrate. The final tailings from the zinc flotationcircuit will be pumped to a TMF. Copper, lead, and zinc concentrates will be thickened and pressure-filtered before being transported by truck to a portand shipped to smelters.Based on the mine plan developed for the Arctic FS and metallurgical testwork results, the LOM average metal recoveries and concentrate grades willbe:●Copper concentrate:●Recovery: 89.9% copper; 10.9% gold; 26.4% silver●Copper grade: 30.3%●Lead concentrate:●Recovery: 79.0% lead; 62.1% gold; 63.1% silver●Lead grade: 55.0%Table of Contents48●Zinc concentrate:●Recovery: 90.6% zinc●Zinc grade: 59.2%The average annual dry concentrate production is estimated as:●Copper concentrate: 241,024 t/a●Lead concentrate: 28,234 t/a●Zinc concentrate 173,093 t/aThe recovery plan includes provision for reagents, and water and power requirementsInfrastructure, Permitting and Compliance ActivitiesInfrastructureThe Arctic Project site is a remote, greenfields site that is remote from existing infrastructure. Infrastructure that will be required for the mining andprocessing operations will include:●Open pit mine●Stockpiles and WRF●Truck workshop, truck wash, mine offices, mine dry facility and warehouse●Administration building●Mill dry facility●Plant workshop and warehouse●Primary crushing building●Fine ore stockpile building●Process plant and laboratory●Concentrate loadout building●Reagent storage and handling building●Raw water supply building●Tailings management facility●Surface water diversion and collection channels, culverts, and containment structures●WRCP●WTPs.Table of Contents49AccessThe Arctic Project site will be accessed through a combination of State of Alaska-owned highways (existing), an Alaska Industrial Development andExport Authority-owned private road (proposed) and Trilogy-owned access roads (proposed). The AMDIAP road is proposed by AIDEA to connect theAmbler mining district to the Dalton Highway. The AMDIAP road expected to be permitted as a private road with restricted access for industrial use. Toconnect the Arctic Project site and the existing exploration camp to the proposed AMDIAP road, a 30.7 km access road (the Arctic access road) willneed to be built.The State of Alaska-owned, public Dahl Creek airport will require upgrades to support the planned regular transportation of crews to and fromFairbanks. The cost of these upgrades has been included in the capital cost estimate.PowerPower generation will be by five diesel generators, producing a supply voltage of 13.8 kV. The total connected load will be 27.1 MW with a normalrunning load of 16.0 MW. Diesel will be supplied via existing fuel supply networks in the region and shipped along the AMDIAP road.AccommodationThe Arctic Project will require three different self-contained camps, equipped with their own power and heat generation capabilities, water treatmentplant, sewage treatment plant, and garbage incinerator. The existing 90-person exploration camp will be used to start the construction of the Arcticaccess road. A 185-person construction camp will be constructed at the intersection of the AMDIAP road and Arctic access road and will bedecommissioned once construction is complete. The permanent camp will be constructed along the Arctic access road, closer to the plannedprocessing facility. The 400-person permanent camp will be constructed ahead of operations to support the peak accommodation requirements duringconstruction.Waste Rock FacilityA large WRF will be developed north of the Arctic pit in the upper part of the Subarctic Creek valley. The WRF is be designed to store waste rock as wellas provide a buttress for the tailings containment in the adjacent footprint. The total volume of waste rock is expected to be 146 Mm3 (298 Mt);however, there is potential for expanded volume in the waste if placement density is <2.0 t/m3. The WRF will have a final height of 280 m to anelevation of 930 masl and is planned to be constructed in lifts of either 5, 10 or 20 m height with catch benches every 20 m to achieve an overall slopeangle of 2.7H:1V.Most of the waste rock is anticipated to be potentially acid-generating and there will be no separation of waste based on acid generation potential.Rather, seepage from the WRF will be collected and treated.Overburden StockpilesThere will also be two small overburden stockpiles to store the stripped topsoil and overburden from the TMF footprint. The topsoil stockpile will beplaced between the haul roads with capacity to store up to 325,000 m3 of material while the overburden stockpile will be located below the lower haulroad between the pit and the mill site with capacity to store up to 2,200,000 m3.Tailings Management FacilityThe TMF will be located at the headwaters of Subarctic Creek, in the upper-most portion of the creek valley. The 58.6 ha footprint of the TMF will befully lined with an impermeable liner. Tailings containment will be provided by the natural topography on the valley sides and an engineered crossvalley dam that will be buttressed by the WRF constructed immediately downstream of the TMF. A starter dam will be constructed to elevation 830 m.Three subsequent raises willTable of Contents50bring the final dam crest elevation to 890 m, which is 40 m lower than the final elevation of the WRF. The TMF is designed to store approximately 34.5Mm3 (37.8 Mt) of tailings plus 4.5 Mm3 of water produced over the 12-year mine life and still provide capacity for the probable maximum flood with2.5 m of freeboard.Water ManagementThe proposed mine development is located in the valley of Subarctic Creek, a tributary to the Shungnak River. A surface water management system willbe constructed to segregate contact and non-contact water. Non-contact water will be diverted around mine infrastructure to Subarctic Creek. Agroundwater seepage monitoring and collection system will be located down gradient of the WRF and seepage collection pond. Contact water will beconveyed to treatment facilities prior to discharge to the receiving environment.A collection pond (WRCP) will be located directly below the toe of the WRF and will be used to collect seepage from the WRF, runoff from the WRF andhaul road corridor area, and water pumped from the open pit.The Arctic Project water and load balance indicates that during operations excess water from the WRCP will need to be treated prior to discharge tothe receiving environment. In the last year of operations and during closure, water from the dewatering of the TMF will also need to be treated prior todischarge to the receiving environment.Water Treatment PlantsA HDS lime-based neutralization and precipitation process will be used to treat effluent from the WRCP. The HDS WTP will operate during the openwater season from May through October, during operations through to post-closure. Treated effluent will be discharged via a 12 km pipeline to theShungnak River. Long-term water treatment at the HDS WTP will be required in perpetuity.A SeWTP will treat excess water in the TMF that is predicted to have elevated selenium concentrations. The SeWTP is anticipated to commencetreatment during operation in mine year 12. A portion of the treated effluent from the HDS WTP will be combined with excess water from the TMF,and treated for selenium such that the selenium water quality standard is met after a mixing zone in the Shungnak River. The SeWTP will cease oncethe TMF is dewatered (by approximately year 15 of closure).Market StudiesMetal pricing was based on combination of two year trailing actual metal prices, market research and bank analyst forward price projections, preparedin July 2020 by Jim Vice of StoneHouse Consulting Inc., who was retained by Trilogy.The long-term consensus metal price assumptions selected for the Arctic FS were:●Copper: $3.00/lb●Zinc: $1.10/lb●Lead: $1.00/lb●Gold: $1,300/oz●Silver: $18.00/ozSmelter terms were applied for the delivery of copper, zinc and lead concentrate. It was assumed that delivery of all concentrates would be to an EastAsian smelter at currently available freight rates. Total transport costs for the concentrate are estimated at $270.98/dmt.Table of Contents51Environmental, Permitting, Social and Closure ConsiderationsEnvironmental ConsiderationsThe Arctic Project area includes the Ambler lowlands and Subarctic Creek within the Shungnak River drainage. A moderate amount of baselineenvironmental data collection has occurred in the area including surface and groundwater quality sampling, surface hydrology monitoring, wetlandsmapping, aquatic life surveys, avian and mammal habitat surveys, cultural resource surveys, hydrogeology studies, meteorological monitoring, andML/ARD studies.Permitting ConsiderationsTrilogy undertakes its current mineral exploration activities at the Arctic deposit under State of Alaska and Northwest Arctic Borough (“NWAB”)permits. Trilogy is presently operating under a State of Alaska Miscellaneous Land Use Permit that expires at the end of 2022, and a NWAB Permit thatexpires also expires at the end of 2022. Both permits are renewable.Mine development permitting will be largely driven by the underlying land ownership; regulatory authorities vary depending on land ownership. TheArctic Project area includes patented mining claims (private land under separate ownership by Trilogy), State of Alaska land, and NANA land (privateland).Because the Arctic Project is situated to a large extent on State land, it will be necessary to obtain a Plan of Operation Approval (which includes theReclamation Plan and Closure Cost Estimate) from the Alaska Department of Natural Resources (“ADNR”). The Arctic Project will also requirecertificates to construct and then operate a dam(s) (tailings and water storage) from the ADNR (Dam Safety Unit) as well as water use and dischargeauthorizations, an upland mining lease and a mill site lease, as well as several minor permits including those that authorize access to constructionmaterial sites from ADNR.The Alaska Department of Environmental Conservation (“ADEC”) would authorize waste management under an integrated waste management permit,air emissions during construction and then operations under an air permit, and an Alaska Pollutant Discharge Elimination System permit for anywastewater discharges to surface waters, and a Multi-Sector General Permit for stormwater discharges. The ADEC would also be required to review theUS Army Corps of Engineers (“USACE”) Section 404 permit to certify that it complies with Section 401 of the Clean Water Act (“CWA”).The Alaska Department of Fish and Game would have to authorize any culverts or bridges that are required to cross fish-bearing streams or otherimpacts to fish-bearing streams that result in the altering or affecting fish habitat.U.S. Army Corps of Engineers (“USACE”) would require a CWA Section 404 permit for dredging and filling activities in Waters of the United Statesincluding jurisdictional wetlands. The USACE Section 404 permitting action would require the USACE to comply with the Natural Environmental PolicyAct (“NEPA”) and, for a project of this magnitude, the development of an Environmental Impact Statement is anticipated. The USACE would likely bethe lead federal agency for the NEPA process. As part of the Section 404 permitting process, the Arctic Project will have to meet USACE wetlandsguidelines to avoid, minimize and mitigate impacts to waters of the US including wetlands.The Arctic Project will also have to obtain approval for a Master Plan from the NWAB. In addition, actions will have to be taken to change the boroughzoning for the Arctic Project area from Subsistence Conservation and General Conservation to Resource Development and transportation.The overall timeline required for permitting would be largely driven by the time required for the NEPA process, which is triggered by the submission ofthe Section 404 permit application to the USACE. The timeline includes the development and publication of a draft and final EIS and ends with a Recordof Decision, and Section 404-permit issuance. In Alaska, the EIS and other State and Federal permitting processes are generally coordinated so thatpermitting and environmental review occurs in parallel. The NEPA process could require between two to three years to complete, and could potentiallytake longer.Table of Contents52Social and CommunityThe Arctic Project is located approximately 40 km northeast of the villages of Shungnak and Kobuk, and 64 km east-northeast of the native village ofAmbler. The population in these villages range from 151 in Kobuk (2010 Census) to 262 in Shungnak (2010 Census). Residents live a largely subsistencelifestyle with incomes supplemented by trapping, guiding, local development projects, government aid and other work in, and outside of, the villages.The Arctic Project has the potential to significantly improve work opportunities for village residents. Trilogy is working directly with the villages toemploy residents in the ongoing exploration program as mechanics, geotechnicians, core cutters, administrative staff, camp-services staff, heavyequipment operators, drill helpers, and environmental technicians. Trilogy and NANA have established a Workforce Development Committee to assistwith developing a local workforce. In addition, Trilogy has existing contracts with native-affiliated companies (such as NANA Management Services andKUNA Engineering Inc.) that are providing camp catering and environmental services for the Arctic Project, respectively.Local community concerns will also be formally recognized during the development of the Arctic Project EIS. Early in the EIS process, the lead federalpermitting agency will hold scoping meetings in rural villages to hear and record the concerns of the local communities so that the more significant ofthese concerns can be addressed during the development of the EIS. In addition, the lead federal agency would have government-to-governmentconsultations with the Tribal Councils in each of the villages, as part of the EIS process, to discuss the Arctic Project and hear Council concerns.Closure PlanningMine reclamation and closure are largely driven by State regulations that specify that a mine must be reclaimed concurrent with mining operations tothe greatest extent possible and then closed in a way that leaves the site stable in terms of erosion and manages degradation of water quality fromacid rock drainage or metal leaching on the site. A detailed Reclamation Plan and Closure Cost Estimate will be submitted to the State agencies forreview and approval in the future, during the formal mine permitting process.Owing to the fact that the Arctic Project is likely to have facilities on a combination of private (patented mining claims and native land) and State land,it is likely that the Reclamation Plan will be submitted and approved as part of the plan of operations, which is approved by the ADNR. However, sincethe reclamation plan must meet regulations of both ADNR and the ADEC, both agencies will review and approve the Reclamation Plan and Closure CostEstimate. In addition, private land owners must formally concur with the portion of the Reclamation Plan for their lands so that it is compatible withtheir intended post-mining land use.The estimate cost of closure is based on unit rates used by SRK on other closure projects in cold environments. The indirect costs were included aspercentages of the estimated direct costs based on guidelines for Alaska (DOWL 2015). Long-term water treatment and maintenance of certain watermanagement facilities were calculated separately, and a NPV is provided for the first 100 years, at a discount rate of 4.3%.Reclamation and closure costs were estimated to be $158.2 million, in discounted 2020 US dollars. Annual (undiscounted) costs associated with long-term closure activities and operation of the HDS WTP are estimated to be $5.1 million.Table of Contents53Capital and Operating CostsCapital CostsThe capital cost estimate has an estimated accuracy of ±15% and uses quarter 4, 2019 US dollars as the base currency. The total estimated initialcapital cost for the design, construction, installation, and commissioning of the Arctic Project is estimated to be $905.6 million. A summary of theestimated capital cost is shown in Table 7.Table 7 – Initial Capital CostsCost Type Description US$M Direct Mine 280.1 Crushing 28.3 Process 116.6 Tailings 70.0 On-Site Infrastructure 109.3 Off-Site Infrastructure 53.7 Direct Subtotal 658.0Indirect Indirects 130.7 Contingency 94.6 Owners Costs 23.4 Indirect Total 248.7Project Total 906.7The total sustaining capital cost estimate is $113.8 million for the 12-year LOM which includes equipment, tailings and other items. Closure costs wereestimated to be $205.4 million. These costs are summarized in Table 8.Table 8 – Sustaining Capital and Closure CostsCost Type Description US$M DirectMine 15.1Process 1.3Tailings 25.1On-Site Infrastructure 50.4IndirectIndirects 13.8Contingency 8.0Total Sustaining Capital 113.8Closure Costs 205.4Operating CostsThe operating cost estimates use US dollars as the base currency and have an accuracy of ±15%. An average operating cost was estimated for the ArcticProject based on the proposed mining schedule. These costs included mining, processing, G&A, surface services, and road toll costs. The average LOMoperating cost for the Arctic Project is estimated to be $50.65/ t milled. The breakdown of costs in Table 9 is estimated based on the LOM average millfeed rate.All pre-production costs have been included in capital costs.Table of Contents54Table 9 – Operating CostsLOM Average Unit Operating CostPercentage of TotalDescription ($/ t milled) Annual Operating CostsMining* 18.4836%Processing 18.3136%G&A 5.15 10%Surface Operations 0.68 1%Road Toll 8.04 16%Total Operating Cost 50.65 100%* Excludes pre-production costsEconomic AnalysisThe results of this economic analysis represent forward looking information. The results depend on the inputs that are subject to several known andunknown risks, uncertainties, and other factors that may cause actual results to differ materially from those presented in this section. Information thatis forward looking includes mineral reserve estimates, commodity prices, the proposed mine production plan, construction schedule, projectedrecovery rates, proposed capital and operating cost estimates, closure cost estimates, toll road cost estimates, and assumptions on geotechnical,environmental, permitting, royalties, and hydrogeological information.An economic analysis was undertaken on a 100% basis to determine the IRR, net present value and payback on initial investment of the Arctic Project.Trilogy holds 50% of Ambler Metals. The Arctic Project consists of a three-year pre-production construction period, followed by 12 years of production.Ausenco developed a pre-tax cash flow model for the Arctic Project and the NPV and IRR were calculated at the beginning of the construction period inYear -3.The pre-tax financial model incorporated the production schedule and smelter term assumptions to produce annual recovered payable metal, or grossrevenue, in each concentrate stream by year. Off-site costs, including the applicable refining and treatment costs, penalties, concentrate transportationcharges, marketing and representation fees, and royalties were then deducted from gross revenue to determine the NSR. The operating cash flow wasthen produced by deducting annual mining, processing, G&A, surface services, and road toll charges from the NSR. Initial and sustaining capital wasdeducted from the operating cash flow in the years they occur, to determine the net cash flow before taxes. Initial capital cost includes all estimatedexpenditures in the construction period, from Year -3 to Year -1 inclusive. First production occurs at the beginning of Year 1. Sustaining capitalexpenditure includes all capital expenditures purchased after first production, including mine closure and rehabilitation. The model includes anallocation of a 1% NSR attributable to NANA.The pre-tax financial results are:●30.8% IRR●$1,550.9 million NPV at an 8% discount rate●2.4 year payback period, on the initial capital costs of $905.6 million●Undiscounted pre-tax cashflow of $3,768.0 million over LOMTable of Contents55The following tax regimes were incorporated in the post-tax analysis: US Federal Income Tax, Alaska State Income Tax, and Alaska Mining License Tax.Taxes are calculated based on currently enacted United States and State of Alaska tax laws and regulations, including the US Federal enactment of theTax Cuts & Jobs Act on December 22, 2017. At the base case metal prices used for this study, the total estimated taxes payable on the Arctic Projectprofits are $924.7 million over the 12-year mine life.The post-tax financial results are:●27.1% IRR●$1,134.7 million NPV at an 8% discount rate●2.6 year payback period, on the initial capital costs of $905.6 million●Undiscounted post-tax cashflow of $ 2,843.4 million over LOMSensitivity AnalysisAusenco investigated the sensitivity of the Arctic Project’s pre-tax NPV, and IRR to several project variables, including metal prices (copper, zinc, lead,gold, silver), capital costs, and operating costs (onsite and offsite). The metal grade is not presented in these sensitivity graphs because the impacts ofchanges in the metal grade mirror the impact of changes in metal price.The Arctic Project’s pre-tax NPV at an 8% discount rate is most sensitive to changes in copper price, followed by zinc price, off-site operating costs, on-site operating costs, capital costs, silver price, gold price, and lead price.The Arctic Project’s pre-tax IRR is most sensitive to changes in copper price and capital cost, followed by zinc price and off-site operating costs, and inthen decreasing order, on-site operating costs, silver price, gold price, and lead priceExploration, Development, and ProductionConstraints and InterfacesThe Arctic Project will be an integrated development with several consultants contributing to the overall design process. Specialist contractors willmost likely be engaged for specific packages, such as the Arctic access road, and the construction camps, generally on a “design and construct” basis.It is essential that these parties work together to ensure data being used is both current and meaningful. Data transfer between parties shall be strictlycontrolled and in accordance with Document Control protocols.The early design interfaces for the Arctic Project will include at least:●Mine development●Waste Rock placement and Tails Dam●Project water management and treatment●Arctic Access Road design and construction, in particular the pioneer road necessary to allow earliest possible access to the Mine pre-assembly construction site●Pioneer, Construction and Permanent Camps.Table of Contents56The Interface Management procedures will be developed to ensure services at the battery limits are clearly defined and understood by all partiesaffected.Key Project MilestonesKey project milestones will be developed once the project is committed to construction and the required permits are in hand.The Mine requires nominally two years of pre-strip operations, tailings pond starter dam development and water accumulation before actualproduction mining operations can commence.For that pre-strip work to start, the Arctic access road from the AMDIAP intersection to the mine site will have to be constructed to at least a pioneerroad condition that will allow the mine fleet and the support facilities to be delivered, built and made operational.Tailings pond construction must be to a height to allow natural collection of water in quantities that will allow plant operations to commence.Proven TechnologyThe Arctic Project will utilize proven technology and equipment that can be built, operated and maintained under adverse weather conditionsThe Design Criteria, Technical Specifications and Data sheets shall reflect the location, the environmental and initial logistics constraints that may affectthe procurement and construction effort.Engineering, Procurement and Construction Management ApproachTwo engineering, procurement and construction management (“EPCM”) strategies have been identified that are structured to account for theabnormally long pre-strip mining operation. The first option is the basis for the capital and operating cost estimate.Early Engineering Only with 2-Stage ProcurementThere is a need to establish the mine facilities and assemble the Mine Fleet in time to allow the pre-strip operation to start some two years before theProcess Plant receives its first ore. This means that there will be a significant amount of detailed engineering requiring completion well in advance ofthe time required for conventional engineering, procurement and construction of just the process plant and supporting infrastructure. This has beenassessed as requiring detailed engineering to start some four years before the process plant starts production.In particular, the pioneer access road design and contracts and civil design for the Mine Support facilities will be required early in the schedule. Bydefault, the rest of the civil design would need to attach to that early works for simple plant layout and construction coordination purposes. For that tooccur the plant layout will be required to be frozen a lot earlier than normal. That in turn is dependent on sizing and selection of the major processequipment items and the receipt of certified vendor data.Effectively, the detailed design phase will need to follow the conventional approach and run its course but started at a time that meets the early worksschedule requirements. Everything other than the mine support facilities will be designed some two years in advance of when it is needed.With the early equipment order placement, the supply phase could become inordinately long, extending over three years in most cases, when in factthe equipment is not likely to be needed until the last eighteen months prior to plant start-up.Table of Contents57An unorthodox but proven option to this extended design, supply and construction schedule is to have the EPCM Contractor buy the major equipmentin two steps:●Step 1: Buy only the vendor certified engineering data to allow detailed engineering to continue to completion but hold the manufacturingfunctions until later in the overall schedule, effectively a delay of around twelve to fifteen months.●Step 2: Based on agreed vendor manufacturing durations, apply a “late” release of the equipment for manufacture with deliveries effectivelybecoming a “Just-in Time” logistics operation.This strategy provides the following advantages:●Engineering can start and continue to completion using critical certified vendor data without the need for an extended “standby”involvement.●Procurement functions can work in parallel with the engineering group with no disconnect between the two disciplines.●The Procurement team can generally disband early in the schedule with just key personnel retained to provide continuity of support.●The expediting team can mobilize later in the schedule to drive manufacture and delivery in a concerted campaign.●Equipment deliveries can be orchestrated to suit the conditions at the time with everything consolidated into a transit compound forcoordinated shipping to site.●Reduced cashflow demands.The disadvantages with this approach are:●The vendors need to be clearly briefed as to what the system means to their manufacturing schedule.●A payments formula needs to be in place to account for a delayed delivery strategy.●Some vendors have difficulty in determining just what their actual engineering costs are.Early EPCM Leading to Plant Care and MaintenanceUnder this approach, the EPCM would work to conventional design and construction schedule, starting to suit the mine access requirements butfollowing on to completion without interruption. That would bring the total process plant and supporting infrastructure to a mechanical completioncondition nominally twelve to fifteen months before it is able to start work.The plant could not be commissioned through lack of ore and would have to be placed into care and maintenance mode until ore became available.This has an inherent advantage in that if the pre-strip operation was completed earlier than scheduled, and sufficient water is accumulated, the plantoperations would be able to take advantage of the fact the plant was already mechanically complete. The care and maintenance requirements in thatenvironment for that duration will require close assessment.Interpretations and ConclusionsThe Arctic deposit will be mined at an annual rate of 36 Mt/a, with an overall stripping ratio of 6.9:1. Ore will be processed by conventional methods toannually produce 241,024 tonnes of copper, 28,234 tonnes of lead, and 173,093 tonnes ofTable of Contents58zinc, all in concentrates for provision to third party refiners. Waste and tailings materials will be stored in surface facilities, which will be closed andreclaimed at the end of the mine; contact water will be treated and discharged to the environment throughout the life of mine. Precious metalsattendant with the concentrates will be largely payable. While there are expected to be several deleterious elements in the concentrates at levels thatmay incur penalties, there are no special processing requirements.Under the assumptions presented in the 2020 Arctic Report, the Arctic Project shows positive economics.The financial analysis excludes consideration of the NANA Agreement, whereby NANA has the right, following a construction decision, to elect topurchase a 16% to 25% direct interest in the Arctic Project or, alternatively, to receive a 15% Net Proceeds Royalty.The financial analysis excludes consideration of the new joint venture formed between South32 and Trilogy.The cost assumptions for the AMDIAP road are estimates provided by Trilogy. There is a risk to the capital and operating cost estimates, the financialanalysis, and the Mineral Reserves if the toll road is not built in the time frame required for the Arctic Project, or if the toll charges are significantlydifferent from what was assumed.In terms of project execution, the mine requires nominally two years of pre-strip operations, tailings pond starter dam development and wateraccumulation before actual production mining operations can commence.For that pre-strip work to start, the Arctic access road from the AMDIAP intersection to the mine site will have to be constructed to at least a pioneerroad condition that will allow the mine fleet and the support facilities to be delivered, built and made operational.RecommendationsA single-phase work program is recommended, which will include: additional drilling program to upgrade a portion of the indicated resource tomeasures resource; drill and blast study; geotechnical investigations and studies; further geohazards assessment; site specific seismic hazardassessment; updating of hydrogeological models and groundwater management plans; optimization of the plant and related service facilities andevaluation of the power supply; examination of water management, water treatment, WRF and TMF designs; baseline studies and environmentalpermitting activities; and additional metallurgical testwork. The budget for this work is estimated at about $7.0 million.Bornite Project, Ambler District, AlaskaBornite ProjectExcept as otherwise stated, the scientific and technical information relating to the Bornite Project contained in this Form 10-K is derived from the 2018Bornite Report titled “NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA” dated July 20, 2018 with an effective date of June 5,2018 prepared by BD Resource Consulting, Inc., SIM Geological Inc., and International Metallurgical & Environmental Inc. The information regarding theBornite Project is based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full textof the 2018 Bornite Report which has been filed with certain Canadian securities regulatory authorities pursuant to NI 43-101 and is available forreview on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.Bornite Project - Property Description and LocationThe property is located in the Ambler mining district of the southern Brooks Range, in the NWAB of Alaska. The property is located in Ambler River A-2quadrangle, Kateel River Meridian T 19N, R 9E, sections 4, 5, 8 and 9. The Bornite Project is located 248 km east of the town of Kotzebue, 19 km northof the village of Kobuk, 275 km west of the Dalton Highway, an all-weather state maintained public road, at geographic coordinates N67.07° latitudeand W156.94° longitude (Universal Transverse Mercator North American Datum 83, Zone 4W coordinates 7440449N, 589811E).Table of Contents59At the time of the formation of Ambler Metals, Trilogy transferred its Alaskan assets, including the Bornite Project, to the newly formed joint venture.See “Significant Developments in 2020”. The mineral resource estimates with respect to the Bornite Project are reported on a 100% basis, of whichTrilogy’s share is 50%.Bornite Project - Accessibility, Climate, Local Resources, Infrastructure, and PhysiographyPrimary access to the Bornite Project is by air, using both fixed wing aircraft and helicopters. There are four well maintained, approximately 1,500 m-long gravel airstrips located near the property, capable of accommodating charter fixed wing aircraft. These airstrips are located 40 km west at Ambler,23 km southwest at Shungnak, 19 km south at Kobuk, and 15 km south at Dahl Creek. There is daily commercial air service from Kotzebue to the villageof Kobuk, the closest community to the property. During the summer months, the Dahl Creek Camp airstrip is suitable for larger aircraft, such as C-130and DC-6. In addition to the four 1,500 m airstrips, there is a 700 m airstrip located at the Bornite Camp. The airstrip at Bornite is suited to smalleraircraft, which support the Bornite Camp with personnel and supplies.There is no direct water access to the property. During spring runoff, river access is possible by barge from Kotzebue Sound to Ambler, Shungnak, andKobuk via the Kobuk River.A two-lane, two-wheel drive gravel road links the Bornite Project’s main camp to the 1,525 m Dahl Creek airstrip and village of Kobuk.The climate in the region is typical of a sub-arctic environment. Exploration is generally conducted from late May until late September. Weatherconditions on the Bornite Project can vary significantly from year to year and can change suddenly. During the summer exploration season, averagemaximum temperatures range from 10°C to 20°C, while average lows range from -2°C to 7°C. By early October, unpredictable weather limits safehelicopter travel to the property. During winter months, the property can be accessed by snow machine, track vehicle, or fixed wing aircraft. Wintertemperatures are routinely below -25°C and can exceed -50°C. Annual precipitation in the region averages at 395 mm with the most rainfall occurringfrom June through September, and the most snowfall occurring from November through January.Drilling and mapping programs are seasonal and have been supported out of the Main Bornite Camp and Dahl Creek Camp. The main Bornite Campfacilities are located on Ruby Creek on the northern edge of the Cosmos Hills. The camp provides office space and accommodations for the geologists,drillers, pilots, and support staff. There are four 2-person cabins installed by NANA prior to our tenure. In 2011, the main Bornite Camp was expandedto 20 sleeping tents, 3 administrative tents, 2 shower/bathroom tents, 1 medical tent, and 1 dining/cooking tent. With these additions, the campcapacity was increased to 49 beds. A 30 m by 9 m core logging facility was also built in the summer of 2011. An incinerator was installed near theBornite airstrip to manage waste created by the Bornite Project. Power for the Bornite Project is supplied by a 175 kW Caterpillar diesel generator.Water is provided by a permitted artesian well located 250 m from the Bornite Camp. In 2012, the camp was further expanded with the addition of alaundry tent, a women's shower/washroom tent, a recreation tent, several additional sleeping tents, and a 2 x enlargement of the kitchen tent. Campcapacity increased to 76 beds. The septic field was upgraded to accommodate the increase in camp population. One of the two-person cabins waswinterized for use by the winter caretaker. A permitted landfill was established to allow for the continued cleanup and rehabilitation of the historicshop facilities and surroundings. The Dahl Creek camp is a leased facility used as an overflow or alternative facility to the main Bornite Camp. The DahlCreek camp has a main cabin for dining and administrative duties, and a shower facility. Sleeping facilities include two hard-sided sleeping cabins withseven beds (primarily used for staff), one 4-person sleeping tent, and three 2-person sleeping tents for a total of 17 beds. There are support structures,including a shop and storage facilities.The Bornite Project is located on Ruby Creek on the northern edge of the Cosmos Hills. The Cosmos Hills are part of the southern flank of the BrooksRange in Northwest Alaska. Topography in the area is moderately rugged. Maximum relief in the Cosmos Hills is approximately 1,000 masl with anaverage of 600 masl. Talus covers the upper portions of the hills; glacial and fluvial sediments occupy valleys. The Kobuk Valley is located at thetransition between boreal forest and Arctic tundra. Spruce, birch, and poplar are found in portions of the valley, with a ground cover of lichens(reindeer moss).Table of Contents60Willow and alder thickets and isolated cottonwoods follow drainages, and alpine tundra is found at higher elevations. Tussock tundra and low, heath-type vegetation covers most of the valley floor. Patches of permafrost exist on the property. Wildlife in the property area is typical of Arctic andSubarctic fauna. Larger animals include caribou, moose, Dall sheep, bears (grizzly and black), wolves, wolverines, coyotes, and foxes. Fish speciesinclude salmon, sheefish, arctic char, and arctic grayling. The Kobuk River, which briefly enters the Upper Kobuk Mineral Projects on its southwestcorner, is a significant salmon spawning river. The caribou on the property belong to the Western Arctic herd that migrates twice a year – south inAugust, from their summer range north of the Brooks Range, and north in March from their winter range along the Buckland River.Bornite Project - HistoryKennecott and Bear Creek Mining TenureRegional exploration began in the early 1900s when gold prospectors noted copper occurrences in the hills north of Kobuk, Alaska. In 1947, localprospector Rhinehart “Rhiny” Berg along with various partners traversing in the area located outcropping mineralization along Ruby Creek (Bornite) onthe north side of the Cosmos Hills. They subsequently staked claims over the Ruby Creek showings and constructed an airstrip for access. In 1957,BCMC, Kennecott's exploration subsidiary, optioned the property from Berg. Exploration drilling in 1961 and 1962 culminated in the discovery of the“No.1 Ore Body” where drill hole RC-34 cut 20 m of 24% copper (the “No.1 Ore Body” is a historic term used by BCMC that does not connote economicviability in the present context; it is convenient to continue to use the term to describe exploration work and historic resource estimation in a specificarea of what is now generally known as Ruby Creek Upper Reef). The discovery of the “No.1 Ore Body” led to the development of an exploration shaftin 1966. The shaft, which reached a depth of 328 m, encountered a significant watercourse and was flooded near completion depth. The shaft wassubsequently dewatered and an exploration drift was developed to provide access for sampling and mapping, and to accommodate undergrounddrilling to further delineate mineralization. A total of 59 underground holes were drilled and, after the program, the shaft was allowed to re-flood. Thediscovery of the Arctic Project in 1965 prompted a hiatus in exploration at Bornite, and only limited drilling occurred up until 1976.In the late 1990s, Kennecott resumed its evaluation of the Bornite deposit and the mineralization in the Cosmos Hills with an intensive soil, stream, androck chip geochemical sampling program using 32 element ICP analyses. Grid soil sampling yielded 765 samples. Ridge and spur sampling resulted inan additional 850 soil samples in the following year. Skeletonized core samples (85 samples) from key historic drill holes were also analyzed using 32element ICP analytical methods. Geochemical sampling identified multiple areas of elevated copper and zinc in the Bornite region.Kennecott completed numerous geophysical surveys as an integral part of exploration throughout their tenure on the property. Various reports, notes,figures, and data files stored in Kennecott’s Salt Lake City exploration office indicated that geophysical work included, but was not limited to, thefollowing:●Airborne magnetic and EM surveys (fixed-wing INPUT) (1950s)●Gravity, single point (“SP”), Audio-Frequency Magneto-Telluric (“AMT”), EM, borehole and surface IP/resistivity surveys (1960s)●Gravity, airborne magnetic, and CSAMT surveys (1990s)We have little information or documentation associated with these geophysical surveys conducted prior to the 1990s. Where data are available inthese earlier surveys, the lack of details in data acquisition, coordinate systems, and data reduction procedures limit their usefulness. The onlycomplete geophysical report available concerns down-hole IP/resistivity results. Most notable is the 1996 gravity survey from the Bornite deposit intothe Ambler lowlands. The Bornite deposit itself is seen as a significant 3 milligal anomaly. Numerous 2 milligal to > 6 milligal anomalies occur undercover in the Ambler lowlands and near the Aurora Mountain and Pardner Hill occurrences. In addition to the geophysicalTable of Contents61surveys conducted by Kennecott, the ADNR completed an aeromagnetic survey of portions of the Ambler mining district in 1974-1975.Several studies have been undertaken reviewing the geology and geochemistry of the Bornite deposit. Most notable is Murray Hitzman’s PhDdissertation at Stanford University and Don Runnel’s PhD dissertation at Harvard University. Bernstein and Cox reported on mineralization of the “No. 1Ore Body” in a 1986 paper in Economic Geology. In addition to the historical work, Ty Connor at the Colorado School of Mines recently completed aMaster’s thesis which reported on the timing of alteration and mineralization at the Bornite deposit.Kennecott conducted two technical reviews of the groundwater conditions and a summary of the findings related to the flooding of the explorationshaft. In 1961, Kennecott collected 32 coarse reject samples from five drill holes to support preliminary metallurgical test work at Bornite. Samplestargeted high-grade (> 10%) copper mineralization from the Upper Reef at Ruby Creek.Bornite Project - Geological Setting and MineralizationThe Bornite Project is located within the Arctic Alaska Terrane, a sequence of mostly Paleozoic continental margin rocks that make up the Brooks Rangeand North Slope of Alaska. It is within the Phyllite Belt geologic subdivision, which together with the higher-grade Schist Belt, stretches almost theentire length of the Brooks Range and is considered to represent the hinterland of the Jurassic Brooks Range orogeny. The southern margin of thePhyllite Belt is marked by mélange and low angle faults associated with the Kobuk River fault zone, while the northern boundary is thought to begradational with the higher-grade metamorphic rocks of the Schist Belt.The geology of the Bornite resource area is composed of alternating beds of carbonate rocks (limestone and dolostone) and calcareous phyllite.Limestone transitions laterally into dolostone, which hosts the majority of the mineralization and is considered to be hydrothermal in origin. Spatialrelationships and petrographic work establish dolomitization as genetically related to early stages of the copper mineralizing system.Work by Trilogy in 2015 focused on furthering the understanding of the distribution and nature of the various lithologic units and their context in asedimentary depositional model. The updated model, based on lithogeochemical signatures of the various units along with their historical visuallogging, shows stacked debris flows composed of basal non-argillaceous channelized debris flows breccias with a fining upward sequence ofincreasingly argillaceous-rich breccias capped by high calcium (Ca) phyllites, confined laterally in channels between either massive or thin-beddedplatform carbonates. Two stacked debris flow sequences are apparent, the Lower and Upper reefs. The Upper Reef grades vertically into cappingargillaceous limestones instead of discrete high Ca phyllites indicating a shallowing upward or filling of the debris flow channels. Based on this updatedinterpretation, a series individual debris flow cycles have been modeled. Low calcium (Ca) phyllites, such as the Anirak Schist (QP) and the Beaver CreekPhyllite respectively underlie and cap the local stratigraphy suggesting different sourcing than the locally derived high Ca phyllites of the debris flowdominated Bornite Carbonate sequence stratigraphy. The Beaver Creek Phyllite is in structural contact with the Bornite Carbonate Sequence while thecontact with the underlying Anirak Schist is an unconformity. In addition to the stacked sedimentary stratigraphy, a crosscutting breccia dubbed the P-Breccia has been identified in and around the recently discovered South Reef mineralization. Though poorly defined by the overall lack of drilling in thearea, the body which contains excellent copper grade lies at or near the Iron Mountain discontinuity. It remains unclear whether the P-Breccia is apost-depositional structural, hydrothermal or solution-collapse induced breccia.Structural fabrics observed on the property include bedding and two separate foliations. Bedding (S0) can be measured only rarely where phyllite andcarbonate are interbedded and it is unclear to what extent it is transposed. The pervasive foliation (S1) is easily measured in phyllites and may bereflected by colour banding and/or stylolamination (flaggy habit in outcrop) of the carbonates. Core logging shows that S1 is folded gently on the 10 mscale and locally tightly folded at the decimetre scale. S2 axial planar cleavage is locally developed in decimetre scale folds of S1. Both S1 and S2foliations are considered to be Jurassic in age. Owing to their greater strength, bodies of secondary dolostone have resisted strain and foliationdevelopment, whereas the surrounding limestone and calc-phyllite appear in places to have beenTable of Contents62attenuated during deformation. This deformation, presumably Jurassic, complicates sedimentological interpretations. Potentially the earliest and mostprominent structural feature in the resource area is the northeast-trending Iron Mountain discontinuity which is still problematic in its interpretation.Mineralization at Bornite occurs as tabular mineralized zones that coalesce into crudely stratiform bodies hosted in secondary dolomite. Twosignificant dolomitic horizons that host mineralization have been mapped by drilling and include: 1) the Lower Reef, a 100 to 300 m thick dolomitizedzone lying immediately above the basal quartz phyllite unit of the Anirak Schist; and 2) the Upper Reef, a 100 to 150 m thick dolomite horizon roughly300 m higher in section.The Lower Reef dolomite outcrops along the southern margin of the Ruby Creek zone and is spatially extensive throughout the deposit area. It hosts asignificant portion of the shallow resources in the Ruby Creek zone as well as higher grade resources down dip and to the northeast in the South Reef.The Upper Reef zone hosts relatively high-grade resources to the north in the Ruby Creek zone. The Upper reef zone appears to lie at an important NE-trending facies transition to the NW of the main drilled area and locally appears to be at least partially thrust over the Lower Reef stratigraphy to thesoutheast.Drill results from 2013 show dolomitization and copper mineralization in the Upper and Lower Reefs coalescing into a single horizon along the northernlimits of current exploration. The NE- trending Ruby Creek and South Reef zones also coalesce into a roughly 1000 m wide zone of >200 m thickdolomite containing significant copper mineralization dipping north at roughly 5-10 degrees. The 2017 drill results show that the mineralized dolomitehorizon continues for at least another 700m down-dip to the northeast.Bornite Project – MineralizationCopper mineralization at Bornite is comprised of chalcopyrite, bornite, and chalcocite distributed in stacked, roughly stratiform zones exploitingfavourable stratigraphy within the dolomitized limestone package. Mineralization occurs, in order of increasing grade, as disseminations, irregular anddiscontinuous stringer-style veining, breccia matrix replacement, and stratiform massive sulphides. The distribution of copper mineral species is zonedaround the bottom-centre of each zone, with bornite-chalcocite-chalcopyrite at the core and progressing outward to chalcopyrite-pyrite. Additionalvolumetrically minor copper species include carrollite, digenite, tennantite-tetrahedrite, and covellite. Stringer pyrite and locally significant sphaleriteoccur above and around the copper zones, while locally massive pyrite and sparse pyrrhotite occur in association with siderite alteration below coppermineralization in the Lower Reef.In addition to the copper mineralization, significant cobalt mineralization is found accompanying bornite-chalcocite mineralization. Cobalt occurs withhigh-grade copper as both carrollite (Co2CuS4) and as cobaltiferous rims on recrystallized pyrite grains. Preliminary geometallurgical work by Trilogysupports this observation and shows cobalt occurring primarily as cobaltiferious pyrite (approximately 80% of he contained cobalt) and within othercobalt minerals such as carrollite, and cobaltite (CoAsS) present throughout the deposit (Upper Reef, Lower Reef, and South Reed).Appreciable silver values are also found with bornite-rich mineralization in the South Reef and Ruby Creek zones.Bornite Project – ExplorationExploration in and around the Bornite Project by Kennecott from 1957 to 1998 is summarized above. In addition to the extensive drilling completedduring the more than 40-year tenure of Kennecott in the district, Kennecott completed widespread surface geochemical sampling, regional andproperty scale mapping, and numerous geophysical surveys employing a wide variety of techniques. The majority of this data has been acquired by usand forms the basis for renewed exploration that targets Bornite-style mineralization in the Bornite carbonate sequence.NovaGold as the precursor company to us began to actively pursue an agreement to explore the Bornite Project with NANA in 2005 resulting in aninitial airborne geophysical survey in 2006. Negotiations on the consolidation and exploration of the entire Ambler district continued for the nextseveral years culminating in the NANA Agreement in October 2011.Table of Contents63With the NANA Agreement approaching completion, NovaGold initiated work in 2010 to begin to characterize the exploration potential anddepositional controls by re-logging and re-analyzing select drill holes with a Niton portable x-ray fluorescence (“XRF”) to determine geochemicalvariability. In 2011, NovaGold began an initial drill program to verify the historical database and exploration potential and conducted additionalgeophysical surveys to provide better targeting tools for continued exploration in the district. In 2012, we expanded the IP geophysical coveragecompleting a major district-wide survey that targeted the prospective Bornite Carbonate sequence. Subsequent resource drilling between 2011 and2013 based on the exploration targeting is discussed in the “Bornite Project - Mineral Resource Estimates” section below.2006 NovaGold ExplorationIn 2006, NovaGold contracted Fugro Airborne Surveys to complete a detailed helicopter DIGHEM magnetic, EM and radiometric survey of the CosmosHills. The survey covered a rectangular block approximately 18 km by 49 km which totaled 2,852 line kilometres. The survey was flown at 300 m linespacing with a line direction of N20E. The DIGHEM helicopter survey system produced detailed profile data of magnetics, EM responses andradiometrics (total count, uranium, thorium, and potassium) and was processed into maps of magnetics, discrete EM anomalies, EM apparentresistivity, and radiometric responses.2010 NovaGold ExplorationIn 2010, in anticipation of completing the NANA Agreement, NANA granted NovaGold permission to begin low level exploration at Bornite; thisconsisted of re-logging and re-analyzing select drill holes using a Niton portable XRF. In addition to the 2010 re-logging effort, NovaGold contracted aconsulting geophysicist, Lou O'Connor, to compile a unified airborne magnetic map for the Ambler mining district from Kennecott, Alaska DNR, andNovaGold airborne geophysical surveys.2011 NovaGold ExplorationIn 2011, NovaGold contracted Zonge International Inc. (“Zonge”) to conduct both dipole-dipole complex resistivity induced polarization (“CRIP”) andnatural source audio-magnetotelluric (“NSAMT”) surveys over the northern end of the prospect to develop tools for additional exploration targetingunder cover to the north.NSAMT data were acquired along two lines totaling 5.15 line-km, with one line oriented generally north-south through the centre of the survey areaand one being the southernmost east-west line in the survey area. CRIP data were acquired on five lines: four east-west lines and one north-south line,for a total coverage of 14.1 line-km and 79 collected CRIP stations. The initial objective of the survey was to investigate geological structures and thedistribution of sulphides possibly associated with copper mineralization.Results from the paired surveys show that wide-spaced dipole-dipole resistivity is the most effective technique to directly target the mineralizationpackage. Broad low resistivity anomalies reflecting pyrite haloes and mineralization appear to define the limits of the fluid package. Well-defined andoften very strong chargeability anomalies are also present, but appear in part to be masked by phyllitic units which also have strong chargeabilitysignatures. The NSAMT show similar resistivity features as the IP, but are less well resolved.2012 Trilogy ExplorationIn light of the success of the 2011 geophysical program, we contracted Zonge to conduct a major district-wide dipole/dipole IP survey, a down-hole IPradial array survey in the South Reef area, and an extensive physical property characterization study of the various lithologies to better interpret theexisting historical geophysical data.Zonge completed 48 line km of 200 m dipole/dipole IP during 2012, infilling and expanding on the 2011 survey, and stretching across the mostprospective part of the outcropping permissive Bornite Carbonate sequence. The results show a well-defined low resistivity area associated withmineralization and variable IP signatures attributed both toTable of Contents64mineralization and the overlying Beaver Creek phyllite. Numerous target areas occur in the immediate Bornite area with lesser targets occurring in theAurora Mountain and Pardner Hill areas and in the far east of the survey area.During the 2012 drill program at South Reef, a single drill hole was targeted on a low resistivity area approximately 500 m to 600 m southeast of theSouth Reef mineralization trend. Although the drill hole intersected some dolomite alteration in the appropriate stratigraphy, no significant sulphideswere encountered.In addition to the extensive ground IP survey, Zonge also completed 9 km of down-hole radial IP using an electrode placed in drill hole RC12-0197 tofurther delineate the trend and potential in and around the South Reef. In addition to the 2012 ground geophysical surveys, extensive physicalproperty data including resistivity, chargeability, specific gravity, and magnetic susceptibility were captured for use in modelling the existing ground IPand gravity surveys, and the airborne EM and magnetic surveys.In addition to geophysical focused exploration, a district wide geologic map was compiled integrating Kennecott’s 1970’s mapping of the Cosmos Hillswith selective Trilogy mapping in 2012.2013 Trilogy ExplorationThe emphasis of the 2013 program was to further validate and refine the 2012 geologic map of the Cosmos Hills. A deep penetrating soil andvegetation geochemical orientation survey was completed over the South Reef deposit, utilizing various partial leaches and pH methods. The initial,approximately 1 km, test lines suggest a good response for several of the partial leaches of the soils but little response in the vegetative samples;further follow-up is warranted to the north of the deposit into the Ambler lowlands.2014 Trilogy ExplorationDuring 2014, exploration work was limited to a re-logging and re-sampling program of historical Kennecott drill core.2015 Trilogy ExplorationAs a follow-up to the 2013 field program, a deep penetrating soil and vegetation geochemical survey was extended north of the deposit into theAmbler lowlands. Trilogy geologists completed a lithogeochemical desktop study and a comprehensive update to the 3D lithology model; the updateddomains have been utilized in the most recent resource estimation.2017 Trilogy ExplorationThe 2017 field program extended the 2013 and 2015 Deep Penetrating Geochemical soil survey another 500m to the northeast. The 2013 soil line wasextended 1500m to the east to test over the covered projection of the Two Grey Hills carbonate section. The 3D lithology model was updated toincorporate the 2017 drill program results, which are described in Section 10,Trilogy also completed a close spaced (100m station spacing) ground gravity survey over a 2 km by 4km grid covering the existing resource area andextending northeast over the 2017 drill target area. The complete Bouguer Anomaly residual plot (removes a strong decreasing to the northeastregional gradient) shows good correlation with the Lower Reef mineralization that outcrops on surface with the gravity high gradually decreasingdown-dip to the northeast.As part of the overall gravity program, Mira Geosciences created a petrophysical model for the Bornite Deposit that synthesized the expected gravityresponse on surface (forward model) for the 2017 gravity stations. This forward model matches very closely with the actual survey data over thedeposit area, but diverges on the south end where the expected response of gravity low is actually a strong gravity high that may reflect shallowmineralization up-dip along the South Reef trend. Mira also completed a geologically constrained 3D inversion using the 2017 gravity data. Two areasof anomalously high densities (>2.9 g/cc) were identified. The first area extends up to 750m to the east-northeast of RC17-Table of Contents650239, which was one of the more successful holes in 2017 and is coincident with the Iron Mountain structure. The second anomaly is located justabove the Anirak contact (Lower Reef) to the west of the 2017 target area and 700m to the north of the closest drill hole (RC-53), which is weaklymineralized along that horizon. This area falls along the northwest-southeast high grade thickness trend.2018 Trilogy ExplorationThe 2018 field program comprised of 12 drill holes totaling approximately 10,123 meters (33,212 feet) of exploration drilling through a combination ofinfill and expansion drill holes in and around the known deposit. The original drilling campaign was budgeted to be 8,000 meters utilizing 3 drill rigs andwas subsequently expanded to 10,000 meters with the addition of 2 more drill rigs. The 2018 program followed up on drilling completed during the2017 exploration program, which was one of the larger programs in the history of drilling at the Bornite Project. The objective of the 2018 drillcampaign was to infill and expand the currently defined open pit and underground mineral resources.Bornite Project – DrillingA total of 214 surface core holes and 51 underground core holes, totaling 104,587 meters have been drilled targeting the Bornite deposit during 23different annual campaigns dating from 1957 through 2019. All the drill campaigns, except for the 2011 NovaGold campaign and the 2012, 2013, 2017to 2019 Trilogy campaigns were completed by Kennecott or their exploration subsidiary BCMC. All drill holes except RC13-230 and RC13-232 whichhave been reserved for metallurgical studies and the 2017 to 2019 drill holes were utilized in the estimation of the current resource. The 2017 through2018 drill holes were used for a resource estimation in early 2019 that was not materially different for the current resource and was not disclosed.In the 2017 drill campaign, nine holes were initiated but two abandoned due to drilling problems. The seven drill holes completed in 2017 stepped-outbetween 250 to 400m from the previous drill holes, distances considered too far to support the estimation of mineral resources. Additional, closer-spaced drill holes are required in this area to provide the degree of confidence required to support resource estimation.Sprague and Henwood, a Pennsylvania-based drilling company, completed all of the Kennecott drilling, with the exception of the 1997 program (threedrill holes) completed by Tonto Drilling Services, Inc. (a NANA-Dynatech company). The 2011 thru 2013 NovaGold/Trilogy programs used BoartLongyear Company as the drill contractor. The 2017 program used Tuuq Drilling, a NANA company, who sub-contracted Major Drilling.In the initial years of drilling at Bornite, Kennecott relied on AX core (1.1875 in or 30.2 mm diameter), but, as drilling migrated towards deeper targets,a change to BX core (1.625 in or 41.3 mm diameter) was implemented to help limit deviation. From 1966 to 1967, drilling activity at Bornite movedunderground and EX diameter core (0.845 in or 21.5 mm diameter) was implemented to define the Ruby Creek Upper Reef zone “No.1 Ore Body”.Drilling activity moved back to the surface in 1968, and, from 1968 to 1972, BX core was most commonly drilled. In later years, core size increased toNX (2.125 in or 54.0 mm diameter) and finally, in 2011, core size increased to NQ (1.874 in or 47.6 mm diameter) and HQ (2.5 in or 63.5 mm diameter).Progressively larger diameter drill rods have been continually used over the years in an attempt to minimize drill hole deviation.There is only partial knowledge of specific drill core handling procedures used by Kennecott during their tenure at the Bornite Deposit. All of the drilldata collected during the Kennecott drilling programs (1958 to 1997) was logged on paper drill logs, copies of which are stored in the Kennecott officein Salt Lake City, Utah. Electronic scanned copies of the paper logs, in PDF format, are held by Trilogy. Drill core was sawed or split with a splitter, withhalf core submitted to various assay labs and the remainder stored in the Kennecott core storage facility at the Bornite Deposit. In 1995, Kennecottentered the drill assay data, the geologic core logs, and the down hole collar survey data into an electronic format. In 2009, NovaGold geologistsverified the geologic data from the original paper logs against the Kennecott electronic format and then merged the data into a Microsoft™ SQLdatabase. Sampling of drill core by Kennecott and BCMC focused primarily on the moderate to high grade mineralized zones. Intervals of visiblesulphide mineralization containing roughlyTable of Contents66>0.5 to 1% copper were selected for analysis by Union Assay Office Inc. of Salt Lake City, Utah. This approach left numerous intervals containing weakto moderate copper mineralization un-sampled in the historic drill core. During the 2012 exploration program, we began sampling a portion of thisremaining drill core in select holes in the South Reef area. Trilogy extended this sampling program to the Ruby Creek area in 2013 and 2014.Throughout our tenure at Bornite, the following core handling procedures have been implemented. Core is slung by helicopter, or transported by truckor ATV, from the drill rig to the core-logging facility. Upon delivery, geologists and geotechnicians open and inspect the core boxes for any irregularities.They first mark the location of each drilling block on the core box, and then convert footages on the blocks into metric equivalents. Geotechnicians orgeologists measure the intervals (or “from/to”) for each box of core and include this information, together with the drill hole ID and box number, on ametal tag stapled to the end of each box. Geotechnicians then measure the core to calculate percent recovery and rock quality designation (“RQD”).RQD is the sum of the total length of all pieces of core over 12 cm in a run. The total length of core in each run is measured and compared to thecorresponding run length to determine percent recovery. Core is then logged with lithology and visual alteration features captured on observedinterval breaks. Mineralization data, including sulphide species and abundance (recorded as percent), and gangue and vein mineralogy are collected foreach sample interval with an average interval of approximately 2 m. Structural data is collected as point data. Geologists then mark sample intervals tocapture each lithology or other geologically appropriate intervals. Sample intervals of core are typically between 1 m and 3 m in length but are not toexceed 3 m in length. Occasionally, if warranted by the need for better resolution of geology or mineralization, smaller sample intervals have beenemployed. Geologists staple sample tags on the core boxes at the start of each sample interval and mark the core itself with a wax pencil to designatesample intervals. This sampling approach is considered sound and appropriate for this style of mineralization and alteration. Drill core is digitallyphotographed prior to sampling. Drill core is cut in half using diamond core saws. Specific attention to core orientation is maintained during coresawing to ensure that representative samples are obtained. One-half of the core is retained in the core box for storage on site, or at our Fairbankswarehouse, and the other half is bagged and labeled for analysis. Samples are selected for specific gravity measurements.In 2013, 33 historic drill holes in the Ruby Creek area, and in 2014, 37 historic drill holes in the Ruby Creek Area were re-logged, re-sampled and re-assayed as these holes had previously only been selectively sampled by Kennecott. Entire holes were re-logged utilizing Trilogy protocols discussedabove. Samples were submitted either as half-core, where previously sampled, or whole core where un-sampled (this was done to ensure that asufficient volume of material was provided for analysis). Sample intervals were matched to historic intervals whenever possible or selected to reflectTrilogy sampling procedures described above. The objectives of the re-assay/re-logging program were threefold: 1) to implement a QA/QC program onintervals previously sampled by Kennecott in order to confirm the validity of their results; 2) to identify additional lower grade (0.2-0.5% copper), whichwas not previously sampled; and 3) to provide additional multi-element ICP data to assist in the geologic interpretation of the deposit.Bornite Project - Sample Preparation, Analyses and SecuritySample preparation, analytical lab accreditation and security measures taken during historical Kennecott and BCMC programs are unknown to us;however, we are not aware of any reason to suspect that any of these samples have been tampered with. The 2011 to 2013 and 2017 samples wereeither in the custody of NovaGold or Trilogy personnel or the assay laboratories at all times, and the chain of custody of the samples is welldocumented.Once drill core was sawed, one half was retained for future reference and the other half was sent to ALS Minerals (formerly ALS Chemex) in Vancouverfor analyses. Shipment of core samples from the Bornite camp occurred whenever backhaul capacity was available on the chartered aircraft, which wasgenerally 5 to 6 days a week. Rice bags, containing two to four individual poly-bagged core samples, were marked and labeled with the ALS Mineralsaddress, project name (Bornite), drill hole number, bag number, and sample numbers enclosed. Rice bags were secured with a pre-numbered plasticsecurity tie, assembled into loads for transport by chartered flights on a commercial airline to Fairbanks, and directly delivered by a contractedexpeditor to the ALS Minerals preparation facility in Fairbanks. In addition to the core samples, control samples were inserted into the shipments at therate of one standard, one blank and one duplicate perTable of Contents6717 core samples. Samples were logged into a tracking system on arrival at ALS Minerals, and weighed. Samples were then crushed, dried, and a 250 gsplit was pulverized to greater than 85% passing 75 μm.Gold assays in 2011 and 2012 were determined using fire analysis followed by an atomic absorption spectroscopy finish; gold was not analyzed in 2013or 2014. The lower detection limit was 0.005 ppm gold; the upper limit was 10 ppm gold. An additional 48-element suite was assayed by ICP-MS andICP-AES methodologies, following a four-acid digest. Over limit (>1.0%) copper and zinc analyses were completed by AA, following a four-acid digest.ALS Minerals has attained International Organization for Standardization (ISO) 9001:2000 registration. In addition, the ALS Minerals laboratory inVancouver is accredited to ISO 17025 by Standards Council of Canada for a number of specific test procedures including fire assay of gold by AA, ICPand gravimetric finish, multi-element ICP and AA assays for silver, copper, lead and zinc. Trilogy has no relationship with any primary or check assaylabs utilized.During 2012, 2013, and 2014, Trilogy staff performed continuous validation of the drill data; both while logging was in progress and after the fieldprogram was complete. Trilogy also retained independent consultant Caroline Vallat, P.Geo. of GeoSpark Consulting Inc. to: 1) import digital drill datato the master database and conduct QA/QC checks upon import, 2) conduct a QA/QC review of paired historical assays and Trilogy 2012, 2013 and2014 re-assays; 3) monitor an independent check assay program for the 2012, 2013, and 2014 campaigns; and 4) generate a QA/QC report for the2012, 2013, and 2014 campaigns along with a 2017 review of the cobalt data.Bornite Project - Mineral Resource EstimatesThe mineral resource estimate has been prepared by BD Resource Consulting, and SIM Geological Inc. We have filed several previous NI 43-101Technical Reports on the Bornite Project dated March 18, 2014, February 5, 2013, July 18, 2012 and April 19, 2016. The effective date of this resource isJune 5, 2018.During the summer of 2017, Trilogy drilled seven drill holes testing the area down-dip continuity of the northern part of the Bornite deposit. These drillholes successfully tested the mineralized target horizon but the spacing of these holes is considered too far to support the generation of additionalmineral resource estimates. As a result, the estimates of copper resources remain unchanged from those reported in April 2016.During the period from 2011 through 2017, Trilogy implemented an expanded program of re-sampling and re-assaying for an extended suite ofelements including cobalt. This report includes a description of the procedures used to estimate cobalt resources for the Bornite deposit.The Bornite Project database comprises a total of 243 diamond drill (core) holes totaling 86,584 m; 173 holes target the Ruby Creek zone and 45 holestarget the South Reef zone. The remaining 25 holes in the database are exploratory in nature and test for satellite mineralization proximal to theBornite Deposit. The database contains a total of 32,138 samples that have been analyzed for copper content and 26,574 that have been analyzed forcobalt content. During 2014, Trilogy geologists re-logged and sampled 37 Kennecott drill holes comprising approximately 13,000 meters with partial orno assays. The resource estimate incorporates the results from the 2014 field program as well as advancements to the 3D geological model completedduring 2015.Mineralization in the Ruby Creek zone occurs as two discrete strata bound lenses: a Lower Reef which outcrops and dips approximately 10-15 degreesto the northeast; and an Upper Reef lying roughly 150+ meters above the Lower Reef stratigraphy and which includes a small high-grade zonehistorically referred to as the "No.1 Orebody" by Kennecott. Mineralization is hosted by a Devonian age carbonate sequence containing broad zones ofdolomite alteration and associated sulfide mineralization including bornite, chalcopyrite, and chalcocite occurring as disseminations and veinstockworks as well as crackle and mosaic breccia fillings and locally massive to semi-massive replacement bodies. The geological and assay databasehave been reviewed and audited by BDRC and SGI. It is of the opinion of BDRC and SGI that the current drilling information is sufficiently reliable tointerpret with confidence the boundaries for copper mineralization and that the assay data are sufficiently reliable to support mineral resourceestimation. That estimationTable of Contents68utilizes two-meter compositing of assays from 216 drill holes completed between 1961 and 2013. Estimated blocks were 5 x 5 x 5 meters on a side.Sixty domains were established for the estimation, all of which were treated as hard boundaries with no mixing of data between the domains. A seriesof carbonate and phyllite lithology domains together with grade probability shells at 2% copper and 0.2% copper thresholds were used to constrain theestimates. Visual inspections of the probability shells show that they fit well with observed levels of bornite, chalcocite and chalcopyrite mineralization.Based on the interpreted local high-grade nature of the mineralization, both capping and outlier restriction strategies were implemented to control theinfluence of high-grade mineralization in the resource model. This methodology removed approximately 3% of the contained copper in the Ruby Creekarea and 7% of the contained copper in the South Reef area.A total of 5,366 samples containing specific gravity measurements were utilized to estimate densities in the block model. Specific gravity values wereestimated into model blocks using inverse distance squared moving averages using the domains described previously.Copper and cobalt grades in model blocks were estimated using ordinary kriging. A dynamic search orientation strategy was utilized, during both gradeand specific gravity interpolations, which is controlled by the interpreted trends of mineralization in the Upper, Lower and South Reef zones. The blockmodel has been validated through a combination of visual and statistical methods to ensure that the grade and density estimates are an appropriaterepresentation of the underlying sample data.The Bornite deposit comprises several zones of relatively continuous moderate to high-grade copper mineralization that extends from surface todepths of more than 800 m below surface. The deposit is potentially amenable to a combination of open pit and underground extraction methods. It isimportant to recognize that these discussions of underground and surface mining parameters are used solely for the purpose of testing the“reasonable prospects for economic extraction,” and do not represent an attempt to estimate mineral reserves. No mineral reserves have beencalculated for the Bornite Project.Indicated Mineral Resources includes blocks in the model that are potentially amenable to open pit extraction methods and are delineated by drillingwith holes spaced at a maximum distance of 75 meters and exhibit a relatively high degree of confidence in the grade and continuity of mineralization.Resources in the Inferred category require a minimum of one drill hole within a maximum distance of 100 m and exhibit reasonable confidence in thegrade and continuity of mineralization.In the opinion of the Qualified Persons, the level of understanding of the geologic controls that influence the distribution of copper mineralization atthe Bornite Deposit is relatively good. The drilling, sampling and validation practices utilized by Trilogy during the various campaigns have beenconducted in a professional manner and adhere to accepted industry standards. The confidence in older, historic, drilling conducted by Kennecott hasbeen demonstrated through a series of validation checks and, overall, the underlying database is considered sufficient for the estimation of Indicatedand Inferred Mineral Resources. The mineral resources have been estimated in conformity with generally accepted CIM Estimation of MineralResources and Mineral Reserves Best Practices Guidelines and are reported in accordance with the Canadian Securities Administrators’ NI 43-101. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineralresource will be converted into mineral reserve. The estimate of mineral resources for the Bornite Project are summarized in “Bornite Project – MineralResource Statement”.Bornite Project - Mineral Resource StatementMineral Resources are classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014).Table of Contents69Table 6: Indicated Resource Estimate for the Bornite ProjectSee “Cautionary Note to United States Investors”. This section uses the term “indicated resources”. We advise United States investors that these termsare not recognized by the SEC. United States investors are cautioned not to assume that estimates of indicated mineral resources are economicallyminable or will be upgraded into measured mineral resources. See “Risk Factors” and “Cautionary Note to United States Investors”.Estimate of Copper Mineral Resources – IndicatedType Cut-off(Cu %) M tonnes Grade(Cu %) ContainedMetal(Mlbs Cu) IndicatedIn-Pit(2) 0.5 40.5 1.02 913Notes:1.These resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standards. Mineral resources that are notmineral reserves do not have demonstrated economic viability. See “Risk Factors” and “Cautionary Note to United States Investors.”2.Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb Cu, mining costs of US$2.00/tonne, milling costsof US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees.3.Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metalcontent.4.Tonnage and grade measurements are in metric units. Contained copper are reported as imperial pounds.5.All amounts are stated in U.S. dollars unless otherwise noted.6.Mineral resources are reported on a 100% basis. Following the formation of Ambler Metals, Trilogy and South32 each own 50% of the BorniteProject.Table 7: Inferred Resource Estimate for the Bornite ProjectSee “Cautionary Note to United States Investors”. This section uses the term “inferred resources”. We advise United States investors that these termsare not recognized by the SEC. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability thanthe estimation of other categories of resources. See “Risk Factors” and “Cautionary Note to United States Investors”.Estimate of Copper Mineral Resources – InferredType Cut-off(Cu %) M tonnes Grade(Cu %) ContainedMetal(Mlbs Cu) InferredIn-Pit (2) 0.5 84.1 0.95 1,768Below-Pit (3) 1.5 57.8 2.89 3,683Total Inferred 141.9 1.74 5,450Table of Contents70Notes:1.These resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standards. See “Risk Factors” and“Cautionary Note to United States Investors.”2.Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb Cu, mining costs of US$2.00/tonne, milling costsof US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees.3.Mineral resources at a 1.5% cut-off are considered as potentially economically viable in an underground mining scenario based on an assumedprojected copper price of $3.00/lb, underground mining costs of $65.00 per tonne, milling costs of $11.00 per tonne, G&A of $5.00 per tonne,and an average metallurgical recovery of 87%.4.Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metalcontent.5.Tonnage and grade measurements are in metric units. Contained copper are reported as imperial pounds.6.All amounts are stated in U.S. dollars unless otherwise noted.7.Mineral resources are reported on a 100% basis. Following the formation of Ambler Metals, Trilogy and South32 each own 50% of the BorniteProject.Estimate of Cobalt Mineral Resources – InferredClass Type Cut-off(Cu %) Tonnes(million) AverageGradeCo (%) ContainedMetalCo (Mlbs) InferredIn-Pit(1) 0.5 124.6 0.017 45InferredBelow-Pit 1.5 57.8 0.025 32Inferred Total 182.4 0.019 771.Resources stated as contained within a pit shell developed using a metal price of US$3.00/lb Cu, mining costs of US$2.00/tonne, milling costsof US$11/tonne, G&A cost of US$5.00/tonne, 87% metallurgical recoveries and an average pit slope of 43 degrees.2.Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of theMineral Resources will be converted into Mineral Reserves.3.It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated mineral resources with additionalexploration.4.Due to limited sample data, none of the cobalt resource meets the confidence for Indicated class resources. All cobalt resources areconsidered in the Inferred category.5.Mineral resources are reported on a 100% basis. Following the formation of Ambler Metals, Trilogy and South32 each own 50% of the BorniteProject.There are no known factors related to environmental, permitting, legal, title, taxation, socio-economic, marketing or political issues which couldmaterially affect the mineral resource.Table of Contents71Bornite Project – MetallurgyMetallurgical test work to date indicates that the Bornite Project can be treated using standard grinding and flotation methods to produce copperconcentrates. Initial testing indicates copper recoveries of approximately 87% resulting in concentrate grades of approximately 28% copper with verylow potential penalty elements. Further metallurgical test work is warranted to test these assumptions.Bornite Project – Environmental ConsiderationsThe Bornite Project area includes NANA’s Bornite and ANCSA lands, the Ruby Creek drainage (a tributary of the Shungnak River), the Shungnak Riverdrainage, and portions of the Ambler Lowlands. Since 2007, baseline environmental data collection has occurred in the area including archaeology,aquatic life surveys, sediment sampling, wetlands mapping, surface water quality sampling, hydrology, meteorological monitoring, and subsistence.Additional baseline environmental data in NANA’s Bornite and ANCSA lands, the Ruby Creek drainage, the Shungnak River drainage, portions of theAmbler Lowlands, and downstream receiving environments will be required to support future mine design, development of an EIS, permitting,construction and operations.Bornite Project – Mining OperationsThe Bornite Project is not currently in production; for contemplated exploration or development activities see above.Bornite Project – Exploration and Development PermittingDevelopment of the Bornite Project will require a significant number of permits and authorizations from state, federal, and regional organizations.Much of the groundwork to support a successful permitting effort must be undertaken prior to submission of permit applications so that issues can beidentified and resolved, baseline data can be acquired, and regulators and stakeholders can become familiar with the proposed project. Thecomprehensive permitting process for the Bornite Project can be divided into three categories:1.Exploration state/regional permitting: required to obtain approval for drilling, camp operations, engineering, and environmental baselinestudies.2.Pre-application phase: conducted in conjunction with engineering feasibility studies. This stage includes the collection of environmentalbaseline data and interaction with stakeholders and regulators to facilitate the development of a project that can be successfully permitted.3.The National Environmental Policy Act phase: formal agency review of the Federal and State requirements for public and agency participationto determine if and how the Bornite Project can be done in an acceptable manner.The permit review process will determine the number of management plans required to address all aspects of the Project to ensure compliance withenvironmental design and permit criteria. Each plan will describe the appropriate environmental engineering standard and the applicable operationsrequirements, maintenance protocols, and response actions.Glossary of Technical TermsThe following technical terms defined in this section are used throughout this Form 10-K:“AA” is atomic absorption.“Ag” is the chemical symbol for silver.“Ai” is abrasion index.Table of Contents72“AMT” is audio-magnetotelluric.“Au” is the chemical symbol for gold.“BWi” is bond ball mill work index.“CIM” is the Canadian Institute of Mining, Metallurgy and Petroleum.“Co” is the chemical symbol for cobalt.“Cu” is the chemical symbol for copper.“CuEq” is copper equivalent.“DIGHEM” is a proprietary geophysical survey system."d/a" is days per annum.“dilution” is waste, which is unavoidably mined with ore.“dip” is the angle of inclination of a geological feature/rock from the horizontal.“EM” is electromagnetic.“fault” is the surface of a fracture along which movement has occurred.“gangue” are non-valuable components of the ore.“grade” is the measure of concentration of metal within mineralized rock.“g” is a gram.“g/t” is grams per metric tonne.“ha” is a hectare.“HDS” is high density sludge.“ICP” is induced couple plasma.“ICP-MS” is inductively coupled plasma-mass spectroscopy.“ICP-AES” is inductively coupled plasma-atomic emission spectroscopy.“IRR” is internal rate of return.“km” is a kilometer.“kWhr” is kilowatt hours.“kV” is a kilovolt.“LOM” is the life-of-mine.“LiDAR” is light detection and ranging.Table of Contents73“μm” is a micron or mircrometer and is one millionth of a meter.“m” is a meter.“Ma” is million years.“masl” is meters above sea level.“ML/ARD” is metal leaching and acid rock drainage.“mm” is a millimeter.“Mm3” is million cubic meters.“MS” is massive sulphide.“Mt/a” is million tonnes per annum.“MW” is million watts.“NPV” is net present value.“NSR” mean net smelter return“ounce” or “oz” is a troy ounce.“Pb” is the chemical symbol for lead.“ppm” is parts per million.“QA/QC” is quality assurance and quality control.“SAG” is semi-autogenous grind.“SeWTP” is a selenium water treatment plant.“SG” is specific gravity.“SMS” is semi-massive sulphide.“strike” is the duration of line formed by the intersection of strata surfaces within the horizontal plane, always perpendicular to the dip direction.“tailings” is the finely ground waste rock from which valuable minerals or metals have been extracted.“TMF” is a tailings management facility.“tonne" or "t” is a metric tonne: 1,000 kilograms or 2,204.6 pounds.“t/d” is tonnes per day.“VMS” is volcanogenic massive sulphide.“WRCP” is a waste rock collection pond.Table of Contents74“WRF” is a waste rock facility.“WTP” is a water treatment plan.“XRF” is x-ray fluorescence spectroscopy.“Zn” is the chemical symbol for zinc.Item 3. LEGAL PROCEEDINGSFrom time to time, we are a party to routine litigation and proceedings that are considered part of the ordinary course of business. We are not awareof any material current, pending, or threatened litigation. There are no material proceedings pursuant to which any of our directors, officers oraffiliates or any owner of record or beneficial owner of more than 5% of our securities or any associate of any such director, officer or security holder isa party adverse to us or has a material interest adverse to us.Item 4. MINE SAFETY DISCLOSURESOperations are subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of1977 (the “Mine Act”). At our current stage of exploration, we are not yet subject to MSHA.Companies required to file periodic reports under the Exchange Act, that operate mines regulated under the Mine Act are required to make certaindisclosures pursuant to Section 1503(a) of Dodd-Frank. We have nothing to disclose pursuant to Section 1503(a) of Dodd-Frank for the fiscal yearended November 30, 2020.Table of Contents75PART IIItem 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIESThe Company’s common stock is traded on the TSX and the NYSE American under the symbol “TMQ”. As of February 11, 2021, there were 1,461registered holders of our Common Shares.Dividend PolicyWe have not declared or paid any dividends on our Common Shares. Our current business plan requires that for the foreseeable future, any futureearnings be reinvested to finance the growth and development of our business. We will not declare or pay any dividends until such time as our cashflow 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 determines that our shareholders couldmake better use of the cash.Unregistered Sales of Equity SecuritiesNone.Repurchase of SecuritiesDuring fiscal year 2020, neither Trilogy nor any affiliate of Trilogy repurchased Trilogy Common Shares.Exchange ControlsThere are no governmental laws, decrees or regulations in Canada that restrict the export or import of capital, including foreign exchange controls, orthat affect the remittance of dividends, interest or other payments to non-resident holders of the securities of Trilogy, other than Canadianwithholding tax.Certain Canadian Federal Income Tax Considerations for U.S. HoldersThe following is a general summary of the principal Canadian federal income tax considerations generally applicable under Income Tax Act (Canada)(the “Tax Act”) to a holder of Common Shares, each of whom, at all relevant times, for the purposes of the Tax Act, holds such Common Shares ascapital property, deals at arm’s length with the Company, is not affiliated with the Company and, for purposes of the Tax Act, is not, is not deemed tobe, a resident of Canada and has not and will not use or hold or be deemed to use or hold the Common Shares in the course of carrying on business inCanada (a “Non-Resident Holder”) and is not a “specified shareholder” (as defined in subsection 18(15) of the Tax Act. A “specified shareholder” forthese purposes generally includes a person who (either alone or together with persons with whom that person is not dealing at arm’s length forpurposes of the Tax Act) owns or has the right to acquire or control 25% or more of the Common Shares determined on a votes or fair market valuebasis. Special rules, which are not discussed below, may apply to a non-resident of Canada that is an insurer which carries on business in Canada andelsewhere.The Common Shares will generally be considered capital property to a Non-Resident Holder unless either (i) the Non-Resident Holder holds theCommon Shares in the course of carrying on a business of buying and selling securities or (ii) the Non-Resident Holder has acquired the CommonShares in a transaction or transactions considered to be an adventure or concern in the nature of trade.The term “U.S. Holder,” for the purposes of this section, means a Non-Resident Holder who, for purposes of the Canada-United States TaxConvention (1980) as amended, (the “Convention”), is at all relevant times a resident of the UnitedTable of Contents76States and is a “qualifying person” within the meaning of the Convention. In some circumstances, fiscally transparent entities (including limited liabilitycompanies) will be entitled to benefits under the Convention. U.S. Holders are urged to consult with their own tax advisors to determine theirentitlement to benefits under the Convention based on their particular circumstances.This summary is based on the current provisions of the Tax Act, the regulations thereunder (the “Regulations”), the current provisions of theConvention, counsel’s understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency (the“CRA”) publicly available prior to the date hereof. This summary also takes into account all specific proposals to amend the Tax Act and Regulationspublicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (collectively, the “Proposed Tax Amendments”). Noassurances can be given that the Proposed Tax Amendments will be enacted or will be enacted as proposed. Other than the Proposed TaxAmendments, this summary does not take into account or anticipate any changes in law or the administration policies or assessing practice of CRA,whether by judicial, legislative, governmental or administrative decision or action, nor does it take into account provincial, territorial or foreign incometax legislation or considerations, which may differ significantly from those discussed herein.This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Non-Resident Holder and no representations with respect to the income tax consequences to any particular Non-Resident Holder are made. Thissummary is not exhaustive of all Canadian federal income tax considerations. Accordingly, Non-Resident Holders should consult their own taxadvisors with respect to their own particular circumstances. The discussion below is qualified accordingly.Currency ConversionSubject to certain exceptions that are not discussed herein, for purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition ofCommon Shares, including dividends, adjusted cost base and proceeds of dispositions must be determined in Canadian dollars using the daily exchangerate of the Bank of Canada on the particular date the particular amount arose or such other rate of exchange as acceptable to the CRA.Disposition of Common SharesA Non-Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non-Resident Holder on a dispositionof the Common Shares, nor will capital losses arising from the disposition be recognized under the Tax Act, unless the Common Shares constitute“taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder at the time of disposition and the Non-Resident Holder is notentitled to relief under an applicable income tax treaty or convention. As long as the shares are then listed on a “designated stock exchange” (asdefined in the Tax Act) (which currently includes the TSX and the NYSE American) at the time of disposition, the Common Shares generally will notconstitute taxable Canadian property of a Non-Resident Holder, unless at any time during the 60-month period immediately preceding the dispositionthe following two conditions are met concurrently: (i) the Non-Resident Holder, persons with whom the Non-Resident Holder did not deal at arm’slength, partnerships in which the Non-Resident Holder or persons with whom the Non-Resident Holder did not deal at arm’s length holds amembership interest directly or indirectly through one or more partnerships, or the Non-Resident Holder together with all such persons, owned or wasconsidered to own 25% or more of the issued shares of any class or series of shares of the capital stock of the Company; and (ii) more than 50% of thefair market value of the Common Shares was derived directly or indirectly from one or any combination of real or immovable property situated inCanada, “Canadian resource properties” (as defined in the Tax Act), “timber resource properties” (as defined in the Tax Act) or a options in respect of,or interests in, or civil law rights in, such properties, whether or not it exists.If the Common Shares are taxable Canadian property to a Non-Resident Holder, any capital gain realized on the disposition or deemed disposition ofsuch shares, may not be subject to Canadian federal income tax pursuant to the terms of an applicable income tax treaty or convention betweenCanada and the country of residence of a Non-Resident Holder, including the Convention.Table of Contents77A Non-Resident Holder whose shares are taxable Canadian property should consult their own advisors.Dividends on Common SharesUnder the Tax Act, dividends on Common Shares paid or credited to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of25% of the gross amount of the dividends. This withholding tax may be reduced pursuant to the terms of an applicable income tax treaty or conventionbetween Canada and the country of residence of a Non-Resident Holder. Under the Convention, a U.S. Holder will generally be subject to Canadianwithholding tax at a rate of 15% of the gross amount of such dividends (or 5% in the case of a U.S. Holder that is a company beneficially owning at least10% of the Company’s voting shares). In addition, under the Convention, dividends may be exempt from Canadian non-resident withholding tax if paidto certain U.S. Holders that are qualifying religious, scientific, literary, educational or charitable tax-exempt organizations and qualifying trusts,companies, organizations or arrangements operated exclusively to administer or provide pension, retirement or employee benefits that are exemptfrom tax in the United States and that have complied with specific administrative procedures.Certain U.S. Federal Income Tax ConsiderationsThe following is a general summary of certain anticipated U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arisingfrom and relating to the acquisition, ownership and disposition of Common Shares.This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income taxconsiderations that may apply to a U.S. Holder as a result of acquisition of Common Shares. Furthermore, this summary does not take into account theindividual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax considerations applicable to such U.S.Holder of Common Shares. Except as specified below, this summary does not discuss applicable tax reporting requirements. Accordingly, this summaryis not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. U.S. Holders shouldconsult their own tax advisors regarding the U.S. federal, U.S. state and local, and foreign tax consequences relating to the acquisition, ownership anddisposition of Common Shares.No ruling from the U.S. Internal Revenue Service (the “IRS”) or legal opinion has been requested, or will be obtained, regarding the potential U.S.federal income tax considerations applicable to U.S. Holders as discussed in this summary. This summary is not binding on the IRS, and the IRS is notprecluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities onwhich this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions takenin this summary.Scope of this SummaryAuthoritiesThis summary is based on the U.S. Internal Revenue, as amended (“Code”), regulations promulgated by the Department of the Treasury (whether final,temporary or proposed) (“Treasury Regulations”), U.S. court decisions, published rulings and administrative positions of the IRS, and the Convention,that are applicable and, in each case, in effect as of the date of this document. Any of the authorities on which this summary is based could be changedin a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis, which could affect the U.S.federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, ofany proposed legislation that, if enacted, could be applied on a retroactive basis.U.S. HoldersFor purposes of this section, a “U.S. Holder” is a beneficial owner of Common Shares that, for U.S. federal income tax purposes, is (a) an individual whois a citizen or resident of the United States for U.S. federal income tax purposes; (b) a corporation, or other entity classified as a corporation for U.S.federal income tax purposes, that is created or organizedTable of Contents78in or under the laws of the United States or any state in the United States, including the District of Columbia; (c) an estate if the income of such estateis subject to U.S. federal income tax regardless of the source of such income; or (d) a trust if (i) such trust has validly elected to be treated as a U.S.person for U.S. federal income tax purposes, or (ii) a U.S. court is able to exercise primary supervision over the administration of such trust and one ormore U.S. persons have the authority to control all substantial decisions of such trust.Non-U.S. HoldersFor purposes of this summary, a “Non-U.S. Holder” is a beneficial owner of Common Shares that is neither a U.S. Holder nor a U.S. partnership (orother “pass-through” entity). This summary does not address the U.S. federal income tax considerations applicable to Non-U.S. Holders relating to theacquisition, ownership and disposition of Common Shares. Accordingly, Non-U.S. Holders should consult their own tax advisors regarding the U.S.federal, U.S. state and local, and foreign tax consequences (including the potential application of and operation of any tax treaties) relating to theacquisition, ownership, and disposition of Common Shares.U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not AddressedThis summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under theCode, including (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts or other tax-deferredaccounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate investment trusts or regulated investmentcompanies or that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (c) U.S.Holders that have a “functional currency” other than the U.S. dollar; (d) U.S. Holders that own Common Shares as part of a straddle, hedgingtransaction, conversion transaction, constructive sale or other arrangement involving more than one position; (e) U.S. Holders that acquired CommonShares in connection with the exercise of employee stock options or otherwise as compensation for services; (f) U.S. Holders that hold Common Sharesother than as a capital asset (generally property held for investment purposes) within the meaning of Section 1221 of the Code; (g) U.S. Holders thatare required to accelerate the recognition of any item of gross income with respect to Common Shares as a result of such income being recognized onan applicable financial statement; or (h) U.S. Holders that own, directly, indirectly or by attribution, 10% or more, by voting power or value, of theoutstanding shares of the Company. The summary below also does not address the impact on persons who are U.S. expatriates or former long-termresidents of the United States subject to Section 877 of the Code. U.S. Holders and others that are subject to special provisions under the Code,including U.S. Holders described immediately above, should consult their own tax advisors.If an entity that is classified as a partnership (or other “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S.federal income tax consequences applicable to such partnership (or “pass-through” entity) and the partners of such partnership (or owners of such“pass-through” entity) generally will depend on the activities of the partnership (or “pass-through” entity) and the status of such partners (or owners).Partners of entities that are classified as partnerships (and owners of “pass-through” entities) for U.S. federal income tax purposes should consult theirown tax advisors regarding the U.S. federal income tax consequences relating to the acquisition, ownership and disposition of Common Shares.Tax Consequences Other than U.S. Federal Income Tax Consequences Not AddressedThis summary does not address the U.S. state and local, U.S. estate and gift, U.S. alternative minimum tax, or foreign tax consequences to U.S. Holdersrelating to the acquisition, ownership, and disposition of Common Shares. Each U.S. Holder should consult its own tax advisor regarding the U.S. stateand local, U.S. estate and gift, U.S. federal alternative minimum tax and foreign tax consequences relating to the acquisition, ownership, anddisposition of Common Shares.Table of Contents79U.S. Federal Income Tax Consequences of the Acquisition, Ownership and Disposition of Common SharesDistributions on Common SharesSubject to the PFIC rules discussed below, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to a CommonShare will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income taxwithheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed for U.S. federalincome tax purposes. To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distributionwill be treated first as a tax-free return of capital to the extent of a U.S. Holder’s tax basis in the Common Shares and thereafter as a gain from the saleor exchange of such Common Shares (see “Sale or Other Taxable Disposition of Common Shares” below). However, the Company does not intend tomaintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assumethat any distribution by the Company with respect to the Common Shares will constitute ordinary dividend income. Subject to applicable limitations,dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally will be eligible for the preferential tax rates applicable tolong-term capital gains for dividends, provided certain holding period and other conditions are satisfied, including that the Company not be classified asa PFIC (as discussed below) in the tax year of distribution or in the preceding tax year. Dividends received on Common Shares by corporate U.S. Holderswill not be eligible for the “dividends received deduction”. The dividend rules are complex, and each U.S. Holder should consult its own tax advisorregarding the application of such rules.Sale or Other Taxable Disposition of Common SharesSubject to the PFIC rules discussed below, upon the sale or other taxable disposition of Common Shares a U.S. Holder generally will recognize capitalgain or loss in an amount equal to the difference between (a) the amount of cash plus the fair market value of any property received and (b) its taxbasis in such Common Shares sold or otherwise disposed of. Such gain generally will be treated as “U.S. source” for purposes of applying the U.S.foreign tax credit rules unless the gain is subject to tax in Canada and is re-sourced as “foreign source” under the Convention and such U.S. Holderelects to treat such gain or loss as “foreign source” (see a more detailed discussion at “Foreign Tax Credit” below). Any such gain or loss generally willbe capital gain or loss, which will be long-term capital gain or loss if, at the time of the sale or other disposition, such Common Shares are held for morethan one year. Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently nopreferential tax rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitationsunder the Code.Foreign Tax CreditSubject to the PFIC rules discussed below, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect todividends paid on Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for suchCanadian income tax. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction willreduce a U.S. Holder’s income that is subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxespaid (whether directly or through withholding) by a U.S. Holder during a year. The foreign tax credit rules are complex and involve the application ofrules that depend on a U.S. Holder’s particular circumstances. Accordingly, each U.S. Holder should consult its own U.S. tax advisors regarding theforeign tax credit rules.Receipt of Foreign CurrencyThe amount of any distribution paid in foreign currency to a U.S. Holder in connection with the ownership of Common Shares, or on the sale, exchangeor other taxable disposition of Common Shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rateapplicable on the date of actual or constructive receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). If theforeign currency receivedTable of Contents80is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the dateof receipt. A U.S. Holder that receives foreign currency and converts such foreign currency into U.S. dollars at a conversion rate other than the rate ineffect on the date of receipt may have a foreign currency exchange gain or loss, which generally would be treated as U.S. source ordinary income orloss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method of tax accounting. U.S. Holders should consulttheir own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning and disposing of foreign currency.Additional Tax on Passive IncomeIndividuals, estates and certain trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net investmentincome” including, among other things, dividends and net gain from disposition of property (other than property held in certain trades or businesses).Special rules apply to PFICs. U.S. Holders should consult with their own tax advisors regarding the effect, if any, of this tax on their ownership anddisposition of Common Shares.Passive Foreign Investment Company RulesIf the Company is considered a PFIC within the meaning of Section 1297 of the Code at any time during a U.S. Holder’s holding period, then certaindifferent and potentially adverse tax consequences would apply to such U.S. Holder’s acquisition, ownership and disposition of Common Shares.PFIC Status of the CompanyThe Company generally will be a PFIC if, for a given tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income or(b) 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income, based on the fairmarket value of such assets. “Gross income” generally includes all revenues less the cost of goods sold plus income from investments and fromincidental or outside operations or sources, and “passive income” includes, for example, dividends, interest, certain rents and royalties, certain gainsfrom the sale of stock and securities, and certain gains from commodities transactions. Active business gains arising from the sale of commoditiesgenerally are excluded from passive income if substantially all (85% or more) of a foreign corporation’s commodities are stock in trade or inventory,depreciable property used in a trade or business, or supplies regularly used or consumed in a trade or business, and certain other requirements aresatisfied.For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of theoutstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporationand (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and asset testdescribed above, “passive income” does not include any interest, dividends, rents or royalties that are received or accrued by the Company from a“related person” (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person thatis not passive income.Under certain attribution rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of theCompany which is also a PFIC (a “Subsidiary PFIC”), and will be subject to U.S. federal income tax on (a) a distribution on the shares of a Subsidiary PFICand (b) a disposition of shares of a Subsidiary PFIC, both as if the U.S. Holder directly held the shares of such Subsidiary PFIC.The Company believes that it was not a PFIC for the tax years ended November 30, 2015, 2016, 2017 and 2020. The Company believes it was a PFIC forthe tax years ended November 30, 2018 and 2019 and may be a PFIC in future tax years. No opinion of legal counsel or ruling from the IRS concerningthe status of the Company as a PFIC has been obtained or is currently planned to be requested. The determination of whether the Company (or asubsidiary of the Company) was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which aresubject to differing interpretations. In addition, whether the Company (or subsidiary) will be a PFIC for any tax year depends on the assets and incomeof the Company (and each such subsidiary) over the course of each suchTable of Contents81tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS willnot challenge any determination made by the Company (or subsidiary) concerning its PFIC status or that the Company (and any subsidiary) was not, orwill not be, a PFIC for any tax year. U.S. Holders should consult their own tax advisors regarding the PFIC status of the Company and any subsidiary ofthe Company.Default PFIC Rules under Section 1291 of the CodeIf the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership and disposition of Common Shareswill depend on whether such U.S. Holder makes a QEF election or makes a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”) with respect to Common Shares. A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will bereferred to in this summary as a “Non-Electing U.S. Holder”.A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxabledisposition of Common Shares and (b) any excess distribution paid on the Common Shares. A distribution generally will be an “excess distribution” tothe extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributionsreceived during the three preceding tax years (or during a U.S. Holder’s holding period for the Common Shares, if shorter).If the Company is a PFIC, under Section 1291 of the Code any gain recognized on the sale or other taxable disposition of Common Shares (including anindirect disposition of shares of a Subsidiary PFIC), and any excess distribution paid on Common Shares (or a distribution by a Subsidiary PFIC to itsshareholder that is deemed to be received by a U.S. Holder) must be ratably allocated to each day of a Non-Electing U.S. Holder’s holding period for theCommon Shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or excess distribution and to years beforethe Company became a PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax year would be subject to U.S. federalincome tax at the highest tax applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for eachsuch year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any suchinterest paid as “personal interest”, which is not deductible.If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds Common Shares, the Company will continue to be treated as aPFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent years. If theCompany ceases to be a PFIC, a Non-Electing U.S. Holder may terminate this deemed PFIC status with respect to Common Shares by electing torecognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such Common Shares were sold on the last day ofthe last tax year for which the Company was a PFIC.Under proposed Treasury Regulations, if a U.S. Holder has an option, warrant or other right to acquire stock of a PFIC, such option, warrant or right isconsidered to be PFIC stock subject to the default rules of Section 1291 of the Code. Under rules described below, if the Company was a PFIC, theholding period for the option, warrant or other right would begin on the day after the date a U.S. Holder acquired the option, warrant or other right.This would impact the availability of the QEF Election and Mark-to-Market Election with respect to an option, warrant or other right. Thus, a U.S.Holder would have to account for an option, warrant or other right and Common Shares under the PFIC rules and the applicable elections differently(see discussion below under “QEF Election” and “Market-to-Market Election”.)QEF ElectionIn the event the Company is a PFIC and a U.S. Holder makes a QEF Election for the first tax year in which its holding period of its Common Sharesbegins, such U.S. Holder generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its Common Shares.However, a U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capitalgain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will betaxed asTable of Contents82ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain over (b) net short-term capital gain, and“ordinary earnings” are the excess of (a) “earnings and profits” over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S.federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed tosuch U.S. Holder by the Company. However, a U.S. Holder that makes a QEF Election may, subject to certain limitations, elect to defer payment ofcurrent U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will betreated as “personal interest”, which is not deductible.A U.S. Holder that makes a QEF Election generally (a) may receive a tax-free distribution from the Company to the extent that such distributionrepresents “earnings and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) willadjust such U.S. Holder’s tax basis in the Common Shares to reflect the amount included in income or allowed as a tax-free distribution because of suchQEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition ofCommon Shares.The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEFElection is timely. A QEF Election will be treated as “timely” if it is made for the first year in the U.S. Holder’s holding period for the Common Shares inwhich the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S.Holder files a U.S. federal income tax return for such year.A QEF Election will apply to the tax year for which such QEF Election is made and to all subsequent tax years, unless such QEF Election is invalidated orterminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Companyceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC.Accordingly, if the Company becomes a PFIC in a subsequent tax year, the QEF Election will be effective, and the U.S. Holder will be subject to the QEFrules described above during a subsequent tax year in which the Company qualifies as a PFIC.As discussed above, under proposed Treasury Regulations, if a U.S. Holder has an option, warrant or other right to acquire stock of a PFIC, such option,warrant or right is considered to be PFIC stock subject to the default rules of Section 1291 of the Code on its disposition. However, a holder of anoption, warrant or other right to acquire stock of a PFIC may not make a QEF Election that will apply to the option, warrant or other right to acquirePFIC stock. In addition, under proposed Treasury Regulations, if a U.S. Holder holds an option, warrant or other right to acquire stock of a PFIC, theholding period with respect to shares of stock of the PFIC acquired upon exercise of such option, warrant or other right will include the period that theoption, warrant or other right was held. U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to CommonShares.The Company will make available to U.S. Holders, upon their written request, timely and accurate information as to its status as a PFIC, and will provideto a U.S. Holder all information and documentation that a U.S. Holder making a QEF Election with respect to the Company, and any Subsidiary PFIC inwhich the Company owns, directly or indirectly, more than 50% of such Subsidiary PFIC’s total aggregate voting power, is required to obtain for U.S.federal income tax purposes in the event it is a PFIC. However, U.S. Holders should be aware that the Company can provide no assurances that it willprovide any such information relating to any Subsidiary PFIC, in which the Company owns, directly or indirectly, 50% or less of such Subsidiary PFIC’saggregate voting power. Because the Company may own shares in one or more Subsidiary PFICs and may acquire shares in one or more SubsidiaryPFICs in the future, they will continue to be subject to the rules discussed above with respect to the taxation of gains and excess distributions withrespect to any Subsidiary PFIC for which the U.S. Holders do not obtain the required information. U.S. Holders should consult their tax advisorregarding the availability of, and procedure for making, a QEF Election with respect to the Company and any Subsidiary PFIC.Table of Contents83Mark-to-Market ElectionA U.S. Holder may make a Mark-to-Market Election only if the Common Shares are marketable stock. The Common Shares generally will be“marketable stock” if they are regularly traded on (a) a national securities exchange that is registered with the SEC; (b) the national market systemestablished pursuant to section 11A of the Securities and Exchange Act of 1934; or (c) a foreign securities exchange that is regulated or supervised by agovernmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financialdisclosure and other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreignexchange, ensure that such requirements are actually enforced; and (ii) the rules of such foreign exchange ensure active trading of listed stocks. If suchstock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded” for any calendar year during which suchstock is traded, other than in de minimus quantities, on at least 15 days during each calendar quarter. Each U.S. Holder should consult its own taxadvisor regarding whether the Common Shares constitute marketable stock.A U.S. Holder that makes a Mark-to-Market Election with respect to its Common Shares generally will not be subject to the rules of Section 1291 of theCode discussed above. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder’s holdingperiod for Common Shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply tocertain dispositions of, and distributions on, the Common Shares.A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equalto the excess, if any, of (a) the fair market value of the Common Shares, as of the close of such tax year over (b) such U.S. Holder’s tax basis in suchCommon Shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (i) suchU.S. Holder’s adjusted tax basis in the Common Shares over (ii) the fair market value of such Common Shares (but only to the extent of the net amountof previously included income as a result of the Mark-to-Market Election for prior tax years).U.S. Holders that make a Mark-to-Market Election generally also will adjust their tax basis in the Common Shares to reflect the amount included ingross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of CommonShares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or loss (not to exceed the excess, if any, of (a) the amountincluded in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of suchMark-to-Market Election for prior tax years).A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the CommonShares cease to be “marketable stock” or the IRS consents to revocation of such election. U.S. Holders should consult their own tax advisors regardingthe availability of, and procedure for making, a Mark-to-Market Election.Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to Common Shares, no such election may be made with respectto the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning because such stock is not marketable. Hence, the Mark-to-Market Electionwill not be effective to eliminate the interest charge described above with respect to deemed dispositions of Subsidiary PFIC stock or distributions froma Subsidiary PFIC.Other PFIC RulesUnder Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder thathad not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise be tax-deferred(e.g., gifts and exchanges pursuant to corporate reorganizations) in the event the Company is a PFIC during such U.S. Holder’s holding period for therelevant shares. However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which Common Sharesare transferred.Table of Contents84Certain additional adverse rules will apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEFElection. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may beprovided in Treasury Regulations, be treated as having made a taxable disposition of such Common Shares.In any year in which the Company is classified as a PFIC, a U.S. Holder will be required to file an annual report with the IRS containing such informationas Treasury Regulations and/or other IRS guidance may require. U.S. Holders should consult their own tax advisors regarding the requirements of filingsuch information returns under these rules, including the requirement to file an IRS Form 8621.In addition, a U.S. Holder who acquires Common Shares from a decedent will not receive a “step up” in tax basis of such Common Shares to fair marketvalue unless such decedent had a timely and effective QEF Election in place.Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC.The PFIC rules are complex, and U.S. Holders should consult their own tax advisors regarding the PFIC rules and how they may affect the U.S. federalincome tax consequences of the acquisition, ownership, and disposition of Common Shares in the event the Company is a PFIC at any time during suchholding period for such Common Shares.Information Reporting, Backup Withholding TaxCertain U.S. Holders are required to report information relating to an interest in Common Shares subject to certain exceptions (including an exceptionfor Common Shares held in accounts maintained by certain financial institutions), by attaching a completed IRS Form 8938, Statement of SpecifiedForeign Financial Assets, with their tax return for each year in which they hold an interest in Common Shares. U.S. Holders should consult their own taxadvisors regarding information reporting requirements relating to their ownership of Common Shares.Payments made within the United States, or by a U.S. payor or U.S. middleman, of dividends on Common Shares, and proceeds arising from certainsales or other taxable dispositions of Common Shares, may be subject to information reporting and backup withholding tax, at the rate of 24%, if a U.S.Holder (a) fails to furnish such U.S. Holder’s correct U.S. social security or other taxpayer identification number (generally on Form W-9); (b) furnishesan incorrect U.S. taxpayer identification number; (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject tobackup withholding tax; or (d) fails under certain circumstances to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S.taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, U.S. Holdersthat are corporations generally are excluded from these information reporting and backup withholding tax rules. Backup withholding is not anadditional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal incometax liability, if any, or will be refunded, if such U.S. Holder timely furnishes the required information to the IRS. U.S. Holders should consult their owntax advisors regarding the information reporting and backup withholding tax rules.Table of Contents85Item 6. SELECTED FINANCIAL DATAThe selected financial data in the table below have been selected in part, from our consolidated financial statements, which have been prepared inaccordance with accounting principles generally accepted in the United States. The selected financial data should be read in conjunction with thoseconsolidated financial statements and the notes thereto.in thousands of dollars, except per share amountsYear Ended November 3020202019201820172016 $ $ $ $ $ Results of operations (Earnings) loss and comprehensive (earnings) loss for the period (161,767) 27,905 21,849 21,104 4,862Basic (earnings) loss per share (1.14) 0.21 0.18 0.20 0.05Diluted (earnings) loss per share (1.12) 0.21 0.18 0.20 0.05Financial position Working capital 10,392 17,803 21,976 4,851 15,056Total assets 185,265 51,617 54,659 40,279 46,747Total long-term liabilities 408 31,000 20,800 10,365 —Shareholders’ equity 183,811 18,263 32,202 25,665 46,154Table of Contents86Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSTable of Contents87GeneralThis Management’s Discussion and Analysis (“MD&A”) of Trilogy Metals Inc. (“Trilogy”, “the Company”, “us” or “we”) is dated February 11, 2021 andprovides an analysis of our audited financial results for the year ended November 30, 2020 compared to the years ended November 30, 2019 andNovember 30, 2018.The following information should be read in conjunction with our November 30, 2020 audited consolidated financial statements and related noteswhich were prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). A summary of the U.S. GAAPaccounting policies is outlined in note 2 of the audited consolidated financial statements. All amounts are in United States dollars unless otherwisestated. References to “Canadian dollars” and “C$” and “CDN$” are to the currency of Canada and references to “U.S. dollars”, “$” or “US$” are to thecurrency of the United States.Richard Gosse, P. Geo, is a Qualified Person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), and hasapproved the scientific and technical information in this MD&A.Trilogy’s shares are listed on the Toronto Stock Exchange (“TSX”) and the NYSE American under the symbol “TMQ”. Additional information related toTrilogy, including our annual report on Form 10-K, is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.Description of businessWe are a base metals exploration company focused on the exploration and development of mineral properties, through our equity investee, in theAmbler mining district located in Alaska, U.S.A. We conduct our operations through a wholly owned subsidiary, NovaCopper US Inc. which is doingbusiness as Trilogy Metals US (“Trilogy Metals US”). Our Upper Kobuk Mineral Projects, (“UKMP” or “UKMP Projects”) were contributed into a 50/50joint venture named Ambler Metals LLC (“Ambler Metals”) between Trilogy and South32 Limited (“South32”) on February 11, 2020 (see below). Theprojects contributed to Ambler Metals consist of: i) the Ambler lands which host the Arctic copper-zinc-lead-gold-silver project (the “Arctic Project”);and ii) the Bornite lands being explored under a collaborative long-term agreement with NANA Regional Corporation, Inc. (“NANA”), a regional AlaskaNative Corporation, which hosts the Bornite carbonate-hosted copper project (the “Bornite Project”) and related assets.Property reviewThe UKMP Projects are held by our equity investee, Ambler Metals of which Trilogy holds a 50% interest. The projects are located in the Ambler miningdistrict in Northwest Alaska. The UKMP Projects comprise approximately 426,690 acres (172,675 hectares) consisting of the Ambler and Bornite lands.Arctic ProjectThe Ambler lands, which host a number of deposits, including the high-grade copper-zinc-lead-gold-silver Arctic Project, and other mineralizedoccurrences within a 100-kilometer-long volcanogenic massive sulfide (“VMS”) belt. The Ambler lands are located in Northwestern Alaska and consistof 185,805 acres (75,192 hectares) of Federal patented mining claims which hosts the Arctic deposit and State of Alaska mining claims which we areactively exploring, within which VMS mineralization has been found.Prior to the formation of the Joint Venture on February 11, 2020, we had recorded the Ambler lands as a mineral property with acquisition costscapitalized and exploration costs expensed in accordance with our accounting policies.Bornite ProjectOn October 19, 2011, Trilogy Metals US and NANA signed a collaborative agreement to explore and develop the Ambler mining district. Under theExploration Agreement and Option to Lease (as amended, the “NANA Agreement”), weTable of Contents88acquired, in exchange for, among other things, a $4.0 million cash payment to NANA, the exclusive right to explore the Bornite property and landsdeeded to NANA through the Alaska Native Claims Settlement Act (“ANCSA”), located adjacent to the Arctic Project, and the non-exclusive right toaccess and entry onto NANA’s lands. The NANA Agreement establishes a framework for any future development of either the Bornite Project or theArctic Project. Both projects are included as part of a larger area of interest set forth in the NANA Agreement.Upon the decision to proceed with development of a mine within the area of interest, NANA maintains the right to purchase an ownership interest inthe mine equal to between 16%-25% or retain a 15% net proceeds royalty which is payable after we have recovered certain historical costs, includingcapital and cost of capital. Should NANA elect to purchase an ownership interest in the mine, consideration will be payable based on the electedpercentage purchased and all the costs incurred on the properties less $40.0 million, not to be less than zero. The parties would form a joint ventureand be responsible for all future costs incurred in connection with the mine, including capital costs of the mine, based on each party’s pro-rata share.NANA would also be granted a net smelter return royalty between 1% and 2.5% upon the execution of a mining lease or a surface use agreement, theamount of which is determined by the particular area of land from which production originates.Prior to the formation of the Joint Venture on February 11, 2020, we had accounted for the Bornite property as a mineral property with acquisitioncosts capitalized and exploration costs expensed in accordance with our accounting policies.Corporate developmentsAppointment of CEOTony Giardini was appointed as President and CEO of the Company effective June 1, 2020. Mr. Giardini has been a director of the Company since 2012and will continue to be an executive director. Mr. Giardini has extensive experience as an executive officer and key leadership team member with hisprevious roles as President of Ivanhoe Mines Ltd. (“Ivanhoe”), a base metals development and exploration company, and as Chief Financial Officer atKinross Gold Corporation, a senior gold producer. Mr. Giardini has extensive experience with joint ventures and large capital projects, includingIvanhoe’s three large development assets, Platreef, Kipushi and Kamoa-Kakula.Joint ventureOption agreementOn April 10, 2017, Trilogy and Trilogy Metals US entered into an Option Agreement to form a Joint Venture with South32 Group Operations Pty Ltd., awholly-owned subsidiary of South32, which agreement was later assigned by South32 Operations Pty Ltd. to its affiliate, South32 USA Exploration Inc.on the UKMP (“Option Agreement”). Under the terms of the Option Agreement, as amended, Trilogy Metals US granted South32 the right to form a50/50 joint venture to hold all of Trilogy Metals US’ Alaskan assets. South32 exercised its option on December 19, 2019.Formation of joint ventureOn February 11, 2020, Trilogy completed the formation of the 50/50 joint venture with South32. Trilogy contributed all its assets associated with the172,675-hectare UKMP, including the Arctic and Bornite Projects, while South32 contributed a subscription price of US$145 million (the “SubscriptionPrice”), resulting in each party owning a 50% interest in Ambler Metals. The Subscription Price will be used to advance the Arctic and Bornite Projects,along with exploration in the Ambler mining district. With Ambler Metals being well funded, with access to $145 million, Trilogy does not expect tofund programs and budgets to advance the UKMP until the Subscription Price is spent by Ambler Metals. To assist Ambler Metals during the initial setup phase, Trilogy was paying all of Ambler Metals’ invoices and being reimbursed pursuant to a services agreement (the “Services Agreement”)between Trilogy and Ambler Metals untilTable of Contents89the back office is fully transitioned to a new permanent team employed by the Joint Venture. The Services Agreement ended on December 31, 2020.To ensure a successful startup of the Joint Venture, management from Trilogy and South32 took on interim management roles. Darryl Steane,South32’s Business Development Manager assumed the duties as Interim President of Ambler Metals; Elaine Sanders, Trilogy’s Chief Financial Officerassumed the duties as Interim Vice President Finance of Ambler Metals; and Robert (Bob) Jacko, Trilogy’s Senior Vice President Operations assumedthe duties as Interim Vice President Operations of Ambler Metals. Prior to the end of the year, the permanent management team at Ambler Metalswas hired and are all now based in Alaska. The joint venture company is led by President and Chief Executive Officer, Ramzi Fawaz, Vice PresidentOperations, Kevin Torpy and Vice President Finance, Rebecca Donald. In addition to the appointment of the leadership team at Ambler Metals, theTrilogy technical team has transitioned over to the joint venture entity.Ambler Metals is an independently operated company, jointly controlled by Trilogy and South32 through a four-member board of which two membersare currently appointed by Trilogy based on its 50% equity interest. All significant decisions related to the UKMP require the approval of bothcompanies. We determined that Ambler Metals is a variable interest entity, or VIE, because it is expected to need additional funding from its ownersfor its significant activities. However, we concluded that we are not the primary beneficiary of Ambler Metals as the power to direct its activities,through its board, is shared under the limited liability company agreement. As we have significant influence over Ambler Metals through ourrepresentation on its board, we use the equity method of accounting for our investment in Ambler Metals. Our investment in Ambler Metals wasinitially measured at its fair value of $176 million upon recognition. Our maximum exposure to loss in this entity is limited to the carrying amount of ourinvestment in Ambler Metals, which, as of November 30, 2020, totaled $173 million as well as approximately $114,000 of amounts receivable per theServices Agreement. The amounts receivable as at November 30, 2020 was subsequently collected.During the year ended November 31, 2020, Ambler Metals loaned $57.5 million back to South32 and retained $87.5 million of the $146 millioncontributed by South32. The loan has a 7-year maturity date, but we anticipate that Ambler Metals will begin to draw down on the loan with cash callsto South32 before the end of 2021 to fund South32’s 50% share of the 2021 budget. The loan is secured by South32’s membership interest in AmblerMetals and guaranteed by South32 International Investment Holdings Pty Ltd.Project activities2020 Program and BudgetIn a press release dated February 26, 2020, the Company announced that Ambler Metals had approved a 2020 budget of $22.8 million for theadvancement of the UKMP Projects. The budget was to be 100% funded by Ambler Metals. The 2020 program budget included 10,000 meters ofdrilling at the Arctic Project, 2,500 meters of drilling within the Ambler VMS belt and geological mapping and geochemical soil sampling at the BorniteProject. Prior to the start of the field season, we and our joint venture partner, South32 decided not to proceed with the 2020 exploration programafter assessing the current novel coronavirus (COVID-19) environment. The Company and South32 gave due consideration to the merits of carrying outan abridged work program at the UKMP. However, given the continued uncertainty resulting from COVID-19, ongoing safety concerns (despite addedsafety protocols including physical distancing, protective equipment and testing) and the fact that, due to COVID-19, the planned field season hadalready been delayed to the point at which any field season would provide limited critical path benefits, the decision was made not to proceed with a2020 field season.Arctic ProjectIn a press release dated August 20, 2020, the Company announced the results of its feasibility study for the Arctic Project (the “Arctic FS”). The Arctic FSwas prepared on a 100% ownership basis, of which Trilogy’s share is 50%. The Arctic FSTable of Contents90describes the technical and economic viability of establishing a conventional open-pit copper-zinc-lead-silver-gold mine and mill complex for a 10,000tonne per day operation for a minimum 12-year mine life.On October 2, 2020, we filed the technical report for the Company’s Arctic Project entitled “Arctic Feasibility Study Alaska, USA NI 43-101 TechnicalReport" with an effective date of August 20, 2020, prepared by Ausenco Engineering Canada Inc., Wood Canada Limited and SRK Consulting (Canada)Inc. (the “2020 Arctic Report”). The 2020 Arctic report describes the Arctic FS as discussed above. The 2020 Arctic Report supersedes the Company’s2018 technical report for the Arctic Project.Ambler Mining District Industrial Access Project (“AMDIAP” or “Ambler Road Project”)On March 27, 2020, the BLM, the lead federal agency for the permitting of the AMDIAP, released the Final Environmental Impact Statement (“EIS”) forthe AMDIAP. This follows on the Draft EIS completed on August 23, 2019. On July 23, 2020, the BLM issued the Joint Record of Decision (“JROD”) for the Ambler Road Project. The JROD approves the development of thenorthern or “A” route which is to be a 211-mile-long gravel private access road in the southern Brooks Range foothills to provide industrial access tothe Ambler Mining District. Along with the JROD, a Section 404 Permit, which is governed by the Clean Water Act (“CWA”), was issued by the UnitedStates Army Corp. of Engineers (“USACE”) to AIDEA.Subsequent to the issuance of the JROD, a coalition of national and Alaska environmental non-government organizations (“ENGO”) have filed a lawsuitagainst the federal agencies responsible for issuing the JROD. The ENGO’s main position is that due process was not carried out during the permittingof the AMDIAP. Subsequently, AIDEA and Ambler Metals have filed for and received intervenor status in the lawsuit and will be defending the issuanceof the JROD and the permits. On January 6, 2021, BLM, NPS and AIDEA signed Right-of-Way agreements giving AIDEA the ability to cross federally owned and managed lands alongthe route for the Ambler Road Project approved in the JROD. The authorizing documents with the two agencies are the final federal permits requiredfor the Ambler Road Project. Ambler Metals is continuing discussions with AIDEA on securing a predevelopment funding agreement for the detailed engineering work for theAmbler Road Project.OutlookOn November 19, 2020, the Company announced the approval of the 2021 program and budget for Ambler Metals of approximately $27 million toadvance the UKMP. The budget is fully funded by Ambler Metals. Activities planned at the Arctic Project include 7,600 meters of drilling which willhave the dual purpose of extracting additional material for metallurgical work and for the conversion of mineral resources into the measured category.The metallurgical program that is associated with this drilling will support variability test work and pilot plant work which will commence later in 2021. Engineering work will continue at Arctic with the aim of submitting the application for the Notice of Intent for the 404 Dredge and Fill Permit, which iscovered by the Clean Water Act, to the United States Army Corps of Engineers. The Company currently anticipates Ambler Metals will submit thepermit applications during the second half of 2021. Following up from the 2019 work performed along the 70-mile (100 kilometer) Ambler VMS belt, Ambler Metals will continue exploration efforts alongthe belt to discover and define additional deposits that may provide feed to a future Arctic mill. Ambler Metals plans to conduct a 7,000-meterregional exploration drill campaign at the Sunshine prospect and at other drill-ready targets. The drill program is expected to commence in earlysummer and finish before the end of September. The drilling may be preceded by detailed geologic mapping, geochemical soil sampling and groundgeophysics.The Company has approved a 2021 cash budget for corporate activities of approximately $5.3 million. The corporate budget consists of personnel andrelated costs of $2.0 million, professional fees of $1.1 million, investor relations andTable of Contents91marketing costs of $0.6 million, office related costs of $0.5 million, insurance costs of $0.4 million and regulatory costs of $0.3 million. The Company’smanagement team is focused on the oversight of our investment in Ambler Metals and will closely work with Ambler Metals as it starts its first fieldseason as a new team and prepares to submit the permit applications for the Arctic Project during the second half of the year. The Company’stechnical staff will work closely with South32’s technical team and Ambler Metals exploration staff to review opportunities on advancing its knowndeposits and look at potential new targets in the large land package that is held by Ambler Metals. The Company plans to participate in investormeetings and conferences virtually and online for most of the year and has therefore reduced its travel budget for 2021 from previous years. Asignificant amount of uncertainty exists with the Company’s annual renewal of its insurance policies and costs are currently unpredictable. Insurancepremiums may differ significantly from our budget. The Company has sufficient cash on hand to fund its corporate activities including any increases ininsurance premiums upon renewal.Summary of resultsin thousands of dollars,except for per share amountsYear endedYear endedYear endedNovember 30, November 30, November 30, 202020192018Selected expenses $ $ $ Mineral properties and feasibility study expenses 2,610 19,211 16,490 General and administrative 1,650 1,838 1,532Professional fees 1,347 1,382 453Salaries 1,411 1,314 1,467Salaries – technical services 898 — —Salaries – stock-based compensation 3,564 3,845 1,441Loss on held for trading investments — — 272Gain on derecognition of assets contributed to joint venture (175,770) — —Equity in investee 2,855 — —Comprehensive earnings (loss) for the year 161,767 (27,905) (21,849)Basic earnings (loss) per common share 1.14 (0.21) (0.18)Diluted earnings (loss) per common share 1.12 (0.21) (0.18)For the year ended November 30, 2020, we reported a net earnings of $161.8 million (or $1.14 basic earnings and $1.12 diluted earnings per commonshare) compared to a net loss in 2019 of $27.9 million (or $0.21 basic and diluted loss per common share) and a net loss of $21.8 million in 2018 (or$0.18 basic and diluted loss per common share). The 2020 movement to net earnings was primarily due to the $175.8 million gain realized on thederecognition of assets contributed to the joint venture, offset by our 50% share of the joint venture’s net operating loss and feasibility study chargesincurred for the Arctic project subsequent to the formation of the joint venture. Mineral properties expense was eliminated after the contribution ofmineral properties to the joint venture at the end of the first quarter of 2020. This resulted in a significant cost savings of $17.7 million in relation tothe prior year comparative. Going forward, all project related costs will be captured through our 50% equity recognition of the joint venture’soperating loss. Adding to the variances in 2020 were incremental decreases in general and administrative expenses, professional fees and stock-basedcompensation offset by an increase in salaries. The increase in salaries resulted from the addition of management during the current year for whichthere is no prior year comparative. Pursuant to the Services Agreement, $0.9 million of salaries and wages were incurred by the Company in support ofthe joint venture back office while Ambler set up its permanent team. Salaries were lower in the prior year due to the resignation of the CEO in thefourth quarter.The 2019 movement in net loss was primarily due to the increased size and magnitude of the field programs undertaken at our mineral properties.Adding to this variance in 2019 were incremental increases in general and administrative expenses, professional fees and stock-based compensationoffset by a slight decrease in salaries. Additionally, there were losses recognized on both the sale of investments as well as investments designated asheld for trading in the prior year that did not exist in the fiscal 2019 year. We executed a $18.2 million program at the UKMP in 2019, with $9.2 milliononTable of Contents92the Bornite Project funded by South32 under the Option Agreement, $2 million on a new regional exploration program funded 50/50 by Trilogy andSouth 32 and $7 million on the Arctic Project funded entirely by Trilogy.Fourth quarter resultsDuring the fourth quarter of 2020, we incurred a loss of $3.2 million compared to a loss of $6.5 million in the fourth quarter of 2019. The primarydrivers for the difference were as follows: a) $3.8 million lower mineral property expenses as the prior year included project activity (field season wasextended to October 2019) for which there are no comparatives in the current period as the mineral properties were contributed to the joint ventureduring the first quarter of 2020; b) $0.4 million lower professional fees as the comparative includes additional legal fees for corporate matters as wellas consulting fees for our former CEO; c) $0.3 million lower stock-based compensation as the prior year included Restricted Share Units (“RSUs”) thatvested during the fourth quarter; and d) a decrease of $0.2 million in general and administrative expenses mostly due to travel cost savings due toCOVID-19 restrictions. These cost savings were offset by a loss of $1.0 million on the equity method investment for which there is no prior yearcomparative, Arctic feasibility study costs of $0.1 million and an increase of $0.3 million in salaries due to new hires to the management team in thefourth quarter 2020.Selected financial dataAnnual informationThe following annual information is prepared in accordance with U.S. GAAP. in thousands of dollarsYear endedYear endedYear endedNovember 30, November 30, November 30, 202020192018$ $ $ Interest income 87 500 346 Services agreement income 929 — —Expenses 12,164 28,405 21,923 Gain (Loss) from continuing operations for the year 161,767 (27,905) (21,849) Gain (Loss) and comprehensive loss for the year 161,767 (27,905) (21,849) Total assets 185,265 51,617 54,659Total liabilities 1,454 33,354 22,457Quarterly informationin thousands of dollars,except per share amountsQ4 2020Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019Q2 2019Q1 2019 11/30/2008/31/2005/31/2002/29/2011/30/1908/31/1905/31/1902/28/19 $ $ $ $ $ $ $ $ Interest and other income 5 8 12 62 91 137 150 122 Mineral properties and feasibilitystudy expenses 91 232 742 1,545 3,819 10,951 2,906 1,535Share of loss on equity investment 1,022 1,094 561 178 — — — —Earnings (loss) for the period (3,226) (3,184) (3,002) 171,179 (6,525) (12,535) (4,509) (4,336)Earnings (loss) per common share –basic (0.04) (0.02) (0.02) 1.22 (0.05) (0.09) (0.04) (0.03)Earnings (loss) per common share –diluted (0.01) (0.01) (0.02) 1.16 (0.05) (0.09) (0.04) (0.03)Table of Contents93Factors that can cause fluctuations in our quarterly results include the length of the exploration field season at the properties, the type of programconducted, stock option vesting, and issuance of shares. Subsequent to the formation of the Jont Venture, project related costs may cause fluctuationsin our quarterly results through our 50% share of the Joint Venture’s net operating loss.We realized a net earnings of $171.2 million for the first quarter ended February 28, 2020, and comparatively incurred a net loss of $4.3 million for thefirst quarter ended February 28, 2019. The difference of $175.5 million is primarily due to the gain realized on transfer of assets to Ambler Metals,offset by the loss on equity method investment. Additionally, there was a decrease in stock-based compensation offset by higher professional feesincurred due to the formation of the joint venture and the implementation of the new lease accounting standard. General and administrative expenseswere higher due primarily to an executive search for a new CEO in the first quarter of 2020.Our net loss for the second quarter ended May 31, 2020 of $3.0 million was $1.5 million lower versus the comparative period. The difference wasprimarily due to the elimination of mineral property expenses upon the transfer of UKMP assets to the joint venture in the first quarter of 2020, offsetby a $0.6 million loss on equity method investment and $0.7 million Arctic feasibility study costs incurred during the quarter.Similarly, our net loss for the third quarter ended August 31, 2020 of $3.2 million decreased by $9.3 million from the comparative period. The decreasewas primarily due to the elimination of $11 million in mineral properties expenses due to the formation of the Joint Venture, for which there are nocomparable expenses in the current period, offset by $1 million in feasibility study costs during the third quarter of 2020.Liquidity and capital resourcesAt November 30, 2020, we had $11.1 million in cash and cash equivalents and working capital of $10.4 million. We expended $8.3 million on operatingactivities during the 2020 fiscal year compared with $23.5 million for operating activities for the same period in 2019, and expenditures of $22.1 millionfor operating activities for the same period in 2018. A majority of cash spent on operating activities during all periods was expended on mineralproperty expenses, general and administrative expenses, salaries and professional fees. Ambler assumed responsibility for project funding uponformation of the Joint Venture on February 11, 2020. This resulted in a decrease in cash spent during the year ended November 30, 2020, mainly dueto decreased mineral property expenses of $17.7 million offset by $1.1 million on Arctic feasibility study costs. The Company continues to manage itscash expenditures through its working capital and management believes that the working capital available is sufficient to meet its operationalrequirements for the next two years.During the year ended November 30, 2020, we received proceeds of $0.2 million from directors and officers exercise of stock options. Comparatively,during the year ended November 30, 2019, we received proceeds of approximately $9.9 million as a result of an exercise of 6,521,740 warrants and$0.2 million from directors and officers exercise of stock options.During the year ended November 30, 2020, we did not have any investing activities. During the year ended November 30, 2019, we raised $9.6 millionfrom investing activities. The investing proceeds consist of $10.2 million raised through mineral property funding from South32 offset by outflows of$0.6 million on the purchase of a new septic system for our remote exploration camp. During the year ended November 30, 2018, we raised $12.7million from investing activities. These investing proceeds consist of $10.4 million of mineral property funding from South32 and $2.3 million proceedsreceived from the disposition of shares classified as held for trading investment.Table of Contents94Contractual obligationsContractual obligated undiscounted cash flow requirements as at November 30, 2020 are as follows.In thousands of dollarsTotal <1 Year 1–2 Years 2–5 Years Thereafter $ $ $ $ $ Accounts payable and accrued liabilities 888 888 — — — Office lease 728 196 409 123 — 1,616 1,084 409 123 —On February 21, 2017, the Company entered into a lease for office space effective July 1, 2017 for a period of seven years with a total commitment of$1.3 million.Off-balance sheet arrangementsWe have no material off-balance sheet arrangements.Outstanding share dataAt February 11, 2021, we had 144,185,729 common shares issued and outstanding. At February 12, 2021, we had 11,951,650 stock options outstandingwith a weighted-average exercise price of $1.92 and 1,251,253 Deferred Share Units (“DSUs”) outstanding. We continue to hold 11,927 NovaGoldResources Inc. (“NovaGold”) DSUs for which the NovaGold director is entitled to receive one common share of Trilogy for every six NovaGold shares tobe received upon their retirement from the NovaGold board. For additional information on NovaGold DSUs, please refer to note 9 in our November 30,2020 audited consolidated financial statements. Upon the exercise of all the forgoing convertible securities, the Company would be required to issuean aggregate of 13,204,891 common shares.Financial instrumentsOur financial instruments consist of cash and cash equivalents, accounts receivable, deposits, accounts payable and accrued liabilities. The fair value ofthe financial instruments approximates their carrying value due to the short-term nature of their maturity. Our financial instruments initially measuredat fair value and then held at amortized cost include cash and cash equivalents, accounts receivable, deposits, and accounts payable and accruedliabilities. Our investments were held for trading and marked-to-market at each period end with changes in fair value recorded to the statement ofloss. The South32 purchase option was a derivative financial liability measured at fair value with changes in value recorded to the statement of loss.(a) Currency riskCurrency risk is the risk of a fluctuation in financial asset and liability settlement amounts due to a change in foreign exchange rates. The Companyoperates in the United States and Canada. The Company’s exposure to currency risk at November 30, 2020 is limited to Canadian dollar balancesconsisting of cash of CDN$116,000, accounts receivable of CDN$19,000 and certain trade payables and accrued personnel costs CDN$843,000. Basedon a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change byapproximately $55,000.(b) Credit riskCredit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Companyholds cash and cash equivalents with Canadian Chartered financial institutions. The Company’s accounts receivable are for recoverable expenses. TheCompany’s exposure to credit risk is equal to the balance of cash and cash equivalents and accounts receivable as recorded in the financial statements.Table of Contents95(c) Liquidity riskLiquidity risk is the risk that we will encounter difficulties raising funds to meet our financial obligations as they fall due. We are in the exploration stageand do not have cash inflows from operations; therefore, we manage liquidity risk through the management of our capital structure and financialleverage. Future sources of liquidity may arise from equity financing, debt financing, convertible debt, or other means. Our contractually obligated cashflow is disclosed under the section titled “Contractual Obligations.”(d) Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company is exposed to interest rate risk with respect to interest earned on cash and cash equivalents. Based on balances as at November 30, 2020,a 1% change in interest rates would result in a change in net loss of $0.1 million, assuming all other variables remain constant.As we are currently in the exploration phase none of our financial instruments are exposed to commodity price risk; however, our ability to obtainlong-term financing and its economic viability could be affected by commodity price volatility.New accounting pronouncementsCertain recent accounting pronouncements have been included under note 2 in our November 30, 2020 audited consolidated financial statements.Critical accounting estimatesThe most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our equitymethod investment in Ambler Metals LLC, income taxes and valuation of stock-based compensation.Impairment of Investment in Ambler Metals LLCManagement assesses the possibility of impairment in the carrying value of its equity method investment in Ambler Metals LLC whenever events orcircumstances indicate that the carrying amount of the investment may not be recoverable. Significant judgments are made in assessing the possibilityof impairment. Factors that may be indicative of an impairment include a loss in the value of an investment that is not temporary. Managementconsiders several factors in considering if an indicator of impairment has occurred, including but not limited to, significant changes in the legal,business or regulatory environment, adverse changes in the use or physical condition of the underlying mineral properties asset, changes in the marketinterest rates or other market rates of return that are likely to significantly affect the discount rate used in the impairment assessment, significantadverse changes impacting the investee and internal reporting indicating the economic performance of an investment is, or will be,worse thanexpected.These factors are subjective and require consideration at each period end. If an indicator of impairment is determined to exist, the fair value of theimpaired investment is determined based on the valuation of cohort companies with similar projects or upon the present value of expected future cashflows using discount rates and other assumptions believed to be consistent with those used by principal market participants and observed marketearnings multiples of comparable companies.Management’s estimates of mineral prices, mineral resources, foreign exchange rates and projected future production levels and operating capital aresubject to risk and uncertainties that may affect the determination of the recoverability of the equity method investment.Table of Contents96Income taxesWe must make estimates and judgments in determining the provision for income tax expense, deferred tax assets and liabilities, and liabilities forunrecognized tax benefits including interest and penalties. We are subject to income tax law in the United States and Canada. The evaluation of taxliabilities involving uncertainties in the application of complex tax regulation is based on factors such as changes in facts or circumstances, changes intax law, new audit activity, and effectively settled issues. The evaluation of an uncertain tax position requires significant judgment, and a change insuch recognition would result in an additional charge to the income tax expense and liability.Stock-based compensationCompensation expense for options granted to employees, directors and certain service providers is determined based on estimated fair values of theoptions at the time of grant using the Black-Scholes option pricing model, which takes into account, as of the grant date, the fair market value of theshares, expected volatility, expected life, expected forfeiture rate, expected dividend yield and the risk-free interest rate over the expected life of theoption. The use of the Black-Scholes option pricing model requires input estimation of the expected life of the option, volatility, and forfeiture ratewhich can have a significant impact on the valuation model, and resulting expense recorded.Disclosure controls and proceduresDisclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted by the Companyunder U.S. and Canadian securities legislation is recorded, processed, summarized and reported within the time periods specified in those rules,including providing reasonable assurance that material information is gathered and reported to senior management, including the Chief ExecutiveOfficer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to permit timely decisions regarding public disclosure. Management, including theCEO and CFO, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the US Exchange Act and the rules of Canadian Securities Administrators, as at November 30, 2020. Based on this evaluation,the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as at November 30, 2020.Internal control over financial reportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the U.S. Exchange Act and National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim filings. Any system of internalcontrol over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Management has used the Committee ofSponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013) to evaluate the effectiveness of theCompany’s internal control over financial reporting. Based on this assessment, management has concluded that as at November 30, 2020, theCompany’s internal control over financial reporting was effective.Risk factorsTrilogy and its future business, operations and financial condition are subject to various risks and uncertainties due to the nature of its business and thepresent stage of exploration of its mineral properties. Certain of these risks and uncertainties are under the heading “Risk Factors” under Trilogy’sForm 10-K dated February 12, 2021 available on SEDAR at www.sedar.com and EDGAR at www.sec.gov and on our website at www.trilogymetals.com.Additional informationAdditional information regarding the Company, including our annual report on Form 10-K, is available on SEDAR at www.sedar.com and EDGAR atwww.sec.gov and on our website at www.trilogymetals.com.Table of Contents97Cautionary notesForward-looking statementsThis Management’s Discussion and Analysis contains “forward-looking information” and “forward-looking statements” within the meaning of Section27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and otherapplicable securities laws. These forward-looking statements may include statements regarding the Company’s work programs and budgets; perceivedmerit of properties, exploration results and budgets, the Company and Ambler Metals’s funding requirements, mineral reserves and resource estimates,work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economicviability of a project, timelines, strategic plans, statements regarding Ambler Metals’ plans and expectations relating to its Upper Kobuk MineralProjects, sufficiency of the $145 million subscription price to fund the UKMP; impact of COVID-19 on the Company’s operations; market prices forprecious and base metals; statements regarding the Ambler Road Project; or other statements that are not statements of fact. These statements relateto analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions ofmanagement. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent thatthey involve estimates of the mineralization that will be encountered if the property is developed.Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or futureevents 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 certainactions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of theseterms and similar expressions) are not statements of historical fact and may be forward-looking statements.Forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, as well as on anumber of material assumptions, which could prove to be significantly incorrect, including about:●our ability to achieve production at the Upper Kobuk Mineral Projects;●the accuracy of our mineral resource and reserve estimates;●the results, costs and timing of future exploration drilling and engineering;●timing and receipt of approvals, consents and permits under applicable legislation;●the adequacy of our financial resources;●the receipt of third party contractual, regulatory and governmental approvals for the exploration, development, construction and productionof our properties and any litigation or challenges to such approvals;●our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable;●continued good relationships with South32, our joint venture partner, as well as local communities and other stakeholders;●there being no significant disruptions affecting operations, whether relating to labor, supply, power damage to equipment or other matter;●expected trends and specific assumptions regarding metal prices and currency exchange rates;Table of Contents98●the potential impact of the novel coronavirus (COVID-19); and●prices for and availability of fuel, electricity, parts and equipment and other key supplies remaining consistent with current levels.We have also assumed that no significant events will occur outside of our normal course of business. Although we have attempted to identify importantfactors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be otherfactors 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 MD&A. 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.Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events orresults to differ from those reflected in the forward-looking statements, including, without limitation:●risks related to the COVID-19 pandemic;●risks related to inability to define proven and probable reserves;●risks related to our ability to finance the development of our mineral properties through external financing, strategic alliances, the sale ofproperty interests or otherwise;●uncertainty as to whether there will ever be production at the Company’s mineral exploration and development properties;●risks related to our ability to commence production and generate material revenues or obtain adequate financing for our planned explorationand development activities;●risks related to lack of infrastructure including but not limited to the risk whether or not the Ambler Mining District Industrial Access Project, orAMDIAP, will receive the requisite permits and, if it does, whether the Alaska Industrial Development and Export Authority will build theAMDIAP;●risks related to inclement weather which may delay or hinder exploration activities at our mineral properties;●risks related to our dependence on a third party for the development of our projects;●none of the Company’s mineral properties are in production or are under development;●commodity price fluctuations;●uncertainty related to title to our mineral properties;●our history of losses and expectation of future losses;●risks related to increases in demand for equipment, skilled labor and services needed for exploration anddevelopment of mineral properties, and related cost increases;●uncertainties relating to the assumptions underlying our resource estimates, such as metal pricing, metallurgy, mineability, marketability andoperating and capital costs;●uncertainty related to inferred mineral resources;Table of Contents99●mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labor disputes or otherunanticipated difficulties with or interruptions in development, construction or production;●risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of our mineral deposits;●risks related to governmental regulation and permits, including environmental regulation, including the risk that more stringent requirementsor standards may be adopted or applied due to circumstances unrelated to the Company and outside of our control;●the risk that permits and governmental approvals necessary to develop and operate mines at our mineral properties will not be available on atimely basis or at all;●risks related to the need for reclamation activities on our properties and uncertainty of cost estimates related thereto;●risks related to the acquisition and integration of operations or projects;●our need to attract and retain qualified management and technical personnel;●risks related to conflicts of interests of some of our directors and officers;●risks related to potential future litigation;●risks related to market events and general economic conditions;●risks related to future sales or issuances of equity securities decreasing the value of existing Trilogy commonshares, diluting voting power and reducing future earnings per share;●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;●uncertainty as to the volatility in the price of the Company’s common shares;●the Company’s expectation of not paying cash dividends;●adverse federal income tax consequences for U.S. shareholders should the Company be a passive foreign investment company;●risks related to global climate change;●risks related to adverse publicity from non-governmental organizations;●uncertainty as to our ability to maintain the adequacy of internal control over financial reporting as per the requirements of Section 404 of theSarbanes-Oxley Act; and●increased regulatory compliance costs, associated with rules and regulations promulgated by the United States Securities and ExchangeCommission, Canadian Securities Administrators, the NYSE American, the Toronto Stock Exchange, and the Financial Accounting StandardsBoards, and more specifically, our efforts to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act;This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statementsabout the future and are inherently uncertain, and actual achievements of theTable of Contents100Company 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 Trilogy’s Form 10-K dated February 12, 2021, filed with the Canadiansecurities regulatory authorities and the SEC, and other information released by Trilogy and filed with the appropriate regulatory agencies.The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made,and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations oropinions should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-lookingstatements.Cautionary note to United States investorsReserve and resource estimatesThis Management’s Discussion and Analysis has been prepared in accordance with the requirements of the securities laws in effect in Canada, whichdiffer from the requirements of U.S. securities laws. Unless otherwise indicated, all resource and reserve estimates included in this Management’sDiscussion and Analysis have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”)and the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is arule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technicalinformation concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the SEC, and resourceand reserve information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limitingthe generality of the foregoing, the term “resource” does not equate to the term “reserves”. Under U.S. standards, mineralization may not be classifiedas a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time thereserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineralresources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits thatdo not constitute “reserves” by U.S. standards in documents filed with the SEC. Investors are cautioned not to assume that any part or all of mineraldeposits in these categories will ever be converted into reserves. U.S. investors should also understand that “inferred mineral resources” have a greatamount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. Under Canadian rules, estimated “inferredmineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all orany part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitteddisclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” bySEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are alsonot the same as those of the SEC, and reserves reported by the Company in compliance with NI 43-101 may not qualify as “reserves” under SECstandards. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companiesthat report in accordance with U.S. standards.Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKNot applicable.Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATASupplementary DataFor the required supplementary data, please see the section heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” above.Table of Contents101Management’s Report on Internal Control over Financial ReportingThe management of Trilogy Metals Inc. is responsible for establishing and maintaining adequate internal control over financial reporting underRule 13a-15(f) and 15d-15(f) of the U.S. Exchange Act. The Securities Exchange Act of 1934 defines this as a process designed by, or under thesupervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management andother personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles in the United States of America, and includes those policies and procedures that:●pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets ofthe Company;●provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles in the United States of America, and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of the Company; and●provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’sassets that may have a material effect on the consolidated financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation ofeffectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.Management assessed the effectiveness of the Company’s internal control over financial reporting as of November 30, 2020. In making thisassessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission inInternal Control – Integrated Framework (2013).Based upon our assessment and those criteria, management concluded that the Company’s internal control over financial reporting is effective as ofNovember 30, 2020./s/ Tony Giardini /s/ Elaine Sanders Tony Giardini Elaine SandersPresident, Chief Executive Officer & Director Vice President & Chief Financial Officer February 11, 2021 Table of Contents102Report of Independent Registered Public Accounting FirmReport of Independent Registered Public Accounting FirmTo the Shareholders and Board of Directors of Trilogy Metals Inc.Opinions on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Trilogy Metals Inc. and its subsidiaries (together, the Company) as of November 30,2020 and 2019, and the related consolidated statements of earnings (loss) and comprehensive earnings (loss), changes in shareholders’ equity and cashflows for each of the three years in the period ended November 30, 2020, including the related notes (collectively referred to as the consolidatedfinancial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Companyas of November 30, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended November 30,2020 in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionsThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federalsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financialreporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose ofexpressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to erroror fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amountsand disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimatesmade by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide areasonable basis for our opinion./s/ PricewaterhouseCoopers LLPChartered Professional AccountantsVancouver, CanadaFebruary 11, 2021We have served as the Company's auditor since 2012.Table of Contents103Trilogy Metals Inc.Consolidated Balance SheetsAs at November 30, 2020 and 2019 in thousands of US dollarsNovember 30, 2020November 30, 2019 $ $ Assets Current assets Cash and cash equivalents 11,125 19,174Accounts receivable (note 3) 129 264Deposits and prepaid amounts 184 719 11,438 20,157Investment in Ambler Metals LLC (note 4) 173,145 —Fixed assets (note 5) 206 715Mineral properties and development costs (note 6) — 30,631Rent deposit (note 8 (a)) — 114Right of use asset (note 8 (a)) 476 — 185,265 51,617Liabilities Current liabilities Accounts payable and accrued liabilities (note 7) 888 2,354Current portion of lease liability 158 — 1,046 2,354Long-term portion of lease liability (note 8 (b)) 408 —Mineral properties purchase option — 31,000 1,454 33,354Shareholders’ equity Share capital (note 9) – unlimited common shares authorized, no par value Issued –144,137,850 (2019 – 140,427,761) 179,746 177,971Contributed surplus 122 122 Contributed surplus – options (note 9(a)) 23,303 21,123 Contributed surplus – units (note 9(b)) 1,585 1,759Deficit (20,945) (182,712) 183,811 18,263 185,265 51,617Commitments and contingencies (note 13)Subsequent events (note 14)(See accompanying notes to the consolidated financial statements)/s/Tony Giardini, President, CEO and Director /s/ Kalidas Madhavpeddi, Director Approved on behalf of the Board of Directors Table of Contents104Trilogy Metals Inc.Consolidated Statements of Earnings (Loss) and Comprehensive Earnings (Loss)For the Years Ended November 30in thousands of US dollars, except share and per share amounts202020192018$ $ $ Expenses Amortization 91 211 160Feasibility study (note 6(d)) 1,065 — —Foreign exchange (gain) loss 56 (19) (26)General and administrative 1,650 1,838 1,532Investor relations 537 623 406Mineral properties expense (note 6(a)) 1,545 19,211 16,490Professional fees 1,347 1,382 453Salaries 1,411 1,314 1,467Salaries – technical services (note 4(e)) 898 — —Salaries – stock-based compensation 3,564 3,845 1,441Total expenses 12,164 28,405 21,923Other items Loss on held for trading investments — — 272Gain on derecognition of assets contributed to joint venture (note 4(a)) (175,770) — —Share of loss on equity investment (note 4(b)) 2,855 — —Interest and other income (87) (500) (346)Services agreement income (note 4(e)) (929) — —Comprehensive earnings (loss) for the year 161,767 (27,905) (21,849)Basic earnings (loss) per common share 1.14 (0.21) (0.18)Diluted earnings (loss) per common share 1.12 (0.21) (0.18)Basic weighted average number of common shares outstanding 141,464,877 135,225,349 121,778,727Diluted weighted average number of common shares outstanding 144,604,750 135,225,349 121,778,727(See accompanying notes to the consolidated financial statements)Table of Contents105Trilogy Metals Inc.Consolidated Statements of Changes in Shareholders’ EquityFor the Years Ended November 30in thousands of US dollars, except share amounts ContributedContributed Total Contributedsurplus –surplus –shareholders’ Number of sharesShare capitalWarrantssurplusoptionsunitsDeficitequity outstanding $ $ $ $ $ $ $ Balance – 2017 105,684,523 136,525 2,163 124 18,402 1,319 (132,868) 25,665Bought-deal financing (note 9) 24,784,482 28,750 90 — — — (90) 28,750Share issuance costs — (1,805) — — — — — (1,805)Exercise of options 315,148 140 — — (140) — — —Restricted Share Units 800,000 457 — — — (457) — —NovaGold DSU conversion 1,459 2 — (2) — — — —Stock-based compensation — — — — 814 627 — 1,441Loss for the year — — — — — — (21,849) (21,849)Balance – 2018 131,585,612 164,069 2,253 122 19,076 1,489 (154,807) 32,202Exercise of options 1,725,776 1,123 — — (915) — — 208Exercise of warrants 6,521,740 12,166 (2,253) — — — — 9,913Restricted share units 412,501 424 — — — (424) — —Deferred share units 182,132 189 — — — (189) — —Stock-based compensation — — — — 2,962 883 — 3,845Loss for the year — — — — — — (27,905) (27,905)Balance – 2019 140,427,761 177,971 — 122 21,123 1,759 (182,712) 18,263Exercise of options 3,297,588 1,133 — — (916) — — 217Exercise of warrants — — — — — — — —Restricted share units 412,501 642 — — — (642) — —Deferred share units — — — — — — — —Stock-based compensation — — — — 3,096 468 — 3,564Earnings for the year — — — — — — 161,767 161,767Balance – 2020 144,137,850 179,746 — 122 23,303 1,585 (20,945) 183,811(See accompanying notes to the consolidated financial statements)Table of Contents106Trilogy Metals Inc.Consolidated Statements of Cash FlowsFor the Years Ended November 30in thousands of US dollars202020192018 $ $ $ Cash flows used in operating activities Earnings (loss) for the year 161,767 (27,905) (21,849)Adjustments to reconcile net loss to cash flows in operating activities Amortization 91 211 160Right of use asset amortization and lease accretion 182 — —Office lease payments (189) — —Loss on working capital written-off upon joint venture formation 18 — —Gain on derecognition of assets (note 4(a)) (175,770) — —Loss on equity investment in Ambler Metals LLC (note 4(b)) 2,855 — —Loss on held for trading investments — — 272Unrealized foreign exchange loss (gain) 27 1 (53)Stock-based compensation 3,564 3,845 1,441Net change in non-cash working capital Decrease (increase) in accounts receivable 135 (241) 447Decrease (increase) in deposits and prepaid amounts 535 (100) 104(Decrease) increase in accounts payable and accrued liabilities (1,466) 697 (2,592) (8,251) (23,492) (22,070)Cash flows from financing activities Proceeds from exercise of options 217 208 —Proceeds from exercise of warrants — 9,913 —Proceeds from bought deal financing (note 9(d)) — — 28,750Share issuance costs — — (1,805) 217 10,121 26,945Cash flows from investing activities Acquisition of plant & equipment — (645) (7)Mineral properties funding — 10,200 10,435Proceeds from the sale of investments, net of fees — — 2,297 — 9,555 12,725(Decrease) increase in cash and cash equivalents (8,034) (3,816) 17,600Effect of exchange rate on cash and cash equivalents (15) (1) —Cash and cash equivalents – beginning of year 19,174 22,991 5,391Cash and cash equivalents – end of year 11,125 19,174 22,991(See accompanying notes to the consolidated financial statements)Table of Contents107Trilogy Metals Inc.Notes to the Consolidated Financial Statements1) Nature of operationsTrilogy Metals Inc., (“Trilogy”, the “Company”, or “we”) was incorporated in British Columbia under the Business Corporations Act (BC) on April 27,2011. The Company is engaged in the exploration and development of mineral properties, through our equity investee (note 4), with a focus on theUpper Kobuk Mineral Projects (“UKMP”), including the Arctic and Bornite Projects located in Northwest Alaska in the United States of America (“US” or“USA”).2) Summary of significant accounting policiesBasis of presentationThese consolidated financial statements have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) andinclude the accounts of Trilogy and its wholly owned subsidiary, NovaCopper US Inc. (dba “Trilogy Metals US”). All intercompany transactions areeliminated on consolidation. For variable interest entities (“VIEs”) where Trilogy is not the primary beneficiary, we use the equity method ofaccounting.All figures are in United States dollars unless otherwise noted. References to CDN$ refer to amounts in Canadian dollars.These financial statements were approved by the Company’s Board of Directors for issue on February 11, 2021.Cash and cash equivalentsCash and cash equivalents had been comprised of highly liquid investments maturing less than 90 days from date of initial investment.Investment in affiliatesInvestments in unconsolidated ventures over which the Company has the ability to exercise significant influence, but does not control, are accountedfor under the equity method and include the Company’s investment in the Ambler Metals project. We identified Ambler Metals LLC as a VIE as theentity is dependent on funding from its owners. All funding, ownership, voting rights and power to exercise control is shared equally on a 50/50 basisbetween the owners of the VIE. Therefore, the Company has determined that it is not the primary beneficiary of the VIE. The Company’s maximumexposure to loss is its investment in Ambler Metals LLC.Ambler Metals LLC is a non-publicly traded equity investee holding exploration and development projects. Investments in nonconsolidated entitiesaccounted for under the equity method are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value hasoccurred. When indicators exist, the fair value is estimated and compared to the investment carrying value. If any impairment is judgmentallydetermined to be other than temporary, the carrying value of the investment is written down to fair value. The fair value of the impaired investment isdetermined based on quoted market prices, if available, or upon the present value of expected future cash flows using discount rates and otherassumptions believed to be consistent with those used by principal market participants and observed market earnings multiples of comparablecompanies. Events that could indicate impairment of an investment in affiliates include a significant decrease in long-term expected commodity prices,a significant increase in expected operating or capital costs, unfavorable exploration results or technical studies, a significant decrease in reserves, aloss of significant mineral claims or a change in the development plan or strategy for the project.Table of Contents108Fixed assetsPlant and equipment were recorded at cost and amortization began when the asset was put into service. Amortization is calculated on a straight-linebasis over the respective assets’ estimated useful lives. Amortization periods by asset class are:Computer hardware and software3 yearsLeasehold Improvementslease termOffice furniture and equipment5 yearsMachinery and equipment3 – 10 yearsVehicles3 yearsMineral properties and development costsAll direct costs related to the acquisition of mineral property interests were capitalized. Mineral property exploration expenditures were expensedwhen incurred. When it has been established that a mineral deposit is commercially mineable, an economic analysis has been completed and permitsare obtained, the costs subsequently incurred to develop a mine on the property prior to the start of mining operations are capitalized. Capitalizedcosts will be amortized following commencement of production using the unit of production method over the estimated life of proven and probablereserves.The acquisition of title to mineral properties is a complicated and uncertain process. The Company has taken steps, in accordance with industrystandards, to verify the title to mineral properties held prior to being transferred to the Joint Venture, in which it has an interest. Although theCompany has made efforts to ensure that legal titles to its mining assets are properly recorded, there can be no assurance that such title will besecured indefinitely.Impairment of long-lived assetsManagement assesses the possibility of impairment in the carrying value of long-lived assets whenever events or circumstances indicate that thecarrying amounts of the asset or asset group may not be recoverable. Management calculates the estimated undiscounted future net cash flowsrelating to the asset or asset group using estimated future prices, proven and probable reserves and other mineral resources, and operating, capitaland reclamation costs. When the carrying value of an asset exceeds the related undiscounted cash flows, the asset is written down to its estimated fairvalue, which is usually determined using discounted future cash flows. Management’s estimates of mineral prices, mineral resources, foreign exchangerates, production levels operating, capital and reclamation costs are subject to risk and uncertainties that may affect the determination of therecoverability of the long-lived asset. It is possible that material changes could occur that may adversely affect management’s estimates.Income taxesThe liability method of accounting for income taxes is used and is based on differences between the accounting and tax bases of assets and liabilities.Deferred income tax assets and liabilities are recognized for temporary differences between the tax and accounting basis of assets and liabilities as wellas for the benefit of losses available to be carried forward to future years for tax purposes using enacted income tax rates expected to be in effect forthe period in which the differences are expected to reverse. Deferred income tax assets are evaluated and, if realization is not considered more likelythan not, a valuation allowance is provided.Uncertainty in income tax positionsThe Company recognizes tax benefits from uncertain tax positions only if it is at least more likely than not that the tax position will be sustained onexamination by the taxing authorities, based on the technical merits of the position. Any tax benefits recognized in the financial statements from such aposition are measured based on the largest benefit thatTable of Contents109has a greater than 50% likelihood of being realized upon settlement with the taxing authorities. Related interest and penalties, if any, are recorded astax expense in the tax provision.Financial instrumentsHeld-for-trading financial assets and liabilities are recorded at fair value as determined by active market prices or valuation models, as appropriate.Valuation models require the use of assumptions which may include the expected life of the instrument, the expected volatility, dividend payouts, andinterest rates. In determining these assumptions, management uses readily observable market inputs where available or, where not available, inputsgenerated by management. Changes in fair value of held-for-trading financial instruments are recorded in income or loss for the period. Held-for-trading financial assets consisting of common share and warrant investments in a publicly-held mining company were disposed during the 2018fiscal year.Loans and receivables are recorded initially at fair value, net of transaction costs incurred, and subsequently at amortized cost using the effectiveinterest rate method. Loans and receivables consist of cash and cash equivalents, accounts receivable, and deposits.Other financial liabilities are recorded initially at fair value and subsequently at amortized cost using the effective interest rate method. Other financialliabilities include accounts payable and accrued liabilities.Translation of foreign currenciesMonetary assets and liabilities are translated into United States dollars at the exchange rate in effect at the balance sheet date, and non-monetaryassets and liabilities at the exchange rate in effect at the time of acquisition or issue. Income and expenses are translated at rates approximating theexchange rate in effect at the time of transactions. Exchange gains or losses arising on translation are included in income or loss for the period.The functional currency of the Company and its subsidiary and the Company’s reporting currency is the United States dollar.Earnings and loss per shareEarnings and loss per common share is calculated based on the weighted average number of common shares outstanding during the year. TheCompany follows the treasury stock method in the calculation of diluted earnings per share. Under the treasury stock method, the weighted averagenumber of common shares outstanding used for the calculation of diluted loss per share assumes that the proceeds to be received on the exercise ofdilutive stock options and in the prior year, warrants are used to repurchase common shares at the average market price during the period.Stock-based compensationCompensation expense for options granted to employees, directors and certain service providers is determined based on estimated fair values of theoptions at the time of grant using the Black-Scholes option pricing model, which takes into account, as of the grant date, the fair market value of theshares, expected volatility, expected dividend yield and the risk-free interest rate over the expected life of the option. The compensation cost isrecognized using the graded attribution method over the vesting period of the respective options. The expense relating to the fair value of stockoptions is included in expenses and is credited to contributed surplus. Shares are issued from treasury in settlement of options exercised.Compensation expense for restricted share units (“RSUs”) and deferred share units (“DSUs”) granted to employees and directors, respectively, isdetermined based on estimated fair values of the units at the time of grant using quoted market prices or at the time the units qualify for equityclassification under ASC 718. The cost is recognized using the graded attribution method over the vesting period of the respective units. The expenserelating to the fair value of the units is included in expenses, net of forfeitures and is credited to other liabilities or contributed surplus based on theunit’sTable of Contents110classification. Units may be settled in either i) cash, and/or ii) shares purchased in the open market, and/or iii) shares issued from treasury, at theCompany’s election at the time of vesting.Use of estimates and measurement uncertaintiesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions of future events thataffect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reportedamounts of expenditures during the period. Significant judgments include the assessment of potential indicators of impairment of mineral properties.Significant estimates include the measurement of the South32 property acquisition option and subsequent equity method investment, income taxes,and the valuation of stock-based compensation. Actual results could differ materially from those reported.Accounting standards adoptedi.LeasesIn February 2016, the FASB issued new accounting requirements for accounting for, presentation of, and classification of leases (“ASU 2016-02”) which, together with subsequent amendments, is included in ASC 842, Leases. ASC 842 became effective for the Company as ofDecember 1, 2019.The Company adopted ASC 842 using the modified retrospective transition method by applying the transition provision and recording our cumulativeadjustment to opening deficit at the beginning of the period of adoption on December 1, 2019, rather than at the beginning of the comparative periodpresented. Therefore, in the comparative periods, we continue to apply the legacy guidance in ASC 840, including its disclosure requirements. Weelected to apply all of the transition practical expedients available, including:●the package of three practical expedients to (1) not reassess whether any expired or existing contracts are or contain leases, (2) not reassessthe lease classification for any expired or existing leases, and (3) not reassess initial direct costs for any existing lease;●the hindsight practical expedient to use hindsight when determining lease term and assessing impairment of right-of-use assets, if any; and●the easements practical expedient to continue applying our current policy for accounting for any land easements expired before or existing asof December 1, 2019.In addition, we elected to apply the short-term lease recognition exemption and elected to apply the practical expedient to not separate lease andnon-lease components for all applicable leases on transition. The adoption of this new standard resulted in the recognition of right of use assets andlease liabilities of $786,000 as at December 1, 2019.3) Accounts receivable in thousands of dollars November 30, 2020November 30, 2019 $ $GST input tax credits 15 42Recoverable payments — 222Ambler Metals LLC 114 —Accounts receivable 129 264The balance due from Ambler Metals LLC (see note 4 below) consists of services rendered by Trilogy and reimbursements for invoices paid by Trilogyon behalf of Ambler Metals LLC per a service agreement. The balance was paid in full by Ambler Metals LLC subsequent to the year end.Table of Contents1114) Investment in Ambler Metals LLC(a)Formation of Ambler Metals LLCOn February 11, 2020, the Company completed the formation of a 50/50 joint venture named Ambler Metals LLC with South32 Limited (“South32”). Aspart of the formation of the joint venture, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite Projects, whileSouth32 contributed US$145 million, resulting in each party’s subsidiaries directly owning a 50% interest in Ambler Metals LLC. To assist Ambler Metalsduring the initial set up phase, Trilogy was paying all of Ambler Metals’ invoices and being reimbursed pursuant to a services agreement (the “ServicesAgreement”) between Trilogy and Ambler Metals until the back office is fully transitioned to a new permanenet team employed by the joint venture.The Services Agreement ended on December 31, 2020.Ambler Metals LLC is an independently operated company jointly controlled by Trilogy and South32 through a four-member board, of which twomembers are currently appointed by Trilogy based on its 50% equity interest. All significant decisions related to the UKMP require the approval of bothcompanies. We determined that Ambler Metals LLC is a VIE because it is expected to need additional funding from its owners for its significantactivities. However, we concluded that we are not the primary beneficiary of Ambler Metals LLC as the power to direct its activities, through its board,is shared under the Ambler Metals LLC limited liability company agreement. As we have significant influence over Ambler Metals LLC through ourrepresentation on its board, we use the equity method of accounting for our investment in Ambler Metals LLC. Our investment in Ambler Metals LLCwas initially measured at its fair value of $176 million upon recognition. Our maximum exposure to loss in this entity is limited to the carrying amountof our investment in Ambler Metals LLC, which totaled $173 million, as well as approximately $114,000 of amounts receivable per the ServicesAgreement. The following table summarizes the gain on recognition of the UKMP assets upon transfer to the Ambler Metals LLC joint venture onFebruary 11, 2020. in thousands of dollars $Fair value ascribed to Ambler Metals LLC interest 176,000Less: carrying value of contributed /eliminated assets Mineral properties (30,631)Property, plant and equipment (618)Elimination of Fairbanks warehouse right of use asset (93)Elimination of prepaid State of Alaska mining claim fees (303)Add: Reimbursement of claims staking 44Demobilization costs of drills 278Cancellation of Fairbanks warehouse lease liability 93Fair value of mineral properties purchase option 31,000Gain on derecognition 175,770(b)Carrying value of investment in Ambler Metals LLCDuring the year ended November 30, 2020, Trilogy recognized, based on its 50% ownership interest in Ambler Metals LLC, an equity loss equivalent toits pro rata share of Ambler Metals LLC's net loss of $5.7 million for the period betweenTable of Contents112February 11, 2020 (date of joint venture formation) to November 30, 2020. The carrying value of Trilogy’s 50% investment in Ambler Metals LLC as atNovember 30, 2020 is summarized on the following table. in thousands of dollars $February 11, 2020, fair value ascribed to Ambler Metals LLC interest 176,000Share of loss on equity investment from February 11, 2020 to November 30, 2020 (2,855)November 30, 2020, equity method investment 173,145(c)The following table summarizes Ambler Metals LLC's Balance Sheet as at November 30, 2020. in thousands of dollarsNovember 30, 2020 $Current assets: Cash, deposits and prepaid expenses 82,226Non - current assets: Property, equipment and mineral properties 31,287Loan receivable from South32 58,478Current liabilities: Accounts payable and accrued liabilities (1,445)Non - current liabilities: Lease obligation (51)Net assets 170,495(d)The following table summarizes Ambler Metals LLC's net loss from the formation of the joint venture on February 11, 2020 to the end of thereporting period on November 30, 2020.in thousands of dollarsPeriod endingNovember 30, 2020 $ Amortization 95Mineral properties expense 3,619General and administrative expense 3,177Interest income (1,181)Comprehensive loss 5,710(e)Related party transactions - services agreement incomeThe Company charged $0.9 million of expenses related to technical services, including geological, engineering, environmental and humanresources and accounting services in connection with the Services Agreement. In addition, the Company received payments of $2.8 million relatedto operating expenses paid on behalf of Ambler Metals from February 11, 2020 to November 30, 2020 pursuant to the Services Agreement.Table of Contents1135) Fixed assetsin thousands of dollars November 30, 2020 Assets Accumulatedderecognized Cost amortization note 4(a) Net $ $ $ $ British Columbia, Canada Furniture and equipment 63 (41) — 22Leasehold improvements 253 (69) — 184Computer hardware and software 115 (115) — —Alaska, USA Machinery, and equipment 3,667 (3,049) (618) —Vehicles 348 (348) — —Computer hardware and software 4 (4) — — 4,450 (3,626) (618) 206in thousands of dollars November 30, 2019 Accumulated Cost amortization Net $ $ $ British Columbia, Canada Furniture and equipment 63 (29) 34Leasehold improvements 53 (17) 36Computer hardware and software 115 (112) 3Alaska, USA Machinery, and equipment 3,667 (3,026) 641Vehicles 348 (348) —Computer hardware and software 4 (3) 1 4,250 (3,535) 7156) Mineral properties and development costsin thousands of dollarsNovember 30, 2019AssetsNovember 30, 2020derecognizednote 4(a) $ $ $ Alaska, USA Ambler (a) 26,631 (26,631) —Bornite (b) 4,000 (4,000) — 30,631 (30,631) —Table of Contents114in thousands of dollarsNovember 30, 2018Acquisition costsNovember 30, 2019 $ $ $ Alaska, USA Ambler (a) 26,587 44 26,631Bornite (b) 4,000 — 4,000 30,587 44 30,631(a)AmblerOn January 11, 2010, NovaGold Resources Inc. (“NovaGold”), through Alaska Gold Company (“AGC”), its wholly-owned subsidiary, purchased 100%of the Ambler lands in Northwest Alaska, which contains the copper-zinc-lead-gold-silver Arctic Project and other mineralized targets within thevolcanogenic massive sulfide belt, through a series of cash and share payments. Total fair value of the consideration was $26.6 million. The vendorretained a 1% net smelter return royalty that can be purchased at any time for a one-time payment of $10.0 million.The Ambler lands were acquired on October 17, 2011 by Trilogy Metals US through a purchase and sale agreement with AGC. On October 24,2011, NovaGold transferred its ownership of Trilogy Metals US to the Company, then a wholly owned subsidiary of NovaGold, which wassubsequently spun-out to NovaGold shareholders and publicly listed on April 30, 2012 (“NovaGold Arrangement”).(b)BorniteOn October 19, 2011, Trilogy Metals US acquired the exclusive right to explore and the non-exclusive right to access and enter on the Bornitelands, and lands deeded to NANA Regional Corporation, Inc. (“NANA”) through the Alaska Native Claims Settlement Act, located adjacent to theAmbler lands in Northwest Alaska. As consideration, Trilogy Metals US paid $4 million to acquire the right to explore and develop the combinedUpper Kobuk Mineral Projects (“UKMP”) through an Exploration Agreement and Option to Lease with NANA. Upon a decision to proceed withconstruction of a mine on the lands, NANA maintains the right to purchase between a 16%-25% ownership interest in the mine or retain a 15% netproceeds royalty which is payable after Trilogy Metals US has recovered certain historical costs, including capital and cost of capital. Should NANAelect to purchase an ownership interest, consideration will be payable equal to all historical costs incurred on the properties, less $40 million, withthe difference multiplied by the elected percentage purchased. In no event will the purchase amount be less than zero. The parties would form ajoint venture and be responsible for all future costs, including capital costs of the mine based on their pro-rata share.NANA would also be granted a net smelter return royalty of between 1% and 2.5% upon the execution of a mining lease or a surface useagreement, the amount of which is determined by the classification of land from which production originates.(c)Option AgreementOn April 10, 2017, Trilogy and Trilogy Metals US entered into the South32 Option Agreement to form a Joint Venture with South32 GroupOperations Pty Ltd., a wholly-owned subsidiary of South32 Limited, which agreement was later assigned by South32 Operations to its affiliate,South32 USA Exploration Inc. (“South32”) on the UKMP (“Option Agreement”). Under the terms of the Option Agreement, as amended, TrilogyMetals US granted South32 the right to form a 50/50 joint venture to hold all of Trilogy Metals US’ Alaskan assets. Upon exercise of the option, theoption agreement provided that Trilogy Metals US would transfer its Alaskan assets, including the UKMP, and South32 would contribute theSubscription Price (as defined below) to a newly formed and jointly held, limited liability company (“LLC”) (see note 4(a)).Table of Contents115To maintain the option in good standing, South32 was required to fund a minimum of $10 million per year for up to a three-year period, whichfunds were to execute a mutually agreed upon program at the UKMP. The funds provided by South32 could only be expended in accordance withan approved program by a technical committee with equal representation from Trilogy and South32. South32 could exercise its option at any timeover the three-year period to enter into the 50/50 joint venture. To subscribe for 50% of the joint venture, the Option Agreement provided thatSouth32 must contribute $150 million, plus (i) any amounts Trilogy spends on matched parallel funding to a maximum of $16 million over thethree-year period and (ii) $5 million if the option had been exercised between April 1, 2018 and March 31, 2019 or $10 million if the option wasexercised between April 1, 2019 and the expiration date of the option, less the amount of the initial funding contributed by South32 (the“Subscription Price”). South32 funded the full three-year option period. During the year ended November 30, 2020, South32 elected to exercisethe option to form the LLC and made the Subscription Price payment on February 5, 2020 (see note 4 (a)).As the initial option payments were credited against the future subscription price upon exercise, the Company accounted for the paymentsreceived from South32 as deferred consideration for the purchase of the UKMP interest. The $31.0 million of payments received were recognizedas part of the consideration received for the Company’s contribution of the UKMP into the LLC.The option to form the LLC was recognized as a financial instrument at inception of the arrangement with an initial fair value of $nil. This optionwas required to be re-measured at fair value at each reporting date with any changes in fair value recorded in loss for the period. The Companydetermined that the fair value of the option remained $nil during the option period and through to the formation of the Joint Venture on February11, 2020.(d)Mineral properties expenseThe following table summarizes mineral properties expense for the years ended November 30, 2020, 2019 and 2018, and includes expendituresfunded by South32 up to the formation of the Joint Venture on February 11, 2020, as applicable.In thousands of dollars202020192018 $ $ $ Alaska, USA Community 137 596 466Drilling — 5,194 4,545Engineering 723 2,410 1,056Environmental 99 611 806Geochemistry and geophysics 12 1,259 1,253Land and permitting 134 744 705Project support 249 4,652 4,244Other income — (13) (20)Wages and benefits 191 3,758 3,435 1,545 19,211 16,490Mineral property expenses consist of direct drilling, personnel, community, resource reporting and other exploration expenses as outlined above, aswell as indirect project support expenses such as fixed wing charters, helicopter support, fuel, and other camp operation costs. Other than thefeasibility costs related to the Arctic project funded directly by the Company, no additional mineral properties expenses were incurred subsequent tothe formation of the joint venture, as on February 11, 2020, upon the formation of the Joint Venture with South32, all mineral properties previouslyheld by the Company were contributed to Ambler Metals LLC.Table of Contents116The Company funded the Arctic Project feasibility study, costs for which were $1.1 million since the formation of the Joint Venture on February 11,2020. Prior to the formation of the Joint Venture, the Company had also incurred $0.7 million in Arctic Project feasibility costs that are included in themineral properties expense balance of $1.5 million for the year ended November 30, 2020.Cumulative mineral properties expense in Alaska from the initial earn-in agreement on the property in 2004 to the formation of the Joint Venture onFebruary 11, 2020 was $115.3 million and cumulative acquisition costs were $30.6 million. Cumulative spend to date totaled $147 million. On February11, 2020, upon the formation of the joint venture with South32, the acquisition costs of $30.6 million were derecognized upon the contribution of themineral properties to Ambler Metals.(e)DerecognitionAs part of the formation of the Joint Venture with South32 on February 11, 2020, Trilogy contributed all its assets associated with the UKMP, includingthe Arctic and Bornite projects. As a result, machinery and equipment with a carrying value of $0.62 million as well as $30.6 million of mineralproperties related to the UKMP were derecognized by Trilogy on February 11, 2020.7) Accounts payable and accrued liabilitiesin thousands of dollars November 30, 2020November 30, 2019 $ $ Trade accounts payable 226 902Accrued liabilities 198 721Accrued salaries and vacation 464 731Accounts payable and accrued liabilities 888 2,3548) Leases(a)Right-of-use assetin thousands of dollars $ASC 842 transition as at December 1, 2019 681Amortization (162)Lease accretion 50Derecognition of Fairbanks warehouse lease (93) 476The pre-transition rent deposit of approximately $114,000 was transferred to the Right-of-use asset upon adoption of ASC 842 on December 1, 2019and is included in the opening balance of approximately $681,000.(b)Lease liabilitiesThe Company’s lease arrangements primarily consist of an operating lease for our office space ending in June 2024. There are no extension options.Table of Contents117Total lease expense recorded within general and administrative expenses was comprised of the following components: in thousands of dollarsYear endedNovember 30, 2020 $Operating lease costs 162Variable lease costs 131Total lease expense 293Variable lease costs consist primarily of the Company’s portion of operating costs associated with the office space lease as the Company elected toapply the practical expedient not to separate lease and non-lease components.As of November 30, 2020, the remaining lease term was 3.67 years and the discount rate is 8%. Significant judgment was used in the determination ofthe incremental borrowing rate which included estimating the Company’s credit rating.Supplemental cash and non-cash information relating to our leases during the year ended November 30, 2020 are as follows:●Cash paid for amounts included in the measurement of lease liabilities was $188,811.●No cash was paid upon termination of a lease for office and warehouse space and reassignment to Ambler Metals LLC that resulted in thederecognition of the right-of-use asset of $92,974 and the operating lease liability of $93,006.Future minimum payments relating to the lease recognized in our balance sheet as of November 30, 2020 are as follows: in thousands of dollarsNovember 30, 2020 Fiscal year $ 2021 1962022 2022023 2072024 123Total undiscounted lease payments 728Effect of discounting (162)Present value of lease payments recognized as lease liability 566Table of Contents1189) Share capitalAuthorized:unlimited common shares, no par valuein thousands of dollars, except share amountsNumber of sharesAscribed value $ November 30, 2018 131,585,612 164,069Exercise of options 1,725,776 1,123Restricted Share Units 412,501 424Deferred Share Units 182,132 189Exercise of warrants 6,521,740 12,166November 30, 2019 140,427,761 177,971Exercise of options 3,297,588 1,133Restricted Share Units 412,501 642November 30, 2020, issued and outstanding 144,137,850 179,746On April 30, 2012, under the NovaGold Arrangement, Trilogy committed to issue common shares to satisfy holders of NovaGold deferred share units(“NovaGold DSUs”), once vested, on record as of the close of business April 27, 2012. When vested, Trilogy committed to deliver one common share tothe holder for every six shares of NovaGold the holder is entitled to receive, rounded down to the nearest whole number. As of November 30, 2020, atotal of 11,927 NovaGold DSUs remain outstanding representing a right to receive 1,988 Common Shares in Trilogy, which will settle upon certaindirectors retiring from NovaGold’s board.(a)Stock optionsThe Company has a stock option plan providing for the issuance of options with a rolling maximum number equal to 10% of the issued and outstandingCommon Shares at any given time. The Company may grant options to its directors, officers, employees and service providers. The exercise price ofeach option cannot be lower than the greater of market price or fair market value of the Common Shares (as such terms are defined in the plan) at thedate of the option grant. The number of Common Shares optioned to any single optionee may not exceed 10% of the issued and outstanding CommonShares at the date of grant. The options are exercisable for a maximum of five years from the date of grant and may be subject to vesting provisions.During the year ended November 30, 2020, a total of 4,445,000 options (2019 - 3,077,500 options) at a weighted-average exercise price of CDN$2.79(2019 - CDN$2.86) were granted to employees, consultants and directors exercisable for a period of five years with various vesting terms fromimmediate vesting to over a two-year period. The weighted-average fair value attributable to options granted in 2020 was $0.90 (2019 - $1.03).The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model.Table of Contents119Assumptions used in the pricing model for the period are as provided below. November 30, 2020Risk-free interest rates 0.92%Exercise price CAD$2.79Expected life 3 yearsExpected volatility 64.4%Expected dividends NilThe Company recognized a stock option expense of $3.1 million for the year ended November 30, 2020 (2019 - $2.9 million; 2018 - $0.8 million), net offorfeitures.As of November 30, 2020, there were 2,493,337 non-vested options outstanding with a weighted average exercise price of $2.15. The non-vested stockoption expense not yet recognized was $1.0 million. This expense is expected to be recognized over the next two years.A summary of the Company’s stock option plan and changes during the year ended is as follows:November 30, 2020Weighted averageexercise price Number of options $ Balance – beginning of the year 9,205,600 1.11Granted 4,445,000 2.15Exercised (4,263,100) 0.51Cancelled (740,000) 2.27Balance – end of the year 8,647,500 1.84The following table summarizes information about the stock options outstanding at November 30, 2020.OutstandingExercisableUnvested WeightedWeighted Number ofWeightedaverageNumber ofaverageNumber of outstandingaverage yearsexercise priceexercisableexercise priceunvestedRange of price (CAD$) options to expiry CAD$ options CAD$ options $0.44 to $0.50 20,000 0.06 0.44 20,000 0.44 —$0.51 to $1.00 770,000 1.06 0.72 770,000 0.72 —$1.01 to $1.50 1,070,000 2.02 1.04 1,070,000 1.04 —$2.01 to $2.50 865,000 3.98 2.37 865,000 2.37 —$2.51 to $3.00 3,835,000 3.85 2.77 2,121,665 2.82 1,713,335$3.01 to $3.41 2,087,500 4.05 3.03 1,307,498 3.04 780,002 8,647,500 3.43 2.39 6,154,163 2.22 2,493,337The aggregate intrinsic value of vested share options (the market value less the exercise price) at November 30, 2020 was $2.4 million (2019 - $7.2million, 2018 - $12.2 million) and the aggregate intrinsic value of exercised options in 2020 was $2.6 million (2019 - $2.6 million, 2018 - $0.5 million).Table of Contents120(b)Restricted Share Units and Deferred Share UnitsThe Company has a Restricted Share Unit Plan (“RSU Plan”) and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to provide long-termincentives to employees, officers and directors. The RSU Plan and DSU Plan may be settled in cash and/or common shares at the Company’s electionwith each RSU and DSU entitling the holder to receive one common share of the Company or equivalent value. All units are accounted for as equity-settled awards.On April 13 2020, a Company officer was granted 200,000 RSUs, all of which vested immediately. Directors were granted 83,775 DSUs throughoutthe year ended November 30, 2020 based on their election to receive 50% of their annual retainer in DSUs.A summary of the Company’s unit plans and changes during the year ended is as follows: Number of RSUs Number of DSUs Balance – beginning of the year 212,501 1,137,488Granted 200,000 83,775Vested (412,501) —Balance – end of the year — 1,221,263For the year ended November 30, 2020, Trilogy recognized a stock-based compensation expense of $0.5 million (2019 - $0.9 million, 2018 -$0.6 million).(c)Share purchase warrantsDuring the year ended November 30, 2019, all the outstanding warrants were exercised in advance of the July 2, 2019 expiry date. As a result of thewarrants exercised, the Company issued a total of 6,521,740 common shares and received cash proceeds of approximately $9.9 million. The Companyhad no warrants outstanding as at November 30, 2020.(d)Bought deal financingOn April 20, 2018, the Company completed a bought-deal financing for gross proceeds of $28.7 million by issuing 24,784,482 common shares at $1.16per common share. Expenses including bank commissions, legal fees, stock exchange and other fees totaled $1.8 million for net proceeds of $26.9million.10) Management of capital riskThe Company relies upon management to manage capital in order to accomplish the objectives of safeguarding the Company’s ability to continue as agoing concern in order to pursue the development of our mineral properties through our equity investee (note 4) and maintain a capital structurewhich optimizes the costs of capital at an acceptable risk. The Company’s current capital consists of equity funding through capital markets.As the Company is currently in the exploration phase none of its financial instruments are exposed to commodity price risk; however, the Company’sability to obtain long-term financing and its economic viability may be affected by commodity price volatility. The Company will need to raise additionalfunds to support its operations and administration expenses. Future sources of liquidity may include equity financing, debt financing, convertible debt,or other means.To facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary dependingon various factors, including successful capital deployment and general industry conditions.Table of Contents12111) Financial instrumentsThe Company is exposed to a variety of risks arising from financial instruments. These risks and management’s objectives, policies and procedures formanaging these risks are disclosed as follows.The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities.The fair value of the Company’s financial instruments approximates their carrying value due to the short-term nature of their maturity. The Company’sfinancial instruments initially measured at fair value and then held at amortized cost include cash and cash equivalents, accounts receivable, deposits,and accounts payable and accrued liabilities. The Company’s investments were held for trading and marked-to-market at each period end with changesin fair value recorded to the statement of loss. The South32 purchase option was a derivative financial liability measured at fair value with changes invalue recorded to the statement of loss.Financial risk managementThe Company’s activities expose them to certain financial risks, including currency risk, credit risk, liquidity risk, interest risk and price risk.(a)Currency riskCurrency risk is the risk of a fluctuation in financial asset and liability settlement amounts due to a change in foreign exchange rates. The Companyoperates in the United States and Canada. The Company’s exposure to currency risk at November 30, 2020 is limited to the Canadian dollar balancesconsisting of cash of CDN$116,000, accounts receivable of CDN$15,000 and certain trade payables and accrued personnel costs CDN$843,000. Basedon a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change byapproximately $55,000.(b)Credit riskCredit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Companyholds cash and cash equivalents with Canadian Chartered financial institutions. The Company’s only significant exposure to credit risk is equal to thebalance of cash and cash equivalents as recorded in the financial statements.(c)Liquidity riskLiquidity risk is the risk that the Company will encounter difficulties raising funds to meet its financial obligations as they fall due. The Company is in theexploration stage and does not have cash inflows from operations; therefore, the Company manages liquidity risk through the management of itscapital structure and financial leverage.Contractually obligated cash flow requirements as at November 30, 2020 are as follows.in thousands of dollars Total < 1 Year 1–2 Years 2–5 Years Thereafter$$$$$Accounts payable and accrued liabilities 888 888 — — —Office lease 728 196 409 123 — 1,616 1,084 409 123 —(d)Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company is exposed to interest rate risk with respect to interest earned on cashTable of Contents122and cash equivalents. Based on balances as at November 30, 2020, a 1% change in interest rates would result in a change in net loss of $0.1 million,assuming all other variables remain constant.As we are currently in the exploration phase none of our financial instruments are exposed to commodity price risk; however, our ability to obtainlong-term financing and its economic viability could be affected by commodity price volatility.Fair value accountingFinancial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputsused in making the measurement. The three levels of the fair value hierarchy are as follows:Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets orliabilities;Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the fullterm of the asset or liability; andLevel 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable(supported by little or no market activity)The Company did not have any financial assets and liabilities that were measured and recognized at fair value as at November 30, 2020.During the year ended November 30, 2018, the Company disposed of its remaining shares of Gold Mining Inc., a publicly-held mineral explorationcompany.12) Income taxesIncome tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings beforeincome taxes. These differences result from the following items:in thousands of dollarsNovember 30, 2020November 30, 2019November 30, 2018 $ $ $ Combined federal and provincial statutory tax rate 27.00% 27.00% 26.92%Income tax (recovery) at statutory rate 43,677 (7,534) (5,882)Difference in foreign tax rates 2,424 (281) (424)Impact of change in tax rate — — 23,582Effect of foreign exchange changes (4) — —Non-deductible expenditures 1,009 4,061 3,018Income from option payments applied as proceedsof sale (8,812) — —Return to provision adjustments (6) 193 1,319Impact of new lease accounting rules (ASC 842adoption) (28) — —Expiry of Losses — 277 —Change in valuation allowance (38,260) 3,284 (21,613)Income tax recovery (expense) — — —Table of Contents123Deferred income taxes arise from temporary differences in the recognition of income and expenses for financial reporting and tax purposes. Thesignificant components of deferred income tax assets and liabilities at November 30, 2020 and 2019 are as follows:in thousands of dollars November 30, 2020November 30, 2019 $ $ Deferred income tax assets Non-capital losses 51,250 48,968Mineral property interest — 11,351Deferred interest 6,251 6,251Property, plant and equipment 88 70Lease liability 153 —Share issuance costs 267 351Capital Loss — 186Investments — —Other deductible temporary differences 223 345Total deferred tax assets 58,232 67,522Valuation allowance (29,259) (67,519)Net deferred income tax assets 28,973 3Deferred income tax liabilities Investment in Ambler Metals LLC (28,844) —Right of use asset (129) —Other taxable temporary differences — (3)Deferred income tax liabilities (28,973) (3)Net deferred income tax assets — —The Company has loss carry-forwards of approximately $182.6 million that may be available for tax purposes. Certain of these losses occurred prior tothe incorporation of the Company and are accounted for in the financial statements as if they were incurred by the Company. Prior to the NovaGoldArrangement, the Company undertook a tax reorganization in order to preserve the future deductibility of these losses for the Company, subject to thelimitations below. Deferred tax assets have been recognized to the extent of future taxable income and the future taxable amounts related to taxabletemporary differences for which a deferred tax liability is recognized can be offset. A valuation allowance has been provided against deferred incometax assets where it is not more likely than not that the Company will realize those benefits.The losses expire as follows in the following jurisdictions:in thousands of dollarsNon-capital lossesOperating lossesCanadaUnited States $ $ 2021 — 12022 — 3662023 — 9602024 — 569Thereafter 46,965 119,598 46,965 121,494Table of Contents124Future use of U.S. loss carry-forwards is subject to certain limitations under provisions of the Internal Revenue Code including limitations subject toSection 382, which relates to a 50% change in control over a three-year period and are further dependent upon the Company attaining profitableoperations. An ownership change under Section 382 occurred on January 22, 2009 regarding losses incurred by AGC, of which the attributes of thoselosses were transferred to Trilogy Metals US with the purchase of the mineral property in October 2011. Therefore, approximately $39.4 million of theU.S. losses above are subject to limitation under Section 382. Accordingly, the Company’s ability to use these losses may be limited. Furthermore, taxreform provisions under section 172 allow federal net operating losses arising in tax years subsequent to December 31, 2017 to be carried forwardindefinitely. As at November 30, 2020 the Company has $14.2 million in operating losses that can be carried forward indefinitely.An additional change in control may have occurred after November 30, 2011 which may further limit the availability of losses prior to the date ofchange in control.On June 19, 2015, we completed the Sunward acquisition which resulted in an acquisition of control of Sunward Resources ULC under of the IncomeTax Act in Canada. Therefore, the Company’s ability to use approximately $15.2 million of losses in Canada may be limited.13) CommitmentThe Company has commitments with respect to an office lease requiring future minimum lease payments as summarized in note 8(b).14) Subsequent eventsOn December 10, 2020 directors were granted 700,000 stock options vesting immediately. Employees were granted 2,674,500 stock options, of which427,650 options vested immediately, with the remainder vesting equally in thirds on the grant date, the first anniversary of the grant date, and thesecond anniversary of the grant date.Table of Contents125Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURENone.Item 9A. CONTROLS AND PROCEDURESDisclosure Controls and ProceduresDisclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted by the Companyunder U.S. and Canadian securities legislation is recorded, processed, summarized and reported within the time periods specified in those rules,including providing reasonable assurance that material information is gathered and reported to senior management, including the Chief ExecutiveOfficer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to permit timely decisions regarding public disclosure. Management, including theCEO and CFO, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and15d-15(e) of the Exchange Act and the rules of Canadian Securities Administrators, as at November 30, 2020. Based on this evaluation, theCEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as at November 30, 2020.Internal Control over Financial ReportingManagement is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act and National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim filings. Any system of internalcontrol over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance with respect to financial statement preparation and presentation. Management has used the Committee ofSponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013) to evaluate the effectiveness of theCompany’s internal control over financial reporting. Based on this assessment, management has concluded that as at November 30, 2020, theCompany’s internal control over financial reporting was effective.Attestation Report of the Registered Public Accounting FirmThis Annual Report does not include an attestation report of the company’s registered public accounting firm regarding internal controls over financialreporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to law, rules and regulations thatpermit us to provide only management’s report in this Annual Report. Changes in Internal ControlsThere has been no change in our internal control over financial reporting during the quarter ended November 30, 2020 that has materially affected, oris reasonably likely to materially affect, our internal control over financial reporting.Item 9B. OTHER INFORMATIONNone.Table of Contents126PART IIIItem 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information in our 2021 Proxy Statement regarding directors and executive officers and Section 16 reporting information appearing under theheadings “Election of Directors” and “Information Concerning the Board of Directors and Executive Officers” is incorporated by reference in thissection. The information under the heading “Executive Officers of Trilogy” in Part I, Item 1 of this Form 10-K is also incorporated by reference in thissection. The information in our 2021 Proxy Statement regarding our Code of Business Conduct and Ethics under the subheading “Ethical BusinessConduct” under “Statement of Corporate Governance Practices” is also incorporated by reference in this section. Finally, the information in our 2021Proxy Statement regarding the Audit Committee under the heading “Statement of Corporate Governance Practices” is incorporated herein byreference.Item 11. EXECUTIVE COMPENSATIONThe information appearing in our 2021 Proxy Statement under the headings “Compensation Committee Interlocks and Insider Participation”,“Statement of Executive Compensation”, and “Director Compensation” is incorporated by reference in this section.Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERSThe information appearing in our 2021 Proxy Statement under the heading “Securities Authorized For Issuance Under Equity Compensation Plans”(which is also contained in this report in Part II, Item 5) and the information under the heading “Security Ownership Of Certain Beneficial Owners AndManagement And Related Shareholder Matters” is incorporated herein by reference.Securities Authorized for Issuance under Equity Compensation PlansThe following table is as of November 30, 2020.Plan category Number of securities to be issuedupon exercise of outstandingoptions, warrants and rights Weighted-average exercise price ofoutstanding options, warrants andrights Number of securities remainingavailable for future issuance underequity compensation plans(excluding securities reflected incolumn (a)) (a)(b)(c)Equity compensation plans approvedby security holders 9,868,763$ 1.61 11,751,915Equity compensation plans notapproved by security holders — — —Total 9,868,763$ 1.61 11,751,915Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCEThe information appearing in our 2021 Proxy Statement under the heading “Independence of Directors” under the heading “Information Concerningthe Board of Directors and Executive Officers” and under the heading “Statement of Corporate Governance Practices” is incorporated herein byreference.Table of Contents127Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe information appearing in our 2021 Proxy Statement regarding Audit Fees, Audit-Related Fees, Tax Fees, All Other Fees and Audit Committee Pre-Approval Policies under the subheading “Appointment of Auditors” is incorporated herein by reference.PART IVItem 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a)Documents Filed With This Report1.FINANCIAL STATEMENTSPageReport of Independent Registered Public Accounting Firm102Consolidated Balance Sheets103Consolidated Statements of Loss and Comprehensive Loss104Consolidated Statements of Shareholders’ Equity105Consolidated Statements of Cash Flows106Notes to Consolidated Financial Statements1072.FINANCIAL STATEMENT SCHEDULESNone.3.EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTSEmployment Agreement between the Registrant and James Gowans, dated October 21, 2019, identified in exhibit list below.Amendment Agreement between the Company and James Gowans, dated April 9, 2020, identified in exhibit list below.Employment Agreement between the Registrant and Tony Giardini, dated April 20, 2020, identified in exhibit list below.Employment Agreement between the Registrant and Elaine Sanders, dated November 5, 2012, identified in exhibit list below.NovaCopper Inc. Equity Incentive Plan identified in exhibit list below.Form of NovaCopper Inc. Stock Option Agreement identified in exhibit list below.NovaCopper Inc. 2012 Restricted Share Unit Plan identified in exhibit list below.Form of NovaCopper Inc. 2012 Restricted Share Unit Award Agreement identified in exhibit list below.NovaCopper Inc. 2012 Deferred Share Unit Plan identified in exhibit list below.Form of NovaCopper Inc. Deferred Share Unit Award Agreement identified in exhibit list below.Table of Contents128(b)ExhibitsExhibitNo. Description2.1Contribution Agreement, dated February 11, 2020, between NovaCopper US Inc., Trilogy Metals Inc. and Ambler Metals LLC(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 18, 2020)3.1Certificate of Incorporation (incorporated by reference to Exhibit 99.2 to the Company’s Registration Statement on Form 40-F filed onMarch 1, 2012) 3.2Articles of Trilogy Metals Inc., effective April 27, 2011, as altered March 20, 2011 (incorporated by reference to Exhibit 99.3 toAmendment No. 1 to the Company’s Registration Statement on Form 40-F filed on April 19, 2012) 3.3Notice of Articles and Certificate of Name Change, dated September 1, 2016 (incorporated by reference to Exhibit 3.1 to the Company’sCurrent Report on Form 8-K dated September 8, 2016)4.1Description of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed on February12, 2021) 10.1Net Smelter Returns Royalty Agreement, dated effective January 7, 2010, among Kennecott Exploration Company, Kennecott ArcticCompany, Alaska Gold Company, and NovaGold Resources Inc. (incorporated by reference to Exhibit 99.1 to the Company’s Report onForm 6-K filed on April 25, 2012) 10.2Exploration Agreement and Option to Lease, dated October 19, 2011, between NovaCopper US Inc. and NANA Regional Corporation, Inc.(incorporated by reference to Exhibit 99.1 to the Company’s Report on Form 6-K filed on April 25, 2012) 10.3Option Agreement to Form Joint Venture, dated April 10, 2017, among the Company, NovaCopper US Inc. and South32 GroupOperations Pty Ltd. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed on April 20, 2017) 10.4Amended and Restated Limited Liability Company Agreement of Ambler Metals LLC dated February 11, 2020 (incorporated by referenceto Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 18, 2020) 10.5NovaCopper Inc. 2012 Restricted Share Unit Plan (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form10-K filed on February 12, 2013) 10.6NovaCopper Inc. 2012 Deferred Share Unit Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form10-K filed on February 12, 2013, File No. 001-35447) 10.7Form of NovaCopper Inc. Stock Option Agreement (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement onForm S-8 filed on April 27, 2012) 10.8NovaCopper Inc. Equity Incentive Plan (incorporated by reference to Schedule G of Exhibit 99.1 to the Company’s Registration Statementon Form 40-F filed on March 1, 2012)10.9Employment Agreement, dated October 21, 2019, between the Company and James Gowans (incorporated by reference to Exhibit 10.15to the Company’s Annual Report on Form 10-K filed on February 13, 2020)10.10Amendment Agreement, dated April 9, 2020, between the Company and James Gowans (incorporated by reference to Exhibit 10.1 tothe Company’s Current Report on Form 8-K filed on April 9, 2020)Table of Contents12910.11Employment Agreement, dated April 20, 2020, between the Company and Tony Giardini (incorporated by reference to Exhibit 10.1 tothe Company’s Current Report on Form 8-K filed on April 20, 2020)10.12Employment Agreement, dated November 5, 2012, between the Company and Elaine Sanders (incorporated by reference to Exhibit 10.5to the Company’s Registration Statement on Form 10-K filed on February 12, 2013)21.1Subsidiaries of the Registrant 23.1Consent of PricewaterhouseCoopers LLP 23.2Consent of Richard Gosse 23.3Consent of BD Resource Consulting, Inc. 23.4Consent of SIM Geological Inc. 23.5Consent of International Metallurgical & Environmental Inc. 23.6Consent of Ausenco Engineering Canada Inc. 23.7Consent of Wood Canada Limited 23.8Consent of SRK Consulting (Canada) Inc.31.1Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) 31.2Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) 32.1Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 32.2Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350101The following materials from Trilogy Metals Inc.’s Annual Report on Form 10-K for the year ended November 30, 2020, formatted inInline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements ofComprehensive Income (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Shareholders’ Equity, (v) theConsolidated Statements of Cash Flows, (vi) the Notes to the Consolidated Financial Statements, and (vii) Schedule II – Valuation andQualifying Accounts.104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).(c)Financial Statement SchedulesSchedule A – The Financial Statement of Ambler Metals LLC as of November 30, 2020.Item 16. FORM 10-K SUMMARYNone.Table of Contents130Report of Independent Registered Public Accounting FirmTo the Board of Ambler Metals LLCOpinion on the Financial StatementsWe have audited the accompanying balance sheet of Ambler Metals LLC (the Company) as of November 30, 2020 and the related statement of loss and comprehensive loss, changes in members’ equity and cash flows for the period from February 11, 2020 to November 30, 2020 including the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2020 and the results of its operations and its cash flows for the period from February 11, 2020 to November 30, 2020 in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financialstatements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rulesand regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error orfraud.Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, andperforming procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts anddisclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for ouropinion./s/ PricewaterhouseCoopers LLPChartered Professional AccountantsVancouver, CanadaFebruary 11, 2021We have served as the Company's auditor since 2020.Table of Contents131Ambler Metals LLCBalance SheetAs of November 30, 2020 in thousands of US dollars November 30, 2020$AssetsCurrent assetsCash (note 3)81,673Deposits and prepaid543Other assets10Total current assets82,226Right of use asset (note 7)51Loan receivable58,478Property, plant and equipment (note 4)531Mineral properties (note 5)30,705Total assets171,991LiabilitiesCurrent liabilitiesAccounts payable (note 6,8)790Accrued liabilities (note 6)655Lease liabilities (note 7)51Total liabilities1,496Members’ equityOwner contribution – South32145,000Owner contribution – Trilogy31,206Deficit(5,711)Total Members’ equity170,495Total liabilities and members’ equity171,991Subsequent events (note 12)(See accompanying notes to the financial statements)Table of Contents132Ambler Metals LLCStatement of Loss and Comprehensive LossFor the Period February 11, 2020 to November 30, 2020 in thousands of US dollars 2020$ExpensesAmortization95Corporate salaries and wages614General and administrative914Lease expense48Mineral property expense (note 5)3,227Professional fees1,990Foreign exchange loss3Total expenses6,891Other itemsInterest income(1,180)Loss and comprehensive loss for the period5,711(See accompanying notes to the financial statements)Table of Contents133Ambler Metals LLCStatement of Changes in Members’ EquityFor Period Feb 11, 2020 to November 30, 2020in thousands of US dollarsNumber ofTrilogySouth32Totalunitsownerownermembers’outstandingcontributioncontributionDeficitequity$$$$Owner contributions 2,000,000 31,206 145,000 — 176,206 Loss for the period———(5,711)(5,711)Balance – 20202,000,00031,206145,000(5,711)170,495(See accompanying notes to the financial statements)Table of Contents134Ambler Metals LLCStatement of Cash FlowsFor the Period February 11, 2020 to November 30, 2020 in thousands of US dollars 2020$Cash flows used in operating activitiesLoss for the period(5,711)Items not affecting cashAmortization95Interest earned on South32 loan(978)Change in working capitalDecrease (increase) in deposits and prepaids(543)Decrease (increase) in other assets(10)Increase (decrease) in accounts payable and accrued liabilities1,445(5,702)Cash flows from (used in) financing activitiesCash contributed by South32 upon JV formation145,000145,000Cash flows from (used in) investing activitiesLoan issued to South32(57,500)Property staking(118)Purchase of office equipment(7)(57,625)(Decrease) increase in cash81,673Cash – beginning of period—Cash – end of period81,673(See accompanying notes to the financial statements)Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted1351. Organization & basis of presentationAmbler Metals LLC (the “Company” or “Joint Venture”), a Delaware limited liability company, is a 50-50 joint venture between NovaCopper US Inc., awholly owned subsidiary of Trilogy Metals Inc. (collectively “Trilogy”), and South32 USA Exploration Inc., a wholly owned subsidiary of South32 Limited(collectively “South32”).The Company is engaged in the exploration and development of mineral properties with a focus on the Upper Kobuk Mineral Projects (“UKMP”),including the Arctic and Bornite Projects located in Northwest Alaska in the United States of America (“US” or “USA”).On February 11, 2020, pursuant to a contribution agreement among Trilogy, South32 and the Company (the “Contribution Agreement”), Trilogycontributed to the Company substantially all of Trilogy’s assets associated with the Upper Kobuk Mineral Projects ("UKMP") located in northwestAlaska in exchange for a 50% membership interest in the Company. Simultaneously, South32 contributed US$145 million cash in exchange for a 50%membership interest in the Company.The operations and governance of the Joint Venture are provided for in the Company’s Limited Liability Company Agreement dated February 11, 2020(the “LLC Agreement”).The mining rights, deposits and property, plant and equipment contributed to the Company from Trilogy are recognized at Trilogy’s historical carryingvalue on the date of contribution. The contributions, including noncash contributions, made to the Company by each respective member onFebruary 11, 2020 are as follows:Respective contributions to the Joint Venture in thousands of US dollars $Net intangible assets:Mining rights30,587Trilogy contributed net intangible assets30,587Net tangible assets:Deposits1Property, plant and equipment618Trilogy contributed net tangible assets619Cash145,000South32 contributed cash145,000Total capital contributed at inception176,206As a result of these transactions, Trilogy and South32 each have equal interests in the Company and have equal representation on the Board of theCompany.Following the formation of the Joint Venture, on March 17, 2020 the Company loaned South32 $57.5 million secured by South32’s membershipinterest in Ambler Metals and guaranteed by South32 International Investment Holdings Pty Ltd., a wholly owned subsidiary of South32. The loan hasas a 7-year maturity date and is recorded at amortized cost.Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted136The financial statements have been prepared by management in conformity with generally accepted accounting principles in the United States (“U.S.GAAP”) on a going concern basis, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for theforeseeable future.These financial statements have been prepared pursuant to Rule 3-09 of SEC Regulation S-X for inclusion in Trilogy’s 10-K/A, as the Company is anequity investee of Trilogy.2. Summary of significant accounting policiesProperty, plant and equipmentPlant and equipment are recorded at cost and amortization begins when the asset is put into service. Amortization is calculated on a straight-line basisover the respective assets’ estimated useful lives. Amortization periods by asset class are:Computer hardware and software3 yearsMachinery and equipment3 – 10 yearsOffice furniture and equipment5 yearsVehicles3 yearsLeasehold Improvementslease termMineral properties and development costsAll direct costs related to the acquisition of mineral property interests are capitalized. Mineral property exploration expenditures are expensed whenincurred. When it has been established that a mineral deposit is commercially mineable, an economic analysis has been completed and permits areobtained, the costs subsequently incurred to develop a mine on the property prior to the start of mining operations are capitalized. Capitalized costswill be amortized following commencement of production using the unit of production method over the estimated life of proven and probablereserves.Impairment of long-lived assetsManagement assesses the possibility of impairment in the carrying value of long-lived assets whenever events or circumstances indicate that thecarrying amounts of the asset or asset group may not be recoverable. Management calculates the estimated undiscounted future net cash flowsrelating to the asset or asset group using estimated future prices, proven and probable reserves and other mineral resources, and operating, capitaland reclamation costs. When the carrying value of an asset exceeds the related undiscounted cash flows, the asset is written down to its estimated fairvalue, which is usually determined using discounted future cash flows. Management’s estimates of mineral prices, mineral resources, foreign exchangerates, production levels, operating, capital and reclamation costs are subject to risk and uncertainties that may affect the determination of therecoverability of the long-lived asset. It is possible that material changes could occur that may adversely affect management’s estimates.LeasesWe determine if a contractual arrangement represents or contains a lease at inception. Operating leases are included in Right of use assets and Leaseliabilities in our Balance Sheet. Assets under finance leases are included in Property, Plant and Equipment and the related lease liabilities in Leaseliabilities in our Balance Sheet.Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted137Operating and finance lease right of use assets and lease liabilities are recognized based on the present value of the future lease payments over thelease term at the commencement date. When the rate implicit to the lease cannot be readily determined, we utilize the incremental borrowing rate indetermining the present value of the future lease payments. The incremental borrowing rate is the rate of interest our Company would have to pay toborrow on a collateralized basis over a similar term and the amount equal to the lease payments in a similar economic environment.The operating lease expenses are recognized on a straight-line basis over the lease term and included in Lease expenses.Income taxesThe Company is not a taxable entity for income tax purposes. Accordingly, no recognition is given to income taxes for financial reporting purposes. Taxon the net income (loss) of the Company is borne by the owners through the allocation of taxable income (loss). Net income for financial statementpurposes may differ significantly from taxable income for the owners as a result of differences between the tax basis and financial reporting basis ofassets and liabilities and the taxable income allocation requirements under the shareholders agreement.Financial instrumentsLoans and receivables are recorded initially at fair value, net of transaction costs incurred, and subsequently at amortized cost using the effectiveinterest rate method. Loans and receivables consist of cash, deposits, and loans receivable.Other financial liabilities include accounts payable and accrued liabilities.Translation of foreign currenciesForeign denominated monetary assets and liabilities are translated into United States dollars at the exchange rate in effect at the balance sheet date,and non-monetary assets and liabilities at the exchange rate in effect at the time of acquisition or issue. Income and expenses are translated at ratesapproximating the exchange rate in effect at the time of transactions. Exchange gains or losses arising on translation are included in income or loss forthe period.The functional currency of the Company and the Company’s reporting currency is the United States dollar.3. CashAs of November 30, 2020, included in cash is $88,973 (CDN$118,573) denominated in Canadian dollars and $81,583,624 denominated in United Statesdollars.Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted1384. Property, plant and equipmentA summary of property, plant and equipment as of November 30, 2020, is as follows:in thousands of US dollarsAccumulatedCostAmortizationNet$$$Machinery and equipment 1,057 (532) 525 Computer hardware and software12(6)61,069(538)5315. Mineral propertiesin thousands of US dollarsFebruary 11, 2020Acquisition costsNovember 30, 2020$$$Ambler 26,587 118 26,705 Bornite4,000—4,00030,58711830,705a)AmblerOn February 11, 2020, the Ambler lands in Northwest Alaska, which contains the copper-zinc-lead-gold-silver Artic Project and other mineralizedtargets within the volcanogenic massive sulfide belt, were contributed to Ambler Metals LLC pursuant to the contribution agreement. The Ambler landsare subject to a 1% net smelter return (“NSR”) royalty that can be purchased at any time for a onetime payment of $10.0 million.Mineral property costs of $118,157 were added to the Ambler land holdings during the period ended November 30, 2020.b)BorniteOn February 11, 2020, the exclusive right to explore and the non-exclusive right to access and enter on the Bornite lands, and lands deeded to NANARegional Corporation, Inc. (“NANA”) through the Alaska Native Claims Settlement Act, located adjacent to the Ambler lands in Northwest Alaska, werecontributed to Ambler Metals LLC pursuant to the contribution agreement.Upon a decision to proceed with construction of a mine on the lands, NANA maintains the right to purchase between a 16%-25% ownership interest inthe mine or retain a 15% net proceeds royalty which is payable after Ambler Metals LLC has recovered certain historical costs, including capital and costof capital. Should NANA elect to purchase an ownership interest, consideration will be payable equal to all historical costs incurred on the properties atthe elected percentage, not to be less than zero. The parties would form a joint venture and be responsible for all future costs, including capital costsof the mine based on their pro-rata share.Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted139NANA would also be granted a net smelter return royalty of between 1% and 2.5% upon the execution ofs a mining lease or a surface use agreement,the amount of which is determined by the classification of land from which production originates.c)Mineral properties expenseThe following table summarizes mineral properties expense incurred from February 11, 2020 to the period ended November 30, 2020: in thousands of US dollars 2020$Drilling444Engineering645Environmental245Geochemistry and geophysics171Land and permitting232Project support320Wages and benefits1,170Mineral property expense3,2276. Accounts payable and accrued liabilities in thousands of US dollars November 30, 2020$Accounts payable444Accrued demobilization charges339Accrued salaries and vacation232Due to related parties114Other accrued liabilities316Accounts payable and accrued liabilities1,4457. Leases(a)Right-of-use asset in thousands of US dollars November 30, 2020$Recognition of Fairbanks warehouse lease93Amortization(42)51Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted140The Company’s lease arrangement for warehouse space ends in October 2021. Total lease expense recorded was comprised of operating lease costs of$48,015 and variable lease costs of $nil. As of November 30, 2020, the remaining lease term was 11 months.Supplemental cash and non-cash information relating to our leases during the period ended November 30, 2020 are as follows:●Cash paid for amounts included in the measurement of lease liabilities was $48,080.●Non-cash amounts included in the measurement of lease liabilities was $nil.Future minimum payments relating to the lease recognized in our balance sheet as of November 30, 2020 are as follows: in thousands of US dollars November 30, 2020$2021532022 to 2025—Total undiscounted lease payments53Effects of discounting(2)Present value of lease payments recognized as lease liability518. Related party transactionsThe Company incurred $931,897 of expenses related to employee compensation, payroll processing fees, office supplies, and accounting services inconnection with the Services Agreement between Trilogy and the Company dated February 18, 2020 (“Services Agreement”). In addition, the Companymade payments of $2,771,515 related to operating expenses paid by Trilogy and reimbursed by the Company pursuant to the Services Agreement.As of November 30, 2020, included in accounts payable is s $114,303 due to Trilogy.During the period ended November 30, 2020, the Company loaned $57.5 million to South32 and earned interest of $978,383 on the loan.9. Financial risk management(a)Currency riskCurrency risk is the risk of a fluctuation in financial asset and liability settlement amounts due to a change in foreign exchange rates. The Companyoperates in the United States and holds a bank account denominated in Canadian currency to facilitate payments to Canadian vendors, as necessary.The Company’s exposure to the currency risk at November 30, 2020 is limited to the Canadian dollar balances consisting of cash of CDN$118,573 andaccounts payable of CDN$181,461. Based on a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, theCompany’s net loss would change by approximately $5,107.Table of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted141(b)Credit riskCredit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Companyholds cash with US Chartered financial institutions. The Company’s receivables consist of a loan receivable from South32. The Company’s exposure tocredit risk is equal to the balance of cash and loan receivables recorded in the financial statements.(c)Liquidity riskLiquidity risk is the risk that the Company will encounter difficulties raising funds to meet its financial obligations as they fall due. The Company is in theexploration stage and does not have cash inflows from operations; therefore, the Company manages liquidity risk through the terms of the LLCAgreement.Contractually obligated cash flow requirements as at November 30, 2020 are as follows.in thousands of US dollars Total < 1 year Thereafter $$$Accounts payable and accrued liabilities1,4451,445—Warehouse lease5353—1,4981,498—(d)Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company is exposed to interest rate risk with respect to interest earned on cash. Based on cash balances as at November 30, 2020, a 1% changeinterest rates would result in a change in a net loss of $800,000 assuming all other variables remain constant.As we are currently in the exploration phase none of our financial instruments are exposed to commodity price risk; however, the ability for ourOwners to obtain long-term financing and its economic viability could be affected by commodity price volatility.10. Commitments and contingenciesThe Company has commitments with respect to a warehouse lease requiring future minimum lease payments as summarized in note 7.11. Members’ equityThe Company has been established as a limited liability company. Under the terms of the LLC Agreement, unless otherwise provided for in the LLCAgreement, all membership interests are entitled to the same benefits, rights, duties and obligations and vote on all matters.The Company is authorized to establish a capital account for each member equal to that member’s initial capital contribution, represented by Units.The Units are voting and subject to transfer restrictions as defined in the LLCTable of ContentsAmbler Metals LLCNotes to financial statementsexpressed in U.S. dollars, unless otherwise noted142Agreement. As of November 30, 2020, the Company has 2 million Units, with each of South32 and Trilogy owning 1 million Units each, in exchange forthe contributions made to the Company at inception.As described in the LLC Agreement, under certain circumstances a member shall have the right to transfer to any third party all or any part of itsMembership Interest or any economic interest (including its right to receive distributions of cash or property from the Company). Any such transfer issubject to the satisfaction of certain conditions, and the relevant purchase price is determined pursuant to specific formulas, all as set forth in the LLCAgreement.12. Subsequent eventsThe Company has evaluated subsequent events to February 10, 2021, which is the date the financial statements were available to be issued.In December 2020, the Company executed a lease arrangement for office space ending December 2025 for its new Anchorage office space. Futureminimum payments relating to this lease are approximately $920,655.In February 2021, the Company and the Alaska Industrial Development and Export Authority (“AIDEA”) entered into a Funding Agreement to which theCompany agrees to reimburse AIDEA for fifty percent (50%) of the direct costs for certain pre-construction activities of the Ambler Access Project overthe next three to four years, up to $35 million.Table of Contents143SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized.TRILOGY METALS INC.By:/s/ Tony Giardini Name:Tony Giardini Title:President and Chief Executive OfficerDate: February 12, 2021Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated:/s/ Tony GiardiniPresident and Chief Executive OfficerFebruary 12, 2021Tony Giardini(Principal Executive Officer) and Director/s/ Elaine SandersChief Financial Officer (Principal FinancialFebruary 12, 2021Elaine SandersOfficer and Principal Accounting Officer)/s/ James GowansDirectorFebruary 12, 2021James Gowans/s/ William HaydenDirectorFebruary 12, 2021William Hayden/s/ William HensleyDirectorFebruary 12, 2021William Hensley/s/ Gregory LangDirectorFebruary 12, 2021Gregory A. Lang/s/ Kalidas MadhavpeddiDirectorFebruary 12, 2021Kalidas V. Madhavpeddi/s/ Janice StairsDirectorFebruary 12, 2021Janice Stairs/s/ Diana WaltersDirectorFebruary 12, 2021Diana WaltersSignature Title DateExhibit 21.1SUBSIDIARIES OF THE REGISTRANTName of Subsidiary Jurisdiction of Organization NovaCopper US Inc. (dba Trilogy Metals US) DelawareAmbler Metals LLC (50% owned by NovaCopper US Inc.) DelawareExhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statements on Forms S-8 (No. 333-181020, No. 333-188950, No. 333-205102, No. 333-208149and No. 333-234417) and the Registration Statement on Form S-3 (No. 333-234164) of Trilogy Metals Inc. of (i) our report dated February 11, 2021, relating to theconsolidated financial statements of Trilogy Metals Inc., and (ii) our report dated February 11, 2021 relating to the financial statements of Ambler Metals LLC, both ofwhich appear in this Form 10-K./s/ PricewaterhouseCoopers LLPChartered Professional AccountantsVancouver, CanadaFebruary 11, 2021Exhibit 23.2CONSENT OF RICHARD GOSSEI hereby consent to the inclusion in this Annual Report on Form 10-K, which is being filed with the United States Securities and Exchange Commission, of references tomy name and to the use of the scientific and technical information included in Trilogy Metals Inc.’s Annual Report on Form 10-K for the year ended November 30, 2020.I also consent to the incorporation by reference in Trilogy Metals Inc.’s Registration Statements on Form S-8 (No. 333-181020, No. 333-188950, No. 333-205102, No.333-208149 and No. 333-234417) and the Registration Statement on Form S-3 (No. 333-234164) of references to my name and to the use of the scientific and technicalinformation included in the Annual Report on Form 10-K as described above.DATED: February 9, 2021 /s/ Richard Gosse Name: Richard Gosse Exhibit 23.3CONSENT OF BD RESOURCE CONSULTING, INC.The undersigned hereby consents to the inclusion in or incorporation by reference in (i) the Form 10-K of Trilogy Metals Inc. being filed with the U.S. Securities andExchange Commission (the “SEC”) for the fiscal year ended November 30, 2020 and (ii) the registration statements on Form S-3 (No.333-234164) and Form S-8 (No.333-181020, No. 333-188950, No. 333-205102, No. 333-208149 and No. 333-234417) (the “Registration Statements”) of Trilogy Metals Inc. filed with the SEC, to anyamendments or post-effective amendments to the Registration Statements and to any prospectuses or prospectus supplements thereto, of references to BD ResourceConsulting, Inc.’s name and to the use of the technical reports titled (x) “Artic Feasibility Study, Alaska, USA, NI 43-101 Technical Report" dated effective August 20,2020 and released October 2, 2020 and (y) "NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA" dated effective June 5, 2018 and released July20, 2018 (the "Technical Reports"), and the use of scientific and technical information, including any reserve and resource estimates, from the Technical Reports(collectively, the "Technical Information"), including extracts from or summaries of the Technical Information.DATED: February 11, 2021BD Resource Consulting, Inc. /s/ Bruce M. Davis Name: Bruce M. DavisTitle: President Exhibit 23.4CONSENT OF SIM GEOLOGICAL INC.The undersigned hereby consents to the inclusion in or incorporation by reference in (i) the Form 10-K of Trilogy Metals Inc. being filed with the U.S. Securities andExchange Commission (the “SEC”) for the fiscal year ended November 30, 2020 and (ii) the registration statements on Form S-3 (No. 333-234164) and Form S-8 (No.333-181020, No. 333-188950, No. 333-205102, No. 333-208149 and No. 333-234417) (the “Registration Statements”) of Trilogy Metals Inc. filed with the SEC, to anyamendments or post-effective amendments to the Registration Statements and to any prospectuses or prospectus supplements thereto, of references to SIM GeologicalInc.’s name and to the use of the technical reports titled (x) “Artic Feasibility Study, Alaska, USA, NI 43-101 Technical Report” dated effective August 20, 2020 andreleased October 2, 2020 and (y) “NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA” dated effective June 5, 2018 and released July 20, 2018(the “Technical Reports”), and the use of scientific and technical information, including any reserve and resource estimates, from the Technical Reports (collectively, the“Technical Information”), including extracts from or summaries of the Technical Information.DATED: January 21, 2021SIM Geological Inc. /s/ Robert Sim Name: Robert SimTitle: President SIM Geological Inc. Exhibit 23.5CONSENT OF INTERNATIONAL METALLURGICAL & ENVIRONMENTAL INC.The undersigned hereby consents to the inclusion in or incorporation by reference in (i) the Form 10-K of Trilogy Metals Inc. being filed with the U.S. Securities andExchange Commission (the “SEC”) for the fiscal year ended November 30, 2020 and (ii) the registration statements on Form S-3 (No.333-234164) and Form S-8 (No.333-181020, No. 333-188950, No. 333-205102, No. 333-208149 and No. 333-234417) (the “Registration Statements”) of Trilogy Metals Inc. filed with the SEC, to anyamendments or post-effective amendments to the Registration Statements and to any prospectuses or prospectus supplements thereto, of references to InternationalMetallurgical & Environmental Inc.’s name and to the use of the technical reports titled (x) “Artic Feasibility Study, Alaska, USA, NI 43-101 Technical Report” datedeffective August 20, 2020 and released October 2, 2020 and (y) “NI 43-101 Technical Report on the Bornite Project, Northwest Alaska, USA” dated effective June 5,2018 and released July 20, 2018 (the “Technical Reports”), and the use of scientific and technical information, including any reserve and resource estimates, from theTechnical Reports (collectively, the “Technical Information”), including extracts from or summaries of the Technical Information.DATED: February 6, 2021 International Metallurgical & Environmental Inc. /s/ Jeffrey Austin Name: Jeffrey B. AustinTitle: President Exhibit 23.6CONSENT OF AUSENCO ENGINEERING CANADA INC.The undersigned hereby consents to the inclusion in or incorporation by reference in (i) the Form 10-K of Trilogy Metals Inc. being filed with the U.S. Securities andExchange Commission (the “SEC”) for the fiscal year ended November 30, 2020 and (ii) the registration statements on Form S-3 (No. 333-234164) and Form S-8 (No.333-181020, No. 333-188950, No. 333-205102, No. 333-208149 and No. 333-234417) (the “Registration Statements”) of Trilogy Metals Inc. filed with the SEC, ofreferences to the Ausenco Engineering Canada Inc.’s name and to the use of the those sections of the technical report titled “Arctic Feasibility Study, Alaska, USA, NI 43-101 Technical Report” dated effective August 20, 2020 and released October 2, 2020 (the “Technical Report”), that were prepared by Ausenco Engineering Canada Inc.,and the use of scientific and technical information from those sections of the Technical Report that were prepared by Ausenco Engineering Canada Inc. (collectively, the“Technical Information”), including extracts from or summaries of the Technical Information.DATED: February 9, 2021 Ausenco Engineering Canada Inc. /s/ Paul Staples Name: Paul StaplesTitle: VP & Global Practice Lead Exhibit 23.7CONSENT OF WOOD CANADA LIMITED,The undersigned hereby consents to the inclusion in or incorporation by reference in (i) the Form 10-K of Trilogy Metals Inc. being filed with the U.S. Securities andExchange Commission (the “SEC”) for the fiscal year ended November 30, 2020 and (ii) the registration statements on Form S-3 (No. 333-234164) and Form S-8 (No.333-181020, No. 333-188950, No. 333-205102, No. 333-208149 and No. 333-234417) (the “Registration Statements”) of Trilogy Metals Inc. filed with the SEC, to anyamendments or post-effective amendments to the Registration Statements and to any prospectuses or prospectus supplements thereto, of references to Wood CanadaLimited’s name and to the use of the technical report titled “Arctic Feasibility Study, Alaska, USA, NI 43-101 Technical Report” dated effective August 20, 2020 andreleased October 2, 2020 (the “Technical Report”), and the use of scientific and technical information, including any reserve estimates, from the portions of the TechnicalReport prepared by Wood Canada Limited (collectively, the “Technical Information”), including extracts from or summaries of the Technical Information.DATED: February 7, 2021 On behalf of Wood Canada Limited /s/ Greg Gosson Name: Greg GossonTitle: Technical Director, Geology & Compliance Wood Canada LimitedExhibit 23.8CONSENT OF SRK CONSULTING (CANADA) INC.The undersigned hereby consents to the inclusion in or incorporation by reference in (i) the Form 10-K of Trilogy Metals Inc. being filed with the U.S. Securities andExchange Commission (the “SEC”) for the fiscal year ended November 30, 2020 and (ii) the registration statements on Form S-3 (No. 333-234164) and Form S-8 (No.333-181020, No. 333-188950, No. 333-205102, No. 333-208149 and No. 333-234417) (the “Registration Statements”) of Trilogy Metals Inc. filed with the SEC, to anyamendments or post-effective amendments to the Registration Statements and to any prospectuses or prospectus supplements thereto, of references to SRK Consulting(Canada) Inc.’s name and to the use of the technical report titled “Artic Feasibility Study, Alaska, USA, NI 43-101 Technical Report” dated effective August 20, 2020 andreleased October 2, 2020 (the “Technical Report”), and the use of scientific and technical information, including any reserve and resource estimates, from the TechnicalReport (collectively, the “Technical Information”), including extracts from or summaries of the Technical Information.DATED: February 12, 2021 SRK Consulting (Canada) Inc. /s/ Calvin Boese Name: Calvin BoeseTitle: Principal Consultant (Geotechnical) Exhibit 31.1CERTIFICATION OF CHIEF EXECUTIVE OFFICERPURSUANT TO RULE 13a-14(a) OF THESECURITIES EXCHANGE ACT OF 1934I, Tony Giardini, certify that:1. I have reviewed this annual report on Form 10-K of Trilogy Metals Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controlover financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financialreporting. By:/s/ Tony Giardini Tony GiardiniDate: February 12, 2021 Chief Executive OfficerExhibit 31.2CERTIFICATION OF CHIEF FINANCIAL OFFICERPURSUANT TO RULE 13a-14(a) OF THESECURITIES EXCHANGE ACT OF 1934I, Elaine Sanders, certify that:1. I have reviewed this annual report on Form 10-K of Trilogy Metals Inc.;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter(the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controlover financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’sauditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financialreporting.By:/s/ Elaine Sanders Elaine SandersDate: February 12, 2021 Chief Financial OfficerExhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. §1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Trilogy Metals Inc. (the “Company”) on Form 10-K for the year ended November 30, 2020, as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, Tony Giardini, Chief Executive Officer of the Company, certify that:1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: February 12, 2021By:/s/ Tony Giardini Tony Giardini Chief Executive OfficerExhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. §1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Trilogy Metals Inc. (the “Company”) on Form 10-K for the year ended November 30, 2020, as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, Elaine Sanders, Chief Financial Officer of the Company, certify that:1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: February 12, 2021By:/s/ Elaine Sanders Elaine Sanders Chief Financial Officer

Continue reading text version or see original annual report in PDF format above