Trilogy Metals Inc. Annual Report 2023

Plain-text annual report

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended November 30, 2023 OR For the Transion Period from to Commission File Number: 1-35447 TRILOGY METALS INC. (Exact Name of Registrant as Speciﬁed in Its Charter) Brish Columbia (State or Other Jurisdicon of Incorporaon or Organizaon) Suite 1150, 609 Granville Street Vancouver, Brish Columbia Canada (Address of Principal Execuve Oﬃces) 98-1006991 (I.R.S. Employer Idenﬁcaon No.) V7Y 1G5 (Zip Code) (604) 638-8088 (Registrant’s Telephone Number, Including Area Code) Title of Each Class Common Shares, no par value Trading Symbol TMQ Name of Each Exchange on Which Registered NYSE AMERICAN Indicate by check mark if the registrant is a well-known seasoned issuer, as deﬁned in Rule 405 of the Securies Act. Yes ☐ No ☒ Securies registered pursuant to Secon 12(g) of the Act: None Indicate by check mark if the registrant is not required to ﬁle reports pursuant to Secon 13 or Secon 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has ﬁled all reports required to be ﬁled by Secon 13 or 15(d) of the Securies Exchange Act of 1934 during the preceding 12 months (or for such shorter 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 submied electronically every Interacve Data File required to be submied pursuant to Rule 405 of Regulaon 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 reporng company, or emerging growth company. See the deﬁnions of “large accelerated ﬁler,” “accelerated ﬁler,” “smaller reporng company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large Accelerated Filer ☐ Non-accelerated Filer ☒ Accelerated Filer ☐ Smaller reporng company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transion period for complying with any new or revised ﬁnancial accounng standards provided pursuant to Secon 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has ﬁled a report on and aestaon to its management's assessment of the eﬀecveness of its internal control over ﬁnancial reporng under Secon 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounng ﬁrm that prepared or issued its audit report. ☐ If securies are registered pursuant to Secon 12(b) of the Act, indicate by check mark whether the ﬁnancial statements of the registrant included in the ﬁling reﬂect the correcon of an error to previously issued ﬁnancial statements. ☐ Indicate by check mark whether any of those error correcons are restatements that required a recovery analysis of incenve-based compensaon received by any of the registrant’s execuve oﬃcers during the relevant recovery period pursuant to § 240.10D-1(b). ☐ 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, 2023, the aggregate market value of the registrant’s Common Shares held by non-aﬃliates was approximately $98.1 million. As of February 9, 2024, the registrant had 159,749,073 Common Shares, no par value, outstanding. Certain porons of the registrant's deﬁnive proxy statement to be ﬁled with the Securies and Exchange Commission pursuant to Regulaon 14A not later than March 29, 2024, in connecon with the registrant’s 2023 annual meeng of shareholders, are incorporated herein by reference into Part III of this Annual Report on Form 10-K. DOCUMENTS INCORPORATED BY REFERENCE TRILOGY METALS INC. TABLE OF CONTENTS Table of Contents CURRENCY FORWARD-LOOKING STATEMENTS PART I Item 1. Item 1A. Item 1B. Item 1C. Item 2. Item 3. Item 4. BUSINESS RISK FACTORS UNRESOLVED STAFF COMMENTS CYBERSECURITY PROPERTIES LEGAL PROCEEDINGS MINE SAFETY DISCLOSURES PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item 9C. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES [RESERVED] MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE CONTROLS AND PROCEDURES OTHER INFORMATION DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS PART III Item 10. Item 11. Item 12. Item 13. Item 14. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE PRINCIPAL ACCOUNTANT FEES AND SERVICES PART IV Item 15. Item 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES FORM 10-K SUMMARY 2 Page 3 3 6 6 13 26 26 26 81 81 81 81 91 92 104 105 125 125 125 125 126 126 126 126 126 127 127 127 144 Table of Contents Unless the context otherwise requires, the words “we,” “us,” “our,” the “Company” and “Trilogy” refer to Trilogy Metals Inc., formerly NovaCopper Inc. (“Trilogy” or “Trilogy Metals”), a Brish Columbia corporaon, either alone or together with its subsidiaries as the context requires, as of November 30, 2023. CURRENCY All dollar amounts are in United States currency unless otherwise stated. References to C$ or CDN$ refer to Canadian currency, and $ or US$ to United States currency. FORWARD-LOOKING STATEMENTS The informaon discussed in this Annual Report on Form 10-K includes “forward-looking informaon” and “forward-looking statements” within the meaning of Secon 21E of the Securies Exchange Act of 1934 (the “Exchange Act”), and applicable Canadian securies laws. These forward-looking statements may include statements regarding perceived merit of properes, exploraon results and budgets, mineral reserves and resource esmates, work programs, capital expenditures, operang costs, cash ﬂow esmates, producon esmates and similar statements relang to the economic viability of a project, melines, strategic plans, statements relang ancipated acvity with respect to the Ambler Mining District Industrial Access Project (“Ambler Access Project” or “AAP”), the Company’s plans and expectaons relang to the Upper Kobuk Mineral Projects (as deﬁned herein), compleon of transacons, market prices for precious and base metals, the results of the NI 43-101 Arcc Report and S-K 1300 Arcc Report (as deﬁned herein), the ming of the ﬁnal SEIS (as deﬁned herein) and a Record of Decision, or other statements that are not statements of fact. These statements relate to analyses and other informaon that are based on forecasts of future results, esmates of amounts not yet determinable and assumpons of management. Statements concerning mineral resource esmates may also be deemed to constute “forward-looking statements” to the extent that they involve esmates of the mineralizaon that will be encountered if the property is developed. Any statements that express or involve discussions with respect to predicons, expectaons, beliefs, plans, projecons, objecves, assumpons or future events or performance (oen, but not always, idenﬁed by words or phrases such as “expects”, “is expected”, “ancipates”, “believes”, “plans”, “projects”, “esmates”, “assumes”, “intends”, “strategy”, “goals”, “objecves”, “potenal”, “possible” or variaons thereof or stang that certain acons, events, condions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negave of any of these terms and similar expressions) are not statements of historical fact and may be forward- looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertaines and other factors that could cause actual events or results to diﬀer from those reﬂected in the forward-looking statements, including, without limitaon: ● risks related to inability to deﬁne proven and probable reserves; ● risks related to our ability to ﬁnance the development of our mineral properes through external ﬁnancing, strategic alliances, the sale of property interests or otherwise; ● uncertainty as to whether there will ever be producon at the Company’s mineral exploraon and development properes; ● risks related to our ability to commence producon and generate material revenues or obtain adequate ﬁnancing for our planned exploraon and development acvies; ● risks related to lack of infrastructure including but not limited to the risk whether or not the Ambler Access Project will receive the requisite permits and, if it does, whether the Alaska Industrial Development and Export Authority (“AIDEA”) will build the AAP; ● risks related to inclement weather which may delay or hinder exploraon acvies at our mineral properes; 3 Table of Contents ● risks related to our dependence on a third party for the development of our projects; ● none of the Company’s mineral properes are in producon or are under development; ● commodity price ﬂuctuaons; ● uncertainty related to tle to our mineral properes; ● our history of losses and expectaon of future losses; ● risks related to increases in demand for equipment, skilled labor and services needed for exploraon and development of mineral properes and related cost increases; ● uncertaines relang to the assumpons underlying our resource esmates, such as metal pricing, metallurgy, mineability, marketability and operang 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 other unancipated diﬃcules with or interrupons in development, construcon or producon; ● uncertainty related to successfully acquiring commercially mineable mineral rights; ● risks and uncertaines relang to the interpretaon of drill results, the geology, grade and connuity of our mineral deposits; ● risks related to governmental regulaon and permits, including environmental regulaon, including the risk that more stringent requirements or 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 properes will not be available on a mely basis or at all; ● risks related to the need for reclamaon acvies on our properes and uncertainty of cost esmates related thereto; ● risks related to the acquision and integraon of operaons or projects; ● risks related to industry compeon in the acquision of exploraon properes and the recruitment and retenon of qualiﬁed personnel; ● our need to aract and retain qualiﬁed management and technical personnel; ● risks related to conﬂicts of interests of some of our directors and oﬃcers; ● risks related to potenal future ligaon; ● risks related to market events and general economic condions; ● risks related to future sales or issuances of equity securies decreasing the value of exisng Trilogy common shares (“Common Shares”), dilung vong power and reducing future earnings per share; ● risks related to the vong power of our major shareholders and the impact that a sale by such shareholders may have on our share price; 4 Table of Contents ● uncertainty as to the volality in the price of the Company’s Common Shares; ● the Company’s expectaon 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 organizaons; ● uncertainty as to our ability to maintain the adequacy of internal control over ﬁnancial reporng as per the requirements of Secon 404 of the Sarbanes-Oxley Act (“SOX”); ● increased regulatory compliance costs, associated with rules and regulaons promulgated by the United States Securies and Exchange Commission (“SEC”), Canadian Securies Administrators, the NYSE American, the Toronto Stock Exchange (“TSX”), and the Financial Accounng Standards Boards, and more speciﬁcally, our eﬀorts to comply with the Dodd-Frank Wall Street Reform and Consumer Protecon Act (“Dodd- Frank”); and ● risks related to the future eﬀects of the COVID-19 pandemic. This list is not exhausve of the factors that may aﬀect any of our forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or condions may diﬀer materially from those reﬂected in the forward-looking statements due to a variety of risks, uncertaines and other factors, including, without limitaon, those referred to in this report under the heading “Risk Factors” and elsewhere. Our forward-looking statements are based on the beliefs, expectaons and opinions of management on the date the statements are made. In connecon with the forward-looking statements contained herein, we have made certain assumpons about our business, including about: ● our ability to achieve producon at our Arcc and Bornite Projects (as deﬁned herein); ● the accuracy of our mineral resource esmates; ● the results, costs and ming of future exploraon drilling and engineering; ● ming and receipt of approvals, consents and permits under applicable legislaon; ● the adequacy of our ﬁnancial resources; ● the receipt of third party contractual, regulatory and governmental approvals for the exploraon, development, construcon and producon of our properes; ● our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable; ● connued good relaonships with South32 (as deﬁned below), local communies and other stakeholders; ● there being no signiﬁcant disrupons aﬀecng operaons, whether relang to labor, supply, power, damage to equipment or other maers; ● expected trends and speciﬁc assumpons regarding metal prices and currency exchange rates; and 5 Table of Contents ● 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 aempted to idenfy important factors that could cause actual acons, events or results to diﬀer materially from those described in forward-looking statements, there may be other factors that cause acons, events or results not to be as ancipated, esmated or intended. We believe that the assumpons inherent in the forward- 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 obligaon to update forward-looking statements if circumstances or management’s beliefs, expectaons or opinions should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. All forward-looking statements contained herein are qualiﬁed by these cauonary statements. Richard Gosse, a Qualiﬁed Person under NI 43-101 and S-K 1300 (as deﬁned herein) and an employee and Vice President Exploraon of the Company has reviewed and approved the scienﬁc and technical informaon contained in this Annual Report on Form 10-K. TECHNICAL INFORMATION Item 1. BUSINESS PART I Our principal business is the exploraon and development of the Upper Kobuk Mineral Projects (“Upper Kobuk Mineral Projects” or “UKMP” 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 (“Ambler Metals”), a limited liability company owned equally by Trilogy and South32 Limited (“South32”), and is comprised of the (i) Arcc Project, which contains a high-grade polymetallic volcanogenic massive sulﬁde (“VMS”) deposit (“Arcc Project”); and (ii) Bornite Project, which contains a carbonate- hosted copper - cobalt deposit (“Bornite Project”). Our goals include expanding mineral resources and advancing the UKMP Projects through technical, engineering and feasibility studies so that producon decisions can be made on those projects. Our interest in Ambler Metals is held by a wholly-owned subsidiary, NovaCopper US Inc. (dba Trilogy Metals US) (“Trilogy Metals US”), registered to do business in the State of Alaska. We also conduct early-stage exploraon through a wholly owned subsidiary, 995 Exploraon Inc. Name, Address and Incorporaon Trilogy Metals Inc. was incorporated on April 27, 2011 under the name NovaCopper Inc. pursuant to the terms of the Business Corporaons Act (Brish Columbia). NovaCopper Inc. changed its name to Trilogy Metals Inc. on September 1, 2016 to beer reﬂect its diversiﬁed metals resource base. Our registered oﬃce is located at Suite 2600, Three Bentall Centre, 595 Burrard Street, Vancouver, Brish Columbia, Canada, and our execuve oﬃce is located at Suite 1150, 609 Granville Street, Vancouver, Brish Columbia, Canada. 6 Table of Contents Corporate Organizaon Chart The following chart depicts our corporate structure together with the jurisdicon of incorporaon of our subsidiaries at November 30, 2023. All ownership 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 company incorporated under the laws of Delaware. Each of Trilogy and South32 hold a 50% interest in Ambler Metals. All mineral resources and mineral reserve esmates with respect to the Arcc Project and Bornite Project that are disclosed in this Annual Report on Form 10-K are reported on a 100% basis unless otherwise noted. Business Cycle Our business, at its current exploraon phase, is cyclical. Exploraon acvies are conducted primarily during snow-free months in Alaska. The opmum 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 Kobuk Mineral Projects varies from about May through November at lower elevaons and from July through September at higher elevaons. Trilogy’s Strategy Our business strategy is focused on creang value for stakeholders through our ownership and advancement of the Arcc Project and exploraon and advancement of the Bornite Project with our joint venture partner, South32, and through the pursuit of similarly aracve mining projects. We plan to: ● advance the Arcc Project towards development with key acvies including increased deﬁnion of the NI 43-101 and S-K 1300 mineral resources and reserves contained in the Arcc FS, addional metallurgical and geotechnical studies and the advancement of baseline environmental studies; 7 Table of Contents ● advance exploraon in the Ambler Mining District and, in parcular, at the Bornite Project, pursuant to the NANA Agreement (as more parcularly described under “History of Trilogy – Agreement with NANA Regional Corporaon”) through resource development and inial technical studies; and ● pursue project level or corporate transacons that are value accreve. Signiﬁcant Developments in 2023 ● On January 25, 2023, the Company announced the second set of drilling results from the 2022 ﬁeld season at the Upper Kobuk Mineral Projects and on February 27, 2023, the Company announced the third set of drilling results from the 2022 ﬁeld season at the UKMP. ● On February 14, 2023, the Company announced an updated feasibility study technical report for the Arcc Project and an updated resource for the Bornite Project, and ﬁled NI 43-101 technical reports for both projects with the Canadian securies regulators. In addion, the Company announced technical report summaries for both projects prepared in accordance with S-K 1300 and which were ﬁled as exhibits with the annual report on Form 10-K. ● On April 25, 2023, the Company completed non-brokered private placement of 5,854,545 Common Shares at a price of $0.55 per Common Share for gross proceeds of $3.2 million. Aer legal and stock exchange fees, the Company received net proceeds of $3.1 million. ● On September 11, 2023 the Company provided an update on the acvies at the UKMP with the Bornite camp opening. ● On October 19, 2023, the Company announced that the United States Bureau of Land Management’s (“BLM”) had ﬁled the dra Supplemental Environmental Impact Statement (“SEIS”) on its website hps://eplanning.blm.gov/eplanning-ui/project/57323/570 and ancipated being in the federal register on October 20, 2023. The dra SEIS was open for a 60-day public comment period, unl December 19, 2023. The BLM reconﬁrmed they ancipate a ﬁnal SEIS is expected in the ﬁrst quarter of 2024, and a Record of Decision within the second quarter of 2024. Signiﬁcant Developments in 2022 ● On January 11, 2022, the Company announced the 2022 program and budget of approximately $28.5 million for the advancement of the UKMP located in Northwestern Alaska. The budget was 100% funded by Ambler Metals. ● On January 20, 2022, the Company announced an updated mineral resource for the Bornite Project. ● On February 7, 2022, the Company announced that the AIDEA had formally approved the proposed plan and budget for the 2022 summer ﬁeld season acvies and services of up to $30.8 million for the Ambler Access Project. The cost was shared 50/50 by AIDEA and Ambler Metals. ● On February 23, 2022, the Company announced that the United States Department of the Interior (“DOI”) ﬁled a moon to remand the Final Environmental Impact Statement (“FEIS”) and suspend the right-of-way permits issued to AIDEA for the Ambler Access Project. The DOI has stated that the suspension of the road permits will allow it to carry out addional supplemental work on the FEIS. The moon also indicated that the DOI has requested that the lawsuits ﬁled against the DOI by a coalion of naonal and Alaska environmental non-government organizaons be suspended. The lawsuits had been ﬁled in response to the BLM issuance of the Joint Record of Decision (“JROD”), that authorized a right-of- way across federally managed lands for AIDEA and the AAP. 8 Table of Contents ● On June 8, 2022, the Company announced that Ambler Metals had commenced mobilizaon for the upcoming exploraon ﬁeld program at the UKMP. ● On September 21, 2022, the Company announced that the BLM had published in the Federal Register a Noce of Intent (“NOI”) that it will prepare the SEIS for the proposed Ambler Mining District Industrial Access Road. The NOI indicates that: ● The BLM will accept comments related to the SEIS for 45 days so that the BLM can determine which, if any, addional impacts and resources related to idenﬁed deﬁciencies should be more thoroughly assessed to facilitate integrang the BLM’s Naonal Environmental Policy Act (“NEPA”) analysis with its ongoing Alaska Naonal Interest Lands Conservaon Act Secon 810 and Naonal Historic Preservaon Act Secon 106 processes; ● Input by Alaska Nave Tribes and Corporaons will connue to be of crical importance and that BLM will connue to consult with these enes under applicable guidance; and ● Preparaon of the SEIS in compliance with NEPA will addionally help the BLM to fulﬁll its obligaons under applicable law. ● On November 23, 2022, the Company announced that the BLM submied a status report in accordance with the Voluntary Remand dated May 17, 2022 stang that the comment period ended on November 4, 2022 for the scoping process of the SEIS and that the BLM currently ancipates publishing a dra SEIS during the second quarter of calendar year 2023, which will be open for public comment upon publicaon. The BLM also ancipates publishing a ﬁnal SEIS, conducng ﬁnal pre-decision consultaon with Alaska Nave Tribes and Corporaons, and issuing a Record of Decision, all within the fourth quarter of calendar year 2023. Signiﬁcant Developments in 2021 ● On January 6, 2021, the BLM, the Naonal Park Service and the AIDEA signed Right-of-Way agreements giving AIDEA the ability to cross federally owned and managed lands along the route for the Ambler Road Project approved in the Joint Record of Decision. The agreements grant a 50- year right-of-way on federally owned and managed land by the federal agencies for the future development of the Ambler Mining District Industrial Access Road. The authorizing documents with the two agencies are the ﬁnal federal permits required for the Ambler Road Project. ● In a press release dated February 11, 2021, the Company announced its approval for Ambler Metals to enter into an Ambler Access Development Agreement (the “Development Agreement”) with AIDEA. The Development Agreement deﬁnes how AIDEA and Ambler Metals will work cooperavely together on the pre-development work for the Ambler Access Project to address funding and oversight of the project’s feasibility and perming acvies unl the pares reach a decision on the construcon of the project. The cost of the pre-development work and acvies will be paid 50% by AIDEA and 50% by Ambler Metals based on an annually agreed program and budget. Under the Development Agreement, Ambler Metals and AIDEA agree to contribute up to $35 million each for pre-development costs of the Ambler Access Project through December 31, 2024. ● In a press release dated April 19, 2021, the Company announced that the AIDEA had formally approved the proposed plan and budget for the 2021 summer ﬁeld season acvies and services of up to $13 million for the Ambler Access Project. The cost was to be shared 50/50 by AIDEA and Ambler Metals. The Board of AIDEA authorized up to $6.5 million for ﬁeld season acvies. These funds were to be matched by up to another $6.5 million from Ambler Metals under the terms of the Ambler Access Development Agreement that was approved by the AIDEA Board on February 10, 2021 and subsequently executed by both pares, resulng in a total budget for 2021 of up to $13 million. The AAP is a proposed 211-mile, east-west running controlled industrial access road that would provide industrial access to the Ambler Mining District in northwestern Alaska. 9 Table of Contents ● In a press release dated May 17, 2021, the Company announced that Ambler Metals had ﬁnalized the details of the 2021 exploraon ﬁeld program at the UKMP for the previously approved $27 million exploraon budget. The exploraon program was aligned with a strategy developed by the Company and South32 which priorizes the exploraon budget within the UKMP. The strategy deﬁnes a program that advances the highest priority projects and exploraon targets, both VMS and Carbonate-Hosted Copper (“CHC”), ranging from early-stage geophysical anomalies that were idenﬁed during the 2019 airborne Versale Time Domain Electromagnec (“VTEM”) survey to advanced VMS and CHC prospects with historical resources. The site camp opened on June 1, 2021. History of Trilogy Spin-Out We were formerly a wholly-owned subsidiary of NovaGold Resources Inc. (“NovaGold”). In April 2012, Trilogy Common Shares were distributed to NovaGold shareholders pursuant to a Plan of Arrangement under the Companies Act (Nova Scoa) and were listed and posted for trading on the TSX and on the NYSE American. Name Change We changed our corporate name to Trilogy Metals Inc. from NovaCopper Inc. in 2016 to beer 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 Corporaon On October 19, 2011, NANA Regional Corporaon, Inc. (“NANA”), an Alaska Nave Corporaon headquartered in Kotzebue, Alaska, and Trilogy Metals US entered an Exploraon Agreement and Opon Agreement (as amended, the “NANA Agreement”) for the cooperave development of NANA’s respecve resource interests in the Ambler Mining District of Northwest Alaska. Upon the formaon of Ambler Metals, the Company assigned its rights and obligaons under the NANA Agreement to Ambler Metals. The NANA Agreement consolidates Ambler Metals’ and NANA’s land holdings into an approximately 142,831-hectare land package and provides a framework for the exploraon and any future development of this high-grade and prospecve 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 Alaska Nave Claims Selement Act (“ANCSA”) lands (each as deﬁned in the NANA Agreement) and in connecon therewith, to construct and ulize temporary access roads, camps, airstrips and other incidental works. In consideraon for this right, Trilogy Metals US previously paid to NANA $4 million in cash. Ambler Metals is also required to make payments to NANA for scholarship purposes in accordance with the terms of the NANA Agreement. Ambler Metals has further agreed to use reasonable commercial eﬀorts to train and employ NANA shareholders to perform work for Ambler Metals in connecon with its operaons on the Bornite lands, ANCSA lands and Ambler lands (as deﬁned in the NANA Agreement) (collecvely, the “Lands”). The NANA Agreement has a term of 20 years, with an opon in favour of Ambler Metals to extend the term for an addional 10 years. The NANA Agreement may be terminated by mutual agreement of the pares or by NANA if Ambler Metals does not meet certain expenditure requirements on the Bornite lands and ANCSA lands. If, following receipt of a feasibility study and the release for public comment of a related dra environmental impact statement, Ambler Metals decides to proceed with construcon of a mine on the Lands, Ambler Metals will nofy NANA in wring 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 speciﬁc project; 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 Metals from such project (following the recoupment by Ambler Metals of all costs incurred, including operang, capital and carrying costs). The cost to exercise such back-in-right is equal to the percentage interest in the project mulplied by the diﬀerence between (i) all costs incurred by Ambler Metals or its aﬃliates on the project, including historical costs 10 Table of Contents incurred prior to the date of the NANA Agreement together with interest on the costs; and (ii) $40 million (subject to excepons). This amount will be payable by NANA to Ambler Metals in cash at the me the pares enter into a joint venture agreement and in no event will the amount be less than zero. In the event that NANA elects to exercise its back-in-right, the pares will as soon as reasonably praccable form a joint venture, with NANA’s interest being between 16% to 25% and Ambler Metals owning the balance of the interest in the joint venture. Upon formaon of the joint venture, the joint venture will assume all of the obligaons of Ambler Metals and be entled to all the beneﬁts of Ambler Metals under the NANA Agreement in connecon with the mine to be developed and the related Lands. A party’s failure to pay its proporonate share of costs in connecon with the joint venture will result in diluon of its interest. Each party will have a right of ﬁrst refusal over any proposed transfer of the other party’s interest in the joint venture other than to an aﬃliate or for the purposes of granng security. A transfer by either party of any net proceeds royalty interest in a project 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 subject to a ﬁrst right of refusal by Ambler Metals. In connecon with possible development of a mine on the Bornite lands or ANCSA lands, Ambler Metals and NANA will execute a mining lease to allow Ambler 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% net smelter royalty as to producon from the Bornite lands and a 2.5% net smelter royalty as to producon from the ANCSA lands. If Ambler Metals decides to proceed with construcon of a mine on the Ambler lands, NANA will enter into a surface use agreement with Ambler Metals which will aﬀord Ambler Metals access to the Ambler lands along routes approved by NANA on the Bornite lands or ANCSA lands. In consideraon for the grant of such surface use rights, Ambler Metals will grant NANA a 1% net smelter royalty on producon and an annual payment of $755 per acre as adjusted for inﬂaon each year beginning with the second anniversary of the eﬀecve date of the NANA Agreement and for each of the ﬁrst 400 acres (and $100 for each addional acre) of the lands owned by NANA and used for access which are disturbed and not reclaimed. Ambler Metals has formed an oversight commiee with NANA, which consists of four representaves from each of Ambler Metals and NANA (the “Oversight Commiee”). The Oversight Commiee is responsible for certain planning and oversight maers carried out by us under the NANA Agreement. The planning and oversight maers that are the subject of the NANA Agreement will be determined by majority vote. The representaves of each of Ambler Metals and NANA aending a meeng will have one vote in the aggregate and in the event of a e, the Ambler Metals representaves jointly shall have a deciding vote on all maers other than Subsistence Maers, as that term is deﬁned in the NANA Agreement. There shall be no deciding vote on Subsistence Maers and Ambler Metals may not proceed with such maers unless approved by majority vote of the Oversight Commiee or with the consent of NANA, such consent not to be unreasonably withheld or delayed. Principal Markets We do not currently have a principal market. Our principal objecve is to become a producer of copper. Specialized Skill and Knowledge All aspects of our business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, mining and accounng. See “Execuve Oﬃcers of Trilogy” for details as to the speciﬁc skills and knowledge of our directors and management. Environmental Protecon Mining is an extracve industry that impacts the environment. Along with our joint venture partner, South32, our goal is to evaluate ways to minimize that impact and to develop safe, responsible and proﬁtable operaons by developing natural resources for the beneﬁt of our employees, shareholders and communies and maintain high standards for environmental performance at the UKMP Projects. We strive to meet or exceed environmental standards at the UKMP Projects. One way Ambler Metals does this is through collaboraons with local communies in Alaska, including Nave 11 Table of Contents Alaskan groups. Ambler Metals’ environmental performance will be overseen at the Ambler-board and Trilogy-board level and environmental performance is the responsibility of the project manager. All new acvies and operaons will be managed for compliance with applicable laws and regulaons. In the absence of regulaon, best management pracces 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 regulaons applicable to our operaons and potenal negave eﬀects of these laws and regulaons, see Item 1A. Risk Factors, and Item 2 Properes, Environmental, Perming, Social and Closure Consideraons below. Employees As of November 30, 2023, we had 5 full-me employees, all except our CEO, were employed at our execuve oﬃce in Vancouver, BC. We have entered into execuve employment agreements with the CEO and CFO (each as deﬁned herein). Informaon About Our Execuve Oﬃcers As of November 30, 2023, we had two execuve oﬃcers, namely Tony Giardini and Elaine Sanders. The following informaon is presented as of November 30, 2023. Name and Residence Tony Giardini Rome, Italy Director, President and Chief Execuve Oﬃcer Elaine Sanders Brish Columbia, Canada VP, Chief Financial Oﬃcer and Corporate Secretary Age 64 Held Oﬃce Since June 1, 2020(1) 54 January 30, 2012(2) Business Experience During Past Five Years Chief Execuve Oﬃcer of Trilogy (2020 – present); President of Ivanhoe Mines Ltd. (May 2019 – March 2020); Chief Financial Oﬃcer of Kinross Gold Corporaon (December 2012 - April 2019) Vice President and Chief Financial Oﬃcer of Trilogy (2012 – present); Corporate Secretary of Trilogy (2011 – present) (1) Mr. Giardini was appointed President and Chief Execuve Oﬃcer on June 1, 2020. (2) Ms. Sanders was appointed Chief Financial Oﬃcer on January 30, 2012. She became a full-me employee of the Company on November 13, 2012. Compeve Condions The mineral exploraon and development industry is compeve in all phases of exploraon, development and producon. There is a high degree of compeon faced by us in Alaska and elsewhere for skilled management employees, suitable contractors for drilling operaons, technical and engineering resources, and necessary exploraon and mining equipment, and many of these competor companies have greater ﬁnancial resources, operaonal experse, and/or more advanced properes than us. Addionally, our operaons are in a remote locaon where skilled resources and support services are limited. We have in place experienced management personnel and connue to evaluate the required experse and skills to carry out our operaons. As a result of this compeon, we may be unable to achieve our exploraon and development in the future on terms we consider acceptable or at all. See “Item 1A. Risk Factors.” Available Informaon We make available, free of charge, on or through our website, at www.trilogymetals.com our Annual Report on Form 10-K, which includes our audited ﬁnancial statements, our Quarterly Reports on Form 10-Q, and our Current Reports on 12 Table of Contents Form 8-K and amendments to those reports ﬁled or furnished pursuant to Secon 13(a) or 15(d) of the Exchange Act. The SEC maintains a website that contains reports, proxy and informaon statements, and other informaon at www.sec.gov. Our website and the informaon contained therein or connected thereto are not intended to be, and are not incorporated into this Annual Report on Form 10-K. Item 1A. RISK FACTORS Invesng in our securies is speculave and involves a high degree of risk due to the nature of our business and the present stage of exploraon of our mineral properes. The following risk factors, as well as risks currently unknown to us, could materially adversely aﬀect our future business, operaons and ﬁnancial condion and could cause them to diﬀer materially from the esmates described in forward-looking informaon relang to Trilogy, or our business, property or ﬁnancial results, each of which could cause purchasers of securies to lose all or part of their investments. Risks Related to the future of the COVID Pandemic The outbreak of the coronavirus (COVID-19) may aﬀect our operaons. The Company faces risks related to health epidemics and other outbreaks of communicable diseases, which could signiﬁcantly disrupt its operaons and may materially and adversely aﬀect its business and ﬁnancial condions. The Company’s business could be adversely impacted by the eﬀects of the coronavirus or other epidemics. In December 2019, a novel strain of the coronavirus (“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-19 impacts the Company’s business, including exploraon and development acvies at Ambler Metals and the market for its securies, will depend on future developments, which are uncertain and cannot be predicted at this me, and include the duraon, severity and scope of the outbreak and the acons taken to contain or treat the coronavirus outbreak. In parcular, the connued spread of the coronavirus and travel and other restricons established to curb the spread of the COVID-19, has and could connue to materially and adversely impact the Company’s business including without limitaon, the planned exploraon programs at Ambler Metals, employee health, workforce producvity, increased insurance premiums, limitaons on travel, the availability of industry experts and personnel, the ming to process drill and other metallurgical tesng, interrupon of supplies from third pares upon which the Company relies and other factors that will depend on future developments beyond the Company’s control, which may have a material and adverse eﬀect on the its business, ﬁnancial condion and results of operaons. There can be no assurance that the Company's personnel will not be impacted by these pandemic diseases and ulmately see its workforce producvity reduced or incur increased medical costs or insurance premiums as a result of these health risks. Risks Related to the Company’s Mineral Properes We may not have suﬃcient funds to develop our mineral projects or to complete further exploraon programs. We have limited ﬁnancial resources. We currently generate no mining operang revenue and must primarily ﬁnance exploraon acvity and the development of mineral projects by other means. Although South32 funded Ambler Metals in the amount of US$145 million upon formaon of the joint venture in 2020, in the future, once our share of such amount has been expended or we wish to acquire any other properes outside of Ambler Metals, our ability to connue exploraon, development and producon acvies, if any, will depend on our ability to obtain addional external ﬁnancing. Any unexpected costs, problems or delays could severely impact our ability to connue exploraon and development acvies. The failure to meet ongoing obligaons on a mely basis could result in a loss or a substanal diluon 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 addion, we may enter into one or more strategic alliances or joint ventures, in 13 Table of Contents addion to our joint venture with South32, sell marketable securies held by the Company, decide to sell certain property interests, or ulize one or a combinaon of all of these alternaves. The ﬁnancing alternave we choose may not be available on acceptable terms, or at all. If addional ﬁnancing is not available, we may have to postpone further exploraon or development of, or sell our interest in, one or more of our principal properes. 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 of directors (the “Board”) and in the case of the UKMP Projects, by our joint venture partner, South32, such development will require obtaining permits and ﬁnancing, the construcon and operaon of mines, processing plants and related infrastructure, including road access. As a result, we are and will connue to be subject to all of the risks associated with establishing new mining operaons, including: ● the ming and cost, which can be considerable, of the construcon of mining and processing facilies and related infrastructure; ● the availability and cost of skilled labor and mining equipment; ● the availability and cost of appropriate smelng and reﬁning arrangements; ● the need to obtain necessary environmental and other governmental approvals and permits and the ming of the receipt of those approvals and permits; ● the availability of funds to ﬁnance construcon and development acvies; ● potenal opposion from non-governmental organizaons, environmental groups or local groups which may delay or prevent development acvies; and ● potenal increases in construcon and operang costs due to changes in the cost of fuel, power, materials and supplies. The costs, ming and complexies of developing our projects may be greater than ancipated because our property interests are not located in developed areas, and, as a result, our property interests are not currently served by appropriate road access, water and power supply and other support infrastructure. Cost esmates may increase signiﬁcantly as more detailed engineering work is completed on a project. It is common in new mining operaons to experience unexpected costs, problems and delays during construcon, development and mine start-up. In addion, delays in the early stages of mineral producon oen occur. Accordingly, we cannot provide assurance that we will ever achieve, or that our acvies will result in, proﬁtable mining operaons at the UKMP Projects or any other property that we may acquire. In addion, there can be no assurance that our mineral exploraon acvies will result in any discoveries of new mineralizaon. If further mineralizaon is discovered there is also no assurance that the mineralizaon would be economical for commercial producon. Discovery of mineral deposits is dependent upon a number of factors and signiﬁcantly inﬂuenced by the technical skill of the exploraon personnel involved. The commercial viability of a mineral deposit is also dependent upon a number of factors which are beyond our control, including the aributes of the deposit, commodity prices, government policies and regulaon and environmental protecon. 14 Table of Contents The Upper Kobuk Mineral Projects are located in a remote area of Alaska, and access to them is limited. Exploraon and any future development or producon acvies may be limited and delayed by infrastructure challenges, inclement weather and a shortened exploraon season. We cannot provide assurances that the proposed AAP that would provide access to the Ambler Mining District will be built, that it will be built in a mely manner, that the cost of accessing the proposed road will be reasonable, that it will be built in the manner contemplated, or that it will suﬃciently sasfy the requirements of the Upper Kobuk Mineral Projects. The proposed AAP requires signiﬁcant perming and approvals, and the JROD issued in 2020 is currently subject to lawsuits which could delay or prevent the project. Further, changes in the U.S. federal administraon may result in changes in interpretaons or priories which may further delay or prevent the proposed AAP. In addion, successful development of the Upper Kobuk Mineral Projects will require the development of the necessary infrastructure. If adequate infrastructure is not available in a mely manner, there can be no assurance that: ● the development of the Upper Kobuk Mineral Projects will be commenced or completed on a mely basis, if at all; ● the resulng operaons will achieve the ancipated producon volume; or ● the construcon costs and operang costs associated with the development of the Upper Kobuk Mineral Projects will not be higher than ancipated. As the Upper Kobuk Mineral Projects are located in a remote area, exploraon, development and producon acvies may be limited and delayed by inclement weather and a shortened exploraon season. The exploraon of the UKMP Projects has also been impacted by COVID-19. See “Risks Related to the future of COVID-19” above. We are dependent on a third party that parcipates in exploraon and development of our Upper Kobuk Mineral Projects. In December 2019, South32 exercised its opon to acquire a 50% interest in Ambler Metals. The formaon of Ambler Metals was completed in February 2020 and Ambler Metals now owns the Upper Kobuk Mineral Projects. Our success with respect to the Upper Kobuk Mineral Projects depends on the eﬀorts and experse of South32 with whom we have contracted; we hold a 50% interest and the remaining 50% interest is held by South32, who is not under our control or direcon. We are dependent on them for the progress and development of the Upper Kobuk Mineral Projects. South32 may also have diﬀerent priories which could impact the ming and cost of development of the Upper Kobuk Mineral Projects. The third 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. The existence or occurrence of one or more of the following circumstances and events could have a material adverse impact on our ability to achieve our business plan, proﬁtability, or the viability of our interests held with the third party, which could have a material adverse impact on our business, future cash ﬂows, earnings, results of operaons and ﬁnancial condion: (i) disagreement with our business partner on how to develop and operate the Upper Kobuk Mineral Projects eﬃciently; (ii) inability to exert inﬂuence over certain strategic decisions made in respect of the jointly-held Upper Kobuk Mineral Projects; (iii) inability of our business partner to meet its obligaons to the joint business or third pares; and (iv) ligaon with our business partner regarding joint business maers. We have no history of producon and no revenue from mining operaons. We have a very limited history of operaons and to date have generated no revenue from mining operaons. As such, we are subject to many risks common to such enterprises, including under-capitalizaon, cash shortages, limitaons with respect to personnel, ﬁnancial and other resources and lack of signiﬁcant revenues. There is no assurance that the Upper Kobuk Mineral Projects, or any other future projects will be commercially mineable, and we may never generate revenues from our mining operaons. 15 Table of Contents Changes in the market price of copper, zinc and other metals, which in the past have ﬂuctuated widely, will aﬀect our ability to ﬁnance connued exploraon and development of our projects and aﬀect our operaons and ﬁnancial condion. 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 volale and are aﬀected by numerous factors beyond our control, including: ● global or regional consumpon paerns; ● the supply of, and demand for, these metals; ● speculave acvies; ● the availability and costs of metal substutes; ● expectaons for inﬂaon; and ● polical and economic condions, 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 to raise funds to ﬁnance the exploraon and development of any of our mineral projects, which would have a material adverse eﬀect on our ﬁnancial condion and results of operaons. The market price of copper, zinc and other metals may not remain at current levels. In parcular, an increase in worldwide supply, and consequent downward pressure on prices, may result over the longer term from increased copper producon from mines developed or expanded as a result of current metal price levels. There is no assurance that a proﬁtable market may exist or connue to exist. Title and other rights to our properes may be subject to challenge. We cannot provide assurance that tle to our properes will not be challenged. We (through our interest in Ambler Metals) indirectly own mineral claims which constute our property holdings. We may not have, or may not be able to obtain, all necessary surface rights to develop a property. Title insurance is generally not available for mineral properes and our ability to ensure that we have obtained a secure claim to individual mining properes may be severely constrained. Our mineral properes may be subject to prior unregistered agreements, transfers or claims, and tle may be aﬀected by, among other things, undetected defects. We have not conducted surveys of all of the claims in which we hold direct or indirect interests. A successful claim contesng our tle to a property will cause us to lose our rights to explore and, if warranted, develop that property or undertake or connue producon thereon. This could result in our not being compensated for our prior expenditures relang to the property. In addion, our ability to connue to explore and develop the property may be subject to agreements with other third pares including agreements with nave corporaons and ﬁrst naons groups, for instance, the lands at the Upper Kobuk Mineral Projects are subject to the NANA Agreement (as more parcularly described under "History of Trilogy - Agreement with NANA Regional Corporaon"). We will incur losses for the foreseeable future. We expect to incur losses unless and unl such me as our mineral projects generate suﬃcient revenues to fund connuing operaons. The exploraon and development of our mineral properes will require the commitment of substanal ﬁnancial resources that may not be available. The amount and ming of expenditures will depend on a number of factors, including the progress of ongoing exploraon and development, the results of consultants’ analyses and recommendaons, the rate at which operang losses are incurred, the execuon of any joint venture agreements with strategic partners and the acquision of addional property interests, some of which are beyond our control. We cannot provide assurance that we will ever achieve proﬁtability. 16 Table of Contents High metal prices in past years have encouraged increased mining exploraon, development and construcon acvity, which has increased demand for, and cost of, exploraon, development and construcon services and equipment. The relave strength of metal prices in past years has encouraged increases in mining exploraon, development and construcon acvies around the world, which has resulted in increased demand for, and cost of, exploraon, development and construcon services and equipment. Increased demand for and cost of services and equipment could result in delays if services or equipment cannot be obtained in a mely manner due to inadequate availability and may cause scheduling diﬃcules due to the need to coordinate the availability of services or equipment, any of which could materially increase project exploraon, development and/or construcon costs. Risks Relang to the Mining Industry and Mineral Reserves Mineral resource and reserve calculaons are only esmates. Any ﬁgures presented for mineral resources or reserves in this Form 10-K and in our other ﬁlings with securies regulatory authories and those which may be presented in the future are and will only be esmates. There is a degree of uncertainty aributable to the calculaon of mineral reserves and mineral resources. Unl mineral reserves or mineral resources are actually mined and processed, the quanty of metal and grades must be considered as esmates only and no assurances can be given that the indicated levels of metals will be produced. In making determinaons about whether to advance any of our projects to development, we must rely upon esmated calculaons as to the mineral resources or reserves and grades of mineralizaon on our properes. The esmang of mineral reserves and mineral resources is a subjecve process that relies on the judgment of the persons preparing the esmates. The process relies on the quanty and quality of available data and is based on knowledge, mining experience, analysis of drilling results and industry pracces. Valid esmates made at a given me may signiﬁcantly change when new informaon becomes available. While we believe that the mineral resource esmates included in this Form 10-K for the Upper Kobuk Mineral Projects are well-established and reﬂect management’s best esmates, by their nature mineral resource esmates are imprecise and depend, to a certain extent, upon analysis of drilling results and stascal inferences that may ulmately prove to be inaccurate. There can be no assurances that actual results will meet the esmates contained in feasibility studies or pre-feasibility studies. As well, further studies are required. Esmated mineral reserves or mineral resources may have to be recalculated based on changes in metal prices, further exploraon or development acvity or actual producon experience. This could materially and adversely aﬀect esmates of the volume or grade of mineralizaon, esmated recovery rates or other important factors that inﬂuence mineral reserve or mineral resource esmates. The extent to which mineral resources may ulmately be reclassiﬁed as mineral reserves is dependent upon the demonstraon of their proﬁtable recovery. Any material changes in mineral resource esmates and grades of mineralizaon will aﬀect the economic viability of placing a property into producon and a property’s return on capital. We cannot provide assurance that mineralizaon can be mined or processed proﬁtably. Our mineral resource esmates have been determined and valued based on assumed future metal prices, cut-oﬀ grades and operang costs that may prove to be inaccurate. Extended declines in market prices for copper, zinc, lead, gold and silver may render porons of our mineralizaon uneconomic and result in reduced reported mineral resources, which in turn could have a material adverse eﬀect on our results of operaons or ﬁnancial condion. We cannot provide assurance that mineral recovery rates achieved in small scale tests will be duplicated in large scale tests under on-site condions or in producon scale. A reducon in any mineral reserves that may be esmated by us could have an adverse impact on our future cash ﬂows, earnings, results of operaons and ﬁnancial condion. No assurances can be given that any mineral resource esmates for the Upper Kobuk Mineral Projects will ulmately be reclassiﬁed as mineral reserves. See “Cauonary Note to United States Investors.” 17 Table of Contents 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 there may be limited ability to assess geological connuity. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with connued exploraon. See “Cauonary Note to United States Investors.” Mining is inherently risky and subject to condions or events beyond our control. The development and operaon of a mine is inherently dangerous and involves many risks that even a combinaon of experience, knowledge and careful evaluaon may not be able to overcome, including: ● unusual or unexpected geological formaons; ● metallurgical and other processing problems; ● metal losses; ● environmental hazards; ● power outages; ● labor disrupons; ● industrial accidents; ● periodic interrupons due to inclement or hazardous weather condions; ● 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 destrucon of, mineral properes, producon facilies or other properes, personal injury or death, including to our employees, environmental damage, delays in mining, increased producon 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 have increased in recent years and in other circumstances the scope of insurance coverage has been reduced. The Company also expects insurance premiums to increase due to the impacts of COVID-19. Insurance against certain environmental risks, including potenal liability for polluon and other hazards associated with mineral exploraon and producon, is not generally available to companies within the mining industry. We may suﬀer a material 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. Exploraon for and development of copper properes involves signiﬁcant ﬁnancial risks which even a combinaon of careful evaluaon, experience and knowledge may not eliminate. While the discovery of an ore body may result in substanal rewards, few properes which are explored are ulmately developed into producing mines. Major expenses may be required to establish reserves by drilling, construcng mining and processing facilies at a site, developing metallurgical processes and extracng metals from ore. We cannot ensure that our current exploraon and development programs will result in proﬁtable commercial mining operaons. 18 Table of Contents The economic feasibility of development projects is based upon many factors, including the accuracy of mineral resource esmates; metallurgical recoveries; capital and operang costs; government regulaons relang to prices, taxes, royales, land tenure, land use, imporng and exporng and environmental protecon; and metal prices, which are highly volale. Development projects are also subject to the successful compleon of feasibility studies, issuance of necessary governmental permits and availability of adequate ﬁnancing. Most exploraon projects do not result in the discovery of commercially mineable ore deposits, and no assurance can be given that any ancipated level of recovery of ore reserves, if any, will be realized or that any idenﬁed mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited. Esmates of mineral reserves, mineral resources, mineral deposits and producon costs can also be aﬀected by such factors as environmental perming regulaons and requirements, weather, environmental factors, unforeseen technical diﬃcules, the metallurgy of the mineralizaon forming the mineral deposit, unusual or unexpected geological formaons and work interrupons. If current exploraon programs do not result in the discovery of commercial ore, we may need to write-oﬀ part or all of our investment in our exisng exploraon stage properes and may need to acquire addional properes. Material changes in mineral reserves, if any, grades, stripping raos or recovery rates may aﬀect the economic viability of any project. Our future growth and producvity will depend, in part, on our ability to develop commercially mineable mineral rights at our exisng properes or idenfy and acquire other commercially mineable mineral rights, and on the costs and results of connued exploraon and potenal development programs. Mineral exploraon is highly speculave in nature and is frequently non-producve. Substanal expenditures are required to: ● establish mineral resources and reserves through drilling and metallurgical and other tesng techniques; ● determine metal content and metallurgical recovery processes to extract metal from the ore; and ● construct, renovate or expand mining and processing facilies. In addion, if we discover ore, it would take several years from the inial phases of exploraon unl producon is possible. During this me, the economic feasibility of producon may change. As a result of these uncertaines, there can be no assurance that we will successfully acquire commercially mineable (or viable) mineral rights. Risks Relang to Government Regulaon We are subject to signiﬁcant governmental regulaons. Our exploraon acvies are subject to extensive federal, state, provincial and local laws and regulaons governing various maers, including: ● environmental protecon; ● the management and use of toxic substances and explosives; ● the management of natural resources; ● the exploraon and development of mineral properes, including reclamaon; ● exports; ● price controls; ● taxaon and mining royales; ● management of tailing and other waste generated by operaons; 19 Table of Contents ● labor standards and occupaonal health and safety, including mine safety; ● historic and cultural preservaon; and ● transportaon. Failure to comply with applicable laws and regulaons may result in civil or criminal ﬁnes or penales or enforcement acons, including orders issued by regulatory or judicial authories enjoining, curtailing or closing operaons or requiring correcve measures, installaon of addional equipment or remedial acons, any of which could result in signiﬁcant expenditures. We may also be required to compensate private pares suﬀering loss or damage by reason of a breach of such laws, regulaons or perming requirements. It is also possible that future laws and regulaons, or more stringent enforcement of current laws and regulaons by governmental authories, could cause us to incur addional expense or capital expenditure restricons, suspensions or closing of our acvies and delays in the exploraon and development of our properes. We require further permits in order to conduct current and ancipated future operaons, and delays in obtaining or failure to obtain such permits, or a failure to comply with the terms of any such permits that we have obtained, would adversely aﬀect our business. Our current and ancipated future operaons, including further exploraon, development and commencement of producon on our mineral properes, require permits from various governmental authories. Obtaining or renewing governmental permits is a complex and me-consuming process. The duraon and success of eﬀorts to obtain and renew permits are conngent upon many variables not within our control. Due to the preliminary stages of the Upper Kobuk Mineral Projects, it is diﬃcult to assess what speciﬁc perming requirements will ulmately apply. Shortage of qualiﬁed and experienced personnel in the U.S. federal and Alaskan State agencies to coordinate a federally led joint environmental impact statement process could result in delays or ineﬃciencies. Backlog within the perming agencies could aﬀect the perming meline or potenal of the Upper Kobuk Mineral Projects, as may negave public percepon of mining projects in general due to circumstances unrelated to the Company and outside of its control. Other factors that could aﬀect the perming meline include (i) the number of other large-scale projects currently in a more advanced stage of development which could slow down the review process for the Upper Kobuk Mineral Projects and (ii) signiﬁcant public response regarding the Upper Kobuk Mineral Projects. We cannot provide assurance that all permits that we require for our operaons, including any for construcon of mining facilies or conduct of mining, will be obtainable or renewable on reasonable terms, or at all. Delays or a failure to obtain such required permits, or the expiry, revocaon or failure to comply with the terms of any such permits that we have obtained, would adversely aﬀect our business. Our acvies are subject to environmental laws and regulaons that may increase our costs and restrict our operaons. All of our exploraon, potenal development and producon acvies are subject to regulaon by governmental agencies under various environmental laws. These laws address emissions into the air, discharges into water, management of waste, management of hazardous substances, protecon of natural resources, anquies and endangered species and reclamaon of lands disturbed by mining operaons. Environmental legislaon is evolving, and the general trend has been towards stricter standards and enforcement, increased ﬁnes and penales for noncompliance, more stringent environmental assessments of proposed projects and increasing responsibility for companies and their oﬃcers, directors and employees. Compliance with environmental laws and regulaons may require signiﬁcant capital outlays on our behalf and may cause material changes or delays in our intended acvies. Several regulatory iniaves are currently ongoing within the State of Alaska that have the potenal to inﬂuence the perming process for the Upper Kobuk Mineral Projects. These include revisions to Alaska's Water Quality Standards regarding mixing zones regulaons, which are currently under Environmental Protecon Agency review, and which revisions may be required in order to authorize a mixing zone for discharge in Subarcc Creek. Future changes in these 20 Table of Contents laws or regulaons could have a signiﬁcant adverse impact on some poron of our business, requiring us to re-evaluate those acvies at that me. Environmental hazards may exist on our properes that are unknown to us at the present me and that have been caused by previous owners or operators or that may have occurred naturally. We may be liable for remediang such damage. Failure to comply with applicable environmental laws, regulaons and perming requirements may result in enforcement acons thereunder, including orders issued by regulatory or judicial authories, causing operaons to cease or to be curtailed, and may include correcve measures requiring capital expenditures, installaon of addional equipment or remedial acons. Land reclamaon requirements for our exploraon properes may be burdensome. Land reclamaon requirements are generally imposed on mineral exploraon companies (as well as companies with mining operaons) in order to minimize long term eﬀects of land disturbance. Reclamaon may include requirements to: ● treat ground and surface water to applicable water quality standards; ● control dispersion of potenally deleterious eﬄuents; and ● reasonably re-establish pre-disturbance landforms and vegetaon. In order to carry out reclamaon obligaons imposed on us in connecon with exploraon, potenal development and producon acvies, we must allocate ﬁnancial resources that might otherwise be spent on further exploraon and development programs. In addion, regulatory changes could increase our obligaons to perform reclamaon and mine closing acvies. If we are required to carry out unancipated reclamaon work, our ﬁnancial posion could be adversely aﬀected. Risks Related to the Acquision of New Projects Risks inherent in acquisions of new properes. We may acvely pursue the acquision of exploraon, development and producon assets consistent with our acquision and growth strategy. From me to me, we may also acquire securies of or other interests in companies with respect to which we may enter into acquisions or other transacons. Acquision transacons involve inherent risks, including but not limited to: ● accurately assessing the value, strengths, weaknesses, conngent and other liabilies and potenal proﬁtability of acquision candidates; ● ability to achieve idenﬁed and ancipated operang and ﬁnancial synergies; ● unancipated costs; ● diversion of management aenon from exisng business; ● potenal loss of our key employees or key employees of any business acquired; ● unancipated changes in business, industry or general economic condions that aﬀect the assumpons underlying the acquision; ● decline in the value of acquired properes, companies or securies; 21 Table of Contents ● assimilang the operaons of an acquired business or property in a mely and eﬃcient manner; ● maintaining our ﬁnancial and strategic focus while integrang the acquired business or property; ● implemenng uniform standards, controls, procedures and policies at the acquired business, as appropriate; and ● to the extent that we make an acquision outside of markets in which it has previously operated, conducng and managing operaons in a new operang environment. Acquiring addional businesses or properes could place increased pressure on our cash ﬂow if such acquisions involve a cash consideraon. The integraon of our exisng operaons with any acquired business will require signiﬁcant expenditures of me, aenon and funds. Achievement of the beneﬁts expected from consolidaon would require us to incur signiﬁcant costs in connecon with, among other things, implemenng ﬁnancial and planning systems. We may not be able to integrate the operaons of a recently acquired business or restructure our previously exisng business operaons without encountering diﬃcules and delays. In addion, this integraon may require signiﬁcant aenon from our management team, which may detract aenon from our day-to-day operaons. Over the short-term, diﬃcules associated with integraon could have a material adverse eﬀect on our business, operang results, ﬁnancial condion and the price of our Common Shares. In addion, the acquision of mineral properes may subject us to unforeseen liabilies, including environmental liabilies, which could have a material adverse eﬀect on us. There can be no assurance that any future acquisions will be successfully integrated into our exisng operaons. Any one or more of these factors or other risks could cause us not to realize the ancipated beneﬁts of an acquision of properes or companies and could have a material adverse eﬀect on our ﬁnancial condion. We face industry compeon in the acquision of exploraon properes and the recruitment and retenon of qualiﬁed personnel. We compete with other exploraon and producing companies, many of which are beer capitalized, have greater ﬁnancial resources, operaonal experience and technical capabilies or are further advanced in their development or are signiﬁcantly larger and have access to greater mineral reserves, for the acquision of mineral claims, leases and other mineral interests as well as for the recruitment and retenon of qualiﬁed employees and other personnel. If we require and are unsuccessful in acquiring addional mineral properes or in recruing and retaining qualiﬁed personnel, we will not be able to grow at the rate we desire, or at all. Risks Related to the Company’s Execuve Oﬃcers and Board of Directors We may experience diﬃculty aracng and retaining qualiﬁed management and technical personnel to grow our business. We are dependent on the services of key execuves and other highly skilled and experienced personnel to advance our corporate objecves as well as the idenﬁcaon of new opportunies for growth and funding. Mr. Giardini and Ms. Sanders are currently our only execuve oﬃcers. It will be necessary for us to recruit addional skilled and experienced execuves. Our inability to do so, or the loss of any of these persons or our inability to aract and retain suitable replacements for them, or addional highly skilled employees required for our acvies, would have a material adverse eﬀect on our business and ﬁnancial condion. Some 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 exploraon and development or mining-related acvies, including, in parcular, NovaGold. To the extent that such other companies may parcipate in ventures in which we may parcipate in, or in ventures which we may seek to 22 Table of Contents parcipate in, our directors and oﬃcers may have a conﬂict of interest in negoang and concluding terms respecng the extent of such parcipaon. In all cases where our directors and oﬃcers have an interest in other companies, such other companies may also compete with us for the acquision of mineral property investments. Any decision made by any of these directors and oﬃcers involving Trilogy will be made in accordance with their dues and obligaons to deal fairly and in good faith with a view to the best interests of Trilogy and its shareholders. In addion, each of the directors is required to declare and refrain from vong on any maer in which these directors may have a conﬂict of interest in accordance with the procedures set forth in the Business Corporaons Act (Brish Columbia) and other applicable laws. In appropriate cases, the Company will establish a special commiee of independent directors to review a maer in which several directors, or management, may have a conﬂict. Nonetheless, as a result of these conﬂicts of interest, the Company may not have an opportunity to parcipate in certain transacons, which may have a material adverse eﬀect on the Company’s business, ﬁnancial condion, results of operaon and prospects. General Risk Factors General economic condions 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 impact of COVID-19 have had a profound impact on the global economy. Many industries, including the copper mining industry, are impacted by these market condions. Some of the key impacts of the current ﬁnancial market turmoil include contracon in credit markets resulng in a widening of credit risk, devaluaons, high volality 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 other economic condions, including but not limited to, consumer spending, employment rates, business condions, inﬂaon, 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 and ability to ﬁnance. Speciﬁcally: ● the volality of copper, zinc, lead and other metal prices would impact our esmates of mineral resources, revenues, proﬁts, losses and cash ﬂow, and the feasibility of our projects; ● negave economic pressures could adversely impact demand for our future producon, if any; ● construcon related costs could increase and adversely aﬀect the economics of any project; ● volale energy, commodity and consumables prices and currency exchange rates could impact our esmated producon costs; and ● the devaluaon and volality of global stock markets would impact the valuaon of our equity and other securies. Future sales or issuances of equity securies could decrease the value of any exisng Common Shares, dilute investors’ vong power and reduce our earnings per share. We may sell addional equity securies (including through the sale of securies converble into Common Shares) and may issue addional equity securies to ﬁnance our operaons, exploraon, development, acquisions or other projects. We are authorized to issue an unlimited number of Common Shares. We cannot predict the size of future sales and issuances of equity securies or the eﬀect, if any, that future sales and issuances of equity securies will have on the market price of the Common Shares. Sales or issuances of a substanal number of equity securies, or the percepon that such sales could occur, may adversely aﬀect prevailing market prices for the Common Shares. With any addional sale or issuance of equity securies, investors will suﬀer diluon of their vong power and may experience diluon in our earnings per share. 23 Table of Contents Our largest shareholder has signiﬁcant inﬂuence on us and may also aﬀect the market price and liquidity of the securies. Electrum Strategic Opportunies Fund L.P. (“Electrum”) is our single largest shareholder, controlling approximately 20% of the outstanding vong securies. Accordingly, Electrum will have signiﬁcant inﬂuence in determining the outcome of any corporate transacon or other maer submied to the shareholders for approval, including mergers, consolidaons and the sale of all or substanally all of our assets and other signiﬁcant corporate acons. Unless signiﬁcant parcipaon of other shareholders takes place in such shareholder meengs, Electrum may be able to approve such maers itself. The concentraon of ownership of the shares by Electrum may: (i) delay or deter a change of control of the Company; (ii) deprive shareholders of an 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 transacons that are otherwise beneﬁcial to us. The interests of Electrum may 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 that investors are willing to pay for securies. If Electrum sells a substanal number of shares in the public market, the market price of the shares could fall. The percepon 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 volale. The market price of our Common Shares may be subject to large ﬂuctuaons, which may result in losses to investors. The market price of the Common Shares may increase or decrease in response to a number of events and factors, including: our operang performance and the performance of competors and other similar companies; volality in metal prices; the arrival or departure of key personnel; the number of Common Shares to be publicly traded aer an oﬀering; the public’s reacon to our press releases, material change reports, other public announcements and our ﬁlings with the various securies regulatory authories; changes in earnings esmates or recommendaons by research analysts who track the Common Shares or the shares of other companies in the resource sector; changes in general economic and/or polical condions; acquisions, strategic alliances or joint ventures involving us or our competors; and the factors listed under the heading “Cauonary Statement Regarding Forward-Looking Informaon.” The market price of the Common Shares may be aﬀected by many other variables which are not directly related to our success and are, therefore, not within our control, including other developments that aﬀect the market for all resource sector securies, the breadth of the public market for the Common Shares and the aracveness of alternave 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 future earnings be reinvested to ﬁnance the growth and development of our business. We do not intend to pay cash dividends on the Common Shares in the foreseeable future. We will not declare or pay any dividends unl such me as our cash ﬂow exceeds our capital requirements and will depend upon, among other things, condions then exisng including earnings, ﬁnancial condion, restricons in ﬁnancing arrangements, business opportunies and condions and other factors, or our Board determines that our shareholders could make beer 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 tax years ending November 30, 2020 and 2021, but we believe we were a PFIC for the tax years ending November 30, 2018, 2019, 2022 and 2023 and may be a PFIC in future 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 Consideraons – U.S. Holders”) holding period, then such U.S. Holder generally will be required to treat any gain realized upon a disposion of Common Shares and any so- called “excess distribuon” received on its Common Shares as ordinary income, and to pay an interest charge on a 24 Table of Contents poron of such gain or distribuons, unless the shareholder makes a mely and eﬀecve “QEF Elecon” or a “Mark-to-Market Elecon” (each as deﬁned below under “Certain U.S. Federal Income Tax Consideraons – Default PFIC Rules under Secon 1291 of the Code”). A U.S. Holder who makes a QEF Elecon generally must report on a current basis its share of our net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to our shareholders. A U.S. Holder who makes the Mark-to-Market Elecon generally must include as ordinary income each year the excess of the fair market value of the Common Shares over the U.S. Holder’s tax basis therein. This paragraph is qualiﬁed in its enrety by the discussion below the heading “Certain U.S. Federal Income Tax Consideraons.” Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquision, ownership, and disposion of Common Shares. Proposed legislaon in the U.S. Congress, including changes in U.S. tax law, and the Inﬂaon Reducon Act of 2022, may adversely impact the Company and the value of Common Shares. Changes to U.S. tax laws (which changes may have retroacve applicaon) could adversely aﬀect the Company or holders of Common Shares. In recent years, many changes to U.S. federal income tax laws have been proposed and made, and addional changes to U.S. federal income tax laws are likely to connue to occur in the future. The U.S. Congress is currently considering numerous items of legislaon which may be enacted prospecvely or with retroacve eﬀect, which legislaon could adversely impact the Company’s ﬁnancial performance and the value of Common Shares. Addionally, U.S. states in which we operate or own assets may impose new or increased taxes. If enacted, most of the proposals would be eﬀecve for the current or later years. The proposed legislaon remains subject to change, and its impact on the Company and purchasers of Common Shares is uncertain. In addion, the Inﬂaon Reducon Act of 2022 includes provisions that will impact the U.S. federal income taxaon of corporaons. Among other items, this legislaon includes provisions that will impose a minimum tax on the book income of certain large corporaons and an excise tax on certain corporate stock repurchases that would be imposed on the corporaon repurchasing such stock. It is unclear how this legislaon will be implemented by the U.S. Department of the Treasury and we cannot predict how this legislaon or any future changes in tax laws might aﬀect the Company or purchasers of Common Shares. Global climate change is an internaonal concern and could impact our ability to conduct future operaons. Global climate change is an internaonal issue and receives an enormous amount of publicity. We would expect that the imposion of internaonal treaes or U.S. or Canadian federal, state, provincial or local laws or regulaons pertaining to mandatory reducons in energy consumpon or emissions of greenhouse gasses could aﬀect the feasibility of our mining projects and increase our operang costs. Adverse publicity from non-governmental organizaons could have a material adverse eﬀect on us. There is an increasing level of public concern relang to the eﬀect of mining producon on our surroundings, communies and environment. Non- governmental organizaons (“NGOs”), some of which oppose resource development, are oen vocal crics of the mining industry. While we seek to operate in a socially responsible manner, adverse publicity generated by such NGOs related to extracve industries, or our operaons speciﬁcally, could have an adverse eﬀect on our reputaon and ﬁnancial condion or our relaonship with the communies in which we operate. We may fail to achieve and maintain the adequacy of our internal control over ﬁnancial reporng as per the requirements of the Sarbanes-Oxley Act. We are required to document and test our internal control procedures in order to sasfy the requirements of Secon 404 of SOX. It requires an annual assessment by management of the eﬀecveness of our internal control over ﬁnancial reporng. We may in the future fail to achieve and maintain the adequacy of our internal control over ﬁnancial reporng, as such standards are modiﬁed, supplemented or amended from me to me, and we may not be able to ensure that 25 Table of Contents we can conclude on an ongoing basis that we have eﬀecve internal control over ﬁnancial reporng in accordance with Secon 404 of SOX. Our failure to sasfy the requirements of Secon 404 of SOX on an ongoing, mely basis could result in the loss of investor conﬁdence in the reliability of our ﬁnancial statements, which in turn could harm our business and negavely impact the trading price of our Common Shares. In addion, any failure to implement required new or improved controls, or diﬃcules encountered in their implementaon, could harm our operang results or cause us to fail to meet our reporng obligaons. Future acquisions of companies may provide us with challenges in implemenng the required processes, procedures and controls in our acquired operaons. Acquired companies may not have disclosure control and procedures or internal control over ﬁnancial reporng that are as thorough or eﬀecve as those required by securies laws currently applicable to us. Our business is subject to evolving corporate governance and public disclosure regulaons that have increased both our compliance costs and the risk of noncompliance, which could have an adverse eﬀect on our stock price. We are subject to changing rules and regulaons promulgated by a number of United States and Canadian governmental and self-regulated organizaons, including the SEC, the Canadian Securies Administrators, the NYSE American, the TSX, and the Financial Accounng Standards Board. These rules and regulaons connue to evolve in scope and complexity and many new requirements have been created in response to laws enacted by the United States Congress, making compliance more diﬃcult and uncertain. Our eﬀorts to comply with new rules and regulaons, including those promulgated under Dodd-Frank, have resulted in, and are likely to connue to result in, increased general and administrave expenses and a diversion of management me and aenon from revenue-generang acvies to compliance acvies. In the future, we may be subject to legal proceedings. Due to the nature of our business, we may be subject to numerous regulatory invesgaons, claims, lawsuits and other proceedings in the ordinary course of our business. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in ligaon, including the eﬀects of discovery of new evidence or advancement of new legal theories, the diﬃculty of predicng decisions of judges and juries and the possibility that decisions may be reversed on appeal. There can be no assurances that these maers will not have a material adverse eﬀect on our business. Item 1B. UNRESOLVED STAFF COMMENTS None. Item 1C. CYBERSECURITY Not applicable. Item 2. PROPERTIES Trilogy’s principal business is the exploraon and development of the Upper Kobuk Mineral Projects located in the Ambler Mining District in Northwest Alaska, United States. The Upper Kobuk Mineral Projects are held by Ambler Metals LLC (“Ambler Metals”), a limited liability company owned equally by Trilogy and South32 Limited, and is comprised of the (i) Arcc Project, a development stage property, which contains a high-grade polymetallic volcanogenic massive sulﬁde deposit; and (ii) Bornite Project, an exploraon stage property, which contains a carbonate-hosted copper - cobalt deposit. 26 Table of Contents 27 Alaska Category Inferred Arcc – 50% Aributable Interest Bornite – 50% Aributable Interest Table of Contents Mineral Resource Summary Table as of November 30, 2023 Project Resource Tonnage Average Grade Contained Metal Content (Mt) 2.25 Cu (%) Pb (%) Zn (%) Au (g/t) Ag (g/t) Cu Pb Zn (Mlb) (Mlb) (Mlb) Au (koz) Ag (Moz) 1.92 0.70 2.93 0.43 35.6 94.5 34.5 144 31 2.5 Inferred 101.3 1.46 3,257 Notes: 1. A Qualiﬁed Person and an employee of the Company, has approved the mineral reserves and mineral resources included in this Annual Report on Form 10-K as of November 30, 2023 and reviewed the reserves and resources in the S-K 1300 Arcc Report and the S-K 1300 Bornite Report and conﬁrmed that the reserves and resources remain current as of November 30, 2023. 2. Mineral Resources were prepared in accordance with the standards and deﬁnions of S-K 1300 and represent disclosure of Mineral Resources under S-K 1300 standards and deﬁnions. The Mineral Resource esmate is reported exclusive of Mineral Reserves. There are no Mineral Reserves esmated on the Bornite property. Trilogy Metals’ 50% aributable interest is stated in the table. Figures may not sum due to rounding. The mineral resources are reported in place (point of reference). 3. 4. 5. 6. Arcc Notes: 7. Mineral Resources stated are contained within a conceptual pit shell developed using metal prices of $3.00/lb Cu, $0.90/lb Pb, $1.00/lb Zn, $1,300/oz Au and $18/oz Ag and metallurgical recoveries of 92% Cu, 77% Pb, 88% Zn, 63% Au and 56% Ag and operang costs of $3/t mining and $35/t process and general and administrave costs. The assumed average pit slope angle is 43º. As a result of ﬂaening the north end of the reserve pit to stabilize the pit wall due to the presence of talc, a poron of the reserve pit extended beyond the resource constraining pit shell and a second pass of mineral resource tabulaon was performed exterior to the constraining resource pit and interior to the constraining reserve pit which is included in the Mineral Resource tabulaon. The 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 x 0.005). 8. 9. Bornite Notes: 10. Mineral resources are constrained by: an open pit shell at a cut-oﬀ grade of 0.5% Cu, with an average pit slope of 43 degrees; and underground mining shapes with a cut-oﬀ grade of 1.79% Cu. The cut-oﬀ grades include the consideraons of a $4.05/lb Cu price, process recovery of 87.2%, open pit mining costs of $3.21/t mined, underground mining cost of $73.62/t mined, process cost of $19.14/t processed, G&A cost of $4.14/t processed, treatment, reﬁning, sales cost of $0.73/lb Cu in concentrate, road use cost of $8.04/t processed, 2% NSR royalty. 28 Table of Contents Mineral Reserve Esmate as of November 30, 2023 for the Arcc Project, Alaska USA Classiﬁcaon Tonnage Average Grade Mt Cu (%) Pb (%) Zn (%) Au (g/t) Ag (g/t) Probable Mineral Reserves – 50% Aributable Interest 23.35 2.11 0.56 2.90 0.42 31.8 Notes: 1. A Qualiﬁed Person and an employee of the Company, has approved the mineral reserves and mineral resources included in this Annual Report on Form 10-K as of November 30, 2023 and reviewed the reserves and resources in the S-K 1300 Arcc Report and the S-K 1300 Bornite Report and conﬁrmed that the reserves and resources remain current as of November 30, 2023. 2. Mineral Reserves were esmated assuming open pit mining methods and include a combinaon of internal and contact diluon. Total diluon is expected to be between 30% and 40%. Pit slopes vary by sector and range from 26° to 56°. A marginal NSR cut-oﬀ of $38.8 /t is used. 3. Mineral Reserves are based on prices of $3.46/lb Cu, $0.91/lb Pb, $1.12/lb Zn, $1,615/oz Au, and $21.17/oz Ag. 4. Variable process recoveries averaging 92% Cu in Cu concentrate, 62% Pb in Pb concentrate, 88% Zn in Zn concentrate, 47% Au in Cu concentrate, 33% Ag in Cu concentrate, 26% Au in Pb concentrate and 49% Ag in Pb concentrate. 5. Mineral Reserves are based on mining cost of $2.52/t incremented at $0.02/t/5m and $0.012/t/5m below and above 790 m elevaon, respecvely. 6. Costs applied to processed material following: process operang cost of $18.31/t, G&A of $5.83/t, sustaining capital cost of $2.37/t, closure cost of $4.27/t, road toll cost of $8.04/t. Strip rao (waste:ore) is 7.3:1. Selling terms following: payables of 96.5% of Cu, 95% of Pb and 85% of Zn, treatment costs of $80/t Cu concentrate, $160/t Pb concentrate and $215/t Zn concentrate; reﬁning costs of $0.08/lb Cu in Cu concentrate, and$10/oz Au, $1.25/oz Ag in Pb concentrate; and transport cost $270.98/t concentrate. Fixed royalty percentage of 1% NSR. 7. 8. 9. 10. Trilogy Metals’ 50% aributable interest is stated in the table. 11. The point of reference for the Mineral Reserves is deﬁned at the point where the ore is delivered to the processing plant. 12. The metal prices and costs were ﬁxed over the 13-year mine life. The following descripons summarize selected informaon about the Upper Kobuk Mineral Projects, which are located in the Ambler Mining District of Alaska and include the Arcc Project and the Bornite Project. The Arcc Project and the Bornite Project are held by Ambler Metals, of which Trilogy holds a 50% interest. All mineral resources and mineral reserve esmates with respect to the Arcc Project and Bornite Project that are disclosed in this Annual Report on Form 10-K are reported on a 100% basis unless otherwise noted. Please also see “Management’s Discussion and Analysis—Project Acvies” for more informaon on the development and nature of our interest in the Upper Kobuk Mineral Projects. The Company’s book value of its investment in Ambler Metals is $135.2 million as of November 30, 2023. Arcc Project The Company is subject to and required to disclose mineral resources and mineral reserves in accordance with Subpart 229.1300 of Regulaon S-K – Disclosure by Registrants Engaged in Mining Operaons (“S-K 1300”). While the S-K 1300 rules are similar to Naonal Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) rules in Canada, they are not idencal and therefore two reports have been produced for the Arcc Project. The informaon in Item 2, Properes, contains pernent informaon required under both NI 43-101 and S-K 1300. Except as otherwise stated, the scienﬁc and technical informaon relang to the Arcc Project contained in this Form 10-K is derived from the (i) 2023 S- K 1300 report for Arcc tled “Arcc Project Technical Report Summary, Ambler Mining District, Alaska” dated November 30, 2022 prepared by Ausenco Engineering Canada Inc., Wood Canada Limited, SRK Consulng (Canada) Inc. and Brown and Caldwell, each of whom are not aﬃliated with Trilogy (“S-K 1300 Arcc 29 Table of Contents Report”) and the (ii) 2023 Arcc Report tled “Arcc Project NI 43-101 Technical Report on Feasibility Study, Ambler Mining District, Alaska” with an eﬀecve date of January 20, 2023, prepared by Ausenco Engineering Canada Inc., Wood Canada Limited, SRK Consulng (Canada) Inc. and Brown and Caldwell (“NI 43-101 Arcc Report”). The informaon regarding the Arcc Project is based on assumpons, qualiﬁcaons and procedures which are not fully described herein. Reference should be made to the full text of the S-K 1300 Arcc Report and the NI 43-101 Arcc Report which has been ﬁled, as applicable, with the relevant US and Canadian securies regulatory authories. The NI 43-101 Arcc Report is available for review on SEDAR+ at www.sedarplus.ca and the S-K 1300 Arcc Report is available for review on EDGAR at www.sec.gov. Arcc Project Descripon, Locaon and Access Project Descripon NovaGold acquired the Arcc Project from Kenneco Exploraon Company and Kenneco Arcc Company (collecvely, “Kenneco”) in 2004. In 2011, NovaGold transferred all copper projects to NovaCopper Inc. and spun-out NovaCopper to its then exisng shareholders in 2012. NovaCopper Inc. subsequently underwent a name change to Trilogy Metals Inc. in 2016. Under the Kenneco Purchase and Terminaon Agreement, Kenneco retained a 1% net smelter return (“NSR”) royalty that was subsequently sold by Kenneco. The 1% NSR runs with the lands and is purchasable at any me from the royalty holder for a one-me payment of $10 million. The Arcc Project is directly held by Ambler Metals LLC (“Amber Metals”), in a 50/50 joint venture formed between South32 and Trilogy in February 2020. Upon the formaon of the joint venture, Trilogy contributed all of its Alaskan assets, including the Arcc Project and the NANA Agreement, to Ambler Metals in exchange for a 50% membership interest and at the same me, South32 contributed $145 million in cash for a 50% membership interest. The land tenure consists of 2,136 conguous State claims totaling 230,736 acres (93,336 hectares), including 905 40-acre claims, 1231 160-acre claims, and 18 Federal patented claims comprising 271.9 acres (110 hectares) held in the name of Ambler Metals. Surface use of the private land held as Federal patented claims is limited only by reservaons in the patents and by generally-applicable environmental laws. Surface use of State claims allows the owner of the mining claim to make such use of the surface as is “necessary for prospecng for, extracon of, or basic processing of minerals.” NANA controls lands granted under the Alaska Nave Claims Selement Act to the south of the Arcc Project boundary. Ambler Metals and NANA are pares to the NANA Agreement that consolidates the pares’ land holdings into an approximately 190,929 hectares land package and provides a framework for the exploraon and development of the area. The NANA Agreement has a term of 20 years, with an opon in favour of Ambler Metals to extend the term for an addional 10 years. If, following receipt of a feasibility study and the release for public comment of a related dra environmental impact statement, a decision is made to proceed with construcon of a mine on the lands subject to the NANA Agreement, NANA will have 120 days to elect 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) not exercise 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 that NANA elects to exercise its back-in-right, the pares will, as soon as reasonably praccable, form a joint venture with NANA elecng to parcipate between 16% to 25%, and Ambler Metals owning the balance of the interest in the joint venture. If Ambler Metals decides to proceed with construcon of a mine on its own lands subject to the NANA Agreement, NANA will enter into a surface use agreement which will aﬀord Ambler Metals access to the Arcc Project along routes approved by NANA. In consideraon for the grant of such surface use rights, NANA will receive a 1% net smelter royalty on producon and provide an annual payment on a per acre basis. Locaon and Access The Arcc Project is located in the Ambler Mining District of the southern Brooks Range, in the Northwest Arcc Borough (“NWAB”) of Alaska. The Arcc Project is geographically isolated with no current road access or nearby power infrastructure. The Arcc Project is about 270 km east of the town of Kotzebue, 37 km northeast of the village of Kobuk, 30 Table of Contents and 260 km west of the Dalton Highway, an all-weather State maintained public road, at geographic coordinates N67.17° latude and W156.39° longitude and Universal Transverse Mercator (UTM) North American Datum (NAD) 83, Zone 4 coordinates 7453080N, 613110E. Primary access to the Arcc Project is by air, using both ﬁxed wing aircra and helicopters. There are four well-maintained, approximately 1,500 m-long gravel airstrips located near the Arcc Project, capable of accommodang charter ﬁxed wing aircra. 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 to the village of Kobuk, the closest community to the Arcc Project. During the summer months, the Dahl Creek Camp airstrip is suitable for larger aircra, such as a C-130 and DC-6. In addion 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 aircra, which support the Bornite Camp with personnel and supplies. There is also a 450 m airstrip (Arcc airstrip) located at the base of Arcc Ridge that can support smaller aircra. A winter trail and a one-lane dirt track suitable for high-clearance vehicles or construcon equipment links the Arcc Project’s main camp located at Bornite to the Dahl Creek airstrip southwest of the Arcc deposit. An unimproved gravel track connects the Arcc airstrip with the Arcc deposit. History Prospectors in search of gold, travelling up the Kobuk River in 1898-99 (Grinnell, 1901), found small gold placer deposits in the southern Cosmos Hills, south of the Arcc deposit, which were worked intermiently over the ensuing decades. Around this me, copper mineralizaon at Ruby Creek and Pardner Hill in the northern Cosmos Hills was explored using small shas and adits (Smith and Eakin, 1911). In 1947, Rhinehart “Rhiny” Berg staked claims over the Ruby Creek prospects, carried out extensive trenching and the ﬁrst diamond drilling, and constructed an airstrip for access (alaskamininghalloﬀame.org 2012). Bear Creek Mining Company (“BCMC”), an exploraon subsidiary of Kenneco, oponed the Ruby Creek property from Berg in 1957. The prospect became known as Bornite and Kenneco conducted extensive exploraon over the next 31 Table of Contents decade, culminang in the discovery of the high-grade No. 1 zone and the sinking of an exploraon sha to conduct underground drilling. While exploring the Bornite deposit, BCMC carried out reconnaissance exploraon throughout the western Brooks Range, including a large regional stream sediment survey in 1962. Inial follow up did not idenfy mineralizaon of interest however in 1965, Riz Bigelow (BCMC) and his team of geologists found boulders of massive sulphides at an anomaly (1400 ppm Cu) located 28 km northeast of Bornite that led to the discovery of outcropping mineralizaon the following year. The area was subsequently staked and, in 1967, nine core holes were drilled at the Arcc deposit, eight of which yielded massive sulphide intercepts over an almost 500-m strike length. BCMC conducted intensive exploraon on the property unl 1977 and then intermiently through to 1998. No drilling or addional exploraon was conducted on the Arcc Project between 1999 and 2003. In addion to drilling and exploraon at the Arcc deposit, BCMC also conducted exploraon at numerous other prospects in the Ambler Mining District (most notably Dead Creek, Sunshine, Cliﬀ, and Horse). The abundance of VMS prospects in the district resulted in a series of compeng companies in the area, including Sunshine Mining Company, Anaconda Company, Noranda Exploraon Company, GCO Minerals Company, Cominco American Resource Inc. (Cominco), Teck Cominco, Resource Associates of Alaska, Was, Griﬃs and McOuat Ltd., and Houston Oil and Minerals Company, culminang into a claim staking war in the district in 1973. Falconbridge and Union Carbide also conducted work later in the district. District exploraon by Sunshine Mining Company and Anaconda resulted in two addional signiﬁcant discoveries in the district; the Sun deposit located 60 km east of the Arcc deposit, and the Smucker deposit located 36 km west of the Arcc deposit. These two deposits are outside the current Arcc Project area. District exploraon connued unl the early 1980s on the four larger deposits in the district (Arcc, Bornite, Smucker and Sun) when the district fell into 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 successor company, connues to hold the Smucker deposit. In 2007, Andover Mining Corporaon purchased a 100% interest in the Sun deposit for $13 million and explored the property through 2013. The Sun deposit and adjacent lands were acquired by Valhalla Metals Inc., a private company, which staked over the Sun deposit in 2017 aer the creditors for the bankrupt Andover Mining Corporaon failed to pay the annual rent of the state claims and submit the Annual Labour Statement. In 1981 and 1983, Kenneco received three US Mineral Survey patents (MS2245 totaling 240 acres over the Arcc deposit – later amended to include another 32 acres; and MS2233 and MS2234 for 25 claims totaling 516.5 acres at Bornite). The Bornite patented claims and surface development were subsequently sold to NANA Regional Corporaon, Inc. in 1986. No producon has occurred at the Arcc deposit or at any of the other deposits within the Ambler Mining District. Prior Ownership and Ownership Changes – Arcc Deposit and the Ambler Lands BCMC inially staked federal mining claims covering the Arcc deposit area beginning in 1966. The 1960’s drill programs deﬁned a signiﬁcant high-grade polymetallic resource at the Arcc deposit and, in the early 1970s, Kenneco began the patent process to obtain complete legal tle to the Arcc deposit. In 1981, Kenneco received US Mineral Survey patent M2245 covering 16 mining claims totaling 240.018 acres. In 1983, US Mineral Survey patent M2245 was amended to include two addional claims totaling 31.91 acres. With the passage of the Alaska Naonal Interest Lands Conservaon Act in 1980, which expedited nave land claims outlined in the ANSCA and State lands claims under the Alaska Statehood Act, both the State of Alaska and NANA selected signiﬁcant areas of land within the Ambler Mining District. State selecons covered much of the Ambler schist belt, host 32 Table of Contents to the volcanogenic massive sulphide deposits including the Arcc deposit, while NANA selected signiﬁcant porons of the Ambler Lowlands to the immediate south of the Arcc deposit as well as much of the Cosmos Hills including the area immediately around Bornite. In 1995, Kenneco renewed exploraon in the Ambler schist belt containing the Arcc deposit patented claims by staking an addional 48 state claims at Nora and 15 state claims at Sunshine Creek. In the fall of 1997, Kenneco staked 2,035 state claims in the belt consolidang their enre land posion and acquiring the majority of the remaining prospecve terrain in the VMS belt. Five more claims were subsequently added in 1998. Aer a short period of exploraon which focused on geophysics and geochemistry combined with limited drilling, exploraon work on the Arcc Project again entered a hiatus. On March 22, 2004, Alaska Gold Company (“Alaska Gold”), a wholly-owned subsidiary of NovaGold completed an Exploraon and Opon Agreement with Kenneco to earn an interest in the Ambler land holdings. Previous Exploraon and Development Results – Arcc Deposit Kenneco’s ownership of the Arcc Project saw two periods of intensive work from 1965 to 1985 and from 1993 to 1998, before oponing the property to NovaGold in 2004. Though reports, memos, and ﬁles exist in Kenneco’s Salt Lake City oﬃce, only limited digital compilaon of the data exists for the earliest generaon of exploraon at the Arcc deposit and within the VMS belt. Beginning in 1993, Kenneco iniated a re-evaluaon of the Arcc deposit and assembled a computer database of previous work at the Arcc deposit and in the district. A computer-generated block model was constructed in 1995 and an updated resource esmate was performed using the block model. Subsequently, Kenneco 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 exploraon that occurred as a result of the 1973 staking war, much of the earliest exploraon work on the Ambler Schist belt was lost during the post-1980 hiatus in district exploraon. The following subsecons outline the best documented data at the Arcc deposit as summarized in the 1998 Kenneco exploraon report, including the assembled computer database; however, this outline is not considered to be either exhausve or in-depth. In 1982, geologists with Kenneco, Anaconda and the State of Alaska published the deﬁnive geologic map of the Ambler schist belt (Hitzman et al. 1982). The S-K 1300 Arcc Report and the NI 43-101 Arcc Report both summarize the known exploraon mapping, geochemical, and geophysical programs conducted for VMS targets in the Ambler Mining District. Table 1 below summarizes the exploraon mapping, geochemical, geophysical, and mining studies conducted on the Arcc deposit. Geological Seng, Mineralizaon and Deposit Types Regional Geology – Southern Brooks Range The Ambler Mining District occurs along the southern margin of the Brooks Range within an east-west trending zone of Devonian to Jurassic age submarine volcanic and sedimentary rocks (Hitzman et al., 1986). The district covers both: 1) VMS-like deposits and prospects hosted in the Devonian age Ambler Sequence (or Ambler Schist belt or Schist Belt), a group of metamorphosed bimodal volcanic rocks with interbedded tuﬀaceous, graphic and calcareous volcaniclasc metasediments; and 2) epigenec carbonate-hosted copper deposits occurring in Silurian to Devonian age carbonate and phyllic rocks of the Bornite Carbonate Sequence. The Ambler Sequence occurs in the upper part of the Anirak Schist, the thickest member of the Schist belt or Coldfoot subterrane (Moore et al., 1994). VMS-like stratabound mineralizaon can be found along the enre 110 km strike length of the district. Immediately south of the Schist belt, in the Cosmos Hills, a me equivalent secon of the Anirak Schist includes the approximately 1 km thick Bornite Carbonate 33 Table of Contents Sequence. Mineralizaon of both the VMS-like deposits of the Schist belt and the carbonate-hosted deposits of the Cosmos Hills has been dated at 375 to 387 Ma (Selby et al., 2009; McClelland et al., 2006). The Ambler Mining District is characterized by increasing metamorphic grade to the north, perpendicular to the strike of the east-west trending units. The district shows isoclinal folding in the northern poron and thrust faulng to south (Schmidt, 1983). The Devonian to Late Jurassic age Angayucham basalt and the Triassic to Jurassic age maﬁc volcanic rocks are in low-angle over thrust contact with various units of the Ambler Schist belt and Bornite Carbonate Sequence along the northern edge of the Ambler Lowlands. Ambler Sequence Geology Rocks that form the Ambler Sequence consist of a lithologically diverse sequence of lower Devonian age carbonate and siliciclasc strata with interlayered maﬁc lava ﬂows and sills. The clasc strata, derived from terrigenous connental 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, penetrave deformaon. Sustained upper greenschist-facies metamorphism with coincident formaon of a penetrave schistosity and isoclinal transposion of bedding marks the ﬁrst deformaon period. Pervasive similar-style folds on all scales deform the transposed bedding and schistosity, deﬁning the subsequent event. At least two later non-penetrave compressional events deform these earlier fabrics. Observaons of the structural and metamorphic history of the Ambler Mining District are consistent with current tectonic evoluon models for the Schist belt, based on the work of others elsewhere in the southern Brooks Range (Goschalk and Oldow, 1988; Till et al., 1988; Vogl et al., 2002). Arcc Deposit Geology Previous workers at the Arcc deposit (Russell 1995 and Schmidt 1983) describe three mineralized horizons: the Main Sulphide Horizon, the Upper South Horizon and the Warm Springs Horizon. The Main Sulphide Horizon was further subdivided into three zones: the southeast zone, the central zone and the northwest zone. Previous deposit modelling was grade-based resulng in numerous individual mineralized zones represenng relavely thin sulphide horizons. Earlier work by Ambler Metals deﬁned the Arcc deposit as two or more discrete horizons of sulphide mineralizaon contained in a complexly deformed isoclinal fold with an upright upper limb and an overturned lower limb hosng the main mineralizaon. Nearby drilling suggested that a third upright lower limb, likely occurs beneath the currently explored stragraphy. Mineralizaon Mineralizaon occurs as straform semi-massive sulphide (“SMS”) to massive sulphide (“MS”) beds within primarily graphic schists and ﬁne-grained quartz mica schists. The sulﬁde beds average 4 m in thickness but vary from less than 1 m up to as much as 18 m in thickness. The sulﬁde mineralizaon occurs within eight modelled zones lying along the upper and lower limbs of the Arcc isoclinal ancline. The zones are all within an area of roughly 1 km2 with mineralizaon extending to a depth of approximately 250 m below the surface. There are ﬁve zones of MS and SMS that occur at speciﬁc pseudo- stragraphic levels which make up the bulk of the Mineral Resource esmate. The other three zones also occur at speciﬁc pseudo-stragraphic levels, but are too disconnuous. Unlike more typical VMS deposits, mineralizaon is not characterized by steep metal zonaon or massive pyric zones. Mineralizaon dominantly consists of sheet-like zones of base metal sulﬁdes with variable pyrite and only minor zonaon, usually on a small scale. 34 Table of Contents Mineralizaon is predominately coarse-grained sulphides comprising chalcopyrite, sphalerite, galena, tetrahedrite-tennante, pyrite, arsenopyrite, and pyrrhote. Sulphides occur as disseminated (<30%), semi-massive (30 to 50% sulphide) to massive (greater than 50% sulphide) layers. Trace amounts of electrum are also present. Gangue minerals associated with the mineralized horizons include quartz, barite, white mica, chlorite, slpnomelane, talc, calcite, dolomite and cymrite. Deposit Types The mineralizaon at the Arcc deposit and at several other known occurrences within the Ambler Sequence stragraphy of the Ambler Mining District consists of Devonian age, polymetallic (zinc-copper-lead-silver-gold) VMS-like occurrences. Observaons and interpretaons at the Arcc deposit such as: 1) the tectonic seng with Devonian volcanism in an evolving connental ri; 2) the geologic seng with bimodal volcanic rocks including pillow basalts and felsic volcanic tuﬀs; 3) an alteraon assemblage with well-deﬁned magnesium- rich footwall alteraon and sodium-rich hanging wall alteraon; and 4) typical polymetallic base-metal mineralizaon with massive and semi-massive sulphides, are indicave of a VMS deposit that has undergone high strain and complex folding and faulng. A variety of VMS types have been well documented in the literature (Franklin et al., 2005), with the Ambler Schist belt deposits most like deposits associated with bimodal felsic dominant volcanism related to incipient riing. However, the abundance of volcaniclasc rocks with argillaceous sedimentary rocks and the tabular nature of mineralizaon are considered by Piercey (2022) to be similar to felsic silicilasc VMS environments. Evidence exists for both exhalaon and emplacement on the seaﬂoor and replacement of rocks in the sub-seaﬂoor, either via ﬁlling of void space or via dissoluon of original rocks and replacement by new minerals (Piercey, 2022). For example, the presence of barite, aributed to the mixing of BaCl2(aq) from hydrothermal ﬂuids with seawater sulphate (SO4(aq)) at the vent-seawater interface supports some of the mineralizaon at Arcc likely precipitated on the seaﬂoor. In contrast, there is ample textural evidence of subseaﬂoor replacement at Arcc, such as the presence of transions from massive sulphides into selecve replacement of interpreted permeable tuﬀ beds in the hanging wall mudstones. The tonnage, grades, and stragraphic seng of the Arcc deposit, and its broader tectonostragraphic seng, are similar to other felsic siliclasc VMS environments globally. The deposit has strong similaries to deposits found the Finlayson Lake VMS district, Yukon, Bathurst district, New Brunswick, and some parts of the Iberian Pyrite Belt, Spain-Portugal (Piercey, 2022). A VMS model is considered applicable for use in exploraon targeng in the Arcc Project area. Exploraon Table 1 summarizes the exploraon work conducted by NovaGold, Trilogy (formerly, NovaCopper) and Ambler Metals from 2004 to 2022. Field exploraon was largely conducted during the period between 2004 to 2007 and 2021 to 2022 with associated engineering and characterizaon studies between 2008 and 2021. Table 1 - Summary of Overall Exploraon Acvies Targeng VMS Style Mineralizaon in the Ambler Sequence Stragraphy and the Arcc Deposit Work Completed Geological Mapping - - Year 2004 2005 Details - - 35 Focus Arcc deposit surface geology Ambler Sequence west of the Arcc deposit Table of Contents Work Completed - - - Year 2006 2015, 2016 2016 2021 2022 2004 2005 2006 2007 2007 2019 - - Geophysical Surveys SWIR Spectrometry TDEM Downhole EM VTEM Plus (Versale Time Domain Electromagnec) airborne helicopter geophysical ZTEM (Z-Axis Tipper Electromagnec) airborne helicopter geophysical Geochemistry Details - SRK - - - 2004 drill holes 2 loops 13 loops 6 loops 4 drill holes 400m line spacing with 200m inﬁll with e lines 4000m spacing 2019 400m line spacing with e lines 4000m spacing - - - - - - 2005 2006 2007 2021 2022 - - - - - - 36 Focus COU, Dead Creek, Sunshine, Red Geotechnical Structural Mapping Arcc deposit surface geology Snow, Ambler, Nani, DH, Cliﬀ, Sunshine, Dead Creek, BT, 98- 9/Pipe, COU, SE Arcc, Nora Snow, Ambler, Nani, DH, Bud, Sunshine, Dead Creek, BT, 98- 9/Pipe, COU, East Arcc, Nora, South Cliﬀ, SK, Cynbad, Z, Tom Tom, Kogo/White Creek Alteraon characterizaon Follow-up of Kenneco DIGHEM EM survey District targets Arcc extensions Arcc deposit Ambler Mining District and Cosmos Hills with inﬁll over Arcc, Sunshine and Horse-Cliﬀ Ambler Mining District and Cosmos Hills with inﬁll over Arcc, Sunshine and Horse-Cliﬀ Stream silts – core area prospects Soils – core area prospects Stream silts – core area prospects Soils – Arcc deposit area Soils - VTEM 26-29, JA Creek, West Dead Creek, Dead Creek Soils - Sub Arcc Valley, South Cliﬀ, VTEM 26-29, VTEM-41, VTEM-23 , East and West Sunshine, Tom Table of Contents Work Completed Year Details Survey - Collar 2004 to 2011, 2018, 2019, 2021, 2022 2004, 2008 Photography/Topography 2010 LiDAR Survey 2015, 2016 Technical Studies Geotechnical ML/ARD Metallurgy Geotechnical and Hydrology Geotechnical and Hydrology ML/ARD Metallurgy Project Evaluaon Resource Esmaon PEA 2010 2011 2012 2012 2015, 2016, 2018, 2019, 2021, 2022 2015, 2016, 2017, 2018, 2019 2015, 2016, 2017, 2018, 2019, 2021 2008 2011 2012 DGPS Resurveys - - BGC SRK SGS BGC SRK SRK SGS, ALS SRK SRK Tetra Tech 37 Focus Tom, Kogo/White Creek, SK, Cynbad, East Arcc, West Dead Creek, Dead Creek, 98-9/Pipe, Z, Nora, Ambler, Nani Streams silts - Core area prospects All 2004 to 2019 NovaCopper drill holes Historical Kenneco drill holes Photography/topography LiDAR over Arcc Deposit Preliminary geotechnical and hazards Preliminary ML and ARD Preliminary mineralogy and metallurgy Preliminary rock mechanics and hydrology Arcc P FS and FS slope design Stac kinec tests and ABA update - ongoing Cu-Pb Separaon Testwork; Flotaon and Variability Testwork; SAG Mill Comminuon (SMC) Testwork, ﬁltraon Testwork, thickener Testwork, and tailings seling tesng Resource esmaon PEA - Underground PEA – Open Pit Table of Contents Work Completed PFS FS Year 2018 2020 Details Ausenco Ausenco Focus Pre-Feasibility Study Feasibility Study Note: Metallurgy; PEA = preliminary economic assessment. SWIR = short wave infrared; LiDAR = light detecon and ranging; ML = metal leaching; BGC = BGC Engineering Inc.; SGS = SGS Canada; ALS = ALS Drilling Drilling at the Arcc deposit and within the Ambler Mining District has been ongoing since the inial discovery of mineralizaon in 1966. Approximately 67,639 m of drilling has been completed within the Ambler Mining District, including 55,038 m of drilling in 285 drill holes at the Arcc deposit or on potenal extensions in 32 campaigns spanning 56 years. All drill holes, except 11 geotechnical holes in 2017, 24 geotechnical holes drilled in 2018, 8 geotechnical holes from the 2021 program and 34 exploraon holes from the 2022 program, for which assay results were not available - were considered for use in the esmate of Mineral Resources. Geotechnical drilling is summarized in Table 2 and Table 3. The number of holes reported for each year are the holes that were staﬀed by a geotechnician at the rig and the primary purpose was to gather geotechnical data. 38 Table of Contents Number of Holes Oriented core Water level monitoring Falling head packer tests Point load tests Uniaxial compressive strength Direct shear tesng Modulus tesng Triaxial tesng Acousc Televiewer Falling Head, Singleor Straddle packer tests Airli pump test Hydraulic conducvity tesng (slug tesng) Cohesive and residual shear strength tests on soils Compressive strength test on core and rock Extended duraon injecon tests Table 2 – Summary of Geotechnical Drilling 2011 5 X 2015 2 X 2016 3 X X X X X X X X X X X X X X X X X X X X 2017 11 2018 24 X X X X X X X 2019 4 X 2021 8 X 2022 5 X X X X X X X X X X X X X X X X Table 3 – Summary of Geotechnical Drilling by Year and Purposes Year 2011 2015 2016 2017 2018 2019 2021 2022 Purpose Obtain geotechnical data in areas of the deposit that may host underground infrastructure or could pose issues with underground mining. Collect geotechnical and hydrological data to beer understand the wall rock characteriscs and hydrology within the open pit area. Complete the 3 drill holes that were deferred/not completed from the 2015 program. Collect geotechnical and hydrological data for tailings management and waste rock facilies within the enre Sub Arcc Creek valley. Collect geotechnical and hydrological data for waste rock dump, tailings management facility, and surface infrastructure in the Upper Sub Arcc Creek Valley. Provide addional geotechnical and hydrological data for pit design for the Feasibility Study. Deﬁne talc horizons on east side of pit for pit design. Deﬁne extent of lower talc horizons on northeast side of pit for pit design. 39 Table of Contents NovaGold re-surveyed collars of selected historical holes in 2004 and again in 2008. The re-surveys showed lile variaon compared to the historical surveys. The downhole survey data show a pronounced deviaon of the drill holes toward an orientaon more normal to the foliaon. Incomplete Kenneco data exist with regards to overall core recovery but based on 917 intervals of 3.05 m or less in the historical database, the average recovery was 92%. Kenneco RQD measurements in the 1998 program averaged 87.0%. There has been no systemac evaluaon of recovery by rock type. Core recovery during NovaGold/NovaCopper/Trilogy Metals and Ambler Metals drill programs was good to excellent, resulng in quality samples with lile to no bias. Sampling, Analysis and Data Veriﬁcaon Sampling and Analysis The data for the Arcc deposit were generated over three primary drilling campaigns: 1966 to 1986 when BCMC, a subsidiary of Kenneco was the primary operator, 1998 when Kenneco resumed work aer a long hiatus, and 2004 to present under NovaGold, Trilogy (formerly, NovaCopper), and Ambler Metals. Between 2004 and 2005, NovaGold conducted a systemac drill core re-logging and re-sampling campaign of Kenneco and BCMC era drill holes AR-09 to AR-74. NovaGold either took 1 to 2 m samples every 10 m or sampled enre lengths of previously unsampled core within a minimum of 1 m and a maximum or 3 m intervals. The objecve of the sampling was to generate a full ICP geochemistry dataset for the Arcc deposit and ensure connuous sampling throughout the deposit. From 2004 to 2019, sample intervals are determined by the geological relaonships observed in the core and limited to a 2.5 m maximum length and 1 m minimum length. Sample intervals terminate at lithological and mineralizaon boundaries. Aer logging, the core was cut in half using diamond core saws. If core was not competent, it was split by using a spoon to transfer half of the core into the sample bag. One-half of the core was returned to the core box for storage on site and the other half was bagged, labelled, and sent to ALS Minerals Laboratories in Vancouver for analysis and the other half was archived in the core storage facility at the Bornite Camp facilies or at the Ambler Metals warehouse in Fairbanks. For the 2021 metallurgical holes, ¼ core was sampled for analysis at ALS, ¼ retained, and ½ sent for metallurgical tesng. 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 to greater than 85% passing 75 μm. Samples were submied for mulelement analysis of a 0.25 gram sample by Inducvely Coupled Plasma (ICP) Mass Spectrometry (MS) following a 4-acid digeson, and for gold analysis of a 30 gram sample by Fire Assay (FA) with an Atomic Absorpon (AA) ﬁnish. Over limit ICP-MS Cu, Pb, and Zn samples were resubmied for analysis of a 0.4 gram sample by ICP-Atomic Emission Spectroscopy (AES) or AA following a 4 acid digeson. The overlimit value for Cu, Pb, and Zn is 10,000 ppm. Over limit gold results were resubmied for analysis of a 30 gram sample by FA with a Gravimetric ﬁnish. The overlimit value for Au is 10 ppm. The Lower detecon limits for Cu, Pb, and Zn by ICP-MS are 0.2 ppm, 0.5 ppm, and 2 ppm respecvely. The lower detecon limit for Au by FAAA is 0.05 ppm. Between 2004 and 2005 NovaGold completed a resampling program of historic drill holes. As a result, 85% of the assay intervals now have recent assay results from ALS Minerals. All core and pulp reject samples submied to the ALS Minerals laboratory since 2004 were accompanied by standard, blank and duplicate control samples. Secondary laboratory check samples were analysed at Acme in Vancouver or SGS Burnaby. The secondary laboratory check samples were selected to represent the data populaon using a random selecon of 5% of the samples within percenle range groups. 40 Table of Contents GeoSpark Consulng has prepared several reports summarizing the control sample results received between 2004 and 2019. Paired laboratory and ﬁeld determinaons for mineralized zone SG measurements from 1998 and the 2004 program show very low variaon. SRK conducts monthly QA/QC review of kinec test leachates for all operang kinec tests. Data Veriﬁcaon Wood qualiﬁed persons reviewed database veriﬁcaon and laboratory QA/QC reports and made data entry error spot checks, inspected down hole survey results for anomalous kinks and excessive bends in the drill hole traces, reviewed reports summarizing the results of drill core sampling and assaying completed since 2004, reviewed the assay database for gaps and overlaps, and reviewed the historic re-assay program results. The following two signiﬁcant issues were observed: ● A signiﬁcant high bias in historic Cu and low bias in historic Pb assay results ● Apparent low bias in Random Forest assisted speciﬁc gravity predicons In the current assay table historic sample interval assay results are given priority over the historic sample interval re-assay results. This is not expected to have a material impact on the grade esmaon but using the re-assay results would further migate the risk associated with the observed biases in the historic Cu and Pb values. Overall, the database veriﬁcaon and management and the laboratory QAQC monitoring completed by NovaGold, Trilogy Metals, and Ambler Metals has resulted in a reasonably reliable drill hole database suitable for supporng the Mineral Resource esmated for the Arcc deposit. Some deﬁciencies exist that when recﬁed will make the drill hole database even more robust. Mineral Processing and Metallurgical Tesng Since 1970, metallurgical testwork has been conducted to evaluate the ability of the Arcc deposit to produce copper, lead and zinc concentrates. In general, the samples tested produced similar metallurgical performances and the Arcc Project has seen the development of a robust metal recovery process to support the current operaonal plans. Work conducted included mineralogy and ﬂotaon tesng, locked cycle tests, comminuon tests, copper/lead separaon testwork, talc opmizaon testwork, and thickening and ﬁltraon tesng. Testwork can be broken into four key me periods: 1. Historical testwork completed prior to 2012, primarily by Kenneco Research Centre in Utah, and Lakeﬁeld Research Ltd., Lakeﬁeld, Ontario; 2. Preliminary Trilogy testwork conducted at SGS Mineral Services, Vancouver (“SGS Vancouver”), in 2012 to 2015; 3. Detailed Trilogy testwork conducted at ALS Metallurgy in Kamloops, BC (“ALS Metallurgy”) in 2015 to 2019; and 4. Amber Metals testwork conducted at ALS Metallurgy and SGS Mineral Services in 2021 to 2022. 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 Arcc deposit. The ﬂotaon test procedures used talc pre-ﬂotaon, convenonal copper-lead bulk ﬂotaon and zinc ﬂotaon, followed by copper and lead separaon. In general, the 2012-2015 test results indicated that the samples responded well to the ﬂowsheet tested. The average results of the locked cycle tests (without copper and lead separaon) were as follows: 41 Table of Contents ● The copper recoveries to the bulk copper-lead concentrates ranged from 89% to 93% excluding the Zone 1 & 2 composite which produced a copper 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, the zinc grades of the concentrates produced were higher than 55%, excluding the concentrate generated from Composite Zone 1 & 2, which contained only 44.5% zinc. ● Gold and silver were predominantly recovered into the bulk copper-lead concentrates. Gold recoveries to this concentrate ranged from 65% to 80%, and silver recoveries ranged from 80% to 86%. Using an open circuit procedure, the copper and lead separaon tests on the bulk copper–lead concentrate produced from the locked cycle tests generated reasonable copper and lead separaon. The copper concentrates produced contained approximately 28% to 31% copper, while the grades of the 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 copper concentrate and on average the silver was equally recovered into the copper and lead concentrates. Subsequent testwork to beer deﬁne the copper and lead separaon process was conducted in 2017, including a more detailed evaluaon of the precious metal deportment in the copper and lead separaon process. Grindability tesng was completed during both the SGS Vancouver and ALS Metallurgy testwork programs to support the design and economics of eﬃcient grinding of the Arcc materials. SAG mill test results included a single JKTech drop-weight test and 19 SAG media competency tests using variability samples. Test results show the material is amenable to SAG milling and is relavely so, with a reported breakage (axb) average value of 189.7. Bond ball mill work index (BWi) tests were completed on 44 samples and values ranged from 5.4 to 13.1 kWh/t with an average BWi of 8.82 kWh/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 data indicate that the samples are neither resistant nor abrasive to ball mill grinding. The materials are considered to be so or very so in terms of grinding requirements. The grinding testwork was used to support detailed grinding circuit design. In 2017, ALS Metallurgy conducted detailed copper and lead separaon ﬂotaon testwork using a bulk sample of copper– lead concentrate produced from the operaon of a pilot plant. This testwork conﬁrmed high lead recoveries in locked cycle tesng of the copper–lead separaon process and conﬁrmed precious metal recoveries into the representave 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. Detailed mineralogical analysis showed that a majority of gold values were occurring as liberated ﬁne-grained gold parcles. The conclusions of testwork conducted both in 2012 and 2017 indicate that the Arcc materials are well-suited to the producon of high-quality copper and zinc concentrates using ﬂotaon techniques which are industry standard. Copper and zinc recovery data were reported in the range of 88% to 92%, which reﬂected the high-grade nature of the deposit as well as the coarse-grained nature of these minerals. Grade variaons within the deposit will be observed as indicated by the grade variaons observed in variability samples, however, mill feed variability is expected to be limited and readily manageable with good plant operaonal pracces. Lead concentrates have the potenal to be of good quality and can also be impacted by zones of very high talc. Considerable care will be required to ensure maximum talc recovery to remove talc, which has the potenal to dilute lead concentrate grades. The lead concentrate is also shown to be rich in precious metals, which has some advantages in terms of marketability of this material. Ancillary testwork was completed by third party consultants on representave concentrate samples, to provide thickening and ﬁltraon data for the various concentrates. Seling and ﬁltraon rates were observed to be typical for sulﬁde concentrates and moisture contents in ﬁnal ﬁlter cakes were observed to be lower than expected. 42 Table of Contents Metallurgical testwork was completed to provide representave tailings samples for use in detailed solids seling and compacon testwork to provide data for tailings design studies. A detailed study of water treatment chemistry was undertaken to evaluate and conﬁrm the opon of destroying cyanide contained in soluons from the proposed copper–lead separaon process. The use of an SO2/air process in a small-scale pilot plant demonstrated removal of 99% of the contained cyanide and supported the concept of maintaining low cyanide concentraons within the proposed tailings pond soluons. In 2021, various metallurgical testwork programs were conducted at ALS Metallurgy, SGS, and MO Group. ALS Metallurgy completed several testwork programs, including ﬂotaon tesng with the Preﬂotaon circuit only to establish talc performance; further ﬂowsheet development test work to invesgate the beneﬁts of sequenal ﬂotaon versus the original bulk ﬂow sheet; and a variability testwork to support the development of improved metallurgical recovery models. The objecve of the ALS Metallurgy program was to invesgate bulk and sequenal ﬂotaon ﬂowsheets with composites formed from two parent composites, and then select a ﬂowsheet for a geo-metallurgical evaluaon through tesng with variability samples. The mineralizaon was amenable to either a bulk ﬂowsheet followed by copper-lead separaon, or a sequenal ﬂowsheet, both following a pre-ﬂotaon stage to remove talc. Table 4 shows average performance obtained for the Avg Talc Composite in the Flowsheet Development phase of the tesng. Table 4 – Comparison of Bulk versus Sequenal Locked-Cycle Test Results – ALS 2021 Composite Copper concentrate Lead concentrate Zinc concentrate Copper concentrate Lead concentrate Zinc concentrate Assays Distribuon (%) Cu (%) Pb (%) Zn (%) Ag (g/t) Au (g/t) Mg (%) Cu Pb Zn Ag Au 28.0 7.90 0.87 27.6 2.72 0.98 0.86 39.0 0.38 0.87 49.3 1.09 Avg Talc Bulk 181 1124 41 4.17 4.75 0.35 Avg Talc - Sequenal 168 1360 47 3.23 5.31 0.77 4.27 6.30 55.9 2.05 9.71 54.5 0.46 1.23 0.04 1.96 1.40 0.17 87.3 5.1 1.9 90.2 1.2 2.1 8.3 78.1 2.6 8.9 69.9 7.3 9.1 2.8 83.3 4.7 3.1 83.5 36.0 46.0 5.7 34.9 39.4 6.5 60.9 14.3 3.5 48.7 11.2 7.7 Copper recovery to the copper concentrate was slightly higher for the sequenal ﬂowsheet; however, gold recovery to the copper concentrate was substanally lower. The lead concentrate grade for the Avg Talc composite could likely be improved over that shown above with opmizaon of copper- lead separaon condions given the higher lead concentrate grade measured with other composites. Zinc circuit performance was similar for the two ﬂowsheets, although higher zinc recovery to the copper concentrate was recorded for the bulk circuit. Magnesium content in the copper concentrate was higher for the sequenal circuit, but similar in the lead concentrate for both circuits. 43 Table of Contents Based on economic analysis comparing the bulk and sequenal circuit, the bulk circuit ﬂowsheet was selected for the Variability tesng. An overall metallurgical balance for the project is summarized in Table 5. The projected metallurgical recoveries are based on an expected average recovery over the life-of-mine (LOM), and results of metallurgical variability testwork conducted in 2021 and 2022. Table 5 – Summary of Overall Metal Recovery – Arcc Project Process stream Process Feed Copper Conc. Lead Conc. Zinc Conc. Tailings Mass % 100 6.3 0.6 4.7 88.4 Concentrate Grade Metal Recoveries Cu % 2.1 30.3 2.0 1.0 0.1 Pb % 0.5 1.7 53.9 0.5 0.1 Zn % 2.8 0.7 5.9 53.6 0.3 Au g/t 0.4 3.4 Ag g/t 31.1 Cu % - 160.5 92.1 14.1 2425.8 0.3 0.1 38.3 4.6 0.6 2.2 5.1 Pb % - 19.4 61.3 4.4 14.8 Zn % - 1.6 1.3 88.4 8.7 Au % - 52.2 21.4 3.2 23.2 Ag % - 32.4 48.8 5.7 13.1 SGS conducted SAG Power Index (SPI®) tests to invesgate the eﬀect of friable ores on the plant throughput. MO Group conducted talc circuit modelling using the data obtained from the ALS Metallurgy Preﬂotaon test work program to invesgate the beneﬁts of talc circuit open and closed-circuit cleaning. The MO Group also conducted dewatering and ﬁltraon test work on the talc concentrate and ﬁnal tailings generated from the Preﬂotaon test work program. Thickening and ﬁltraon testwork were completed by the MO Group on representave preﬂotaon concentrate and tailings samples, to invesgate opportunies to improve water recovery and reduce operang costs. The results were used to incorporate a tailings thickener in the process plant ﬂow sheet. Mineral Resource and Mineral Reserve Esmates Mineral Resource Esmate Mineral Resources have not been previously disclosed under S-K 1300 standards prior to ﬁscal year ended November 30, 2022 and deﬁnions in a ﬁling with the United States Securies and Exchange Commission (SEC). A descripon of the key assumpons, parameters, and methods used in the mineral resource esmate are included in Chapter 11 of the S-K 1300 Arcc Report . A brief discussion of the material assumpons and criteria used in the mineral resource esmaon are as follows: Mineral resource esmates are performed from a 3D block model based on geostascal applicaons using LeapFrog soware. The block model has a parent block size measuring 10 x 10 x 5 m with a sub-block size measuring 2 x 2 x1 m and uses data derived from 171 drill holes within the Arcc deposit. The resource esmate was generated using drill hole sample assay results and the interpretaon of a geological model which relates to the spaal distribuon of copper, lead, zinc, gold and silver. Interpolaon characteriscs were deﬁned based on the geology, drill hole spacing, and geostascal analysis of the data. The eﬀects of potenally anomalous high-grade sample data, composited to 2 m intervals, are controlled by capping each mineralizaon zone. The grade models have been validated using a combinaon of visual and stascal methods. The resources were classiﬁed according to their proximity to the sample data locaons and are reported using the 2014 CIM Deﬁnion Standards in the NI 43-101 Arcc Report and standards and deﬁnions 44 Table of Contents in S-K 1300 in the S-K 1300 Arcc Report. The tonnes, grade, and classiﬁcaon are the same under the two standards. Model blocks esmated by three or more drill holes spaced at a maximum distance of 100 m are included in the Indicated category. Inferred blocks are within a maximum distance of 150 m from a drill hole. The deposit is amenable to open pit extracon methods. Reasonable prospects for economic extracon were established by constraining mineralizaon within a pit shell based on technical and economic assumpons presented in Table 6. As a result of ﬂaening the north end of the reserve pit to stabilize the pit wall due to the presence of talc, a poron of the reserve pit extended beyond the resource constraining pit shell. A second pass of resource tabulaon was performed on the Indicated and Inferred classiﬁed blocks exterior to the resource constraining pit shell and interior to the reserve constraining pit shell, above a 0.5% copper equivalent (CuEq) cut-oﬀ. The formula for the CuEq is shown in footnote 5 of Table 7. Table 6 - Parameters Used to Generate a Resource-Constraining Pit Shell Opmizaon Parameter Open Pit Mining Cost Milling Cost + G&A Pit Slope Copper Price Lead Price Zinc Price Gold Price Silver Price Metallurgical Recovery: Copper Lead Zinc Gold Silver Unit $/t mined $/t processed degree $/lb $/lb $/lb $/oz $/oz % % % % % Value 3 35 43 3.00 0.90 1.00 1,300 18 92 77 88 63 56 Note: no adjustments for mining recovery or diluon. The metal prices and costs were ﬁxed over the 13-year mine life. The metal prices are within the range of industry consensus of long-term average metal prices based on an assessment of industry peers, and long-term forecast prices by banks at the me of the mineral resource esmate. Trilogy’s aributable interest in the Mineral Resource esmate exclusive of Mineral Reserves is stated in Table 7a. The Mineral Resource esmate inclusive of Mineral Reserves is stated in Table 7b . All Indicated Mineral Resources have been converted to Mineral Reserves. Mineral Resources are reported in place (point of reference) and on a 100% basis; however, Trilogy Metals aributable interest is 50% of the tonnes and metal content. 45 Table of Contents Table 7a – S-K 1300 Mineral Resource Summary Table, Exclusive of Mineral Reserves Resource Tonnage Category Inferred -100% Inferred – 50% Aributable Interest (Mt) 4.5 2.25 Average Grade Contained Metal Content Cu (%) 1.92 1.92 Pb (%) 0.70 0.70 Zn (%) 2.93 2.93 Au (g/t) 0.43 0.43 Ag (g/t) 35.6 35.6 Cu (Mlb) 189 94.5 Pb Zn (Mlb) (Mlb) 69 34.5 288 144 Au (koz) 62 31 Ag (Moz) 5 2.5 Notes: 1. A Qualiﬁed Person and an employee of the Company, has approved the mineral reserves and mineral resources included in this Annual Report on Form 10-K as of November 30, 2023 and reviewed the resources in the S-K 1300 Arcc Report conﬁrmed that the resources remain current as of November 30, 2023. 4. 2. Mineral Resources were prepared in accordance with the standards and deﬁnions of S-K 1300. 3. Mineral Resources stated are contained within a conceptual pit shell developed using metal prices of $3.00/lb Cu, $0.90/lb Pb, $1.00/lb Zn, $1,300/oz Au and $18/oz Ag and metallurgical recoveries of 92% Cu, 77% Pb, 88% Zn, 63% Au and 56% Ag and operang costs of $3/t mining and $35/t process and general and administrave costs. The assumed average pit slope angle is 43º. As a result of ﬂaening the north end of the reserve pit to stabilize the pit wall due to the presence of talc, a poron of the reserve pit extended beyond the resource constraining pit shell and a second pass of mineral resource tabulaon was performed exterior to the constraining resource pit and interior to the constraining reserve pit which is included in the Mineral Resource tabulaon. The 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 x 0.005). The Mineral Resource esmate is reported exclusive of those Mineral Resources that were converted to Mineral Reserves. Trilogy Metals’ 50% aributable interest is stated in the table. Figures may not sum due to rounding. 5. 6. 7. 8. Table 7b – NI 43-101 Mineral Resource Summary Table, Inclusive of Mineral Reserves Resource Tonnage Conﬁdence Category Indicated Inferred Notes: (Mt) 35.7 4.5 Average Grade Contained Metal Content Cu (%) 2.98 1.92 Pb (%) 0.79 0.70 Zn (%) 4.09 2.93 Au (g/t) 0.59 0.43 Ag (g/t) 45.2 35.6 Cu Pb Zn Au Ag (Mlb) (Mlb) (Mlb) (koz) (Moz) 2,347 189 621 69 3,216 288 675 62 52 5 1. Mineral Resources are current as of November 30, 2022 and were veriﬁed by a Wood QP. 2. Mineral Resources stated are contained within a conceptual pit shell developed using metal prices of $3.00/lb Cu, $0.90/lb Pb, $1.00/lb Zn, $1300/oz Au and $18/oz Ag and metallurgical recoveries of 92% Cu, 77% Pb, 88% Zn, 63% Au and 56% Ag and operang costs of $3/t mining and $35/t process and G&A. The assumed average pit slope angle is 43°. The cut-oﬀ grade is 0.5% copper equivalent. CuEq = (Cu%x0.92) + (Zn%x0.290) + (Pb%x0.231) + (Au g/tx0.398) + (Ag g/tx0.005). As a result of ﬂaening the north end of the reserve pit to stabilize the pit wall due to the presence of talc, a poron of the reserve pit extended beyond the resource constraining pit shell. Approximately 568kt of 1.72% Cu, 0.77% Pb, 0.23 g/t Au 3. 4. 46 Table of Contents and 21.3 g/t Ag in the Indicated category, and approximately 319 kt of 2.01% Cu, 0.87% Pb, 2.53% Zn, 0.50 g/t Au and 37.5 g/t Ag in the Inferred category were added to the Mineral Resource tabulaon. The Mineral Resource esmate is reported inclusive of those Mineral Resources that were converted to Mineral Reserves. Trilogy Metals’ aributable interest is 50% in the table. Figures may not sum due to rounding. 5. 6. 7. Factors that may aﬀect the mineral resource esmate are listed below: ● Uncertaines in sampling and drilling methods, data processing and handling. ● Metal price assumpons. ● Uncertaines in the cost assumpons used to determine the cut-oﬀ grade. ● Uncertaines in the geological and mineralizaon shapes, and geological and grade connuity assumpons. ● Uncertaines in the historically predicted (esmated) SG values determined by Random Forest Regressor. ● Uncertaines in the geotechnical, mining, and metallurgical recovery assumpons. ● Uncertaines represented by historical assay values for payable metals. ● Uncertaines in the resource esmaon parameters including parameters such as capping values, search ellipsoids, variogram models, number of composites. ● Changes in the Mineral Resource Classiﬁcaon criteria. ● Uncertaines to the input and design parameter assumpons that pertain to the conceptual pit constraining the esmates. ● Uncertaines in the assumpons made to the concentrate marketability, payability and penalty terms. ● Uncertaines in the assumpons regarding the connued ability to access the site, retain mineral and obtain surface rights tles, obtain environment and other regulatory permits, and maintain the social license to operate. Mineral Reserve Esmates Mineral Reserves were not disclosed under S-K 1300 standards prior to ﬁscal year ended November 30, 2022 in a ﬁling with the SEC. A descripon of the key assumpons, parameters, and methods used in the mineral reserve esmate are included in Chapter 12 of the S-K 1300 Arcc Report . A brief discussion of the material assumpons and criteria used in the mineral reserve esmaon are as follows: Mineral Reserves were classiﬁed in accordance with the CIM Deﬁnion Standards for Mineral Resources and Mineral Reserves (May 10, 2014) in the NI 43-101 Arcc Report and in accordance with the standards and deﬁnions of S-K 1300 in the S-K 1300 Arcc Report. There are no diﬀerences in the resulng tonnes, grade, or classiﬁcaon between the two reporng standards. Modifying factors were applied to the Indicated Mineral Resources to convert them to Probable Mineral Reserves. All of the Indicated Mineral Resources were converted to Probable Mineral Reserves. The point of reference for reporng the Mineral Reserves is at delivery to the mill, as such, the Mineral Reserves for the Arcc deposit incorporate appropriate mining diluon and mining recovery esmaons. The pit shell that deﬁnes the ulmate pit limit was derived in While using the Pseudoﬂow pit opmizaon algorithm. The opmizaon procedure uses the block value and pit slopes to determine a group of blocks represenng pits of valid slopes that yield the maximum proﬁt. The block value is calculated using informaon stored in the geological block model, commodity prices, mining and processing costs, process recovery, and the sales cost for the metals produced. 47 Table of Contents The pit slopes are used as constraints for removal precedence of the blocks (Xiaoyu Bai, et al., 2017). Table 8 provides a summary of the primary opmizaon inputs. Metal prices and costs were ﬁxed over the 13-year mine life . Parameter Copper Lead Zinc Gold Silver Discount Rate Diluon and Mine Losses Reference Bench Elevaon Base Cost Incremental Mining Cost Uphill (below 790m) Downhill (above 790m) Operang Cost G&A Sustaining Capital Road Toll Cost Closure Processing Rate Copper Lead Zinc Gold Silver Payable – Main Element Unit $/lb $/lb $/lb $/oz $/oz % % m $/t $/t/5m $/t/5m $/t milled $/t milled $/t milled $/t milled $/t milled kt/d % % % % % % Table 8 – Opmizaon Inputs Value Cu Conc. Pb Conc. Zn Conc. Metal Prices 3.46 0.91 1.12 1,615 21.17 8 Esmated in a block-by-block basis, adding up 30% to 40%. Mining Cost 790 2.52 0.02 0.012 Process Costs 18.31 5.83 2.37 8.04 4.27 10 Process Recovery 48 89.9 8.1 3.4 10.9 26.4 96.5 2.4 79 0.4 62.1 63.1 95 2.7 2.2 90.6 5.4 3.4 85 Table of Contents Parameter Treatment Cost Copper Gold Silver Transport Cost Concentrate Losses Insurance Cost Representaon/Markeng Geotechnical Sector 1 (2L-E) Geotechnical Sector 2 (2L-W) Geotechnical Sector 3 (2U) Geotechnical Sector 4 (3) Geotechnical Sector 5 (4L) Geotechnical Sector 6 (4U) Unit $/dmt $/lb $/oz $/oz $/dmt % weight % $/wmt degrees degrees degrees degrees degrees degrees Value Cu Conc. Pb Conc. Zn Conc. 80 0.08 5 0.5 160 - 10 1.25 215 - - - Reﬁning Cost 271 0.42 0.15 2.5 Slope Angles Variable based on slope dip direcon. IRA ranging from 26 to 56. Variable based on slope dip direcon IRA ranging from 38 to 56. Variable based on slope dip direcon IRA ranging from 29 to 56. Variable based on slope dip direcon IRA ranging from 30 to 56. Variable based on slope dip direcon IRA ranging from 34 to 56. Variable based on slope dip direcon IRA ranging from 37 to 56. NANA Surface Use %NSR 1 Note: IRA = inter ramp angle Royales The Mineral Reserves statement is shown in Table 9. Trilogy Metals aributable interest is 50% of the tonnes of the Mineral Reserves. Table 9 – Mineral Reserve Esmate Conﬁdence Category Probable Mineral Reserves – 100% Probable Mineral Reserves – 50% Aributable Interest Tonnage Mt 46.7 23.35 Average Grades Cu (%) Pb (%) Zn (%) Au (g/t) Ag (g/t) 2.11 2.11 0.56 0.56 2.90 2.90 0.42 0.42 31.8 31.8 Notes: 1. A Qualiﬁed Person and an employee of the Company, has reviewed the reserves in the S-K 1300 Arcc Report and conﬁrmed that the reserves remain current as of November 30, 2023. 2. Mineral Reserves were esmated assuming open pit mining methods and include a combinaon of internal and contact diluon. Total diluon is expected to be between 30% and 40%. Pit slopes vary by sector and range from 26° to 56°. A marginal NSR cut-oﬀ of $38.8/t is used. 49 Table of Contents 3. Mineral Reserves are based on prices of $3.46/lb Cu, $0.91/lb Pb, $1.12/lb Zn, $1,615/oz Au, and $21.17/oz Ag. 4. Variable process recoveries averaging 92.2% Cu in Cu concentrate, 62.2% Pb in Pb concentrate, 87.6% Zn in Zn concentrate, 16.0% Pb in Cu concentrate, 1.9% Zn in Cu concentrate, 47.2% Au in Cu concentrate, 32.7% Ag in Cu concentrate, 0.8% Cu in Pb concentrate, 1.3% Zn in Pb concentrate, 26.1% Au in Pb concentrate, 48.7% Ag in Pb concentrate, 2.1% Cu in Zn concentrate, 4.5% Pb in Zn concentrate, 3.3% Au in Zn concentrate, 5.8% Ag in Zn concentrate. 5. Mineral Reserves are based on mining cost of $2.52/t incremented at $0.02/t/5m and $0.012/t/5m below and above 790 m elevaon, respecvely. 6. Costs applied to processed material following: process operang cost of $18.31/t, G&A of $5.83/t, sustaining capital cost of $2.37/t, closure cost of $4.27/t, road toll cost of $8.04/t. Strip rao (waste:ore) is 7.3:1. Selling terms following: payables of 96.5% of Cu, 95% of Pb and 85% of Zn, treatment costs of $80/t Cu concentrate, $160/t Pb concentrate and $215/t Zn concentrate; reﬁning costs of $0.08/lb Cu in Cu concentrate, and$10/oz Au, $1.25/oz Ag in Pb concentrate; and transport cost $270.98/t concentrate. Fixed royalty percentage of 1% NSR. 7. 8. 9. 10. Trilogy Metals’ aributable interest is 50% of the tonnage stated in the table. The Arcc Mineral Reserves are subject to the types of risks common to open pit polymetallic mining operaons that exist in Alaska and may be materially aﬀected by the following risk factors include: ● ● ● ● ● ● ● ● ● ● Changes in the metal prices from what was assumed; Changes to the assumpons used to generate the cut-oﬀs; Changes in local interpretaons of mineralizaon geometry and connuity of mineralized zones; Changes to geological and mineralizaon shapes, and geological and grade connuity assumpons; Changes to density and domain assignments from what was assumed; Changes to geotechnical, hydrogeological design assumpons; Changes to mining and metallurgical recovery assumpons; Change to the input and design parameter assumpons that pertain to the open pit constraining the esmates; Assumpons as to concentrate marketability, payability and penalty terms; Assumpons as to the connued ability to access the site, retain mineral tenure and obtain surface rights tles, obtain environment and other regulatory permits, and maintain the social license to operate. More speciﬁcally the presence of certain talc layers in the rock have not been included in the current geological model and could aﬀect the metallurgical recoveries and slope stability. Addionally, there is currently no developed surface access to the Arcc Project area and beyond. Access to the Arcc Project is proposed to be via AAP, a road approximately 340 km (211 miles) long, extending west from the Dalton Highway where it would connect with the proposed Arcc Project area. Construcon costs of the road are not yet ﬁnal. The working assumpon is that AIDEA would arrange ﬁnancing in the form of a public-private partnership to construct and arrange for the construcon and maintenance of the access road. AIDEA would charge a toll to mulple mining and industrial users (including the Arcc Project) in order to pay back the costs of ﬁnancing the AAP. The amount paid in tolls by any user would be aﬀected by the cost of the road, its ﬁnancing structure, and the number of mines and other users of the road which could also include commercial transportaon of materials and consumer items that would use the AAP to ship concentrates to the Port of Anchorage in Alaska and possibly provide goods and commercial materials to villages in the region. 50 Table of Contents The Mineral Reserve esmaon assumes toll payments of $5.52/t processed, plus a road maintenance fee of $2.52/t milled processed, resulng in a total road toll and maintenance LOM unit cost of $8.04/t processed. There is a risk that a negoated road toll agreement may result in higher costs than what has been assumed. Mining Operaons The Arcc Project is designed as a convenonal truck-shovel operaon with 144 t trucks and 15 m3 shovels. The pit design includes four nested phases to balance stripping requirements while sasfying the concentrator requirements. The design parameters include a ramp width of 30 m, road grades of 10%, bench height of 5 m, targeted mining width between 70 m and 100 m, berm interval of 20 m, variable slope angles by sector and a minimum mining width of 30 m. The smoothed ﬁnal pit design contains approximately 46.7 Mt of ore and 340.2 Mt of waste for a resulng stripping rao of 7.3:1. Within the 46.7 Mt of ore, the average grades are forecasted to be 2.11% Cu, 2.90% Zn, 0.56% Pb, 0.42 g/t Au and 31.8 g/t Ag. The scheduling constraints set the maximum mining capacity at 35 Mt/a, and the maximum process capacity at 10 kt/d. The producon schedule based on the Probable Mineral Reserves shows a total life-of-mine (LOM) of 15 years, including 2 years of pre-producon and 13 years of producon. Processing and Recovery Operaons The 10,000 t/d process plant design is convenonal for the industry and will operate two 12-hour shis per day, 365 d/yr with an overall plant availability of 92%. The process plant will produce three concentrates: 1) copper concentrate, 2) zinc concentrate, and 3) lead concentrate. Gold and silver are expected to be payable at a smelter; both gold and silver is expected to be payable in the copper and lead concentrates. While there are several deleterious elements reporng to the concentrates at levels that could incur penales, there are no special processing provisions required to make a readily saleable concentrate. The presence of naturally hydrophobic talc minerals was consistently observed in the various testwork programs. There is lile reason to expect concentrates will be impaired by talc contaminaon as talc can be eﬀecvely removed from the ﬂotaon process prior to base metal ﬂotaon. Talc and ﬂuorine levels will be managed by opmizaon of the talc pre-ﬂoat circuit, eﬀecvely removing talc and ﬂuorine to ensure the quality of the lead 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 parcle size of 80% passing 80 mm. The crushed material will be ground by two stages of grinding, consisng of one SAG mill and one ball mill in closed circuit with hydrocyclones (SAB circuit). The hydrocyclone overﬂow with a grind size of approximately 80% passing 70 μm will ﬁrst undergo talc pre-ﬂotaon, and then be processed by convenonal bulk ﬂotaon (to recover copper, lead, and associated gold and silver), followed by zinc ﬂotaon. The bulk rougher concentrate will be cleaned and followed by copper and lead separaon to produce a lead concentrate and a copper concentrate. The ﬁnal tailings from the zinc ﬂotaon circuit will be pumped to a tailing management facility (“TMF”). Copper, lead, and zinc concentrates will be thickened and pressure-ﬁltered before being transported by truck to a port and shipped to smelters. Based on the mine plan developed for the NI 43-101 Arcc Report and S-K 1300 Arcc Report and metallurgical testwork results, the LOM average metal recoveries and concentrate grades are presented in Table 10. 51 Table of Contents Descripon LOM Producon Grade Recovery Table 10 – LOM Average Recovery and Concentrate Grade Units t/y % % Cu con 234,132 30.3% Cu 92.1% Cu 52.2% Au 32.5% Ag Pb con 23,300 53.9% Pb 61.3% Pb 21.6% Au 48.6% Ag Zn con 174,202 53.7% Zn 88.5% Zn The recovery plan includes provision for reagents, and water and power requirements. Infrastructure, Perming and Compliance Acvies Infrastructure The Arcc Project site is a remote, greenﬁeld site that is remote from exisng infrastructure. Infrastructure that will be required for the mining and processing operaons will include: ● Open pit mine ● Stockpiles and Waste Rock Facility (“WRF”) ● Truck workshop, truck wash, mine oﬃces, mine dry facility and warehouse ● Power house ● Administraon 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 ● Explosive storage silos and magazines ● Avalanche migaon structures ● TMF ● Surface water diversion and collecon channels, culverts, and containment structures ● Waste rock collecon pond (“WRCP”) 52 Table of Contents ● Process water pond ● Water treatment plant (“WTP”) ● Camp Access The Arcc Project site will be accessed through a combinaon of State of Alaska-owned highways (exisng), an AIDEA-owned private road (proposed) and Ambler-owned access roads (proposed). The AAP road is proposed by AIDEA to connect the Ambler Mining District to the Dalton Highway. The AAP road expected to be permied as a private road with restricted access for industrial use. To connect the Arcc Project site and the exisng exploraon camp to the proposed AAP road, an access road (the Arcc access road) will need to be built. The State of Alaska-owned, public Dahl Creek airport will require upgrades to support the planned regular transportaon of crews to and from Fairbanks. The cost of these upgrades has been included in the capital cost esmate. Power Power generaon will be by ﬁve diesel generators, producing a supply voltage of 13.8 kV. The total connected load will be 25.9 MW with a normal running load of 21.0 MW. Diesel will be supplied via exisng fuel supply networks in the region and shipped along the AAP road. Accommodaon The Arcc Project will require three self-contained camps, in two diﬀerent locaons, equipped with their own power and heat generaon capabilies, potable water treatment plant, sewage treatment plant, and garbage incinerator. The exisng 90-person Bornite Camp currently used for exploraon will be expanded and used to start the construcon of the Arcc access road and the logiscs yard and construcon camp. This Bornite Camp will be expanded and available prior to surface access from the Dalton Highway via the AAP road. A 250-person construcon camp (“CC”) will be constructed at a locaon near the intersecon of the AAP road and Arcc Mine Access road, across the road from the Logiscs Yard. CC will be constructed when limited access via the AAP is available for the transport of camp modules. A Permanent Accommodaons Facility (“PAF”) will be constructed in the same locaon as CC. The PAF will be constructed when the AAP is available to transportaon of the modules by truck and will be operang for about 2 years prior to the commissioning of the Arcc Mill and producon of concentrates. During this period, it will be used to accommodate both construcon personnel and the inial Ambler Metals Mine Operaons and support personnel required for pre-producon mining. Waste Rock Facility The WRF will be developed north of the Arcc pit in the upper part of the Subarcc Creek valley. The WRF is designed as part of the tailings dam structure to provide a buress for tailings containment in the adjacent footprint. The total volume of waste rock is expected to be 162.6 Mm3 (340 Mt); however, there is potenal for expanded volume in the waste if placement density is <2.0 t/m3. The WRF will have a ﬁnal height of 340 m to an elevaon of 990 masl and is planned to be constructed in lis of either 5, 10 or 20 m height with catch benches every 20 m to achieve an overall slope angle of 2.5H:1V. Most of the waste rock is ancipated to be potenally acid-generang and there will be no separaon of waste based on acid generaon potenal. Rather, seepage from the WRF will be collected and treated. 53 Table of Contents Overburden Stockpiles There will also be three small overburden stockpiles to store the stripped topsoil and overburden from the TMF and WRF footprint. The topsoil stockpile will be placed between the haul roads with capacity to store up to 325,000 m3 while the overburden stockpile will be located south of the WRF to store up to 2,200,000 m3. Tailings Management Facility The TMF will be located at the headwaters of Subarcc Creek, in the upper-most poron of the creek valley. The 59 hectares footprint of the TMF will be fully lined with a geomembrane liner. Tailings containment will be provided by an engineered dam, buressed by the WRF that will be constructed immediately downstream of the TMF and the natural topography on the valley sides. A starter dam will be constructed to elevaon 830 m. Three subsequent raises will bring the ﬁnal dam crest elevaon to 892 m, which is 98 m lower than the ﬁnal elevaon of the WRF. The TMF is designed to store approximately 37.4Mm3 (41.2 Mt) of tailings produced over the 13-year mine life, 3.3 Mm3 of addional pond water, as well as 1.5 mes the probable maximum ﬂood, with 2.5 m of freeboard. Water Management The proposed mine development is located in the valley of Subarcc Creek, a tributary to the Shungnak River. A surface water management system will be constructed to segregate contact and non-contact water. Non-contact water will be diverted around mine infrastructure to Subarcc Creek. A groundwater seepage monitoring and collecon system will be located down gradient of the WRF and seepage collecon pond. Contact water will be conveyed to treatment facilies prior to discharge to the receiving environment. A 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 and haul road corridor area, and water pumped from the open pit. The Arcc Project water and load balance model was updated to include the current water management plan. The model indicates that during operaons, excess water from the WRCP will need to be treated prior to discharge to the receiving environment. During closure, water from the dewatering of the TMF will also need to be treated prior to discharge to the receiving environment. Water Treatment Plant It was assumed the site will be assigned water quality-based eﬄuent limits matching the state’s Water Quality Standards for the nearby Subarcc Creek. Therefore, the WTP is designed to treat all parameters in the predicted site wastewater to the WQS of Subarcc Creek. This will eliminate the need for a mixing zone and allow treated water to be discharged year-round if needed. A single WTP, built in stages, will be used. During Operaons phase the WTP will treat eﬄuent from the WRCP, and during Closure phase eﬄuent from the pit. The WTP will inially consist of chemical/physical treatment with reverse osmosis (“RO”) ﬁltraon. During operaons, the RO reject will be sent to the TMF, and only RO permeate will be discharged to Subarcc Creek. When the TMF is closed at the end of the operaons, a biological/chemical/physical plant will be added to treat the RO reject. The biologic plant discharge will be mixed with the RO prior to discharge. Market Studies Metal pricing was guided by 3-year trailing average prices and long-term price forecasts from analysts as published by CIBC in 2022. The metal price assumpons used in the economic analysis: ● Copper: $3.65/lb 54 Table of Contents ● Zinc: $1.15/lb ● Lead: $1.00/lb ● Gold: $1,650/oz ● Silver: $21.00/oz Smelter terms were prepared in January 2023 by StoneHouse Consulng Inc. Smelter terms were applied for the delivery of copper, zinc and lead concentrate. It was assumed that delivery of all concentrates would be to a smelter in the Asia Paciﬁc region at currently available freight rates. Total transport costs for the concentrate are esmated at $324.37/dmt. Environmental, Perming, Social and Closure Consideraons Environmental Consideraons The Arcc Project area includes the Ambler Lowlands and Subarcc Creek within the Shungnak River drainage. A signiﬁcant amount of baseline environmental data collecon has occurred in the area including surface and groundwater quality sampling, surface hydrology monitoring, wetlands mapping, aquac life surveys, avian and mammal habitat surveys, cultural resource surveys, hydrogeology studies, meteorological monitoring, and ML/ARD studies. Perming Consideraons Current mineral exploraon acvies are conducted at the Arcc deposit under State of Alaska and NWAB permits. The State of Alaska Miscellaneous Land Use Permit and the NWAB Permit both expired at the end of 2022 and will be renewed. Mine development perming will be largely driven by the underlying land ownership with regulatory requirements varying depending on land ownership. The Arcc Project area includes patented mining claims (private land under separate ownership by Ambler Metals and NANA), State of Alaska land, and NANA land (private land) Because the infrastructure for the Arcc Project is situated to a large extent on State land, it will likely be necessary to obtain a Plan of Operaon Approval (which includes the Reclamaon Plan and Closure Cost Esmate) from the Alaska Department of Natural Resources (“ADNR”). The Arcc Project will also require cerﬁcates to construct and operate dams (tailings and water storage) from the ADNR (Dam Safety Unit) as well as water use and discharge authorizaons, an upland mining lease and a mill site lease, as well as several minor permits including those that authorize access to construcon material sites from ADNR. The Alaska Department of Environmental Conservaon (“ADEC”) would authorize waste management under an Integrated Waste Management permit, air emissions during construcon and operaons under an air permit, and an Alaska Pollutant Discharge Eliminaon System permit for any wastewater discharges, and a Mul-Sector General Permit for stormwater discharges. The ADEC would also be required to review the US Army Corps of Engineers Secon 404 permit to cerfy that it complies with Secon 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 other impacts to ﬁsh-bearing streams that result in the altering or aﬀecng ﬁsh habitat. The U.S. Army Corps of Engineers (“USACE”) would require a CWA Secon 404 permit for dredging and ﬁlling acvies in Waters of the United States including jurisdiconal wetlands. The USACE Secon 404 perming acon would require the USACE to comply with the NEPA and, for a project of this magnitude, the development of an Environmental Impact Statement (“EIS”) is ancipated. The USACE would likely be the lead federal agency for the NEPA process. As part of the Secon 404 perming process, the Arcc Project will have to meet USACE wetlands guidelines to avoid, minimize and migate impacts to waters of the US including wetlands. 55 Table of Contents The Arcc Project will also have to obtain approval for a Master Plan from the NWAB. In addion, acons will have to be taken to change the borough zoning for the Arcc Project area from Subsistence Conservaon and General Conservaon to Resource Development and Transportaon. The overall meline required for perming would be largely driven by the me required for the NEPA process, which is triggered by the submission of the Secon 404 permit applicaon to the USACE. The meline includes the development and publicaon of a dra and ﬁnal EIS and ends with a Record of Decision and Secon 404-permit issuance. In Alaska, the EIS and other State and Federal perming processes are generally coordinated so that perming and environmental review occurs in parallel. The NEPA process could require about three years to complete and could potenally take longer. Social and Community The Arcc Project is located approximately 40 km northeast of the villages of Shungnak and Kobuk, and 65 km east-northeast of the community of Ambler. The populaon in these villages are 151 in Kobuk (2020 Census), 210 in Shungnak (2020 Census), and 275 in Ambler (2020 Census). Residents largely live a subsistence lifestyle with incomes supplemented by guiding, local development projects, employment through tribal and city councils, government aid, and employment both in and outside of their home villages. The Arcc Project has the potenal to signiﬁcantly improve work opportunies for residents during the exploraon phase, construcon, and during full operaon. Trilogy’s joint venture, Ambler Metals works directly with the Upper Kobuk villages and communies throughout the region to employ residents as mechanics, geotechnicians, core cuers, administrave staﬀ, camp services, heavy equipment operators, drill helpers, and environmental technicians. Stakeholder outreach and community meengs in the region by the Arcc Project’s owners over many years have provided the opportunity to engage with residents, provide updated informaon on the project and future plans for the Upper Kobuk Mineral Project, hear concerns, answer quesons, and build relaonships. This engagement has also idenﬁed various hurdles residents have faced when applying for employment. Opportunies have been created for NANA shareholders to apply and receive educaonal scholarships, parcipate in job shadowing at Bornite, driver’s license courses, and heavy equipment operator training sponsored by the Arcc Project’s owners. It is the company’s goal to connue and grow these eﬀorts throughout the perming process and the life of the project – encouraging and supporng educaon, job training, employment, and economic growth. Closure Planning Mine reclamaon and closure are largely driven by State of Alaska regulaons that specify that a mine must be reclaimed concurrent with mining operaons to the greatest extent possible and then closed in a way that leaves the site stable in terms of erosion and manages degradaon of water quality from acid rock drainage or metal leaching on the site. A detailed Reclamaon Plan and Closure Cost Esmate will be submied to the State of Alaska agencies for review and approval in the future, during the formal mine perming process. Owing to the fact that the Arcc Project is likely to have facilies on a combinaon of private (patented mining claims and nave land) and State land, the Reclamaon Plan will be submied and approved as part of the Plan of Operaons, which is approved by the ADNR. However, since the Reclamaon and Closure plan must meet regulaons of both ADNR and the ADEC, both agencies will review and approve the Reclamaon Plan and Closure Cost Esmate. In addion, private landowners must formally concur with the poron of the Reclamaon Plan for their lands so that it is compable with their intended post-mining land use. The esmated closure costs are determined from unit rates based on projects located in Alaska. The indirect costs were included as percentages of the esmated direct costs. Long-term water treatment and maintenance of certain water 56 Table of Contents management facilies were calculated separately, and a net present value (“NPV”)value is provided for the ﬁrst 100 years, at a discount rate of 4.3%. Annual undiscounted costs associated with long-term operaons of the WTP are esmated to be $11.7 million in Phase 1 closure (15-years post-closure) and $10.8 million in Phase 2 closure (85 years thereaer), amounng to $1,095 million over the 100-year closure period. These costs equate to $258 million when discounted at 4.3% p.a. to the ﬁrst year of post-producon. Capital and Operang Costs Capital Costs The capital cost esmate has an esmated accuracy of ±15% and uses Q3/Q4-2022 US dollars as the base currency within an esmated conngency of ±15%. The total esmated inial capital cost for the design, construcon, installaon, and commissioning of the Arcc Project is esmated to be $1,177 million. A summary of the esmated inial capital cost, sustaining capital cost and closure costs is shown in Table 11. WBS Level 1 1000 2000 3000 4000 5000 6000 7000 8000 9000 Table 11 – Capital Cost Summary WBS Level 1 Descripon Inial Capex ($ M) Sustaining Capex ($ M) Total Capex ($ M) Mining Crushing Process Plant Tailings On-site Infrastructure Oﬀ-site Infrastructure Sub-total Direct Costs Indirects Provisions (Conngency) Owner Costs Sub-total Indirect Costs 277.4 42.5 158.0 88.3 172.8 75.8 834.1 177.4 138.5 26.8 342.7 Project Total 1,176.8 Project Total – Closure Costs 17.5 0 1.3 32.4 35.1 0 86.3 15.1 13.0 0 28.1 114.4 294.9 42.5 159.3 120.7 207.9 75.8 920.4 192.5 151.5 26.8 370.8 1,291.2 170.8 Operang Costs An average operang cost was esmated for the Arcc Project based on the proposed mining schedule. These costs included, mining, processing, G&A, surface services, and road toll costs. The average LOM operang cost for the Arcc 57 Table of Contents Project is esmated to be $59.83/t milled. The breakdown of costs in Table 12 is esmated based on the LOM average mill feed rate of 3,650,000 t/y. All pre-producon costs have been included in the capital cost esmate in “Properes – Arcc Project—Capital and Operang Costs – Capital Costs” above. Descripon Mining* Processing G&A Road Toll and Maintenance Water Treatment Total Operang Cost * Excludes pre-producon costs Economic Analysis Table 12 – Overall Operang Cost Esmate LOM Average Unit Operang Cost ($/ t milled) 22.49 Percentage of Total Annual Operang Costs 37.6% 22.60 5.85 7.72 1.17 59.83 37.8% 9.8% 12.9% 2.0% 100% The results of the economic analyses discussed in this secon represent forward-looking informaon as deﬁned under U.S. and Canadian securies law. The results depend on inputs that are subject to several known and unknown risks, uncertaines, and other factors that may cause actual results to diﬀer materially from those presented herein. Informaon that is forward-looking includes the following: Probable Mineral Reserves that have been modiﬁed from Indicated Mineral Resource esmates; assumed commodity prices and exchange rates; proposed mine and process producon plan; projected mining and process recovery rates; ability to market the three types of concentrate on favourable terms; ability to control the levels of deleterious elements in some of the concentrate batches; sustaining costs and proposed operang costs; assumpons as to closure costs and closure requirements, including WTP requirements; assumpons as to development of the Ambler Access Project, meframe of such development and assumed toll charges; assumpons as to ability to permit the project; assumpons about environmental, perming and social risks. An economic analysis was undertaken on a 100% project ownership basis to determine the internal rate of return (“IRR”), NPV and payback on inial investment of the Arcc Project. Trilogy holds a 50% interest in the Arcc Project though its ownership in Ambler Metals. The Arcc Project consists of a three-year construcon period, followed by 13 years of producon. The pre-tax ﬁnancial model incorporated the producon schedule and smelter term assumpons to produce annual recovered payable metal, or gross revenue, in each concentrate stream by year. Oﬀ-site costs, including the applicable reﬁning and treatment costs, penales, concentrate transportaon charges, markeng and representaon fees, and royales were then deducted from gross revenue to determine the NSR. The operang cash ﬂow was then produced by deducng annual mining, processing, G&A, surface services, and road toll & maintenance charges from the NSR. Inial and sustaining capital was deducted from the operang cash ﬂow in the years they occur, to determine the net cash ﬂow before taxes. Inial capital cost includes all esmated expenditures in the construcon period, from Year -3 to Year -1 inclusive. First producon occurs at the beginning of Year 1. Sustaining capital expenditure includes all capital expenditures purchased aer ﬁrst producon, including mine closure and rehabilitaon. The model includes an allocaon of a 1% NSR aributable to NANA. With total capital costs of $1,719 million over LOM ($1,177 million inial capital cost, $114 million sustaining capital cost and $428 million closure costs), the project demonstrates a pre-tax NPV of $1,500 million at an 8% discount rate, IRR of 58 Table of Contents 25.8% and payback period of 2.9 years. Post-tax ﬁnancials have an NPV of $1,108 million at an 8% discount rate, IRR of 22.8% and payback period of 3.1 years. The esmated cash ﬂow forecast over LOM is $3,942.6 million undiscounted pre-tax cash ﬂow, $1,500.3 million discounted pre-tax cash ﬂow at an 8% discount rate, $3,019.9 million undiscounted post-tax cash ﬂow and $1,108.1 discounted post-tax cash ﬂow at an 8% discount rate. Sensivity Analysis Ausenco invesgated the sensivity of the Arcc Project’s pre-tax NPV, and IRR to several project variables. The following variables were elected for this analysis: ● Copper price ● Zinc price ● Lead price ● Gold price ● Silver price ● Capital costs ● On-site operang costs ● Oﬀ-site operang costs (royales, reﬁning and treatment charges, penales, insurance, markeng, and representaon fees, and concentrate transportaon) Each variable was changed in increments of 10% between -20% to +20% while holding all other variables constant. The project NPV at an 8% discount rate is most sensive to changes in copper price, followed by oﬀ-site operang costs, on-site operang costs, zinc price, capital costs, silver price, gold price and lead price. Exploraon, Development, and Producon Constraints and Interfaces The Arcc Project will be an integrated development with several consultants contribung to the overall design process. Specialist contractors will most likely be engaged for speciﬁc packages, such as the Arcc access road, and the construcon camps, generally on a “design and construct” basis. It is essenal that these pares work together to ensure data being used is both current and meaningful. Data transfer between pares shall be strictly controlled and in accordance with Document Control protocols. The early design interfaces for the Arcc Project will include at least: ● Mine development ● Waste Rock placement and Tails Dam ● Arcc Project water management and treatment ● Arcc Access Road design and construcon, in parcular the pioneer road necessary to allow earliest possible access to the Mine pre-assembly construcon site 59 Table of Contents ● Bornite, Construcon and Permanent Camps The Interface Management procedures will be developed to ensure services at the baery limits are clearly deﬁned and understood by all pares aﬀected. Key Project Milestones Key project milestones will be developed once the project is commied to construcon and the required permits are in hand. The Mine requires nominally two years of pre-strip operaons, tailings pond starter dam development and water accumulaon before actual producon mining operaons can commence. For that pre-strip work to start, the Arcc access road from the AAP intersecon to the mine site will have to be constructed to at least a pioneer road condion that will allow the mine ﬂeet and the support facilies to be delivered, built and made operaonal. Tailings pond construcon must be to a height to allow natural collecon of water in quanes that will allow plant operaons to commence. Proven Technology The Arcc Project will ulize proven technology and equipment that can be built, operated and maintained under adverse weather condions. The Design Criteria, Technical Speciﬁcaons and Data sheets shall reﬂect the locaon, the environmental and inial logiscs constraints that may aﬀect the procurement and construcon eﬀort. Engineering, Procurement and Construcon Management Approach Two engineering, procurement and construcon management (“EPCM”) strategies have been idenﬁed that are structured to account for the abnormally long pre-strip mining operaon. The ﬁrst opon is the basis for the capital and operang cost esmate. Early Engineering Only with 2-Stage Procurement There is a need to establish the mine facilies and assemble the Mine Fleet in me to allow the pre-strip operaon to start some two years before the Process Plant receives its ﬁrst ore. This means that there will be a signiﬁcant amount of detailed engineering requiring compleon well in advance of the me required for convenonal engineering, procurement and construcon of just the process plant and supporng infrastructure. This has been assessed as requiring detailed engineering to start some four years before the process plant starts producon. In parcular, the pioneer access road design and contracts and civil design for the Mine Support facilies will be required early in the schedule. By default, the rest of the civil design would need to aach to that early works for simple plant layout and construcon coordinaon purposes. For that to occur the plant layout will be required to be established at an early stage. That in turn is dependent on sizing and selecon of the major process equipment items and the receipt of vendor data to complete the plant layout. Eﬀecvely, the detailed design phase will need to follow the convenonal approach and run its course but started at a me that meets the early works schedule requirements. Everything other than the mine support facilies will be designed some two years in advance of when it is needed. 60 Table of Contents With the early equipment order placement, the supply phase could become inordinately long, extending over three years in most cases, when in fact the equipment is not likely to be needed unl the last eighteen months prior to plant start¬up. An unorthodox but proven opon to this extended design, supply and construcon schedule is to have the EPCM Contractor procure the major equipment in two steps: ● Step 1: Procure only the vendor cerﬁed engineering data to allow detailed engineering to connue to compleon but hold the manufacturing funcons unl later in the overall schedule, eﬀecvely a delay of around twelve to ﬁeen months. ● Step 2: Based on agreed vendor manufacturing duraons, apply a “late” release of the equipment for manufacture with deliveries eﬀecvely becoming a “Just-in Time” logiscs operaon. This strategy provides the following advantages: ● Engineering can start and connue to compleon using crical cerﬁed vendor data without the need for an extended “standby” involvement. ● Procurement funcons 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 connuity of support. ● The expeding team can mobilize later in the schedule to drive manufacture and delivery in a concerted campaign. ● Equipment deliveries can be orchestrated to suit the condions at the me with everything consolidated into a transit compound for coordinated shipping to site. ● Reduced cashﬂow demands. Potenal issues to be migated 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 Maintenance Under this approach, the EPCM would work to convenonal design and construcon schedule, starng to suit the mine access requirements but following on to compleon without interrupon. That would bring the total process plant and supporng infrastructure to a mechanical compleon condion nominally twelve to ﬁeen 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 unl ore became available. This has an inherent advantage in that if the pre-strip operaon was completed earlier than scheduled, and suﬃcient water is accumulated, the plant operaons would be able to take advantage of the fact the plant was already mechanically complete. The care and maintenance requirements in that environment for that duraon will require close assessment. 61 Table of Contents Interpretaons and Conclusions The Arcc deposit will be mined at an maximum annual rate of 35 Mt of ore per year with an overall stripping rao of 7.3. Ore will be processed by convenonal methods to annually produce 234 kt of copper, 23 kt of lead, and 174 kt of zinc, all in concentrates for provision to third party reﬁners. Waste and tailings materials will be stored in surface facilies, which will be closed and reclaimed at the end of the mine; contact water will be treated and discharged to the environment throughout the life of mine. Precious metals aendant with the concentrates will be largely payable. While there are deleterious elements reporng to the concentrates at levels that could incur penales, special processing provisions have been included in the ﬂowsheet to make a readily saleable concentrate. In terms of project execuon, the mine requires nominally two years of pre-strip operaons, tailings pond starter dam development and water accumulaon before actual producon mining operaons can commence. For that pre-strip work to start, the Arcc access road from the Ambler Access Project intersecon to the mine site will have to be constructed to at least a pioneer road condion that will allow the mine ﬂeet and the support facilies to be delivered, built, and made operaonal. Based on $1,177 million of inial capital costs, sustaining capital costs of $114 million, closure costs of $428 million, $2,969 million in LOM oﬀ-site operang costs and $2,794 million in LOM on-site operang costs, pre-tax ﬁnancial results show a project IRR of 25.8% and an NPV of $1,500 million at an 8% discount rate and a 2.9-year payback period. Post-tax results show a project IRR of 22.8% and NPV of $1,108 million at an 8% discount rate and a 3.1- year payback period. Bornite Project The Company is subject to and required to disclose mineral resources and mineral reserves in accordance with S-K 1300. While the S-K 1300 rules are similar to NI 43-101 rules in Canada, they are not idencal and therefore two reports have been produced for the Arcc Project. The informaon in Item 2, Properes, contains pernent informaon required under both NI 43-101 and S-K 1300. Except as otherwise stated, the scienﬁc and technical informaon relang to the Bornite Project contained in this Form 10-K is derived from the (i) 2023 S-K 1300 report for Bornite tled “Technical Report Summary on the Inial Assessment of the Bornite Mineral Resource, Northwest, Alaska, USA” dated November 30, 2022 prepared by Wood Canada Limited, which is unaﬃliated with Trilogy (“S-K 1300 Bornite Report”) and the (ii) technical report tled “NI 43-101 Technical Report on the Mineral Resource Update of the Bornite Project, Northwest Alaska, USA” with an eﬀecve date of January 26, 2023, prepared by Wood Canada Limited (the “NI 43-101 Bornite Report”). The informaon regarding the Bornite Project is based on assumpons, qualiﬁcaons and procedures which are not fully described herein. Reference should be made to the full text of the S-K 1300 Bornite Report and the NI 43-101 Bornite Report which has been ﬁled, as applicable, with certain Canadian securies regulatory authories pursuant to NI 43-101. The NI 43-101 Bornite Report is available for review on SEDAR+ at www.sedarplus.ca and the S-K 1300 Bornite Report is available for review on EDGAR at www.sec.gov. Property Descripon, Locaon, and Access The Bornite 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-2 quadrangle, Kateel River Meridian T 19N, R 9E, secons 4, 5, 8 and 9. The Bornite Project is located 248 km east of the town of Kotzebue, 19 km north of the village of Kobuk, 275 km west of the Dalton Highway (an all-weather state maintained public road) at geographic coordinates N67.07° latude and W156.94° longitude (Universal Transverse Mercator North American Datum 83, Zone 4W coordinates 7440449N, 589811E). 62 Table of Contents Primary access to the Bornite Project is by air, using both ﬁxed wing aircra and helicopters. There are four well maintained, approximately 1,500 m-long gravel airstrips located near the property, capable of accommodang charter ﬁxed wing aircra. 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 village of Kobuk, the closest community to the property. During the summer months, the Dahl Creek airstrip is suitable for larger aircra, such as C-130 and DC-6. There is also a 700 m airstrip located at the Bornite camp. The airstrip at Bornite is suited to smaller aircra, which support the Bornite camp with personnel and supplies. A two-lane, two-wheel drive gravel road links the Bornite camp to the 1,525 m Dahl Creek airstrip and village of Kobuk. On February 11, 2020, Trilogy Metals transferred the UKMP, including the Bornite property, to a 50/50 joint venture named Ambler Metals. With NANA’s approval, Trilogy Metals also contributed, along with the UKMP, its rights under the NANA Agreement to Ambler Metals while its joint venture partner, South32, contributed $145 million dedicated to advancing the projects. The NANA Agreement provides that NANA will grant Trilogy Metals the nonexclusive right to enter onto, and the exclusive right to explore, the Bornite Lands and the ANCSA Lands (each as deﬁned in the NANA Agreement) and in connecon therewith, to construct and ulize temporary access roads, camps, airstrips, and other incidental works. The NANA Agreement has a term of 20 years, with an opon in favour of Trilogy Metals to extend the term for an addional 10 years. The NANA Agreement may be terminated by mutual agreement of the pares or by NANA if Trilogy Metals does not meet requirements of aggregate expenditures over two consecuve calendar years are not at least $600,000 on NANA’s lands. Trilogy Metals has conﬁrmed they met this expenditure requirement to date. The NANA Agreement outlines a partnership agreement for the development of the UKMP. If, following receipt of a feasibility study and the release for public comment of a related dra environmental impact statement, Ambler Metals decides to proceed with construcon of a mine on the lands subject to the NANA Agreement, Ambler Metals will nofy NANA in wring and NANA will have 120 days to elect 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) not exercise its back-in-right, and instead receive a net proceeds royalty equal to 15% of the net proceeds realized by Ambler Metals from such project. The cost to exercise such back-in-right is equal to the percentage interest in the property mulplied by the diﬀerence between (i) all costs incurred by Ambler Metals or its aﬃliates on the property, including historical costs incurred prior to the date of the NANA Agreement together with interest on the historical costs; and (ii) $40 million (subject to excepons). This amount will be payable by NANA to Ambler Metals in cash at the me the pares enter into a joint venture agreement and in no event will the amount be less than zero. 63 Table of Contents In the event that NANA elects to exercise its back-in-right, the pares will, as soon as reasonably praccable, form a joint venture with NANA elecng to parcipate between 16% to 25%, and Ambler Metals will own the balance of interest in the joint venture. Upon formaon of the joint venture, the joint venture will assume all obligaons of Ambler Metals and be entled to all the beneﬁts of Ambler Metals under the NANA Agreement in connecon with the mine to be developed and the related lands. A party’s failure to pay its proporonate share of costs in connecon with the joint venture will result in diluon of its interest. Each party will have a right of ﬁrst refusal over any proposed transfer of the other party’s interest in the joint venture other than to an aﬃliate or for the purposes of granng security. A transfer by either party of a NSR royalty on the property or any net proceeds royalty interest in the property other than for ﬁnancing purposes will also be subject to a ﬁrst right of refusal. In connecon with possible development on the Bornite Lands, Ambler Metals and NANA will execute a mining lease to allow Ambler Metals or the joint venture to construct and operate a mine on the Bornite Lands. These leases will provide NANA a 2% NSR royalty as to producon from the Bornite Lands. If Ambler Metals decides to proceed with construcon of a mine on its own lands subject to the NANA Agreement, NANA will enter into a surface-use agreement with Ambler Metals which will aﬀord Ambler Metals access to the project along routes approved by NANA. In consideraon for the grant of such surface use rights, Ambler Metals will grant NANA a 1% NSR royalty on producon and an annual payment of $755 per acre (as adjusted for inﬂaon each year beginning with the second anniversary of the eﬀecve date of the NANA Agreement and for each of the ﬁrst 400 acres (and $100 for each addional acre) of the lands owned by NANA and used for access which are disturbed and not reclaimed. Environmental Liabilies Under the NANA Agreement, NANA is required to complete a baseline environmental report following the cleanup of the former mining camp on the Bornite Lands; this work must be completed to Alaska Department of Environmental Conservaon standards. Cleanup includes the removal and disposal, as required by law, of all hazardous substances present on the Bornite Lands. NANA has indemniﬁed and will hold Trilogy Metals harmless for any loss, cost, expense, or damage suﬀered or incurred aributable to the environmental condion of the Bornite Lands at the date of the baseline report which relate to any acvies prior to the date of the agreement. Reclamaon of mineral exploraon acvies at the Bornite property is completed under the guidelines presented by the State of Alaska in the Mul-Year Hardrock Exploraon Permit #2183 issued by the Department of Natural Resources Division of Mining, Land, and Water. Permits Mulple permits are required during the exploraon phase of the Bornite property. Permits are issued from Federal, State, and Regional agencies, including: the Environmental Protecon Agency, US Army Corps of Engineers, ADEC, Alaska Department of Fish and Game, ADNR, and NWAB. The State of Alaska permit for exploraon on the Bornite property, known as the Annual Hardrock Exploraon Acvity (“AHEA”) Permit, is obtained and renewed every ﬁve years through the ADNR – Division of Mining, Land and Water. Trilogy Metals held an AHEA exploraon permit in good standing with the ADNR and has done so each year since 2004 under Alaska Gold. The Bornite property is within the NWAB therefore requiring a Title 9 Miscellaneous Land Use permit for mineral exploraon, fuel storage, gravel extracon, and the operaon of a landﬁll. The Bornite camp, Bornite landﬁll, and Dahl Creek camp are permied by the ADEC. Aer the formaon of the joint venture, Ambler Metals has renewed the necessary permits for exploraon and related camp operaons. As the Bornite Project progresses, addional permits for environmental baseline and engineering studies will be necessary at Federal, State, and Regional levels. The QP is not aware of any signiﬁcant factors and risks that may aﬀect access, tle, or the right or ability to perform work on the Bornite property other than what is described in the NI 43-101 Bornite Report and the S-K 1300 Bornite Report. 64 Table of Contents The mineral resource esmates with respect to the Bornite Project are reported on a 100% basis, of which Trilogy’s share is 50%. History Kenneco and Bear Creek Mining Tenure Prospectors in search of gold, travelling up the Kobuk River in 1898 to 1899 found several small gold placer deposits in the southern Cosmos Hills that were worked intermiently over the ensuing decades. Around this me, copper mineralizaon at Ruby Creek and Pardner Hill was explored using small shas and adits. At Ruby Creek, Smith describes bornite and chalcopyrite and lesser amounts of galena and pyrite ﬁlling open spaces in brecciated zones in limestone and in places replacing dolomite breccia. In 1947, Rhinehart “Rhiny” Berg staked claims over the Ruby Creek prospects, carried out extensive trenching and the ﬁrst diamond drilling, and constructed an airstrip for access. In 1957, BCMC, Kenneco’s exploraon subsidiary, oponed the property from Berg. Exploraon 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% Cu (the “No. 1 Ore Body” is a historical term used by BCMC that does not connote economic viability in the present context; it is convenient to connue to use the term to describe exploraon work in a speciﬁc area that was previously referred to as the Ruby Creek Zone and is now referred to as simply the Ruby Zone). The discovery of the “No. 1 Ore Body” led to the development of an exploraon sha in 1965 through 1966, the development of an exploraon dri and the compleon of underground drilling in 1967. The discovery of the Arcc project in 1965 prompted a hiatus in exploraon at Bornite, and only limited drilling occurred up unl 1997. In the late 1990s, Kenneco resumed its evaluaon of the Bornite deposit and the mineralizaon in the Cosmos Hills with an intensive soil, stream, and rock chip geochemical sampling program using a 32-element inducvely couple plasma (“ICP”) analyses. Grid soil sampling yielded 765 samples. Ridge and spur sampling resulted in an addional 850 soil samples in the following year. Skeletonized core samples (85 samples) from key historical drill holes were also analyzed using 32 element ICP analycal methods. Geochemical sampling idenﬁed mulple areas of elevated copper and zinc in the Bornite region. Kenneco completed numerous geophysical surveys as an integral part of exploraon throughout its tenure on the Bornite property. Various reports, notes, ﬁgures, and data ﬁles stored in Kenneco’s Salt Lake City exploraon oﬃce indicated that geophysical work included, but was not limited to, the following: ● Airborne magnec and EM surveys (ﬁxed-wing INPUT) (1950s) ● Gravity, single point, audio-frequency magnetotelluric, EM, borehole and surface induced polarizaon (“IP”)/resisvity surveys (1960s) ● Gravity, airborne magnec, and controlled-source audio-frequency surveys (1990s). We have minimal informaon or documentaon associated with these geophysical surveys conducted prior to the 1990s. Where data are available in these earlier surveys, the lack of details in data acquision, coordinate systems, and data reducon procedures limit their usefulness. The only complete geophysical report that is available concerns down-hole IP/resisvity results. Most notable is the 1996 Bouguer gravity survey from the Bornite deposit into the Ambler Lowlands. The Bornite deposit itself is seen as a signiﬁcant 3 milligal anomaly. Numerous 2 milligal to > 6 milligal anomalies occur under cover in the Ambler Lowlands and near the Aurora Mountain and Pardner Hill occurrences. In addion to the geophysical surveys conducted by Kenneco, the ADNR completed an aeromagnec survey of porons 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 PhD dissertaon at Stanford University and Don Runnel’s PhD dissertaon at Harvard University. Bernstein and Cox reported on mineralizaon of the “No. 1 Ore Body” in a 1986 paper in Economic Geology. In addion 65 Table of Contents to the historical work, Ty Connor at the Colorado School of Mines recently completed a Master’s thesis which reported on the ming of alteraon and mineralizaon at the Bornite deposit. Kenneco conducted two technical reviews of the groundwater condions and a summary of the ﬁndings related to the ﬂooding of the exploraon sha. In 1961, Kenneco collected 32 coarse reject samples from ﬁve drill holes to support preliminary metallurgical test work at Bornite. Samples targeted high- grade (> 10%) copper mineralizaon from the Upper Reef at the Ruby Zone. Geological Seng, Mineralizaon and Deposit Types Geology The Bornite Project is located within the Arcc Alaska Terrane, a sequence of mostly Paleozoic connental margin rocks that make up the Brooks Range and North Slope of Alaska. It is within the Phyllite Belt geologic subdivision, which together with the higher-metamorphic grade Schist Belt, stretches almost the enre length of the southern Brooks Range and is considered to represent the hinterland of the Jura-Cretaceous Brookian orogeny. The southern margin of the Phyllite Belt is marked by mélange and low-angle faults associated with the Kobuk River fault zone, while the northern boundary is thought to be gradaonal with the higher-grade metamorphic rocks of the Schist Belt. The geology of the Bornite resource area is composed of alternang intervals of carbonate rocks (limestone and dolostone) and calcareous phyllite. Limestone transions laterally into dolostone near zones of mineralizaon and is considered hydrothermally altered. Spaal relaonships and petrographic work suggest that dolomizaon is genecally related to early stages of the copper mineralizing system; however, recent re-logging has quesoned this view. In 2015, Trilogy tried to improve the understanding of the distribuon and nature of the various lithologic units and their context within a sedimentary deposional model. A new interpretaon, based on lithogeochemical signatures of the various units along with their historical visual logging, concluded that stacked debris ﬂows composed of basal non-argillaceous channelized breccias were overlain by upward ﬁning upward sequence of increasingly argillaceous breccias capped by high calcium (Ca) phyllites, conﬁned laterally in channels between either massive or thin-bedded plaorm carbonates. Two mineralized stacked debrite successions were named the Lower and Upper Reefs. The Upper Reef grades upward into argillaceous limestones instead of discrete high Ca phyllites indicang a waning of debris supply. Based on this interpretaon, a series of individual debrites were idenﬁed and modeled. In contrast to the locally derived high-Ca phyllites of the debrite-dominated Bornite carbonate sequence, low calcium (Ca) phyllites are abundant in the allochthonous Anirak schist (quartz phyllite) and the Beaver Creek phyllite that underlie and overlie the Bornite carbonate sequence, respecvely. In addion to deposional lithostragraphy, a cross-cung mineralized breccia called the P-Breccia has been idenﬁed in and around the South Reef deposit. Though poorly deﬁned due to lack of drilling in the area, the P-Breccia zone—which contains excellent copper grade—lies at the apex of the Iron Mountain disconnuity. Although clearly post-deformaonal, it remains unclear whether the P-Breccia is a post-deposional structural, hydrothermal or soluon- collapse breccia. A short lithostragraphic project carried out during the 2021 ﬁeld season updated the interpretaon of the deposional environment of the Bornite succession; this resulted in signiﬁcant diﬀerences when compared to the previously summarized interpretaons. The Bornite succession is now understood to be a carbonate slope deposit characterized by (a) lime mudstone, exported to the slope from a contemporaneous shallow-marine carbonate factory, variably mixed with and interlayered with (b) background argillaceous sediment that is locally carbonaceous. Superimposed on these calcite-dominated normal slope strata are locally impressive thicknesses of dolomudstone-clast conglomerate (formerly breccia). Slope limestone and siltstone-mudstone were originally cenmetrically to decimetrically bedded, but are commonly duclely deformed, producing the variably limey phyllites that exhibit sub-mm scale foliaon. In contrast, the dolostone-clast conglomerates and individual dolomudstone clasts responded brilely to Brookian stress and show no 66 Table of Contents signiﬁcant shearing or plasc deformaon. Instead, plasc deformaon is largely restricted to the various phyllic layers around the peripheries of the dolostone bodies. Structural fabrics observed on the Bornite property include rare bedding and two disnct metamorphic foliaons. Bedding (S0) can be measured only rarely where phyllite and carbonate are interbedded and it is unclear to what extent it is transposed. The pervasive foliaon (S1) is oen mylonic and exhibits both an imprinted stretching lineaon and preferred top direcon. It is easily measured in phyllites and is commonly reﬂected by colour banding and/or stylolaminaon (ﬂaggy habit in outcrop) of the carbonates. Some limestone outcrops, in parcular the thin bedded limestone on Aurora Mountain and the marbles at the base of Coral Hill, also exhibit a stretching lineaon. Core-logging shows that S1 is folded gently on a 10 m scale and locally ghtly folded at the decimetre scale forming a common S2 axial planar cleavage. S2 is folded gently on a 10 m scale forming an upright mesoscale S3 foliaon. S1 and S3 foliaons are thought to be Jura-Cretaceous in age. Structural mapping in 2021 recognized a well-developed stretching lineaon (i.e., L-tectonite) in the carbonate-phyllite rocks, typically oriented shallowly towards the north-northeast or south-southwest. Top direcons indicate movement to the south or south-southwest along the vector of the stretching lineaon. Moreover, new mapping indicates that sﬀ Bornite rocks, in parcular metric to hectametric dolostone bodies, have been boudinaged into 3D ellipsoids. Slip is accommodated by phyllites. Interpretaon of this mapping should be performed to determine whether such a tectonic style plays a role in the distribuon of copper mineralizaon. Owing to their greater rigidity, dolostone bodies of secondary dolostone manifest strain diﬀerently: tan hydrothermal dolostone tends to be broken into cenmetre- to decimetre-scale blocks, whereas grey (diagenec?) dolostone may exhibit unusual, contorted forms, some resembling human ﬁngers or swan necks, as evident in outcrop. Dolostone is rarely cut by plascally deformed zones and instead forms metric to hectametric lenses (augens) encased in plascally deformed calc-mylonite and calc-phyllite. This deformaon, presumably a product of the Jura-Cretaceous Brookian orogeny, complicates sedimentological interpretaons. Mineralizaon at Bornite forms tabular mineralized zones that coalesce into crudely stratabound bodies hosted in dolostone conglomerate/breccia. Two signiﬁcant dolomic horizons that host mineralizaon have been idenﬁed by drilling and include: 1) the Lower Reef, a substanal 100 m to 300 m thick dolomized zone lying immediately above the basal quartz phyllite unit of the Anirak schist and 2) the Upper Reef, a 100 m to 150 m thick dolomite horizon that sits roughly 300 m higher in the secon. The Lower Reef is separated from the Upper Reef by a zone of duclely sheared phyllites up to 60 m thick. The Lower Reef dolostone outcrops along the southern margin of the Ruby Zone and is spaally extensive throughout the deposit area. It hosts a signiﬁcant poron of the shallow mineral resources in the Ruby Zone as well as higher grade mineral resources down-dip and to the northeast in the South Reef area. The Upper Reef hosts relavely high-grade mineral resources to the north in the Ruby Zone. The Upper Reef appears to lie at an important northeast-trending facies transion to the northwest of the main drilled area and appears to be at least parally thrust over the Lower Reef stragraphy to the southeast. Drill results from 2013 show dolomizaon and copper mineralizaon in the Upper and Lower Reefs coalescing into a single unit along the northern limits of current exploraon. The northeast- trending Ruby Zone and South Reef areas also coalesce into a roughly 1,000 m wide zone of >200 m thick dolomite containing signiﬁcant copper mineralizaon dipping north at roughly 5 to 10°. The 2017 drill results show that the mineralized dolomite interval connues for at least another 700m down-dip to the northeast from mineralizaon in the Upper and Lower Reefs. Mineralizaon Copper mineralizaon at Bornite comprises chalcopyrite, bornite, and chalcocite distributed in stacked, stratabound zones exploing favourable lithologies (conglomerate/berccia) within the Bornite sequence. Mineralizaon occurs, in order of increasing grade, as disseminaons, irregular and disconnuous stringer-style veining, breccia matrix 67 Table of Contents replacement, and stratabound massive sulphides. The distribuon of copper minerals is zoned around the boom-centre of each zone of mineralizaon, with bornite-chalcocite-chalcopyrite at the core progressing outward to a fringe of chalcopyrite-pyrite. Addional volumetrically minor copper minerals include carrollite, digenite, tennante-tetrahedrite, and covellite. Stringer pyrite and locally signiﬁcant sphalerite occur above and around the copper zones and locally massive pyrite and sparse pyrrhote are associated with siderite alteraon below copper mineralizaon in the Lower Reef. Signiﬁcant cobalt mineralizaon is found accompanying bornite-chalcocite mineralizaon. Cobalt oen occurs with high-grade copper as carrollite (Co2CuS4) and as cobalferous rims on recrystallized pyrite grains. Preliminary geometallurgical work by Trilogy showed that cobalt occurs primarily as cobalferious pyrite (approximately 80% of the contained cobalt) and within other cobalt minerals such as carrollite, and cobalte (CoAsS). Some appreciable silver values are also found at Bornite, parcularly in associaon with bornite-rich mineralizaon in the South Reef area and Ruby Zone. Deposit Type Copper-cobalt-silver-zinc mineralizaon at Bornite forms disseminaons, veins, and massive sulphides in stacked, semi-stratabound bodies closely associated with secondary hydrothermal dolomizaon. The cross-cung nature of the mineralizaon along with the presence of early pyrite and sphalerite in sedimentary breccia clasts suggest an epigenec origin that was temporally very close aer the deposion of host strata. Re-Os dang supports this interpretaon. Data are limited regarding the sources and nature of the copper-rich ﬂuids that formed the Bornite deposit, but they suggest that mineralizing ﬂuids may have formed from the interacon of saline basin ﬂuids with maﬁc volcanic rocks in the area. An early epigenec carbonate-hosted Cu-Co model is applicable for exploraon targeng in the project area. Exploraon Exploraon work completed by Kenneco is summarized above. In addion to the extensive drilling completed during the more than 40-year tenure of Kenneco in the district, Kenneco completed widespread surface geochemical sampling, regional and property scale mapping, and numerous geophysical surveys employing a wide variety of techniques. Most of this data has been acquired by us and forms the basis for renewed exploraon that targets Bornite-style mineralizaon in the Bornite carbonate sequence. 2006 NOVAGOLD In 2006, NOVAGOLD contracted Fugro Airborne Surveys to complete a detailed helicopter DIGHEM (frequency-domain EM), magnec and radiometric survey of the Cosmos Hills. The survey covered a rectangular block approximately 18 km by 49 km which totalled 2,852-line km. The survey was ﬂown at 300 m line spacing with a line direcon of N20E. The DIGHEM helicopter survey system produced detailed proﬁle data of magnecs, EM responses and radiometrics (total count, uranium, thorium, and potassium) and was processed into maps of magnecs, discrete EM anomalies, EM apparent resisvity, and radiometric responses. 2010 NOVAGOLD In 2010, in ancipaon of compleng the NANA Agreement, NANA granted NOVAGOLD permission to begin low level exploraon at Bornite. This consisted of re-logging and re-analyzing select drill holes using a NitonTM portable XRF. In addion to the 2010 re-logging eﬀort, NOVAGOLD contracted a consulng geophysicist to compile a uniﬁed airborne magnec map for the Ambler Mining District from Kenneco, Alaska DNR, and NOVAGOLD airborne geophysical surveys. 68 Table of Contents 2011 NOVAGOLD In 2011, NOVAGOLD contracted Zonge Internaonal Inc. (“Zonge”) to conduct both dipole-dipole complex resisvity induced polarizaon (“CRIP”) and natural source audio-magnetotelluric (“NSAMT”) surveys over the northern end of Bornite to develop tools for addional exploraon targeng under cover to the north. NSAMT data were acquired along two lines totaling 5.15 line-km; one line is oriented generally north-south through the centre of the survey area and the other line is 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 staons. The inial objecve of the survey was to invesgate geological structures and the distribuon of sulphides possibly associated with copper mineralizaon. Results from the paired surveys show that wide-spaced dipole-dipole resisvity is the most eﬀecve technique to directly target the mineralizaon package. Broad, low-resisvity anomalies reﬂecng pyrite haloes and mineralizaon appear to deﬁne the limits of the ﬂuid package. Well-deﬁned and oen very strong chargeability anomalies are also present but appear in part to be masked by phyllic units which also have strong chargeability signatures. NSAMT shows similar resisvity features as the IP, but these are less well resolved. 2012 NovaCopper Considering the success of the 2011 geophysical program, we contracted Zonge to conduct a major district-wide dipole/dipole IP survey, a down-hole IP radial array survey in the South Reef area, and an extensive physical property characterizaon study of the various lithologies to beer interpret the exisng 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 most prospecve part of the outcropping permissive Bornite carbonate sequence. The results show a well-deﬁned low resisvity area associated with mineralizaon and variable IP signatures aributed both to mineralizaon and the overlying Beaver Creek phyllite. Numerous target areas occur in the immediate Bornite area with lesser targets occurring in the Aurora 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 resisvity area approximately 500 m to 600 m southeast of the South Reef mineralizaon trend. Although the drill hole intersected some dolomite alteraon in the appropriate stragraphy, no signiﬁcant sulphides were encountered. In addion 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 to further delineate the trend and potenal in and around the South Reef. Extensive physical property data including resisvity, chargeability, speciﬁc gravity, and magnec suscepbility were captured for use in modelling the exisng ground IP and gravity surveys, and the airborne EM and magnec surveys. In addion to geophysical focused exploraon, a district wide geologic map was compiled integrang Kenneco’s 1970’s mapping of the Cosmos Hills with selecve Trilogy mapping in 2012. 2013 NovaCopper The emphasis of the 2013 program was to further validate and reﬁne the 2012 geologic map of the Cosmos Hills. A deep penetrang soil and vegetaon geochemical orientaon survey was completed over the South Reef deposit, using various paral leaches and pH methods. The inial, approximately 1 km, test lines suggest a good response for several of the paral leaches of the soils but lile response in the vegetave samples. Follow-up is warranted to the north of the deposit into the Ambler Lowlands. 69 Table of Contents 2014 NovaCopper During 2014, exploraon work was limited to a re-logging and re-sampling program of historical Kenneco drill core. 2015 NovaCopper As a follow-up to the 2013 ﬁeld program, a deep penetrang soil and vegetaon geochemical survey was extended north of the deposit into the Ambler Lowlands. Trilogy geologists completed a litho-geochemical desktop study and a comprehensive update to the 3D lithology model. 2017 Trilogy The 2017 ﬁeld program extended the 2013 and 2015 deep penetrang geochemical (“DPG”) soil survey another 500m to the northeast. The 2013 soil line was extended 1,500m to the east to test over the covered projecon of the Two Grey Hills carbonate secon. The 3D lithology model was updated to incorporate the 2017 drill program results. Trilogy also completed a close spaced ground gravity survey over a 2 km by 4km grid with 100 m staon spacing over the resource area and extending northeast over the 2017 drill target area. The complete Bouguer anomaly residual plot (removes a strong decreasing to the northeast regional gradient) shows good correlaon with the Lower Reef mineralizaon that outcrops on surface with the gravity high gradually decreasing down-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 gravity response on surface (forward model) for the 2017 gravity staons. This forward model matches very closely with the actual survey data over the deposit area but diverges on the south end where the expected response of gravity low is actually a strong gravity high that may reﬂect shallow mineralizaon up- dip along the South Reef trend. Mira also completed a geologically constrained 3D inversion using the 2017 gravity data. Two areas of anomalously high densies (>2.9 g/cc) were idenﬁed. The ﬁrst area extends up to 750m to the east-northeast of RC17-0239, which was one of the more successful holes in 2017 and is coincident with the Iron Mountain structure. The second anomaly is located just above 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 weakly mineralized along that horizon. This area falls along the northwest- southeast high grade thickness trend. 2018 Trilogy During the 2018 ﬁeld season, Trilogy Metals carried out addional DPG and a 2D seismic survey at Bornite. In addion, geophysical and geochemical data from Bornite were studied using exisng datasets. Soil sampling was completed on the westerly extension of the DPG lines on the northwestern poron of the Bornite deposit. DPG was used to assist with outlining the edges of the deposit as well as to corroborate gravity anomalies deﬁned during the 2017 ﬁeld season. A 2D seismic survey was completed by HiSeis (3D seismic imaging) in June 2018. This 2D acquision program was designed to test whether seismic reﬂecon was suitable for the Bornite deposit and to understand the logiscs of any future 3D seismic survey over the project area. Two 6 km 2D seismic lines, a dip line and a strike line, were acquired with a total of 792 unique source locaons to aempt to image hanging wall and footwall shears; other faults and shears; folding of stragraphy; internal (within Bornite sequence) phyllite units; facies changes within the dolostones; and direct detecon of massive sulphide mineralizaon; and any alteraon associated with mineralizaon. Acquision of this 2D dataset used 500 g seismic charges as a means of producing seismic energy. All seismic vibraons were measured on a fully acve line of 1,189 geophone receivers which provided up to 6 km of oﬀset on either side of the source using the Aries I seismic acquision system. Supporng rock property data were acquired from drill core stored in Fairbanks, Alaska. Mira Geosciences completed a 3D inversion model of the 100 m spaced ground gravity data that were collected over the Bornite deposit during the 2017 exploraon season. Using geology to constrain the model, three areas of anomalously higher gravity were deﬁned. Unfortunately, none of these intervals were properly tested in 2017 with two holes, those 70 Table of Contents at Anomaly “B” and “C”, ending above the gravity anomalies. Two of the three idenﬁed anomalies from the 2017 inversion modelling changed in size and relave orientaon with the updated geologic model. Anomaly B, which stretches to the northwest from hole RC17-0238 decreased in extent, likely the result of a thicker-than-previously-modelled Upper Reef carbonate secon in RC17-0238. Anomaly C is much broader and less deﬁned, indicang that it may be the result of underesmang the SG in the lithology model. This anomaly remains untested with the failures of drill holes RC17-0242 and RC18- 0245 and should be redrilled in the future. Anomaly A is relavely unchanged and remains coincident with the Iron Mountain structure. Holes RC18-0246, RC18-0249, and RC18-0250 tested the southwest edge of the anomaly where it joins the South Reef trend. Hole RC18-0250 suggests that mineralizaon wanes to the east, though this hole may have just missed mineralizaon controlled by the Iron Mountain structure. The northeast extent of this anomaly is sll considered a viable exploraon target. South32 completed a QAQC review, lithogeochemical-alteraon assessment, and a vectoring/targeng exercise on downhole geochemical data on the Bornite deposit. The purpose of this exercise was to use downhole analyses to assess the geology, alteraon, and mineralogy of the deposit to vector towards mineralizaon. The Bornite sequence can be classiﬁed into three geochemical groups including: 1) very low immobiles; 2) low immobiles; and 3) higher immobiles. The laer was then subdivided into ﬁve groups based on Al, Cr, and V concentraons. The very low and low immobile groups are predominately limestones and dolomites (including breccias), whereas increasing Al in higher immobiles represent the increasingly argillaceous/micaceous units (phyllites). High Al samples in the lower Bornite sequence can be discriminated from those in the upper sequence based on high Ni:Cu raos. In the South Reef area, lithogeochemistry, supported Trilogy Metals’ geologic model, idenﬁed the lower, central and upper Bornite sequence units and disnguished many of the logged phyllites from breccias. The results support Trilogy Metals’ interpretaon that the Ruby Zone in the Lower Reef is hosted in units corresponding to the South Reef central sequence. 2019 Trilogy In 2019, Trilogy Metals contracted Geotech Ltd. (Geotech) of Aurora, Ontario to complete VTEM Plus (versale me domain electromagnec) and ZTEM (z- axis pper electromagnec) airborne helicopter geophysical surveys over the Cosmos Hills and the Ambler VMS belt. Magnecs were measured using a cesium vapour sensor, while radiometrics was not collected due to snow cover. The VTEM survey was ﬂown along 200 m spaced lines, oriented northwest-southeast over the enre Bornite carbonate sequence north of the Cosmos Arch (which hosts the Bornite deposit), with addional lines at 100 m spacing directly above the Bornite resource. A second set of perpendicular lines (southwest-northeast) were ﬂown at 200 m spacing over just the general Bornite area. Tie lines at ~4,000 m spacing were ﬂown perpendicular to the EM ﬂight lines to provide control for the magnec survey. The VTEM results from the Bornite sequence are complex and appear to be mostly reﬂecng bedrock lithologies (the graphic phyllites). The conducve plates that were modelled are generally coincident with the interpreted phyllite units, as are the apparent anomalies tested by holes RC19-0263 and RC19- 0266. 2020 Ambler Metals Trilogy Metals and South32 decided not to proceed with the 2020 exploraon program due to the coronavirus pandemic. The Bornite geologic model was updated using the 2019 drill program results. The Irish Centre for Research in Applied Geosciences iniated a machine-learning geochemical modelling project to help deﬁne the controls on high-grade copper mineralizaon. 2021 Ambler Metals During the 2021 ﬁeld season, the understanding of the Bornite deposit and the potenal for addional deposits was advanced with a new interpretaon of the carbonate sequence at Bornite and an improved structural understanding of the Cosmos Hills. A specialist in carbonate geology from Laurenan University re-logged two fences/secons of drill holes, east-west and north-south, through the Bornite deposit, to idenfy, disnguish and correlate lithofacies within 71 Table of Contents the Bornite sequence and to idenfy and disnguish diﬀerent types/ages of dolomizaon, including, if possible, their relaon to mineralizaon. Turner describes the Bornite sequence as a tectonized normal carbonate slope deposit that consists of calcic material (lime mud) derived from a nearby shallow-marine source area, interlayered with variable amounts of background terrigenous mud (argillaceous proporon increases with distance downslope). The observed sequence includes massive lime mudstone, thin-bedded argillaceous lime mudstone, lime mudstone cenmetrically interbedded with terrigenous mudstone, calcareous siltstone, and limestone-clast slope conglomerates. Brookian deformaon strained these argillaceous limestone slope deposits to varying degrees producing phyllites and recrystallized, strained limestones/marbles. Importantly, superimposed on the acve limestone slope system is the local presence of dolostone-clast conglomerate. Dolostone clasts are equant and irregular; predominantly dolomudstone (locally with fossil fragments) and are likely derived from subaqueous horst blocks of pre-exisng older dolostone and shed into the slope limestone system. The fault scarp(s) that shed dolostone clasts were probably part of a seaﬂoor paleotopographic system that developed during regional extension and associated fault-mediated syn-deposional subsidence. Also iniated in 2021 was structural mapping around Pardner Hill and Aurora Mountain. Inial results indicate: (1) Large carbonate bodies, such as Pardner Hill, Shield Mountain, and probably also Aurora Mountain, are fault klippen in allochthonous contact with the structurally subjacent Anirak schist; (2) Dolostone bodies are typically boudinaged forming metric to hectametric 3-D ellipsoids encased in duclely deformed phyllites and, in some places, calc- mylonites (limestone protolith); (3) Top-South (to SSW) deformaon at a number of outcrops in the Cosmos Hills suggest that this enre structural block may have been juxtaposed southward from the posion of the Ambler Lowlands or, potenally, from oﬀ the top of the Ambler Highlands (Arcc area) during exhumaon that was part of the Brookian orogeny; (4) the fault contact with the overlying Beaver Creek phyllite is likely a low-angle normal fault that cuts out of the Bornite deposit to the southeast where Beaver Creek is in structural contact with Anirak schist. Two diamond drill holes targeng the Bornite copper-hosng carbonate sequence in the Cosmos Hills and Ambler Lowlands were completed during the 2021 ﬁeld season. Hole ALL21-001 targeted the northeast projecon of the Bornite carbonate sequence under cover in the Ambler Lowlands about 7 km east-northeast of Bornite. The second hole, hole RC21-0267 was located at West Bornite, along the Coxcomb Ridge Pardner Hill saddle, 3.5 km west of the Bornite deposit. Hole ALL21-001 intercepted alternang units of limestone clasc breccia, dolostone clasc breccia, limestone and dolostone with textures similar to the Beaver Creek carbonates; alternang intervals of argillaceous phyllite, argillaceous limey phyllite, argillaceous phyllic limestone, and argillaceous limestone clasc breccias. The phyllic units host trace pyrite mineralizaon and have geochemical signatures that are similar to Beaver Creek phyllites. Unfortunately, the hole was lost at 335 m without drilling through the carbonate stragraphy. Hole RC21-0267 tested the down-dip projecon of weakly mineralized dolomic breccia mapped in the saddle between Coxcomb Ridge and Pardner Hill. The hole intersected argillaceous phyllite (probable Beaver Creek) followed by Bornite sequence: alternang tan phyllic limestone, tan limey phyllite, argillaceous/carbonaceous phyllic limestone, limestone clasc breccia, limestone, and argillaceous limestone clasc breccias and dolostone clasc breccia. Trace to locally 1% chalcopyrite, with lesser amounts of sphalerite, and tennante/tetrahedrite occur through-out a 180 m thickness of dolostone clasc breccia, mostly as disseminaons within the breccia matrix and in this carbonate veins. Within this zone a 54.9 m thick interval averages 0.165% Cu starng from 196.5 m. RC21-0267 ended in a quartz phyllite fault zone at 435 m. Ambler Metals (2022) During the 2022 ﬁeld season, structural mapping around Pardner Hill and Aurora Mountain carried out in 2021 was extended to the south to Cosmos Mountain and to the east to Inerevuk Mountain. In addion, two holes were drilled, hole RC22-0268 at Bornite West to follow up the mineralized interval encountered during the 2021 drilling, and the other 72 Table of Contents at Pardner Hill, hole PH22-0180 to test the down-dip potenal of the historical Pardner Hill resource to the south. The results of these two holes are being compiled and interpreted. Drilling From 1957 to 2019, a total of 273 holes targeted the Bornite deposit during 24 diﬀerent campaigns; 222 surface core holes and 51 underground core holes were drilled, totalling 106,406 m. All of the drill campaigns prior to 2011 were completed by Kenneco or its exploraon subsidiary, BCMC, and the drill campaigns since 2011 were completed by NovaGold (2011), NovaCopper (2012 and 2013) or Trilogy. In the summer of 2017, Trilogy Metals iniated eleven holes, but four were abandoned due to drilling problems. The seven remaining drill holes stepped- out to the north for distances between 250 m to 400 m from the previous drill holes; these were distances considered too far to support the esmaon of mineral resources at that me. In the summer of 2018, Trilogy Metals conducted a drilling program that included the compleon of 12 holes that inﬁlled gaps in previous drilling in the northern, down-dip part of the deposit as well as in the central area between the Ruby Zone and South Reef area. Three addional holes were collared but were abandoned due to drilling problems. In the summer of 2019, Trilogy Metals completed another drilling program comprising eight holes that tested the connuity of the mineralizaon within the Bornite deposit and two holes that tested exploraon targets located about 1 km south and southeast of the deposit. Between 2012 and 2014, Trilogy Metals geologists re-logged and re-sampled legacy drill holes in the Ruby Zone and South Reef area which were previously drilled and only selecvely sampled by Kenneco. These assays were used in the esmaon of the current mineral resource, except where duplicates of Kenneco samples were collected. In the case of duplicates, the original assay informaon was given priority in the mineral resource database. In the inial years of drilling at Bornite, Kenneco relied on AX diameter core (30.2 mm diameter), but, as drilling migrated towards deeper targets, a change to BX diameter core (41.3 mm diameter) was implemented to help limit deviaon. From 1966 to 1967, drilling acvity at Bornite moved underground and EX diameter core (21.5 mm diameter) was implemented to deﬁne the Ruby Zone Upper Reef “No.1 Ore Body”. In 1968, drilling acvity moved back to the surface and from 1968 to 1972, BX diameter core was most commonly drilled. In later years, core size increased to NX (54.0 mm diameter) and ﬁnally, in 2011, core size increased to NQ (47.6 mm diameter) and HQ (63.5 mm diameter). Over the years, progressively larger diameter drill rods have been used in an eﬀort to minimize drill hole deviaons. There is limited informaon with respect to the speciﬁc drill core handling procedures used by BCMC/Kenneco. All drill data collected during 1957 to 1997 were logged on paper drill logs with copies were stored in the Kenneco oﬃce in Salt Lake City, Utah. Electronic, scanned copies of the paper logs are held by Trilogy and stored in the Fairbanks ﬁeld oﬃce. Drill core was sawed or split in half with a splier, half was submied to various assay labratories and the remainder was stored in the Kenneco/BCMC core storage facility at the Bornite deposit. In 1995, Kenneco converted the drill assay data, geologic core logs and the down-hole collar survey data into an electronic format. In 2009, NOVAGOLD geologists veriﬁed the geologic data from the original paper logs against the Kenneco electronic format and then merged the data into a MicrosoTM SQL database. Sampling of drill core by Kenneco/BCMC focused primarily on the moderate-to-high grade mineralized zones. Intervals of visible sulphide mineralizaon containing roughly >0.5% to 1% Cu were selected for analysis by Union Assay Oﬃce Inc. of Salt Lake City, Utah. This approach le numerous intervals containing weak to moderate copper mineralizaon, un-sampled in the historical drill core. During the 2012 exploraon program, we began sampling a poron of this remaining drill core in select holes in the South Reef area. Trilogy extended this sampling program to the Ruby Zone in 2013 and 2014. Throughout our tenure at Bornite, the following core handling procedures have been implemented (including programs conducted by NOVAGOLD and NovaCopper). Core is slung by helicopter or transported by truck or all-terrain vehicle from the drill rig to the core-logging facility. Upon delivery, geologists and geotechnicians open and inspect the core boxes for any irregularies. They ﬁrst mark the locaon of each drilling block on the core box, and then convert footages 73 Table of Contents on the blocks into metric equivalents. Geo-technicians or geologists measure the intervals (or from/to) for each box of core and include this informaon, together with the drill hole ID and box number, on a metal tag stapled to the end of each box. Geo-technicians then measure the core to calculate percent recovery and rock quality designaon (“RQD”). RQD is the sum of the total length of all pieces of core in a run over 12 cm. The total length of core in each run is measured and compared to the corresponding run length to determine percent recovery. Core is then logged with lithology and visual alteraon features captured on observed interval breaks. Mineralizaon data, including sulphide species (recorded as percent), sulphide type (recorded as a relave amount) and gangue and vein mineralogy are collected for each sample interval with an average interval of approximately 2 m. Structural data is collected as point data. Geologists then mark sample intervals to indicate each lithology or other geologically appropriate intervals. Sample intervals of core are typically between 1 m and 3 m in length but are not to exceed 3 m long. Occasionally, if warranted by the need for beer resoluon of geology or mineralizaon, smaller sample intervals have been used. 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 designate sample intervals. This sampling approach is considered sound and appropriate for this style of mineralizaon and alteraon. Drill core is digitally photographed prior to sampling. Drill core is cut in half using diamond core saws. Speciﬁc aenon to core orientaon is maintained during core sawing to ensure that representave samples are obtained. One-half of the core is retained in the core box for storage on site, or at our Fairbanks warehouse, and the other half is bagged and labeled for analysis. Samples are selected for speciﬁc gravity measurements. In 2013 and 2014, 33 historical drill holes and 37 historical drill holes, respecvely, in the Ruby Zone were re-logged, re-sampled and re-assayed as these holes had previously only been selecvely sampled by Kenneco. Enre holes were re-logged using Trilogy protocols discussed above. Samples were submied either as half-core, where previously sampled, or whole core where un-sampled (to ensure that a suﬃcient volume of material was provided for analysis). Sample intervals were matched to historical intervals whenever possible or selected to reﬂect Trilogy sampling procedures described above. The objecves of the re-assay/re-logging program were threefold: 1) to implement a QAQC program on intervals previously sampled by Kenneco in order to conﬁrm the validity of its results; 2) to idenfy addional lower grade (0.2%-0.5% Cu), which was not previously sampled; and 3) to provide addional mul-element ICP data to assist in the geologic interpretaon of the deposit. Preliminary geotechnical data was collected from drill core such as RQD and limited hydrogeology data has been obtained which is suﬃcient to support early-stage resource esmaon. The Wood QP is not aware of any drilling, sampling or recovery factors that could materially impact the accuracy and reliability of the copper results supporng the mineral resource esmate other than what is described in the secons that follow. Sampling, Analysis and Data Veriﬁcaon There is limited documentaon available describing the sample preparaon, security, and analysis of drill core samples with mixed in QAQC check assays. Gold and silver were likely analyzed by ﬁre assay oﬀ site. Between 2012 and 2014, Trilogy Metals completed a re-assay and re-sampling program of the historical drill holes. As a result, 67% of the historical hole assay values are now supported by a current and documented QAQC program The drill core sampling procedures are described above. Aer the drill core was sawed in half, one half was retained for future reference and the other half was sent to ALS Minerals (formerly ALS Chemex) in Vancouver, Brish Columbia for analyses. Core samples were shipped from the Bornite camp when backhaul capacity was available on the chartered aircra; this was generally ﬁve to six days a week. Rice bags, containing two to four individual poly- bagged core samples, were marked and labeled with the ALS Minerals address, project name (Bornite), drill hole number, bag number, and the enclosed sample numbers. Rice bags were secured with a pre-numbered plasc security e, assembled into loads for transport by chartered ﬂights on a commercial airline to Fairbanks, Alaska, and delivered directly to the ALS Minerals preparaon facility by a contracted expeditor. Control samples were also inserted into these shipments at the 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 was pulverized to greater than 85% passing 75 μm. 74 Table of Contents Security measures taken during historical Kenneco and BCMC programs are not known to Trilogy Metals; however, Trilogy Metals is not aware of any reason to suspect that any of these samples have been tampered with. The 2011 to 2019 samples were either in the custody of NOVAGOLD or Trilogy Metals personnel, or the assay laboratories at all mes and the chain of custody of the samples is well documented. Copper and cobalt data were derived using a 48-element suite assayed by inducvely coupled plasma-mass spectrometry (ICP-MS) and atomic emission spectroscopy (ICP-AES) methodologies, following a four-acid digeson. The lower detecon limits for copper and cobalt are 0.2ppm and 0.1 ppm, respecvely. The upper limits were 10,000ppm. Over limit (>1.0%) copper and cobalt analyses were completed by atomic absorpon (AA), following a four-acid digeson. In 2011 and 2012, gold assays were determined using ﬁre analysis followed by an atomic absorpon spectroscopy (AAS) ﬁnish. Gold was not analyzed in 2013 or 2014. The lower detecon limit was 0.005 ppm Au; the upper limit was 10 ppm Au. ALS Minerals has aained Internaonal Organizaon for Standardizaon (ISO) 9001:2000 registraon. In addion, the ALS Minerals laboratory in Vancouver is accredited to ISO 17025 by Standards Council of Canada for a number of speciﬁc test procedures including ﬁre assay of gold by AA, ICP and gravimetric ﬁnish, mul-element ICP and AA assays for silver, copper, lead and zinc. Trilogy has no relaonship with any of the primary or check assay labs used on the Bornite Project. In 2012, 2013, 2014, and 2017 through to 2019, Trilogy Metals staﬀ performed connuous validaon of the drill data during the logging process and aer the ﬁeld program was complete. Trilogy Metals also retained independent consultant GeoSpark Consulng Inc. (“GeoSpark”) to import digital drill data to the master database and conduct QAQC checks upon import; conduct a QAQC review of paired historical assays and Trilogy Metals 2012, 2013 and 2014 re-assays; monitor an independent check assay program for the 2012, 2013 and 2014 campaigns; and generate a QAQC report for each of the drilling campaigns conducted in 2012, 2013, 2014, 2017, 2018 and 2019, including a 2017 review of the cobalt data. QAQC monitoring by GeoSpark included assessment laboratory precision and accuracy using assay results from cerﬁed reference standards, blanks and duplicates inserted into the sample stream by Trilogy Metals personnel. Wood’s geology and resource QP visited the Bornite property from August 29 to September 9, 2022. During the visit, he reviewed drill core, measured drill collars with a handheld GPS unit, visited the historical trench area and viewed the deposit area by helicopter. Wood’s geology and resource QP also measured ﬁve surface drill collars with a handheld GPS unit. Out of ﬁve drill collars, one drill collar was oﬀ more than 40 m when compared to the collar database. Aer further invesgaon, Ambler Metals idenﬁed seven drill collars in the database with planned coordinates, rather than the surveyed coordinates. The QP has reviewed the metallurgical testwork reports, the analycal procedures, qualiﬁcaon of the laboratory, and presentaon of the test results and considers all to have followed industry accepted pracce. Inspecon of the historical drill hole data has revealed some issues with collar, down hole survey and assay results. There are 183 historical holes represenng 46% of the total drilled metres in the Bornite database 177 of which are in the Ruby Zone and six of which are in the South Reef area. There are no signiﬁcant concerns with the current collar survey records.Issues idenﬁed are manageable by the signiﬁcant number of drilling and sampling that has been undertaken, and restricon of the resource classiﬁcaon to the Inferred category. Wood’s geology and resource QP’s review of the database transcripon error checks is considered adequate and provides suﬃcient support for the database to be judged as acceptably error free. In the opinion of the QP the metallurgical data is adequate for the purposes used in the NI 43-101 Bornite Report and the S-K 1300 Bornite Report. Mineral Processing and Metallurgical Tesng In 1961, Kenneco collected 32 coarse reject samples from ﬁve drill holes intersecng the Bornite deposit (RC-34, RC-54, RC-60, RC-61, and RC-65) to support preliminary metallurgical testwork conducted at KRC. Samples targeted high-grade (>10%) copper mineralizaon from the Ruby Zone Upper Reef (“No. 1 Ore Body”) (BCMC, 1961). Locked-cycle laboratory testwork suggested that 97.64% of the copper was recoverable in a concentrate assaying 43.90% Cu. Fine- 75 Table of Contents grinding to 5% passing +200-mesh was required to obtain the liberaon of copper minerals from pyrite necessary for such a high recovery. Mineralogical testwork on the composite sample showed high-grade mineralizaon of the Ruby Zone Upper Reef is dominated by bornite with subordinate chalcocite and chalcopyrite. A total of four metallurgical testwork programs have been conducted on materials from the Bornite Property under the supervision of Trilogy Metals. In 2012, Trilogy Metals contracted ALS Metallurgy to conduct preliminary sample characterizaon and ﬂotaon testwork on mineralized samples collected from the South Reef area. To the extent known, the samples are representave of the styles and types of mineralizaon present in the South Reef area. The program at ALS Metallurgy was based on tradional grinding and ﬂotaon testwork aimed at producing saleable copper concentrates. The testwork connued into 2013. In 2017, Trilogy Metals contracted SGS to conduct detailed metallurgical testwork on a series of samples that represent the lower grade mineralizaon within the constraining pit shell. This work followed the preliminary ﬂowsheet and process opons outlined in the 2012/2013 testwork. This testwork connued into 2018. Addional metallurgical tesng was conducted by ALS Metallurgy in 2018/2019 and again in 2020/2021 which followed on from the process development of the earlier testwork. Metallurgical testwork to date indicates that the Bornite mineralizaon can be treated using standard grinding and ﬂotaon methods to produce clean copper concentrates with good results being obtained. Mineral Resource Esmates The mineral resources were prepared in accordance with CIM Esmaon of Mineral Resources and Mineral Reserves Best Pracce Guidelines (November 2019) and reported in accordance with CIM Deﬁnion Standards for Mineral Resources and Mineral Reserves (CIM Deﬁnions Standards, 2014) and the standards and deﬁnions of S-K 1300. The QP considers the sample preparaon, security and analycal procedures adequate to support an Inferred mineral resource. The Bornite database comprises a total of 273 diamond drill (core) holes totalling 106,406 m; 203 holes target the Ruby Zone to the west and 58 holes target the South Reef area to the east. The remaining 12 holes in the database are exploratory in nature and test for satellite mineralizaon proximal to the Bornite deposit or represent holes that encountered problems and were therefore abandoned. A total of 242 drill holes are used in the mineral resource esmate contains a total of 39,740 samples that were analyzed for copper content and 34,177 that were analyzed for cobalt content. Most holes drilled by Trilogy, plus a few select historical holes drilled by Kenneco, contain addional analyses for elements such as zinc, lead, gold, silver, and cobalt. At this me, only copper has reasonable prospectus for eventual economic extracon. During the 2012, 2013 and 2014 ﬁeld seasons, Trilogy collected samples from drill hole intervals that were not previously sampled. It is assumed that Kenneco did not sample these intervals because, visually, they did not exhibit the presence of high-grade copper mineralizaon (amenable to underground mining). In previous mineral resource esmates, these un-sampled intervals were assigned a default grade of 0% Cu. At this current stage, the majority of the core drilled by Kenneco has been sampled and analyzed for copper content and are included in the database. The sampling and assaying for cobalt is less extensive. Where assay data are not available, these intervals are assigned a zero grade for cobalt (0% Co) when the host rocks are phyllite, or they are le blank when the host rocks are carbonates. Individual sample intervals range from 3 cm to 39.58 m long and average 2.09 m. Drill hole spacing at the Ruby Zone varies from approximately 10 m to 20 m for underground holes and 50 m to 100 m or more for holes drilled from surface. All holes tesng the South Reef area are collared from surface and typically intersect mineralizaon at approximately 100 m to 200 m spacing. 76 Table of Contents Speciﬁc gravity (“SG”) measurements were conducted on 7,476 samples in the database and range from a minimum of 2.12 to a maximum of 5.20 and average 2.89. The distribuon of SG data is considered suﬃcient to support resource esmaon. The geologic model interpreted for the Bornite deposit consists primarily of a series of inter-bedded carbonate and phyllic rocks that dip gently to the north and overlay a quartz-phyllite footwall. The geologic model comprises 18 individual phyllite domains and 16 separate carbonate domains plus a series of separate domains represenng the hanging wall (Beaver Creek phyllite), the footwall (quartz-phyllite Anirak schist), and the overlying overburden. Some of the phyllite and carbonate units are connuous across the enre deposit area and others pinch out and are more localized. The parts of the deposit with the highest grades occur within areas where semi-massive and massive sulphides are present. The density of drilling is insuﬃcient in most areas to allow for the interpretaon of these massive sulphide domains, and a probability shell approach is used to idenfy areas where higher grade mineralizaon is likely to occur. Two probability shells were generated: one at a threshold of 2% Cu and another at a threshold of 0.2% Cu. The 2% Cu shell generally correlates with the presence of massive and semi-massive zones of bornite and chalcopyrite mineralizaon, and the 0.2% Cu shell correlates with the visual presence of chalcopyrite mineralizaon. Cobalt mineralizaon is strongly associated with both sets of copper mineralizaon. The higher grade shell occurs mainly in the South Reef area and is based primarily on visual observaons of the distribuon of sample data suggesng that a relavely connuous zone of higher grade copper mineralizaon occurs above a threshold grade of 2% Cu. Approximately 90% of the sample data in the South Reef area is below 2% Cu and 10% of the data is greater than 2% Cu. A relavely small (>2%) copper probability shell is also generated in the Upper Reef area of the Ruby Zone. Approximately one half of the samples in the carbonate domains have copper grades above the lower grade threshold of 0.2% copper. This limit roughly segregates areas of mineralized versus unmineralized rocks and is sll below the ancipated cut-oﬀ grade of the mineral resource, ensuring that suﬃcient internal diluon is retained in the mineral resource model. There are also areas where the phyllite domains contain appreciable copper grades (above the 0.2% Cu threshold), but these tend to be rare and localized occurrences. Indicator values are assigned to 2 m composites at the grade thresholds, and indicator variograms are produced. Probability values are esmated in model blocks using ordinary kriging; the vercal range and locaons are controlled dynamically using elevaons relave to the trend planes described previously. A series of shells are generated at varying probability thresholds and are then compared to the distribuon of the underlying sample data. The higher grade shell represents areas where there is greater than a 30% probability that the grade will be more than 2% Cu. The lower grade shell envelopes areas where there is a greater than 50% probability that the grade will exceed 0.2% Cu. At this stage of project evaluaon, copper is the only economic contributor at Bornite. There is potenal for reasonable prospects of eventual economic extracon for cobalt with addional drill informaon and metallurgical testwork to establish the appropriate process opons available to produce marketable pyrite-cobalt concentrate. Currently there is insuﬃcient informaon to idenfy reasonable process method for economic recovery of cobalt or a market for the pyrite-cobalt concentrate. The Bornite deposit comprises several zones of relavely connuous moderate- to high-grade copper mineralizaon that extends from surface to depths of more than 800 m below surface. The deposit is amenable to either open pit or underground mining methods. Underground mining assumes a combinaon of longhole stoping and cut-and-ﬁll methods with an average assumed mining cost $73.62/t mined. Using these parameters an open pit marginal cut-oﬀ grade of 0.5% Cu and an underground break-even cut-oﬀ grade of 1.79% Cu were determined. The underground mining shape is based on a 1.79% Cu grade shell and then a ﬁlter was applied to remove isolated blocks that are outside of the underground mining shape that would not meet reasonable prospects for eventual economic extracon. A 20 m pillar was imposed between mining the pit shell and underground mining shapes. The Wood QP considers industry consensus on a long-term price forecast on mineral reserves and cash ﬂows of $3.50/lb Cu is reasonable. It is in accordance with industry-accepted pracce to use higher metal prices for the mineral resource 77 Table of Contents esmates than the pricing used for mineral reserves. The copper price forecast of $3.50/lb was increased by approximately 15% to provide the mineral resource esmate copper price assumpon of $4.05/lb. Mineral Resources are classiﬁed in accordance with S-K 1300 and the CIM Deﬁnion Standards for Mineral Resources and Mineral Reserves (May 2014). The Wood QP reviewed and performed validaon checks on the mineral resource model and based on the results prepared a revised mineral resource statement that is summarized in Table 1. The mineral resource esmates are based on a combinaon of open pit and underground mining methods and a copper price of $4.05/lb. Mineral resources amenable to open pit methods are constrained within a pit shell above a marginal cut-oﬀ grade of 0.5% Cu and those amenable by underground methods are constrained within a grade shell deﬁned by a breakeven cut-oﬀ grade of 1.79% Cu. A poron of the in- pit mineral resource is well above the 1.79% Cu cut-oﬀ and would be amenable to underground mining methods providing ﬂexibility on how to develop the deposit (Table 2). Table 1 – Mineral Resources for the Bornite Deposit as of November 30, 2023 Class Type/Area In-Pit Outside-Pit South Reef Outside-Pit Ruby Zone Inferred Total Inferred – 100% Total Inferred – 50% Aributable Interest Note: Cut-oﬀ (Cu %) 0.50 1.79 1.79 Tonnes (Mt) 170.4 22.0 10.4 202.7 101.3 Average Grade Cu (%) Contained Metal Cu (Mlb) 1.15 3.48 2.28 1.46 1.46 4,303 1,690 521 6,514 3,257 1. A Qualiﬁed Person and an employee of the Company, has approved the mineral resources included in this Annual Report on Form 10-K as of November 30, 2023 and reviewed the resources in the S-K 1300 Bornite Report and conﬁrmed that the resources remain current as of November 30, 2023. 2. Mineral resources are prepared in accordance with the deﬁnions in S-K 1300 and CIM Deﬁnions Standards (2014). No mineral reserves have been esmated on the Bornite Property. 3. Mineral resources are constrained by: an open pit shell at a cut-oﬀ grade of 0.5% Cu, with an average pit slope of 43 degrees; and underground mining shapes with a cut-oﬀ grade of 1.79% Cu. The cut-oﬀ grades include the consideraons of a $4.05/lb Cu price, process recovery of 87.2%, open pit mining costs of $3.21/t mined, underground mining cost of $73.62/t mined, process cost of $19.14/t processed, G&A cost of $4.14/t processed, treatment, reﬁning, sales cost of $0.73/lb Cu in concentrate, road use cost of $8.04/t processed, 2% NSR royalty. Trilogy Metals’ aributable interest is 50% of the tonnage and contained metal stated in the table. Figures may not sum due to rounding. The mineral resources are reported in place (point of reference). 4. 5. 6. 78 Table of Contents Table 2 – Porons of South Reef Mineral Resource Amenable to Underground Mining Class Inferred Inferred Note: Type/Area In-Pit South Reef1 Outside-Pit South Reef2 Total South Reef Cut-oﬀ (Cu %) 1.79 1.79 Tonnes (Mt) 11.0 22.0 33.0 Average Grade Cu (%) 3.56 3.48 3.51 Contained Metal Cu (Mlb) 864 1,690 2,554 1. Subset of the mineral resource and is not addive to the in-pit mineral resource reported in Table 1 2 Restatement of the mineral resources outside of the pit as reported in Table 1 and is not addive to Table 1 Some of the in-pit mineral resources are of suﬃciently high grade to allow mining by underground mining methods which allows ﬂexibility on how they could eventually be extracted. Addional factors that could aﬀect the mineral resource esmate include: ● Unrecognized complexity and other changes to the interpretaon of the geological model and grade shell ● Changes to the mineral resource esmate methodology ● Adjustments to address the perceived high-grade bias in the higher-grade copper ● Unrecognized metallurgical variability ● Addional work may allow the inclusion of cobalt in future updates to the mineral resource statement and expand the mineral resource. ● Approval for developing road access to site. Exploraon, Development, and Producon Based on the mineral resource esmates and exisng metallurgical testwork presented in this NI 43-101 Bornite Report and S-K 1300 Bornite Report, the QPs recommend Trilogy Metals connue to improve their understanding of the Bornite property’s structural geology and their conﬁdence in the database with addional re sampling, drilling and database reviews, scoping study as well as conduct addional metallurgical testwork, hydrogeological and geotechnical assessments, and environmental studies totalling between $16.8 and $19.9 million. Exploraon Potenal Outcropping exposures of the mineralizaon-hosng carbonate stragraphy along with large areas of dolomite alteraon occur over approximately 18 km of strike along the northern ﬂank of the Cosmos Hills. Historical exploraon drilling focused solely on outcropping mineralizaon and subsurface extensions at the Bornite, Aurora Mountain, and Pardner Hill areas. Much of the carbonate belt has sll yet to be evaluated. In addion, airborne geophysics completed in 2006 show the Bornite carbonate sequence and the bounding stragraphy dip to the north under the Ambler Lowlands toward the Ambler Schist Belt. This opens a large area to explore for deposits beneath the ll and recent sediments that occupy the lowlands. Exploraon by Kenneco and Trilogy Metals has used a variety of methodologies. In 1996, Kenneco completed an inial gravity survey of the Ambler Lowlands showing signiﬁcant gravimetric anomalies that may indicate structural dislocaons and potenal alteraon and mineralizaon. In 2011, Trilogy Metals invesgated both deep IP and NSAMT geophysical techniques. Results from the 2011 program led to a 2012 district-wide, 200 m dipole-dipole, deep-penetrang IP survey. 79 Table of Contents Along with extensive physical property data captured for all lithologies, airborne EM and magnec data, the IP data was used to develop a comprehensive geophysical model of the district to support future exploraon targeng. In 2017, Trilogy Metals conducted a more detailed gravity survey that delineated signiﬁcant north-northeast to northeast oriented structures which appear in part to control local basin morphology and mineralizaon. Geochemical methods include convenonal and DPG and lithogeochemical vectoring. Test lines using DPG methods with various selecve paral leaches of metals proved eﬀecve in recognizing margins of South Reef mineralizaon at signiﬁcant depths under cover. A recent analysis of the extensive ICP trace element data set at Bornite demonstrates some signiﬁcant alteraon vectors including iron content of various hydrothermal dolomites. Simple XRF analysis of dolomites in the ﬁeld might prove eﬀecve in vectoring toward Fe-poor mineralized dolomite secons. A beer understanding of the basin development and its structural framework is crical to the exploraon of Bornite-style systems. Dang of mineralizaon in the Ambler Mining District suggests that the Ambler schist belt that hosts the Arcc deposit and the Bornite carbonate-hosted mineralizaon are close to contemporaneous. However, some textural and metamorphic observaons suggest a possible Jura-Cretaceous or younger age for Bornite and as such, mineralizaon at Bornite is suspected to slightly post-date host stragraphy. This early and extensive syngenec/early epigenec signature, along with the overall ﬂuid chemistry of the system invesgated by early workers, such as Hitzman (1983 and 1986), point to large saline basin- generated ﬂuid transport as the mechanism controlling the metallogeny of the Ambler Mining District. Importantly, similar metallogenies related to saline, basin-generated ﬂuids and their associated deposits form some of the largest copper districts in the world. The Bornite Project is not currently in producon; for contemplated exploraon or development acvies see above. Internal Controls Over Mineral Resource and Reserve Esmates Trilogy has internal controls for reviewing and documenng the informaon supporng the mineral resource and mineral reserve esmates, describing the methods used, and ensuring the validity of the esmates. Informaon that is used to compile mineral resources and reserves is prepared and cerﬁed by appropriately qualiﬁed persons at the project sits and is subject to our internal review process which includes review by appropriate management and a Qualiﬁed Person employed by Trilogy. The corporate Qualiﬁed Person presents the mineral resource and reserve informaon to the Board’s Technical Commiee for their review on a periodic basis. Mineral Reserve and Resource Esmate Comparison Between November 30, 2023 and 2022 Mineral Reserves Comparison for Arcc There were no changes to the mineral reserve esmates for the Arcc project from November 30, 2022 to November 30, 2023. Mineral Resources Comparison for Arcc There were no changes to the mineral resource esmates for the Arcc project from November 30, 2022 to November 30, 2023. Mineral Resources Comparison for Bornite There were no changes to the mineral resource esmates for the Bornite project from November 30, 2022 to November 30, 2023. 80 Table of Contents Item 3. LEGAL PROCEEDINGS From me to me, we are a party to roune ligaon and proceedings that are considered part of the ordinary course of business. We are not aware of any material current, pending, or threatened ligaon. There are no material proceedings pursuant to which any of our directors, oﬃcers or aﬃliates or any owner of record or beneﬁcial owner of more than 5% of our securies or any associate of any such director, oﬃcer or security holder is a party adverse to us or has a material interest adverse to us. Item 4. MINE SAFETY DISCLOSURES Operaons are subject to regulaon by the Federal Mine Safety and Health Administraon (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). At our current stage of exploraon, 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 certain disclosures pursuant to Secon 1503(a) of Dodd-Frank. We have nothing to disclose pursuant to Secon 1503(a) of Dodd-Frank for the ﬁscal year ended November 30, 2023. Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the TSX and the NYSE American under the symbol “TMQ”. As of February 9, 2024, there were 1,447 registered holders of our Common Shares. PART II Dividend Policy We have not declared or paid any dividends on our Common Shares. Our current business plan requires that for the foreseeable future, any future earnings be reinvested to ﬁnance the growth and development of our business. We will not declare or pay any dividends unl such me as our cash ﬂow exceeds our capital requirements and will depend upon, among other things, condions then exisng including earnings, ﬁnancial condion, restricons in ﬁnancing arrangements, business opportunies and condions and other factors, or our Board determines that our shareholders could make beer use of the cash. Unregistered Sales of Equity Securies None. Repurchase of Securies During ﬁscal year 2023, neither Trilogy nor any aﬃliate of Trilogy repurchased Trilogy Common Shares. Exchange Controls There are no governmental laws, decrees or regulaons in Canada that restrict the export or import of capital, including foreign exchange controls, or that aﬀect the remiance of dividends, interest or other payments to non-resident holders of the securies of Trilogy, other than Canadian withholding tax. 81 Table of Contents Certain Canadian Federal Income Tax Consideraons for U.S. Holders The following summary describes, as of the date hereof, the principal Canadian federal income tax consequences under Income Tax Act (Canada) (the “Tax Act”) and the regulaons thereunder (the “Regulaons”) generally applicable to a holder of Common Shares who, at all relevant mes, for the purposes of the Tax Act, (i) holds such Common Shares as capital property, (ii) deals at arm’s length with the Company, (iii) is not aﬃliated with the Company, (iv) is not, and is not deemed to be, a resident of Canada, and (v) does not use or hold (and will not be deemed to use or hold) the Common Shares in the course of carrying on a business in Canada, or otherwise in connecon with a business carried on in Canada (a “Non-Resident Holder”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Holder that is an insurer carrying on business in Canada and elsewhere or is an “authorized foreign bank” )as deﬁned in the Tax Act). Such Non-Resident Holders should consult their own tax advisors. The Common Shares will generally be considered capital property to a Non-Resident Holder provided that the Non-Resident Holder does not use or hold (and will not use or hold) the Common Shares in the course of carrying on a business of trading or dealing in securies and such Non-Resident Holder has not acquired (and will not acquire) the Common Shares in one or more transacons considered to be an adventure or concern in the nature of trade. The term “U.S. Holder” for the purposes of this secon, means a Non-Resident Holder who, for purposes of the Canada-United States Tax Convenon (1980) as amended, (the “Convenon”), is at all relevant mes a resident of the United States and is a “qualifying person” under, and entled to the beneﬁts of, the Convenon, Certain U.S. resident enes that are ﬁscally transparent for United States federal income tax purposes (including certain limited liability companies) may not in all circumstances be entled to the beneﬁts of the Convenon. Members of or holders of an interest in such an enty that holds Common Shares should consult their own tax advisors regarding the extent, if any, to which the beneﬁts of the Convenon will apply to the enty in respect of its Common Shares. This summary is based on the informaon contained in this Form 10-K, the current provisions of the Tax Act, the Regulaons, the current provisions of the Convenon and counsel’s understanding of the published administrave policies and assessing pracces of the Canada Revenue Agency (the “CRA”) published in wring by the CRA prior to the date hereof. This summary also takes into account all speciﬁc proposals to amend the Tax Act and Regulaons publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (collecvely, the “Proposed Tax Amendments”). This summary assumes that the Proposed Tax Amendments will be enacted substanally as proposed; however, no assurances can be given that the Proposed Tax Amendments will be enacted as proposed or at all. Other than the Proposed Tax Amendments, this summary does not take into account or ancipate any changes in law or the administrave policies or assessing pracces of the CRA, whether by way of legislave, governmental or judicial decision or acon, nor does it take into account other federal or any provincial, territorial or foreign legislaon or consideraons, which may diﬀer signiﬁcantly from those discussed herein. This summary is not exhausve of all possible Canadian federal income tax consideraons of acquiring or holding Common Shares. This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal, business, or tax advice to any parcular Non-Resident Holder and no representaons with respect to the tax consequences to any parcular Non-Resident Holder are made. Accordingly, Non-Resident Holders should consult their own tax advisors as to the Canadian federal tax consequences, and the tax consequences of any other jurisdicon, applicable to them having regard to their own parcular circumstances. Currency Conversion Generally, for purposes of the Tax Act, all amounts calculated in a currency other than the Canadian dollar relang to the acquision, holding or disposion of Common Shares must be converted into Canadian dollars based on the exchange rates determined in accordance with the Tax Act. The amount of dividends to be included in income, and capital gains and losses realized by a Non-Resident Holder, may be aﬀected by ﬂuctuaons in the relevant exchange rates. 82 Table of Contents Disposion of Common Shares A 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 disposion of the Common Shares, nor will capital losses arising from the disposion be recognized under the Tax Act, unless the Common Shares constute “taxable Canadian property” (as deﬁned in the Tax Act) of the Non-Resident Holder at the me of disposion and the Non-Resident Holder is not entled to relief under an applicable income tax treaty or convenon. As long as the shares are then listed on a “designated stock exchange” (as deﬁned in the Tax Act) (which currently includes the TSX and the NYSE American) at the me of disposion or deemed disposion, the Common Shares generally will not constute taxable Canadian property of a Non-Resident Holder, unless (a) at any me during the 60-month period immediately preceding the disposion the following two condions are met concurrently: (i) one or any combinaon of (A) the Non-Resident Holder, (B) persons not dealing at arm’s length with such Non-Resident Holder, (C) partnerships in which the Non-Resident Holder or a person described in (B) holds a membership interest directly or indirectly through one or more partnerships, owned 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 the fair market value of the Common Shares was derived, directly or indirectly, from one or any combinaon of real or immovable property situated in Canada, “Canadian resource properes” (as deﬁned in the Tax Act), “mber resource properes” (as deﬁned in the Tax Act) or opons in, or interests in, or for civil law rights in, such properes, whether or not the property exists, or (b) the Common Shares are otherwise deemed to be taxable Canadian property pursuant to certain circumstances prescribed in the Tax Act. If the Common Shares are taxable Canadian property to a Non-Resident Holder, an applicable income tax treaty or convenon, including the Convenon, may in certain circumstances exempt that Non-Resident Holder from tax under Tax Act in respect of the disposion or deemed disposion of the Common Shares. A Non-Resident Holder whose shares are taxable Canadian property should consult their own advisors having regard to their parcular circumstances. Dividends on Common Shares Under the Tax Act, dividends on Common Shares paid or credited or deemed to be paid or credited to a Non-Resident Holder will be subject to Canadian withholding tax at the rate of 25% of the gross amount of the dividends unless such rate is reduced by the terms of an applicable income tax treaty or convenon. In general, in the case of a U.S. Holder who is paid or credited a dividend or deemed dividend, is the beneﬁcial owner of such dividend or deemed dividend, and who qualiﬁes for full beneﬁts under the Convenon, the rate of such Canadian withholding tax will generally be reduced to 15% of the gross amount of such dividend (or 5% in the case of a U.S. Holder that is a company beneﬁcially owning at least 10% of the Company’s vong shares). In addion, under the Convenon, dividends may be exempt from Canadian withholding tax if paid to certain U.S. Holders that are qualifying religious, scienﬁc, literary, educaonal or charitable tax-exempt organizaons and qualifying trusts, companies, organizaons or arrangements operated exclusively to administer or provide pension, rerement or employee beneﬁts that are exempt from tax in the United States and that have complied with speciﬁc administrave procedures. The Mullateral Convenon to Implement Tax Treaty Related Measures to Prevent Base Erosion and Proﬁt Shiing of which Canada is a signatory, aﬀects many of Canada’s tax treaes (but not the Convenon), including the ability to claim beneﬁts thereunder. Non-Resident Holders should consult their own tax advisors to determine their entlement to relief under an applicable income tax treaty or convenon. Certain U.S. Federal Income Tax Consideraons The following is a general summary of certain ancipated U.S. federal income tax consideraons applicable to a U.S. Holder (as deﬁned below) arising from and relang to the acquision, ownership and disposion of Common Shares. 83 Table of Contents This summary is for general informaon purposes only and does not purport to be a complete analysis or lisng of all potenal U.S. federal income tax consideraons that may apply to a U.S. Holder as a result of the acquision of Common Shares. Furthermore, this summary does not take into account the individual facts and circumstances of any parcular U.S. Holder that may aﬀect the U.S. federal income tax consideraons applicable to such U.S. Holder of Common Shares. Except as speciﬁed below, this summary does not discuss applicable tax reporng requirements. Accordingly, this summary is 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 should consult their own tax advisors regarding the U.S. federal, U.S. state and local, and non-U.S. tax consequences relang to the acquision, ownership and disposion 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 potenal U.S. federal income tax consideraons applicable to U.S. Holders as discussed in this summary. This summary is not binding on the IRS, and the IRS is not precluded from taking a posion that is diﬀerent from, and contrary to, the posions taken in this summary. In addion, because the authories on which this summary is based are subject to various interpretaons, the IRS and the U.S. courts could disagree with one or more of the posions taken in this summary. Scope of this Summary Authories This summary is based on the U.S. Internal Revenue, as amended (“Code”), regulaons promulgated by the Department of the Treasury (whether ﬁnal, temporary or proposed) (“Treasury Regulaons”), U.S. court decisions, published rulings and administrave posions of the IRS, and the Convenon, that are applicable and, in each case, in eﬀect as of the date of this document. Any of the authories on which this summary is based could be changed in a material and adverse manner at any me, and any such change could be applied on a retroacve or prospecve basis, which could aﬀect the U.S. federal income tax consideraons described in this summary. This summary does not discuss the potenal eﬀects, whether adverse or beneﬁcial, of any proposed legislaon that, if enacted, could be applied on a retroacve basis. U.S. Holders For purposes of this secon, a “U.S. Holder” is a beneﬁcial owner of Common Shares that, for U.S. federal income tax purposes, is (a) an individual who is a cizen or resident of the United States for U.S. federal income tax purposes; (b) a corporaon, or other enty classiﬁed as a corporaon for U.S. federal income tax purposes, that is created or organized in 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 estate is 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 administraon of such trust and one or more U.S. persons have the authority to control all substanal decisions of such trust. Non-U.S. Holders For 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 (or other “pass-through” enty). This summary does not address the U.S. federal income tax consideraons applicable to Non-U.S. Holders relang to the acquision, ownership and disposion 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 non-U.S. tax consequences (including the potenal applicaon of and operaon of any tax treaes) relang to the acquision, ownership, and disposion of Common Shares. 84 Table of Contents U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed This summary does not address the U.S. federal income tax consideraons applicable to U.S. Holders that are subject to special provisions under the Code, including (a) U.S. Holders that are tax-exempt organizaons, qualiﬁed rerement plans, individual rerement accounts or other tax-deferred accounts; (b) U.S. Holders that are ﬁnancial instuons, underwriters, insurance companies, real estate investment trusts or regulated investment companies or that are broker-dealers, dealers, or traders in securies or currencies that elect to apply a mark-to-market accounng method; (c) U.S. Holders that have a “funconal currency” other than the U.S. dollar; (d) U.S. Holders that own Common Shares as part of a straddle, hedging transacon, conversion transacon, construcve sale or other integrated transacons; (e) U.S. Holders that acquired Common Shares in connecon with the exercise of employee stock opons or otherwise as compensaon for services; (f) U.S. Holders that hold Common Shares other than as a capital asset (generally property held for investment purposes) within the meaning of Secon 1221 of the Code; (g) U.S. Holders that are subject to special tax accounng rules; (h) U.S. Holders that own, directly, indirectly or by aribuon, 10% or more, by vong power or value, of the outstanding shares of the Company; (i) are partnerships and other pass-through enes (and investors in such partnerships and enes); (j) are S corporaons (and shareholders thereof): (k) are U.S. expatriates or former long-term residents of the United States; or (l) U.S. Holders that hold Common Shares in connecon with a trade or business, permanent establishment, or ﬁxed base outside the United States; or (m) U.S. Holders that are subject to the alternave minimum tax. 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 enty that is classiﬁed as a partnership (or other “pass-through” enty) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences applicable to such partnership (or “pass-through” enty) and the partners of such partnership (or owners of such “pass- through” enty) generally will depend on the acvies of the partnership (or “pass-through” enty) and the status of such partners (or owners). Partners of enes that are classiﬁed as partnerships (and owners of “pass-through” enes) for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences relang to the acquision, ownership and disposion of Common Shares. Tax Consequences Other than U.S. Federal Income Tax Consequences Not Addressed This summary does not address the U.S. state and local, U.S. estate and gi, U.S. federal net investment income, U.S. alternave minimum tax, or non-U.S. tax consequences to U.S. Holders relang to the acquision, ownership, and disposion of Common Shares. Each U.S. Holder should consult its own tax advisor regarding the U.S. state and local, U.S. estate and gi, U.S. federal net investment income, U.S. federal alternave minimum tax and non-U.S. tax consequences relang to the acquision, ownership, and disposion of Common Shares. U.S. Federal Income Tax Consequences of the Acquision, Ownership and Disposion of Common Shares Distribuons on Common Shares Subject to the PFIC rules discussed below, a U.S. Holder that receives a distribuon, including a construcve distribuon, with respect to a Common Share will be required to include the amount of such distribuon in gross income as a dividend (without reducon for any Canadian income tax withheld from such distribuon) to the extent of the current or accumulated “earnings and proﬁts” of the Company, as computed for U.S. federal income tax purposes. To the extent that a distribuon exceeds the current and accumulated “earnings and proﬁts” of the Company, such distribuon will 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 thereaer as a gain from the sale or exchange of such Common Shares (see “Sale or Other Taxable Disposion of Common Shares” below). However, the Company does not intend to maintain the calculaons of earnings and proﬁts in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribuon by the Company with respect to the Common Shares will constute ordinary dividend income. Subject to applicable limitaons, dividends paid by the Company to non- corporate U.S. Holders, including individuals, generally will be eligible for the preferenal tax rates applicable to long-term capital gains for dividends, provided certain holding period and other condions are 85 Table of Contents sasﬁed, including that the Company not be classiﬁed as a PFIC (as discussed below) in the tax year of distribuon or in the preceding tax year. Dividends received on Common Shares by corporate U.S. Holders will not be eligible for the “dividends received deducon”. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the applicaon of such rules. Sale or Other Taxable Disposion of Common Shares Subject to the PFIC rules discussed below, upon the sale or other taxable disposion of Common Shares a U.S. Holder generally will recognize capital gain 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 tax basis 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 Convenon and such U.S. Holder elects 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 will be capital gain or loss, which will be long-term capital gain or loss if, at the me of the sale or other disposion, such Common Shares are held for more than one year. Preferenal tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferenal tax rates for long-term capital gains of a U.S. Holder that is a corporaon. Deducons for capital losses are subject to signiﬁcant limitaons under the Code. Foreign Tax Credit Dividends paid on Common Shares will be treated as foreign-source income, and generally will be treated as “passive category income” or “general category income” for U.S. foreign tax credit purposes. Any gain or loss recognized on a sale or other disposion of Oﬀered Shares generally will be United States source gain or loss. Certain U.S. Holders that are eligible for the beneﬁts of the Convenon may elect to treat such gain or loss as Canadian source gain or loss for U.S. foreign tax credit purposes. The Code applies various complex limitaons on the amount of foreign taxes that may be claimed as a credit by U.S. taxpayers. In addion, Treasury Regulaons that apply to taxes paid or accrued (the “Foreign Tax Credit Regulaons”) impose addional requirements for Canadian withholding taxes to be eligible for a foreign tax credit, and there can be no assurance that those requirements will be sasﬁed. The Treasury Department has recently released guidance temporarily pausing the applicaon of certain of the Foreign Tax Credit Regulaons. Subject to the PFIC rules discussed below, and the Foreign Tax Credit Regulaons, as discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on Common Shares generally will be entled, at the elecon of such U.S. Holder, to receive either a deducon or a credit for such Canadian 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 deducon will reduce a U.S. Holder’s income that is subject to U.S. federal income tax. This elecon is made on a year-by- year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year. The foreign tax credit rules are complex and involve the applicaon of rules that depend on a U.S. Holder’s parcular circumstances. Accordingly, each U.S. Holder should consult its own U.S. tax advisors regarding the foreign tax credit rules. Receipt of Foreign Currency The amount of any distribuon paid in foreign currency to a U.S. Holder in connecon with the ownership of Common Shares, or on the sale, exchange or other taxable disposion of Common Shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of actual or construcve receipt (regardless of whether such foreign currency is converted into U.S. dollars at that me). If the foreign currency received is 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 date of 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 in eﬀect 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 or loss for foreign tax credit purposes. Diﬀerent rules apply to U.S. Holders who use the accrual method of tax accounng. U.S. Holders should consult 86 Table of Contents their own U.S. tax advisors regarding the U.S. federal income tax consequences of receiving, owning and disposing of foreign currency. Passive Foreign Investment Company Rules If the Company is considered a PFIC within the meaning of Secon 1297 of the Code at any me during a U.S. Holder’s holding period, then certain diﬀerent and potenally adverse tax consequences would apply to such U.S. Holder’s acquision, ownership and disposion of Common Shares. PFIC Status of the Company The 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 producon of passive income, based on the fair market value of such assets. “Gross income” generally includes all revenues less the cost of goods sold plus income from investments and from incidental or outside operaons or sources, and “passive income” includes, for example, dividends, interest, certain rents and royales, certain gains from the sale of stock and securies, and certain gains from commodies transacons. Acve business gains arising from the sale of commodies generally are excluded from passive income if substanally all of a foreign corporaon’s commodies 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 are sasﬁed. 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 the outstanding shares of another corporaon, the Company will be treated as if it (a) held a proporonate share of the assets of such other corporaon and (b) received directly a proporonate share of the income of such other corporaon. In addion, for purposes of the PFIC income test and asset test described above, “passive income” does not include any interest, dividends, rents or royales that are received or accrued by the Company from a “related person” (as deﬁned in Secon 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income. Under certain aribuon rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proporonate share of any subsidiary of the Company which is also a PFIC (a “Subsidiary PFIC”), and will be subject to U.S. federal income tax on (a) a distribuon on the shares of a Subsidiary PFIC and (b) a disposion 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, 2020 and 2021. The Company believes it was a PFIC for the tax years ended November 30, 2018, 2019, 2022 and 2023 and may be a PFIC in future tax years. No opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or is currently planned to be requested. The determinaon of whether the Company (or a subsidiary of the Company) was, or will be, a PFIC for a tax year depends, in part, on the applicaon of complex U.S. federal income tax rules, which are subject to diﬀering interpretaons. In addion, whether the Company (or subsidiary) will be a PFIC for any tax year depends on the assets and income of the Company (and each such subsidiary) over the course of each such tax 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 will not challenge any determinaon made by the Company (or subsidiary) concerning its PFIC status or that the Company (and any subsidiary) was not, or will 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 of the Company. Default PFIC Rules under Secon 1291 of the Code If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquision, ownership and disposion of Common Shares will depend on whether such U.S. Holder makes a QEF elecon or makes a mark-to-market elecon under Secon 1296 of the Code (a “Mark-to-Market Elecon”) with respect to Common Shares. A U.S. Holder that does not make either a QEF Elecon or a Mark-to-Market Elecon will be referred to in this summary as a “Non-Elecng U.S. Holder”. 87 Table of Contents A Non-Elecng U.S. Holder will be subject to the rules of Secon 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable disposion of Common Shares and (b) any excess distribuon paid on the Common Shares. A distribuon generally will be an “excess distribuon” to the extent that such distribuon (together with all other distribuons received in the current tax year) exceeds 125% of the average distribuons received 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 Secon 1291 of the Code any gain recognized on the sale or other taxable disposion of Common Shares (including an indirect disposion of shares of a Subsidiary PFIC), and any excess distribuon paid on Common Shares (or a distribuon by a Subsidiary PFIC to its shareholder that is deemed to be received by a U.S. Holder) must be ratably allocated to each day of a Non-Elecng U.S. Holder’s holding period for the Common Shares. The amount of any such gain or excess distribuon allocated to the tax year of disposion or excess distribuon and to years before the 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. federal income 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 each such year, calculated as if such tax liability had been due in each such year. A Non-Elecng U.S. Holder that is not a corporaon must treat any such interest paid as “personal interest”, which is not deducble. If the Company is a PFIC for any tax year during which a Non-Elecng U.S. Holder holds Common Shares, the Company will connue to be treated as a PFIC with respect to such Non-Elecng U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent years. If the Company ceases to be a PFIC, a Non-Elecng U.S. Holder may terminate this deemed PFIC status with respect to Common Shares by elecng to recognize gain (which will be taxed under the rules of Secon 1291 of the Code discussed above) as if such Common Shares were sold on the last day of the last tax year for which the Company was a PFIC. Under proposed Treasury Regulaons, if a U.S. Holder has an opon, warrant or other right to acquire stock of a PFIC, such opon, warrant or right is considered to be PFIC stock subject to the default rules of Secon 1291 of the Code. Under rules described below, if the Company was a PFIC, the holding period for the opon, warrant or other right would begin on the day aer the date a U.S. Holder acquired the opon, warrant or other right. This would impact the availability of the QEF Elecon and Mark-to-Market Elecon with respect to an opon, warrant or other right. Thus, a U.S. Holder would have to account for an opon, warrant or other right and Common Shares under the PFIC rules and the applicable elecons diﬀerently (see discussion below under “QEF Elecon” and “Market-to-Market Elecon”.) QEF Elecon In the event the Company is a PFIC and a U.S. Holder makes a QEF Elecon for the ﬁrst tax year in which its holding period of its Common Shares begins, such U.S. Holder generally will not be subject to the rules of Secon 1291 of the Code discussed above with respect to its Common Shares. However, a U.S. Holder that makes a QEF Elecon will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain 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 be taxed as ordinary 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 Elecon 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 to such U.S. Holder by the Company. However, a U.S. Holder that makes a QEF Elecon may, subject to certain limitaons, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporaon, any such interest paid will be treated as “personal interest”, which is not deducble. A U.S. Holder that makes a QEF Elecon generally (a) may receive a tax-free distribuon from the Company to the extent that such distribuon represents “earnings and proﬁts” of the Company that were previously included in income by the U.S. Holder because of such QEF Elecon and (b) will adjust such U.S. Holder’s tax basis in the Common Shares to reﬂect the amount included in income or allowed as a tax-free distribuon because of such QEF Elecon. In addion, a U.S. 88 Table of Contents Holder that makes a QEF Elecon generally will recognize capital gain or loss on the sale or other taxable disposion of Common Shares. The procedure for making a QEF Elecon, and the U.S. federal income tax consequences of making a QEF Elecon, will depend on whether such QEF Elecon is mely. A QEF Elecon will be treated as “mely” if it is made for the ﬁrst year in the U.S. Holder’s holding period for the Common Shares in which the Company was a PFIC. A U.S. Holder may make a mely QEF Elecon by ﬁling the appropriate QEF Elecon documents at the me such U.S. Holder ﬁles a U.S. federal income tax return for such year. A QEF Elecon will apply to the tax year for which such QEF Elecon is made and to all subsequent tax years, unless such QEF Elecon is invalidated or terminated or the IRS consents to revocaon of such QEF Elecon. If a U.S. Holder makes a QEF Elecon and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Elecon 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 Elecon will be eﬀecve, and the U.S. Holder will be subject to the QEF rules described above during a subsequent tax year in which the Company qualiﬁes as a PFIC. As discussed above, under proposed Treasury Regulaons, if a U.S. Holder has an opon, warrant or other right to acquire stock of a PFIC, such opon, warrant or right is considered to be PFIC stock subject to the default rules of Secon 1291 of the Code on its disposion. However, a holder of an opon, warrant or other right to acquire stock of a PFIC may not make a QEF Elecon that will apply to the opon, warrant or other right to acquire PFIC stock. In addion, under proposed Treasury Regulaons, if a U.S. Holder holds an opon, warrant or other right to acquire stock of a PFIC, the holding period with respect to shares of stock of the PFIC acquired upon exercise of such opon, warrant or other right will include the period that the opon, warrant or other right was held. U.S. Holders should consult their own tax advisors regarding the applicaon of the PFIC rules to Common Shares. The Company will make available to U.S. Holders, upon their wrien request, informaon as to its status as a PFIC, as reasonably determined by the Company, and will provide to a U.S. Holder all informaon and documentaon that a U.S. Holder making a QEF Elecon with respect to the Company 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 will provide any such informaon relang to any Subsidiary PFIC. Because the Company may own shares in one or more Subsidiary PFICs and may acquire shares in one or more Subsidiary PFICs in the future, they will connue to be subject to the rules discussed above with respect to the taxaon of gains and excess distribuons with respect to any Subsidiary PFIC for which the U.S. Holders do not obtain the required informaon to ﬁle a QEF Elecon. U.S. Holders should consult their own tax advisor regarding the availability of, and procedure for making, a QEF Elecon with respect to the Company and any Subsidiary PFIC. Mark-to-Market Elecon A U.S. Holder may make a Mark-to-Market Elecon only if the Common Shares are marketable stock. The Common Shares generally will be “marketable stock” if they are regularly traded on (a) a naonal securies exchange that is registered with the SEC; (b) the naonal market system established pursuant to secon 11A of the Securies and Exchange Act of 1934; or (c) a foreign securies exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, lisng, ﬁnancial disclosure and other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced; and (ii) the rules of such foreign exchange ensure acve trading of listed stocks. If such stock is traded on such a qualiﬁed exchange or other market, such stock generally will be “regularly traded” for any calendar year during which such stock is traded, other than in de minimus quanes, on at least 15 days during each calendar quarter. Each U.S. Holder should consult its own tax advisor regarding whether the Common Shares constute marketable stock. A U.S. Holder that makes a Mark-to-Market Elecon with respect to its Common Shares generally will not be subject to the rules of Secon 1291 of the Code discussed above. However, if a U.S. Holder does not make a Mark-to-Market 89 Table of Contents Elecon beginning in the ﬁrst tax year of such U.S. Holder’s holding period for Common Shares or such U.S. Holder has not made a mely QEF Elecon, the rules of Secon 1291 of the Code discussed above will apply to certain disposions of, and distribuons on, the Common Shares. A U.S. Holder that makes a Mark-to-Market Elecon will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to 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 such Common Shares. A U.S. Holder that makes a Mark-to-Market Elecon will be allowed a deducon in an amount equal to the excess, if any, of (i) such U.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 amount of previously included income as a result of the Mark-to-Market Elecon for prior tax years). U.S. Holders that make a Mark-to-Market Elecon generally also will adjust their tax basis in the Common Shares to reﬂect the amount included in gross income or allowed as a deducon because of such Mark-to-Market Elecon. In addion, upon a sale or other taxable disposion of Common Shares, a U.S. Holder that makes a Mark-to-Market Elecon will recognize ordinary income or loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Elecon for prior tax years over (b) the amount allowed as a deducon because of such Mark-to-Market Elecon for prior tax years). A Mark-to-Market Elecon applies to the tax year in which such Mark-to-Market Elecon is made and to each subsequent tax year, unless the Common Shares cease to be “marketable stock” or the IRS consents to revocaon of such elecon. U.S. Holders should consult their own tax advisors regarding the availability of, and procedure for making, a Mark-to-Market Elecon. Although a U.S. Holder may be eligible to make a Mark-to-Market Elecon with respect to Common Shares, no such elecon may be made with respect to 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 Elecon will not be eﬀecve to eliminate the interest charge described above with respect to deemed disposions of Subsidiary PFIC stock or distribuons from a Subsidiary PFIC. Other PFIC Rules Under Secon 1291(f) of the Code, the IRS has issued proposed Treasury Regulaons that, subject to certain excepons, would cause a U.S. Holder that had not made a mely QEF Elecon to recognize gain (but not loss) upon certain transfers of Common Shares that would otherwise be tax-deferred (e.g., gis and exchanges pursuant to corporate reorganizaons) in the event the Company is a PFIC during such U.S. Holder’s holding period for the relevant shares. However, the speciﬁc U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which Common Shares are transferred. Certain addional 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 QEF Elecon. For example, under Secon 1298(b)(6) of the Code, a U.S. Holder that uses Common Shares as security for a loan will, except as may be provided in Treasury Regulaons, be treated as having made a taxable disposion 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 informaon as Treasury Regulaons and/or other IRS guidance may require. U.S. Holders should consult their own tax advisors regarding the requirements of ﬁling such informaon returns under these rules, including the requirement to ﬁle an IRS Form 8621. In addion, 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 market value unless such decedent had a mely and eﬀecve QEF Elecon in place. Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribuon from a PFIC. 90 Table of Contents 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. federal income tax consequences of the acquision, ownership, and disposion of Common Shares in the event the Company is a PFIC at any me during such holding period for such Common Shares. Informaon Reporng, Backup Withholding Tax Under U.S. federal income tax law, certain categories of U.S. Holders must ﬁle informaon returns with respect to their investment in, or involvement in, a foreign corporaon. For example, U.S. return disclosure obligaons (and related penales) are imposed on individuals who are U.S. Holders that hold certain speciﬁed foreign ﬁnancial assets in excess of certain thresholds. The deﬁnion of speciﬁed foreign ﬁnancial assets includes not only ﬁnancial accounts maintained in foreign ﬁnancial instuons, but also, unless held in accounts maintained by a ﬁnancial instuon, any stock or security issued by a non-U.S. person, any ﬁnancial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign enty. U.S. Holders may be subject to these reporng requirements unless their Common Shares are held in an account at certain ﬁnancial instuons. Penales for failure to ﬁle certain of these informaon returns are substanal. U.S. Holders should consult with their own tax advisors regarding the requirements of ﬁling informaon returns, including the requirement to ﬁle an IRS Form 8938. 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 certain sales or other taxable disposions of Common Shares, may be subject to informaon reporng and backup withholding tax, currently 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 idenﬁcaon number (generally on Form W-9); (b) furnishes an incorrect U.S. taxpayer idenﬁcaon number; (c) is noﬁed by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax; or (d) fails under certain circumstances to cerfy, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer idenﬁcaon number and that the IRS has not noﬁed such U.S. Holder that it is subject to backup withholding tax. However, U.S. Holders that are corporaons generally are excluded from these informaon reporng and backup withholding tax rules. Backup withholding is not an addional 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 income tax liability, if any, or will be refunded, if such U.S. Holder mely furnishes the required informaon to the IRS. U.S. Holders should consult their own tax advisors regarding the informaon reporng and backup withholding tax rules. The discussion of reporng requirements set forth above is not intended to constute a complete descripon of all reporng requirements that may apply to a U.S. Holder. A failure to sasfy certain reporng requirements may result in an extension of the me period during which the IRS can assess a tax and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsasﬁed reporng requirement. Each U.S. Holder should consult its own tax advisors regarding the informaon reporng and backup withholding rules. THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES. Item 6. [Reserved] Not applicable 91 Table of Contents Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General This Management’s Discussion and Analysis (“MD&A”) of Trilogy Metals Inc. (“Trilogy”, “the Company”, “us” or “we”) is dated February 8, 2024 and provides an analysis of our audited ﬁnancial results for the year ended November 30, 2023 compared to the year ended November 30, 2022. A discussion of our year ended November 30, 2023 compared to November 30, 2022 is contained in our report on Form 10-K for the year ended November 30, 2023. The following informaon should be read in conjuncon with our November 30, 2023 audited consolidated ﬁnancial statements and related notes which were prepared in accordance with United States generally accepted accounng principles (“U.S. GAAP”). A summary of the U.S. GAAP accounng policies is outlined in note 2 of the audited consolidated ﬁnancial statements. All amounts are in United States dollars unless otherwise stated. References to “Canadian dollars” and “C$” and “CDN$” are to the currency of Canada and references to “U.S. dollars”, “$” or “US$” are to the currency of the United States. These consolidated ﬁnancial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilies in the normal course of business for the foreseeable future. As at November 30, 2023, the Company had a working capital surplus of $2.4 million (2022 - $2.4 million) and an accumulated deﬁcit of $81.8 million (2022 - $66.9 million). The Company has no recurring source of cash inﬂows at its current stage. The Company’s cash oulow from operaons was $3.1 million for the year ended November 30, 2023. The Company intends to ﬁnance its future requirements through a combinaon of debt and/or equity issuance. There is no assurance that the Company will be able to obtain such ﬁnancings or obtain them on a favourable terms. These material uncertaines raise substanal doubt about the Company’s ability to connue as a going concern. Richard Gosse, P. Geo, VP Exploraon of the Company, is a Qualiﬁed Person under Naonal Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), and has approved the scienﬁc and technical informaon in this MD&A. Trilogy’s shares are listed on the Toronto Stock Exchange (“TSX”) and the NYSE American under the symbol “TMQ”. Addional informaon related to Trilogy, including our annual report on Form 10-K, is available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Descripon of business We are a base metals exploraon company focused on the exploraon and development of mineral properes, through our equity investee, in the Ambler Mining District located in Alaska, U.S.A. We conduct our operaons through a wholly owned subsidiary, NovaCopper US Inc. which is doing business as Trilogy Metals US (“Trilogy Metals US”). Our Upper Kobuk Mineral Projects, (“UKMP” or “UKMP Projects”) were contributed into a 50/50 joint venture (the “Joint Venture”) named Ambler Metals LLC (“Ambler Metals”) between Trilogy and South32 Limited (“South32”) on February 11, 2020 (see below). The projects contributed to Ambler Metals consist of: i) the Ambler lands which host the Arcc copper-zinc-lead-gold-silver project (the “Arcc Project”); and ii) the Bornite lands being explored under a collaborave long-term agreement with NANA Regional Corporaon, Inc. (“NANA”), a regional Alaska Nave Corporaon, which hosts the Bornite carbonate-hosted copper project (the “Bornite Project”) and related assets. The Company also conducts early-stage exploraon through a wholly owned subsidiary, 995 Exploraon Inc. 92 Table of Contents Corporate developments Private Placement On April 25, 2023, the Company completed non-brokered private placement of 5,854,545 common shares of the Company (the “Common Share”) at a price of $0.55 per Common Share for gross proceeds of $3.2 million. Aer legal and stock exchange fees, the Company received net proceeds of $3.1 million. Property review The UKMP Projects are held by our equity investee, Ambler Metals of which Trilogy holds a 50% interest. The projects are located in the Ambler Mining District in Northwest Alaska. The UKMP Projects comprise approximately 448,217 acres (181,387 hectares) consisng of the Ambler and Bornite lands. On October 19, 2011, NANA Regional Corporaon, Inc. (“NANA”), an Alaska Nave Corporaon headquartered in Kotzebue, Alaska, and Trilogy Metals US entered an Exploraon Agreement and Opon Agreement (as amended, the “NANA Agreement”) for the cooperave development of NANA’s respecve resource interests in the Ambler Mining District of Northwest Alaska. Upon the formaon of Ambler Metals, the Company assigned its rights and obligaons under the NANA Agreement to Ambler Metals. The NANA Agreement consolidates Ambler Metals’ and NANA’s land holdings into an approximately 142,831-hectare land package and provides a framework for the exploraon and any future development of this high-grade and prospecve poly-metallic belt. The NANA Agreement establishes a framework for any future development of either the Bornite Project or the Arcc 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, inclusive of the Arcc and Bornite Projects, NANA maintains the right to purchase an ownership interest in the mine equal to between 16%-25% or retain a 15% net proceeds royalty which is payable aer we have recovered certain historical costs, including capital and cost of capital. Should NANA elect to purchase an ownership interest in the mine, consideraon will be payable based on the elected percentage purchased and all the costs incurred on the properes less $40.0 million, not to be less than zero. The pares would form a joint venture and be responsible for all future costs incurred in connecon 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 execuon of a mining lease or a surface use agreement, the amount of which is determined by the parcular area of land from which producon originates. Arcc Project The Ambler lands, which host a number of deposits, including the high-grade copper-zinc-lead-gold-silver Arcc Project, and other mineralized occurrences within a 100-kilometer-long volcanogenic massive sulﬁde (“VMS”) belt. The Ambler lands are located in Northwestern Alaska and consist of 185,805 acres (75,192 hectares) of Federal patented mining claims which hosts the Arcc deposit and State of Alaska mining claims which we are acvely exploring, within which VMS mineralizaon has been found. Prior to the formaon of the Joint Venture on February 11, 2020, we had recorded the Ambler lands as a mineral property with acquision costs capitalized and exploraon costs expensed in accordance with our accounng policies. Bornite Project On October 19, 2011, Trilogy Metals US and NANA signed a collaborave agreement to explore and develop the Ambler Mining District. Under the Exploraon Agreement and Opon to Lease (as amended, the “NANA Agreement”), we acquired, in exchange for, among other things, a $4.0 million cash payment to NANA, the exclusive right to explore the Bornite property and lands deeded to NANA through the Alaska Nave Claims Selement Act (“ANCSA”), located 93 Table of Contents adjacent to the Arcc Project, and the non-exclusive right to access and entry onto NANA’s lands. The amounts paid to NANA were recorded as acquision costs for the Bornite Project. Prior to the formaon of the Joint Venture on February 11, 2020, we had accounted for the Bornite property as a mineral property with acquision costs capitalized and exploraon costs expensed in accordance with our accounng policies. Joint venture On February 11, 2020, pursuant to a contribuon agreement among Trilogy and South32, Trilogy contributed all its assets associated with the UKMP, including the Arcc and Bornite Projects in exchange for a 50% membership interest in Ambler Metals. Simultaneously, South32 contributed $145 million cash in exchange for a 50% membership interest in Ambler Metals. Ambler Metals is an independently operated company, jointly controlled by Trilogy and South32 through a four-member board of which two members are currently appointed by Trilogy based on its 50% equity interest. All signiﬁcant decisions related to the UKMP require the approval of both companies. We determined that Ambler Metals is a variable interest enty, or VIE, because it is expected to need addional funding from its owners for its signiﬁcant acvies. However, we concluded that we are not the primary beneﬁciary of Ambler Metals as the power to direct its acvies, through its board, is shared under the limited liability company agreement. As we have signiﬁcant inﬂuence over Ambler Metals through our representaon on its board, we use the equity method of accounng for our investment in Ambler Metals. Our maximum exposure to loss in this enty is limited to the carrying amount of our investment in Ambler Metals, which, as of November 30, 2023, totaled $135.0 million. Upper Kobuk Mineral Projects The Company announced the second and third set of drilling results from the 2022 ﬁeld season at the UKMP on January 25, 2023 and February 27, 2023, respecvely. On April 4, 2023, the Company announced the ﬁnal set of drilling results from the 2022 ﬁeld season at the UKMP. On February 14, 2023, the Company announced an updated feasibility study technical report for the Arcc Project and an updated resource for the Bornite Project, and ﬁled NI 43-101 technical reports for both projects with the Canadian securies regulators. In addion, the Company announced technical report summaries for both projects prepared in accordance with S-K 1300, which were ﬁled as exhibits with the annual report for the ﬁscal year ended November 30, 2022 on Form 10-K. In July 2023, Ambler Metals used the camp to support a small team of geologists who were connuing work started in 2022 on the stragraphy and alteraon of the Arcc deposit. The focus of the work was to relog exisng drill core from 13 holes across the deposit and 4 holes from regional prospects. In addion, sampling was undertaken for chemostragraphy and alteraon footprint deﬁnion. Geological and talc models for the Arcc deposit were updated and an updated geological and structural model for the area surrounding Arcc was recommended. The camp was also ulized by Ambler Metals to conduct sampling of core from the Bornite deposit to be used in a study iniated by the Center to Advance the Science of Exploraon to Reclamaon in Mining (“CASERM”) at the Colorado School of Mines to invesgate the occurrence and distribuon of crical elements, including germanium. Ambler Metals has recently accepted a proposal from CASERM with leveraged funding from the United States Geological Survey to contribute samples from Bornite to further invesgate the occurrence, distribuon, and sequestraon of crical elements, including germanium, using a suite of micro-analycal methods such as SEM- and XRF-based techniques, electron probe micro analysis, and LA-ICP-MS. Objecves of the study include compiling a comprehensive whole-rock 60+ geochemical dataset of select samples from the Bornite deposit that complement the exisng dataset from the South Reef area related to a recently prepared Master of Science thesis. 94 Table of Contents Bornite Studies During the third quarter, Ambler Metals engaged Wood Canada Limited and SRK Consulng (Canada) Inc. to complete an inial scoping level study on the Bornite deposit to determine if the ore at Bornite may extend the mine life at the proposed Arcc Project. The scope of work covers mining, processing, hydrogeology, infrastructure, tailings management, and waste rock management. The study assumes that ore from Bornite will be transported approximately 30 km northeast to the Arcc mill for processing aer compleon of mining at the Arcc deposit. Bornite will ulize the proposed infrastructure supporng the Arcc Project including power generaon, airstrips and camp. There are potenal signiﬁcant synergies between Arcc and Bornite which could lower the overall capital costs and extend the regional mine life from 13 years for the Arcc deposit to 30 years with both Arcc and Bornite. The study is considering both an open-pit and an underground mine using exisng geologic modelling, geotechnical informaon, and hydrogeological informaon and, where possible, will rely on concepts and costs developed for the Arcc Feasibility Study. Metallurgical test work to potenally increase cobalt reporng with copper concentrate was iniated in July using three previously tested concentrates from the Bornite deposit. The test work is being conducted by ALS Minerals and was completed in the fourth quarter of this year. Ambler Mining District Industrial Access Project (“AMDIAP” or “Ambler Access Project”) In March 2023, the Board of Ambler Metals approved a budget totalling $12.3 million for the Ambler Access Project. The total budget of $24.6 million, funded equally by AIDEA and Ambler Metals to include funding for 2023 ﬁeld season work consisng of ﬁeld studies, perming and data collecon to assist the USBLM in compleng the addional work to support the SEIS. AIDEA started ﬁeld work in May 2023 ulizing a camp at Coldfoot, which work was completed in mid-September. In mid-June AIDEA started ulizing the Ambler Metals Bornite camp with an average of 40 people daily at camp throughout the summer with approximately 20 NANA shareholder hires among them. Ambler Metals closed the Bornite camp with no safety incidents reported. AIDEA successfully completed the planned ﬁeld program from Bornite consisng of cultural resource inventory surveys and tesng of sites over approximately 450 acres, hydraulic and hydrology studies at bridge crossings to assess condions for area drainage, culvert placement and bridge design, collecng topographical and bathymetric survey data to support bridge data and ﬁsh passage culverts, engineering reconnaissance surveys and ﬁsh habitat invesgaons. As at November 30, 2023, $8.4 million of total budget of $12.3 million has been spent to date on logiscs and cost of the ﬁeld season. On November 15, 2022, the United States Bureau of Land Management (“USBLM”) submied a status report announcing that it ancipated publishing a dra Supplemental Environmental Impact Statement (“SEIS”) in the second quarter of calendar 2023 and a ﬁnal SEIS in the fourth quarter of calendar 2023. On January 17, 2023 and March 20, 2023, the USBLM submied status reports reaﬃrming the ming of the dra and ﬁnal SEIS. On May 19, 2023, the USBLM submied a status report revising the meline for development of the SEIS and a subsequent Record of Decision. The USBLM has ﬁled the dra SEIS on October 19, 2023 and ancipated publishing a ﬁnal SEIS in the ﬁrst quarter of calendar year 2024, and a Record of Decision within the second quarter of calendar year 2024. Outlook The Company has approved a budget for Ambler Metals for ﬁscal 2024 in the amount of $5.5 million (2023 - $9.2 million) and $2.5 million (2023 - $12.3 million) for the Ambler Access Project of which the enre amount is funded by the Joint Venture. Ambler Metals had $63.8 million of cash as at the ﬁscal year end on November 30, 2023. The main focus of 95 Table of Contents this year’s budget is to support external and community aﬀairs, maintain the State of Alaska mineral claims in good standing and the maintenance of physical assets. The Company has approved a 2024 cash budget for corporate, head oﬃce, acvies of approximately $2.8 million (2023 - $4.0 million). The corporate budget consists of personnel and related costs of $0.7 million (2023 - $0.9 million), professional fees of $0.6 million (2023 - $1.5 million), investor relaons and markeng costs of $0.1 million ( 2023 - $0.2 million), oﬃce related costs of $0.4 million (2023 - $0.4 million), insurance costs of $0.6 million (2023 - $0.6 million), regulatory costs of $0.3 million (2023 - $0.3 million) and exploraon acvies of $0.1 million (2023 - $0.1 million). Trilogy had $2.6 million of cash at the ﬁscal year end on November 30, 2023. The Company intends to ﬁnance its future requirements through a combinaon of debt and/or equity issuance. Summary of results Selected expenses Exploraon expenses General and administrave Investor relaons Professional fees Salaries Salaries and directors expense – stock-based compensaon Share of loss on equity investment Comprehensive loss for the year Basic and diluted loss per common share Year ended November 30, 2023 $ 43 1,328 130 1,073 753 3,887 7,844 (14,951) (0.10) in thousands of dollars, Year ended November 30, 2022 $ 47 1,287 183 998 984 3,427 17,360 (24,257) (0.17) For the year ended November 30, 2023, we reported a net loss of $15.0 million (or $0.10 basic and diluted loss per common share) compared to a net loss of $24.3 million (or $0.17 basic and diluted loss per common share) in ﬁscal 2022. The $9.3 million decrease in comprehensive loss in the current year, when compared to ﬁscal 2022, is due to the decrease in our share of losses of Ambler Metals of $9.5 million, decrease in salaries of $0.2 million and parally oﬀset from overall increase of $0.6 million in general and administrave expenses, professional fees and salaries and directors expense – stock- based compensaon when compared to prior ﬁscal year 2022. The decrease in our share of losses of Ambler Metals of $9.5 million is mainly due to the decrease in mineral property expenses over the comparave to prior ﬁscal year 2022. The lack of an exploraon drilling program during the 2023 summer ﬁeld season resulted in decreases in drilling, engineering, and project support cost and parally oﬀset from the increase in spending on the Ambler Access Project. Fourth quarter results For the fourth quarter of 2023, there was a $2.2 million reducon in expenses compared to the fourth quarter of 2022. When comparing to the fourth quarter of 2023 with the fourth quarter of 2022, professional fees decreased by $0.2 million due to addional engineering costs related to updang our technical reports in the fourth quarter of 2022 to comply with the standards and deﬁnions of S-K1300; corporate salaries and related costs increased by $0.2 million due to recording of addional stock-based compensaon in 2023. The decrease in our share of losses of Ambler Metals of $2.2 million is mainly due to the decrease in mineral property expenses from lack of an exploraon ﬁeld season in 2023 and paral oﬀset from the increase in funding acvies for the Ambler Access Project and higher salaries and wages due to restructuring costs. 96 Table of Contents Selected ﬁnancial data Annual informaon The following annual informaon is prepared in accordance with U.S. GAAP. Interest income Expenses Comprehensive loss for the year Total assets Total liabilies Quarterly informaon in thousands of dollars Year ended November 30, 2023 Year ended November 30, 2022 $ 120 7,227 (14,951) 138,020 465 $ 34 6,925 (24,257) 145,995 567 Q4 2023 11/30/23 Q3 2023 08/31/23 Q2 2023 05/31/23 Q1 2023 02/28/23 Q4 2022 11/30/22 Q3 2022 08/31/22 in thousands of dollars, except per share amounts Q2 2022 05/31/22 Q1 2022 02/28/22 Interest and other income Exploraon expense Operang expenses Share of loss on equity investment Write oﬀ of mineral properes Loss for the period Loss per common share – basic and diluted $ 37 20 1,215 1,846 — (3,024) $ 37 22 1,179 2,910 — (4,052) $ 27 — 1,227 1,603 — (2,803) $ 19 1 3,606 1,485 — (5,072) $ 19 — 1,176 4,065 — (5,222) $ 11 — 1,166 8,925 (142) (9,938) $ 2 — 1,468 2,460 119 (4,074) $ 2 — 3,115 1,910 29 (5,023) (0.02) (0.03) (0.02) (0.03) 0.04 (0.07) (0.03) (0.03) Factors that can cause ﬂuctuaons in our quarterly results include the length of the exploraon ﬁeld season at the properes, the type of program conducted, and stock-based compensaon expensing. Subsequent to the formaon of the Joint Venture, project related costs may cause ﬂuctuaons in our quarterly results through our 50% share of the Joint Venture’s net operang loss. For the fourth quarter of 2023, we reported a comprehensive loss of $3.0 million, which consisted of $1.2 million in operang expenses and $1.8 million for Trilogy's 50% share of Ambler Metals’ operang loss. Operang expenses for the fourth quarter of 2023 consisted of corporate salaries, professional fees, general and administrave expenses, director expenses and stock-based compensaon. For the third quarter of 2023, we reported a comprehensive loss of $4.1 million, which consisted of $1.1 million in operang expenses and $2.9 million for Trilogy’s 50% share of Ambler Metals’ operang loss. In the third quarter of 2022, we reported a comprehensive loss of $9.9 million, which consisted of $1.2 million in operang expenses and $8.9 million for Trilogy’s 50% share of Ambler Metals’ operang loss. The decrease in our share of losses of Ambler Metals was mainly due to an decrease in mineral property expenses from decrease in drilling, engineering and project support costs and parally oﬀset from the increased cost in the Ambler Access Project. For the second quarter of 2023, we reported a comprehensive loss of $2.8 million, which consisted of $1.2 million in operang expenses, $1.6 million for Trilogy’s 50% share of Ambler Metals’ operang loss. In the second quarter of 2022, 97 Table of Contents we reported a comprehensive loss of $4.1 million, which consisted of $1.5 million in operang expenses, $2.5 million for Trilogy’s 50% share of Ambler Metals’ operang loss and $0.1 million in mineral properes that were wrien oﬀ during the quarter. The decrease in comprehensive loss in the second quarter of 2023 compared to the same quarter in 2022 was due to decrease in our share loss of Ambler Metals, stock-based compensaon and salaries. The decrease of our share of losses of Ambler Metals was mainly due to decrease in mineral property expenses over the comparave quarter in the prior year from decrease in drilling, engineering and project to support cost, and parally oﬀset from increase cost in the Ambler Access Project. For the ﬁrst quarter of 2023, we reported a comprehensive loss of $5.1 million, which consisted of $3.6 million in operang expenses and $1.5 million for Trilogy’s 50% share of Ambler Metals’ operang loss. In the ﬁrst quarter of 2022, we reported a comprehensive loss of $5.0 million which consisted of $3.1 million in operang expenses and $1.9 million for Trilogy’s share of Ambler Metals’ operang loss. The slight increase in comprehensive loss in the ﬁrst quarter of 2023 compared to the ﬁrst quarter of 2022 was due to increase in stock-based compensaon and professional fees and parally oﬀset from the decrease in our share of losses of Ambler Metals, investor relaons and salaries. The decrease in our share of losses of Ambler Metals was mainly due to decrease in mineral property expenses. Liquidity and capital resources We expended $3.1 million on operang acvies during the 2023 ﬁscal year with the majority of cash spent on corporate salaries, professional fees related to our annual regulatory ﬁlings, annual insurance renewal, annual fees paid to the Toronto Stock Exchange and the NYSE American Exchange and with the American and Canadian securies commissions. At November 30, 2023, we had $2.6 million in cash and working capital (current assets less current liabilies) of $2.4 million. Management connues with cash preservaon strategies to reduce cash expenditures where feasible, including but not limited to reducons in markeng and investor conferences and oﬃce expenses. In addion, the Company’s Board of Directors have agreed to take all of their fees in shares of the Company in an eﬀort to preserve cash and increase share ownership. The Company’s senior management team are also taking a poron of their base salaries in shares of the Company to preserve cash. All project related costs are funded by the Joint Venture. Ambler Metals is well funded to advance the UKMP with $63.8 million in cash and $62.4 million in working capital as at November 30, 2023. There are suﬃcient funds at the Joint Venture to fund an operang budget of $5.5 million and $2.5 million for the Ambler Access Project for ﬁscal 2024. Trilogy does not ancipate having to fund the acvies of Ambler Metals unl the current cash balance $63.8 million is expended. Future cash requirements may vary materially from current expectaons. The Company will need to raise addional funds in the future to support its operaons and administraon expenses. Future sources of liquidity are likely in the form of an equity ﬁnancing but may include debt ﬁnancing, converble debt, exercise of opons, or other means. The connued operaons of the Company are dependent on its ability to obtain addional ﬁnancing or to generate future cash ﬂows. There is no assurance that the Company will be able to obtain such ﬁnancings or obtain them on favourable terms. These material uncertaines raise substanal doubt about the Company’s ability to connue as a going concern. 98 Table of Contents Oﬀ-balance sheet arrangements We have no material oﬀ-balance sheet arrangements. Outstanding share data At February 9, 2024, we had 159,749,073 common shares issued and outstanding. At February 9, 2024, we had 14,354,400 stock opons outstanding with a weighted-average exercise price of CDN$1.79 and 2,623,520 Deferred Share Units (“DSUs”) and 2,818,339 Restricted Share Units (“RSUs”) outstanding. At February 9, 2024 we hold 5,144 NovaGold Resources Inc. (“NovaGold”) DSUs for which the NovaGold director is entled to receive one common share of Trilogy for every six NovaGold shares to be received upon their rerement from the NovaGold board. A total of 859 common shares will be issued upon redempon of the NovaGold DSUs. For addional informaon on NovaGold DSUs, please refer to note 6 in our November 30, 2023 audited consolidated ﬁnancial statements. Upon the exercise of all the forgoing converble securies, the Company would be required to issue an aggregate of 19,797,118 common shares. Financial instruments Our ﬁnancial instruments consist of cash, accounts receivable, deposits, accounts payable and accrued liabilies. The fair value of the ﬁnancial instruments approximates their carrying value due to the short-term nature of their maturity. Our ﬁnancial instruments inially measured at fair value and then held at amorzed cost include cash, accounts receivable, deposits, and accounts payable and accrued liabilies. (a) Currency risk Currency risk is the risk of a ﬂuctuaon in ﬁnancial asset and liability selement amounts due to a change in foreign exchange rates. The Company operates in the United States and Canada. The Company’s exposure to currency risk at November 30, 2023 is limited to Canadian dollar balances consisng of cash of CDN$4,000, accounts receivable of CDN$14,000 and certain trade payables and accrued personnel costs CDN$267,000. Based on a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change by approximately $18,000. (b) Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a ﬁnancial instrument fails to meet its contractual obligaons. The Company holds cash and cash equivalents with Canadian chartered ﬁnancial instuons. The Company’s only signiﬁcant exposure to credit risk is equal to the balance of cash and cash equivalents as recorded in the ﬁnancial statements. The majority of the Company’s cash and cash equivalents held at November 30, 2023 is uninsured. The Company does not consider any of its ﬁnancial assets to be impaired as of November 30, 2023. (c) Liquidity risk Liquidity risk is the risk that we will encounter diﬃcules raising funds to meet our ﬁnancial obligaons as they fall due. We are in the exploraon stage and do not have cash inﬂows from operaons; therefore, we manage liquidity risk through the management of our capital structure and ﬁnancial leverage. Future sources of liquidity may arise from equity ﬁnancing, debt ﬁnancing, converble debt, or other means. (d) Interest rate risk Interest 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 balances as at November 30, 2023, a 1% change in interest rates would result in a change in a negligible change in net loss, assuming all other variables remain constant. 99 Table of Contents As we are currently in the exploraon phase none of our ﬁnancial instruments are exposed to commodity price risk; however, our ability to obtain long- term ﬁnancing and its economic viability could be aﬀected by commodity price volality. New accounng pronouncements There were no new accounng pronouncements requiring management consideraon during ﬁscal year 2023. Crical accounng esmates The most crical accounng esmates upon which our ﬁnancial status depends are those requiring esmates of the recoverability of our equity method investment in Ambler Metals LLC, income taxes and valuaon of stock-based compensaon. Impairment of Investment in Ambler Metals LLC Management assesses the possibility of impairment in the carrying value of its equity method investment in Ambler Metals whenever events or circumstances indicate that the carrying amount of the investment may not be recoverable. Signiﬁcant judgments are made in assessing the possibility of impairment. Factors that may be indicave of an impairment include a loss in the value of an investment that is not temporary. Management considers several factors in considering if an indicator of impairment has occurred, including but not limited to, sustained losses by the investment, the absence of the ability to recover the carrying amount of the investment, signiﬁcant changes in the legal, business or regulatory environment, signiﬁcant adverse changes impacng the investee and internal reporng indicang the economic performance of an investment is, or will be, worse than expected. These factors are subjecve and require consideraon at each period end. If an indicator of impairment is determined to exist, the fair value of the impaired investment is determined based on the valuaon of cohort companies with similar projects or upon the present value of expected future cash ﬂows using discount rates and other assumpons believed to be consistent with those used by principal market parcipants and observed market earnings mulples of comparable companies. Income taxes We must make esmates and judgments in determining the provision for income tax expense, deferred tax assets and liabilies, and liabilies for unrecognized tax beneﬁts including interest and penales. We are subject to income tax law in the United States and Canada. The evaluaon of tax liabilies involving uncertaines in the applicaon of complex tax regulaon is based on factors such as changes in facts or circumstances, changes in tax law, new audit acvity, and eﬀecvely seled issues. The evaluaon of an uncertain tax posion requires signiﬁcant judgment, and a change in such judgement would result in an addional charge to the income tax expense and liability. Stock-based compensaon Compensaon expense for opons granted to employees, directors and certain service providers is determined based on esmated fair values of the opons at the me of grant using the Black-Scholes opon pricing model, which takes into account, as of the grant date, the fair market value of the shares, expected volality, expected life, expected forfeiture rate, expected dividend yield and the risk-free interest rate over the expected life of the opon. The use of the Black-Scholes opon pricing model requires input esmaon of the expected life of the opon, volality, and forfeiture rate which can have a signiﬁcant impact on the valuaon model, and resulng expense recorded. Disclosure controls and procedures Disclosure controls and procedures are designed to ensure that informaon required to be disclosed in reports ﬁled or submied by the Company under U.S. and Canadian securies legislaon is recorded, processed, summarized and 100 Table of Contents reported within the me periods speciﬁed in those rules, including providing reasonable assurance that material informaon is gathered and reported to senior management, including the Chief Execuve Oﬃcer (“CEO”) and Chief Financial Oﬃcer (“CFO”), as appropriate, to permit mely decisions regarding public disclosure. Management, including the CEO and CFO, has evaluated the eﬀecveness of the design and operaon of the Company’s disclosure controls and procedures, as deﬁned in Rule 13a-15(e) and 15d-15(e) of the U.S. Exchange Act and the rules of Canadian Securies Administrators, as at November 30, 2023. Based on this evaluaon, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were eﬀecve as at November 30, 2023. Internal control over ﬁnancial reporng Management is responsible for establishing and maintaining adequate internal control over ﬁnancial reporng as deﬁned in Rule 13a-15(f) and 15d- 15(f) of the U.S. Exchange Act and Naonal Instrument 52-109 Cerﬁcaon of Disclosure in Issuer’s Annual and Interim ﬁlings. Any system of internal control over ﬁnancial reporng, no maer how well designed, has inherent limitaons. Therefore, even those systems determined to be eﬀecve can provide only reasonable assurance with respect to ﬁnancial statement preparaon and presentaon. Management has used the Commiee of Sponsoring Organizaons of the Treadway Commission in Internal Control – Integrated Framework (2013) to evaluate the eﬀecveness of the Company’s internal control over ﬁnancial reporng. Based on this assessment, management has concluded that as at November 30, 2023, the Company’s internal control over ﬁnancial reporng was eﬀecve. Risk factors Trilogy and its future business, operaons and ﬁnancial condion are subject to various risks and uncertaines due to the nature of its business and the present stage of exploraon of its mineral properes. Certain of these risks and uncertaines are under the heading “Risk Factors” under Trilogy’s Form 10-K dated February 9, 2024 available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov and on our website at www.trilogymetals.com. Addional informaon Addional informaon regarding the Company, including our annual report on Form 10-K, is available on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov and on our website at www.trilogymetals.com. Cauonary notes Forward-looking statements This Management’s Discussion and Analysis contains “forward-looking informaon” and “forward-looking statements” within the meaning of Secon 27A of the U.S. Securies Act of 1933, as amended, Secon 21E of the U.S. Securies Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable securies laws. These forward-looking statements may include statements regarding the Company’s work programs and budgets; perceived merit of properes, exploraon results and budgets, the Company and Ambler Metals’ funding requirements, mineral reserves and resource esmates, work programs, capital expenditures, operang costs, cash ﬂow esmates, producon esmates and similar statements relang to the economic viability of a project, melines, strategic plans, statements regarding Ambler Metals’ plans and expectaons relang to its Upper Kobuk Mineral Projects, suﬃciency of the Ambler Metals’ cash to fund the UKMP; impact of COVID-19 on the Company’s operaons; market prices for precious and base metals; statements regarding the Ambler Road Project; the ming of the ﬁnal SEIS and a Record of Decision; or other statements that are not statements of fact. These statements relate to analyses and other informaon that are based on forecasts of future results, esmates of amounts not yet determinable and assumpons of management. Statements concerning mineral resource esmates may also be deemed to constute “forward-looking statements” to the extent that they involve esmates of the mineralizaon that will be encountered if the property is developed. Any statements that express or involve discussions with respect to predicons, expectaons, beliefs, plans, projecons, objecves, assumpons or future events or performance (oen, but not always, idenﬁed by words or phrases such as “expects”, “is expected”, “ancipates”, “believes”, “plans”, “projects”, “esmates”, “assumes”, “intends”, “strategy”, 101 Table of Contents “goals”, “objecves”, “potenal”, “possible” or variaons thereof or stang that certain acons, events, condions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negave of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are based on the beliefs, expectaons and opinions of management on the date the statements are made, as well as on a number of material assumpons, which could prove to be signiﬁcantly incorrect, including about: ● our ability to achieve producon at the Upper Kobuk Mineral Projects; ● the accuracy of our mineral resource and reserve esmates; ● the results, costs and ming of future exploraon drilling and engineering; ● ming and receipt of approvals, consents and permits under applicable legislaon; ● the adequacy of our ﬁnancial resources; ● the receipt of third party contractual, regulatory and governmental approvals for the exploraon, development, construcon and producon of our properes and any ligaon or challenges to such approvals; ● our expected ability to develop adequate infrastructure and that the cost of doing so will be reasonable; ● connued good relaonships with South32, our joint venture partner, as well as local communies and other stakeholders; ● there being no signiﬁcant disrupons aﬀecng operaons, whether relang to labor, supply, power damage to equipment or other maer; ● expected trends and speciﬁc assumpons regarding metal prices and currency exchange rates; ● risks related to the future eﬀects of the COVID-19 pandemic; 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 aempted to idenfy important factors that could cause actual acons, events or results to diﬀer materially from those described in forward-looking statements, there may be other factors that cause acons, events or results not to be as ancipated, esmated or intended. We believe that the assumpons 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, uncertaines and other factors that could cause actual events or results to diﬀer from those reﬂected in the forward-looking statements, including, without limitaon: ● risks related to inability to deﬁne proven and probable reserves; ● risks related to our ability to ﬁnance the development of our mineral properes through external ﬁnancing, strategic alliances, the sale of property interests or otherwise; ● uncertainty as to whether there will ever be producon at the Company’s mineral exploraon and development properes; ● risks related to our ability to commence producon and generate material revenues or obtain adequate ﬁnancing for our planned exploraon and development acvies; 102 Table of Contents ● risks related to lack of infrastructure including but not limited to the risk whether or not the Ambler Mining District Industrial Access Project, or AMDIAP, will receive the requisite permits and, if it does, whether the Alaska Industrial Development and Export Authority will build the AMDIAP; ● risks related to inclement weather which may delay or hinder exploraon acvies at our mineral properes; ● risks related to our dependence on a third party for the development of our projects; ● none of the Company’s mineral properes are in producon or are under development; ● commodity price ﬂuctuaons; ● uncertainty related to tle to our mineral properes; ● our history of losses and expectaon of future losses; ● risks related to increases in demand for equipment, skilled labor and services needed for exploraon and development of mineral properes, and related cost increases; ● uncertaines relang to the assumpons underlying our resource esmates, such as metal pricing, metallurgy, mineability, marketability and operang and capital costs; ● uncertainty related to inferred mineral resources; ● mining and development risks, including risks related to infrastructure, accidents, equipment breakdowns, labor disputes or other unancipated diﬃcules with or interrupons in development, construcon or producon; ● risks and uncertaines relang to the interpretaon of drill results, the geology, grade and connuity of our mineral deposits; ● risks related to governmental regulaon and permits, including environmental regulaon, including the risk that more stringent requirements or 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 properes will not be available on a mely basis or at all; ● risks related to the need for reclamaon acvies on our properes and uncertainty of cost esmates related thereto; ● risks related to the acquision and integraon of operaons or projects; ● our need to aract and retain qualiﬁed management and technical personnel; ● risks related to conﬂicts of interests of some of our directors and oﬃcers; ● risks related to potenal future ligaon; ● risks related to market events and general economic condions; ● risks related to future sales or issuances of equity securies decreasing the value of exisng Trilogy common shares, dilung vong power and reducing future earnings per share; ● risks related to the vong power of our major shareholders and the impact that a sale by such shareholders may have on our share price; ● uncertainty as to the volality in the price of the Company’s common shares; ● the Company’s expectaon of not paying cash dividends; 103 Table of Contents ● 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 organizaons; ● uncertainty as to our ability to maintain the adequacy of internal control over ﬁnancial reporng as per the requirements of Secon 404 of the Sarbanes-Oxley Act; ● increased regulatory compliance costs, associated with rules and regulaons promulgated by the United States Securies and Exchange Commission, Canadian Securies Administrators, the NYSE American, the Toronto Stock Exchange, and the Financial Accounng Standards Boards, and more speciﬁcally, our eﬀorts to comply with the Dodd-Frank Wall Street Reform and Consumer Protecon Act; and ● risks related to the future eﬀects of the COVID-19 pandemic. This list is not exhausve of the factors that may aﬀect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or condions may diﬀer materially from those reﬂected in the forward-looking statements due to a variety of risks, uncertaines and other factors, including, without limitaon, those referred to in Trilogy’s Form 10-K dated February 9, 2024, ﬁled with the Canadian securies regulatory authories and the SEC, and other informaon released by Trilogy and ﬁled with the appropriate regulatory agencies. The Company’s forward-looking statements are based on the beliefs, expectaons and opinions of management on the date the statements are made, and the Company does not assume any obligaon to update forward-looking statements if circumstances or management’s beliefs, expectaons or opinions should change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 104 Table of Contents Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Supplementary Data For the required supplementary data, please see the secon heading “Item 7. Management’s Discussion and Analysis of Financial Condion and Results of Operaons” above. Management’s Report on Internal Control over Financial Reporng The management of Trilogy Metals Inc. is responsible for establishing and maintaining adequate internal control over ﬁnancial reporng under Rule 13a- 15(f) and 15d-15(f) of the U.S. Exchange Act. The Securies Exchange Act of 1934 deﬁnes this as a process designed by, or under the supervision of, the Company’s principal execuve and principal ﬁnancial oﬃcers and eﬀected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of ﬁnancial reporng and the preparaon of ﬁnancial statements for external purposes in accordance with generally accepted accounng 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 transacons and disposions of the assets of the Company; ● provide reasonable assurance that transacons are recorded as necessary to permit preparaon of ﬁnancial statements in accordance with generally accepted accounng principles in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizaons of management and directors of the Company; and ● provide reasonable assurance regarding prevenon or mely detecon of unauthorized acquision, use or disposion of the Company’s assets that may have a material eﬀect on the consolidated ﬁnancial statements. Because of its inherent limitaons, internal control over ﬁnancial reporng may not prevent or detect misstatements. Projecons of any evaluaon of eﬀecveness to future periods are subject to risk that controls may become inadequate because of changes in condions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the eﬀecveness of the Company’s internal control over ﬁnancial reporng as of November 30, 2023. In making this assessment, the Company’s management used the criteria set forth by the Commiee of Sponsoring Organizaons of the Treadway Commission in Internal Control – Integrated Framework (2013). Based upon our assessment and those criteria, management concluded that the Company’s internal control over ﬁnancial reporng is eﬀecve as of November 30, 2023. /s/ Tony Giardini /s/ Elaine Sanders Tony Giardini President, Chief Execuve Oﬃcer & Director Elaine Sanders Vice President & Chief Financial Oﬃcer February 9, 2024 105 Table of Contents Report of Independent Registered Public Accounng Firm To the Shareholders and Board of Directors of Trilogy Metals Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Trilogy Metals Inc. and its subsidiaries (together, the Company) as of November 30, 2023 and 2022, and the related consolidated statements of loss and comprehensive loss, changes in shareholders' equity and cash ﬂows for each of the three years in the period ended November 30, 2023, including the related notes (collecvely referred to as the consolidated ﬁnancial statements). In our opinion, the consolidated ﬁnancial statements present fairly, in all material respects, the ﬁnancial posion of the Company as of November 30, 2023 and 2022, and the results of its operaons and its cash ﬂows for each of the three years in the period ended November 30, 2023 in conformity with accounng principles generally accepted in the United States of America. Substanal Doubt About the Company’s Ability to Connue as a Going Concern The accompanying consolidated ﬁnancial statements have been prepared assuming that the Company will connue as a going concern. As discussed in Note 1 to the consolidated ﬁnancial statements, the Company has no recurring source of operang cash inﬂows at its current stage and is dependent on its ability to obtain addional ﬁnancing or to generate future operang cash inﬂows. These material uncertaines raise substanal doubt about its ability to connue as a going concern. Management's plans in regard to these maers are also described in Note 1. The consolidated ﬁnancial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated ﬁnancial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated ﬁnancial statements based on our audits. We are a public accounng ﬁrm registered with the Public Company Accounng Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securies laws and the applicable rules and regulaons of the Securies 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 we plan 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 ﬁnancial reporng. As part of our audits, we are required to obtain an understanding of internal control over ﬁnancial reporng but not for the purpose of expressing an opinion on the eﬀecveness of the Company's internal control over ﬁnancial reporng. 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 error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated ﬁnancial statements. Our audits also included evaluang the accounng principles used and signiﬁcant esmates made by management, as well as evaluang the overall presentaon of the consolidated ﬁnancial statements. We believe that our audits provide a reasonable basis for our opinion. Crical Audit Maers The crical audit maer communicated below is a maer arising from the current period audit of the consolidated ﬁnancial statements that was communicated or required to be communicated to the audit commiee and that (i) relates to accounts or disclosures that are material to the consolidated ﬁnancial statements and (ii) involved our especially challenging, subjecve, or complex judgments. The communicaon of crical audit maers does not alter in any way our opinion on the consolidated ﬁnancial statements, taken as a whole, and we are not, by communicang the crical audit 106 Table of Contents maer below, providing a separate opinion on the crical audit maer or on the accounts or disclosures to which it relates. Impairment indicator assessment of the Investment in Ambler Metals LLC As described in Notes 2 and 3 to the consolidated ﬁnancial statements, the Company has an investment in Ambler Metals LLC (Ambler) accounted for using the equity method of accounng. As of November 30, 2023, the carrying amount of the Company's investment in Ambler was $135.0 million. Management assesses impairment indicators whenever changes in facts and circumstances indicate there is an other than temporary loss in value of the investment. Management applies signiﬁcant judgment in assessing whether facts and circumstances indicate an other than temporary loss in value has occurred that could give rise to the requirement to conduct an impairment test. Factors such as (i) an absence of the ability to recover the carrying amount of the investment, and (ii) whether there was a deterioraon of market condions are evaluated by management in determining whether there are any indicators of impairment. The principal consideraons for our determinaon that performing procedures relang to the impairment indicator assessment of the investment in Ambler is a crical audit maer are: the signiﬁcant judgment by management when assessing whether indicators of impairment exist, speciﬁcally related to assessing: (i) an absence of the ability to recover the investment in Ambler, and (ii) a deterioraon of market condions. This in turn led to a high degree of auditor judgment and subjecvity in performing procedures to evaluate audit evidence relang to the signiﬁcant judgments made by management in their assessment of indicators of impairment related to the investment in Ambler. The audit eﬀort also involved the use of professionals with specialized skill and knowledge. Addressing the maer involved performing procedures and evaluang audit evidence in connecon with forming our overall opinion on the consolidated ﬁnancial statements. These procedures included, among others, evaluang the reasonableness of management's assessment of impairment indicators related to the investment in Ambler, which included (i) with the assistance of professionals with specialized skill and knowledge evaluang whether there was an absence of the ability to recover the carrying amount of the investment by considering the implied in situ value of recent market transacons of comparable mineral properes, and (ii) evaluang whether there was a deterioraon of market condions and assessing the completeness of facts and circumstances that could be considered as impairment indicators of the Investment in Ambler by performing an audit of the ﬁnancial statements of Ambler as of November 30, 2023. Performing an audit of the ﬁnancial statements of Ambler as of November 30, 2023 included (i) evaluang whether there were signiﬁcant adverse changes in the business climate including signiﬁcant decreases in copper, zinc, and other metal prices, (ii) evaluang whether there were signiﬁcant adverse changes in legal factors with respect to mineral property tle maers, and (iii) evaluang whether there was an accumulaon of costs signiﬁcantly in excess of the amount originally expected for the acquision or construcon of Ambler's mineral properes. /s/PricewaterhouseCoopers LLP Chartered Professional Accountants Vancouver, Canada February 8, 2024 We have served as the Company's auditor since 2012. 107 Table of Contents Assets Current assets Cash Accounts receivable Deposits and prepaid amounts Total current assets Investment in Ambler Metals LLC (note 3) Fixed assets Right of use asset (note 5(a)) Total assets Liabilies Current liabilies Accounts payable and accrued liabilies (note 4) Current poron of lease liability Total current liabilies Long-term poron of lease liability Total liabilies Trilogy Metals Inc. Consolidated Balance Sheets As at November 30, 2023 and 2022 November 30, 2023 in thousands of US dollars November 30, 2022 $ $ 2,590 33 259 2,882 135,021 4 113 138,020 432 33 465 — 465 187,886 118 28,237 3,127 (81,813) 137,555 138,020 2,573 17 320 2,910 142,754 12 319 145,995 345 189 534 33 567 182,178 122 27,352 2,638 (66,862) 145,428 145,995 Shareholders’ equity Share capital (note 8) – unlimited common shares authorized, no par value issued – 155,925,990 (2022 – 146,225,035) Contributed surplus Contributed surplus – opons (note 6(b)) Contributed surplus – units (note 6(c)) Deﬁcit Total shareholders' equity Total liabilies and shareholders' equity Commitments and conngencies (note 10) Subsequent events (note 11) (See accompanying notes to the consolidated ﬁnancial statements) /s/Tony Giardini, President, CEO and Director /s/ Diana Walters, Director Approved on behalf of the Board of Directors 108 Table of Contents Trilogy Metals Inc. Consolidated Statements of Loss and Comprehensive Loss For the Years Ended November 30 Expenses Amorzaon Exploraon expenses Foreign exchange loss (gain) General and administrave Investor relaons Professional fees Salaries Salaries and directors expense – stock-based compensaon Total expenses Other items Gain on disposion of mineral property Interest and other income Services agreement income Share of loss on equity investment (note 3(b)) Write oﬀ mineral properes Loss and comprehensive loss for the year Basic loss per common share Diluted loss per common share Basic weighted average number of common shares outstanding Diluted weighted average number of common shares outstanding in thousands of US dollars, except share and per share amounts 2023 $ 8 43 5 1,328 130 1,073 753 3,887 7,227 — (120) — 2022 $ 17 47 (18) 1,287 183 998 984 3,427 6,925 (84) (34) — 7,844 — (14,951) (0.10) (0.10) 152,647,254 152,647,254 17,360 90 (24,257) (0.17) (0.17) 145,721,736 145,721,736 2021 $ 21 143 36 1,517 602 818 2,007 3,472 8,616 — (16) (22) 13,082 — (21,660) (0.15) (0.15) 144,428,926 144,428,926 (See accompanying notes to the consolidated ﬁnancial statements) 109 Table of Contents Trilogy Metals Inc. Consolidated Statements of Changes in Shareholders’ Equity For the Years Ended November 30 Balance – 2020 Exercise of opons Stock-based compensaon Loss for the year Balance – 2021 Exercise of opons Restricted share units Joint venture contribuon Services seled by common shares Stock-based compensaon Loss for the year Balance – 2022 Private Placement, net of share issue cost Restricted share units Deferred share units Joint venture contribuon Services seled by common shares NovaGold DSU conversion Stock-based compensaon Loss for the year Balance – 2023 in thousands of US dollars, except share amounts Number of shares Share capital Contributed surplus Contributed surplus – opons Contributed surplus – units outstanding 144,137,850 871,961 — — 145,009,811 81,674 992,081 31,469 110,000 — — 146,225,035 5,854,545 3,091,614 415,056 143,505 195,105 1,130 — — 155,925,990 $ 179,746 1,074 — — 180,820 76 1,117 51 114 — — 182,178 3,115 1,911 468 111 99 4 — — 187,886 $ 122 — — — 122 — — — — 122 — — — — — (4) — — 118 $ 23,303 (658) 3,345 — 25,990 (22) — — — 1,384 — 27,352 — — — — — — 885 — 28,237 $ 1,585 — 127 — 1,712 — (1,117) — — 2,043 — 2,638 — (1,911) (468) — — — 2,868 — 3,127 Total shareholders’ equity $ Deﬁcit $ (20,945) — — (21,660) (42,605) — — — (24,257) (66,862) — — — — — — — (14,951) (81,813) 183,811 416 3,472 (21,660) 166,039 54 — 51 114 3,427 (24,257) 145,428 3,115 — — 111 99 — 3,753 (14,951) 137,555 (See accompanying notes to the consolidated ﬁnancial statements) 110 Table of Contents Trilogy Metals Inc. Consolidated Statements of Cash Flows For the Years Ended November 30 Cash ﬂows used in operang acvies Loss for the year Adjustments to reconcile net loss to cash ﬂows in operang acvies Amorzaon Unpaid interest earned Consulng fees seled by common shares Oﬃce lease accounng Gain on disposal of mineral property Loss on equity investment in Ambler Metals LLC (note 3(b)) Unrealized foreign exchange loss (gain) Stock-based compensaon Write oﬀ mineral properes Net change in non-cash working capital Decrease in accounts receivable Decrease (Increase) in deposits and prepaid amounts Decrease in accounts payable and accrued liabilies Total cash ﬂows used in operang acvies Cash ﬂows from ﬁnancing acvies Issuance of common shares, net of share issue cost (note 6(a)) Proceeds from exercise of opons Total cash ﬂows from ﬁnancing acvies Cash ﬂows from invesng acvies Proceeds from disposion of mineral property Total cash ﬂows from invesng acvies Increase (decrease) in cash Eﬀect of exchange rate on cash Cash – beginning of the year Cash – end of the year (See accompanying notes to the consolidated ﬁnancial statements) 111 2023 $ in thousands of US dollars 2022 2021 $ $ (14,951) (24,257) (21,660) 8 (23) 116 17 — 7,844 5 3,887 — 7 61 (64) (3,093) 3,115 — 3,115 — — 22 (5) 2,573 2,590 17 — 114 (16) (84) 17,360 (18) 3,427 90 2 (64) (506) (3,935) — 54 54 142 142 (3,739) 4 6,308 2,573 21 — — (15) — 13,082 10 3,472 — 110 (101) (36) (5,117) — 416 416 — (119) (4,820) 3 11,125 6,308 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements 1) Nature of operaons and Going Concern Trilogy Metals Inc. (“Trilogy”, the “Company”, or “we”) was incorporated in Brish Columbia under the Business Corporaons Act (BC) on April 27, 2011. The Company is engaged in the exploraon and development of mineral properes, through our equity investee (note 3), with a focus on the Upper Kobuk Mineral Projects (“UKMP”), including the Arcc and Bornite Projects located in Northwest Alaska in the United States of America (“US” or “USA”). The Company also conducts early-stage exploraon through a wholly owned subsidiary, 995 Exploraon Inc. These consolidated ﬁnancial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilies in the normal course of business for at least twelve months from the date of approval of these consolidated ﬁnancial statements. As at November 30, 2023, the Company had a working capital of $2.4 million (2022 - $2.4 million) and an accumulated deﬁcit of $81.8 million (2022 - $66.9 million). The Company recorded a loss of $15.0 million and cash oulow from operaons of $3.1 million for the year ended November 30, 2023. The connued operaons of the Company are dependent on its ability to obtain addional ﬁnancing or to generate future cash ﬂows. The Company has no recurring source of operang cash inﬂows at its current stage. The Company intends to ﬁnance its future requirements through a combinaon of debt and equity issuance. There is no assurance that the Company will be able to obtain such ﬁnancings or obtain them on favourable terms. These material uncertaines raise substanal doubt about the Company’s ability to connue as a going concern. These consolidated ﬁnancial statements do not include any adjustments to the amounts and classiﬁcaon of assets and liabilies that might be necessary should the Company be unable to connue as a going concern. Such adjustments could be material. 2) Summary of signiﬁcant accounng policies Basis of presentaon These consolidated ﬁnancial statements have been prepared using accounng principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Trilogy and its wholly owned subsidiaries, NovaCopper US Inc. (dba “Trilogy Metals US”) and 995 Exploraon Inc. All intercompany transacons are eliminated on consolidaon. For variable interest enes (“VIEs”) where Trilogy is not the primary beneﬁciary, we use the equity method of accounng. All ﬁgures are in United States dollars unless otherwise noted. References to CDN$ refer to amounts in Canadian dollars. These ﬁnancial statements were approved by the Company’s Board of Directors for issue on February 8, 2024. Cash and cash equivalents Cash and cash equivalents consist of bank deposits and term deposits that are readily converble into a known amount of cash. Investment in aﬃliates Investments in unconsolidated ventures over which the Company has the ability to exercise signiﬁcant inﬂuence, but does not control, are accounted for under the equity method and include the Company’s investment in the Ambler Metals project. We idenﬁed Ambler Metals LLC (“Ambler Metals”) as a VIE as the enty is dependent on funding from its owners. All funding, ownership, vong rights and power to exercise control is shared equally on a 50/50 basis between the owners of the VIE. Therefore, the Company has determined that it is not the primary beneﬁciary of the VIE. The Company’s maximum exposure to loss is its investment in Ambler Metals. 112 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements Management assesses the possibility of impairment in the carrying value of its equity method investment in Ambler Metals whenever events or circumstances indicate that the carrying amount of the investment may not be recoverable. Signiﬁcant judgments are made in assessing the possibility of impairment. Factors that may be indicave of an impairment include a loss in the value of an investment that is not temporary. Management considers several factors in considering if an indicator of impairment has occurred, including but not limited to, sustained losses by the investment, the absence of the ability to recover the carrying amount of the investment, deterioraon of market condions inclusive of signiﬁcant changes in the legal, business or regulatory environment, signiﬁcant adverse changes impacng the investee and internal reporng indicang the economic performance of an investment is, or will be, worse than expected. These factors are subjecve and require consideraon at each period end. If an indicator of impairment is determined to exist, the fair value of the impaired investment is determined based on the valuaon of cohort companies with similar projects or upon the present value of expected future cash ﬂows using discount rates and other assumpons believed to be consistent with those used by principal market parcipants and observed market earnings mulples of comparable companies. Fixed assets Plant and equipment are recorded at cost and amorzaon begins when the asset is put into service. Amorzaon is calculated on a straight-line basis over the respecve assets’ esmated useful lives. Amorzaon periods by asset class are: Computer hardware and soware Leasehold improvements Oﬃce furniture and equipment Mineral properes and development costs 3 years lease term 5 years All direct costs related to the acquision of mineral property interests are capitalized. Mineral property exploraon expenditures are expensed when incurred. When it has been established that a mineral deposit is commercially mineable, an economic analysis has been completed and permits are obtained, the costs subsequently incurred to develop a mine on the property prior to the start of mining operaons are capitalized. Capitalized costs will be amorzed following commencement of producon using the unit of producon method over the esmated life of proven and probable reserves. Leases At the incepon of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as ROU assets and short-term and long-term lease liabilies, as applicable. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilies represent its obligaon to make lease payments arising from the lease. It also considers terminaon opons and factors those into the determinaon of lease payments. Opons to renew a lease are not included in the assessment unless there is reasonable certainty that the Company will renew. Operang lease liabilies and their corresponding ROU assets are recorded based on the present value of lease payments over the expected remaining lease term. Certain adjustments to the ROU asset may be required for items such as incenves received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company ulizes its incremental borrowing rate, which reﬂects the ﬁxed rate at which it could borrow on a collateralized 113 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Income taxes The liability method of accounng for income taxes is used and is based on diﬀerences between the accounng and tax basis of assets and liabilies. Deferred income tax assets and liabilies are recognized for temporary diﬀerences between the tax and accounng basis of assets and liabilies as well as 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 for the period in which the diﬀerences are expected to reverse. Deferred income tax assets are evaluated and, if realizaon is not considered more likely than not, a valuaon allowance is provided. Uncertainty in income tax posions The Company recognizes tax beneﬁts from uncertain tax posions only if it is at least more likely than not that the tax posion will be sustained on examinaon by the taxing authories, based on the technical merits of the posion. Any tax beneﬁts recognized in the ﬁnancial statements from such a posion are measured based on the largest beneﬁt that has a greater than 50% likelihood of being realized upon selement with the taxing authories. Related interest and penales, if any, are recorded as tax expense in the tax provision. Financial instruments Loans and receivables are recorded inially at fair value, net of transacon costs incurred, and subsequently at amorzed cost using the eﬀecve interest rate method. Loans and receivables consist of cash, accounts receivable, and deposits. Other ﬁnancial liabilies are recorded inially at fair value and subsequently at amorzed cost using the eﬀecve interest rate method. Other ﬁnancial liabilies include accounts payable and accrued liabilies. Translaon of foreign currencies Monetary assets and liabilies are translated into United States dollars at the exchange rate in eﬀect at the balance sheet date, and non-monetary assets and liabilies at the exchange rate in eﬀect at the me of acquision or issue. Income and expenses are translated at rates approximang the exchange rate in eﬀect at the me of transacons. Exchange gains or losses arising on translaon are included in income or loss for the period. The funconal currency of the Company and its subsidiary and the Company’s reporng currency is the United States dollar. Earnings and loss per share Earnings and loss per common share is calculated based on the weighted average number of common shares outstanding during the year. The Company follows the treasury stock method in the calculaon of diluted earnings per share. Under the treasury stock method, the weighted average number of common shares outstanding used for the calculaon of diluted loss per share assumes that the proceeds to be received on the exercise of diluve stock opons and in the prior year, warrants are used to repurchase common shares at the average market price during the period. Stock-based compensaon Compensaon expense for opons granted to employees, directors and certain service providers is determined based on esmated fair values of the opons at the me of grant using the Black-Scholes opon pricing model, which takes into account, as of the grant date, the fair market value of the shares, expected volality, expected dividend yield, the 114 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements risk-free interest rate, and the expected life of the opon. The compensaon cost is recognized using the graded aribuon method over the vesng period of the respecve opons. The expense relang to the fair value of stock opons is included in expenses, net of forfeitures and is credited to contributed surplus. Shares are issued from treasury in selement of opons exercised. Compensaon expense for restricted share units (“RSUs”) and deferred share units (“DSUs”) granted to employees and directors, respecvely, is determined based on esmated fair values of the units at the me of grant using quoted market prices or at the me the units qualify for equity classiﬁcaon under ASC 718. The cost is recognized using the graded aribuon method over the vesng period of the respecve units. The expense relang to the fair value of the units is included in expenses, net of forfeitures and is credited to other liabilies or contributed surplus based on the unit’s classiﬁcaon. Units may be seled in either i) cash, and/or ii) shares purchased in the open market, and/or iii) shares issued from treasury, at the Company’s elecon at the me of vesng. Use of esmates and measurement uncertaines The preparaon of ﬁnancial statements in conformity with U.S. GAAP requires management to make esmates and assumpons of future events that aﬀect the reported amount of assets and liabilies and disclosure of conngent liabilies at the date of the ﬁnancial statements, and the reported amounts of expenditures during the period. Signiﬁcant judgments include the assessment of potenal indicators of impairment of mineral properes and investments in aﬃliates where key judgement is the delay on the Ambler Access Project is temporary and the delay was considered when assessing indicators of impairment. Signiﬁcant esmates include income taxes, and the valuaon of stock-based compensaon. Actual results could diﬀer materially from those reported. 3) Investment in Ambler Metals LLC (a) Formaon of Ambler Metals LLC On February 11, 2020, the Company completed the formaon of the 50/50 Joint Venture named Ambler Metals with South32. As part of the formaon of the Joint Venture, Trilogy contributed all its assets associated with the UKMP, including the Arcc and Bornite Projects, while South32 contributed $145 million, resulng in each party’s subsidiaries directly owning a 50% interest in Ambler Metals. Ambler Metals is an independently operated company jointly controlled by Trilogy and South32 through a four-member board, of which two members are currently appointed by Trilogy based on its 50% equity interest. All signiﬁcant decisions related to the UKMP require the approval of both companies. We determined that Ambler Metals is a VIE because it is expected to need addional funding from its owners for its signiﬁcant acvies. However, we concluded that we are not the primary beneﬁciary of Ambler Metals as the power to direct its acvies, through its board, is shared under the Ambler Metals LLC limited liability company agreement. As we have signiﬁcant inﬂuence over Ambler Metals through our representaon on its board, we use the equity method of accounng for our investment in Ambler Metals. (b) Carrying value of investment in Ambler Metals During the year ended November 30, 2023, Trilogy recognized, based on its 50% ownership interest in Ambler Metals, an equity loss equivalent to its pro rata share of Ambler Metals' net loss of $15.7 million for the year ended November 115 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements 30, 2023 (2022 - $34.7 million). The carrying value of Trilogy’s 50% investment in Ambler Metals as at November 30, 2023 is summarized on the following table. November 30, 2021, Investment in Ambler Metals Joint venture equity contribuon Share of loss on equity investment for the year ending November 30, 2022 November 30, 2022, Investment in Ambler Metals Joint venture equity contribuon Share of loss on equity investment for the year ending November 30, 2023 November 30, 2023, Investment in Ambler Metals (c) The following table summarizes Ambler Metals’ Balance Sheet as at November 30, 2023. Total assets Cash Mineral properes Total liabilies Accounts payable and accrued liabilies Members' equity (total assets less total liabilies) in thousands of dollars $ 160,063 51 (17,360) 142,754 111 (7,844) 135,021 November 30, 2023 $ 97,180 63,829 30,899 (2,931) (2,500) 94,249 in thousands of dollars November 30, 2022 $ 114,049 80,755 30,899 (4,335) (3,664) 109,714 (d) The following table summarizes Ambler Metals’ net loss for the years ended November 30, 2023, November 30, 2022 and November 30, 2021. Depreciaon Corporate salaries and wages General and administrave Mineral property expense Professional fees Foreign exchange (gain)/loss Interest and other income Comprehensive loss (e) Related party transacons November 30, 2023 November 30, 2022 November 30, 2021 Year ended in thousands of dollars $ $ 150 2,068 547 12,822 547 (2) (445) 15,687 113 1,664 738 32,083 792 15 (686) 34,719 $ 77 2,381 991 22,720 1,047 6 (1,058) 26,164 During the ﬁscal year 2023, the Company received $27,000 (2022 - $nil) related to operang expenses paid on behalf of Ambler Metals. During the ﬁscal year 2022, the Company transferred a mineral claim to Ambler Metals and received net proceeds of approximately $140,000. 116 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements 4) Accounts payable and accrued liabilies Trade accounts payable Accrued liabilies Accrued salaries and vacaon Accounts payable and accrued liabilies November 30, 2023 in thousands of dollars November 30, 2022 $ 146 54 232 432 $ 188 36 121 345 Of the accrued salaries and vacaon approximately $155,000 was seled, subsequent to the end of the year, on December 1, 2023 through the issuance of common shares of the Company (the “Common Shares”). 5) Leases (a) Right-of-use asset Balance as at November 30, 2021 Net amorzaon Balance as at November 30, 2022 Net amorzaon Balance as at November 30, 2023 (b) Lease liabilies in thousands of dollars $ 482 (163) 319 (206) 113 The Company’s lease arrangements primarily consist of an operang lease for our oﬃce space ending in June 2024. There are no extension opons. Total lease expense recorded within general and administrave expenses was comprised of the following components: Operang lease costs Variable lease costs Total lease expense Year ended November 30, 2023 in thousands of dollars Year ended November 30, 2022 $ 216 140 356 $ 187 143 330 Variable lease costs consist primarily of the Company’s poron of operang costs associated with the oﬃce space lease as the Company elected to apply the praccal expedient not to separate lease and non-lease components. As of November 30, 2023, the remaining lease term was 0.6 years and the discount rate is 8%. Signiﬁcant judgment was used in the determinaon of the incremental borrowing rate which included esmang the Company’s credit rang. 117 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements Supplemental cash and non-cash informaon relang to our leases during the year ended November 30, 2023 are as follows: ● Cash paid for amounts included in the measurement of lease liabilies was $198,912. Future minimum payments relang to the lease recognized in our balance sheet as of November 30, 2023 are as follows: Fiscal year 2024 Total undiscounted lease payments Eﬀect of discounng Present value of lease payments recognized as lease liability 6) Share capital Authorized: unlimited common shares, no par value November 30, 2022 Private Placement, net of share issue cost Restricted Share Units Deferred Share Units NovaGold deferred share units conversion Services seled by common shares Joint venture equity contribuon (note 4(b)) November 30, 2023, issued and outstanding in thousands of dollars November 30, 2023 $ 33 33 — 33 in thousands of dollars, except share amounts Ascribed value Number of shares 146,225,035 5,854,545 3,091,614 415,056 1,130 195,105 143,505 155,925,990 $ 182,178 3,115 1,911 468 4 99 111 187,886 On April 30, 2012, under the NovaGold Arrangement, Trilogy commied to issue common shares to sasfy holders of NovaGold deferred share units (“NovaGold DSUs”), once vested, on record as of the close of business April 27, 2012. When vested, Trilogy commied to deliver one common share to the holder for every six shares of NovaGold the holder is entled to receive, rounded down to the nearest whole number. As of November 30, 2023, a total of 5,144 NovaGold DSUs remain outstanding represenng a right to receive 859 Common Shares in Trilogy, which will sele upon certain directors rering from NovaGold’s board. (a) Common shares issuance On April 25, 2023, the Company completed a non-brokered private placement of 5,854,545 Common Shares at a price of $0.55 per Common Share for gross proceeds of $3.2 million and net proceeds of $3.1 million. Financing costs consisted of legal and stock exchange fees. 118 Table of Contents (b) Stock opons Trilogy Metals Inc. Notes to Consolidated Financial Statements The Company has a stock opon plan providing for the issuance of opons with a rolling maximum number equal to 10% of the issued and outstanding Common Shares at any given me. The Company may grant opons to its directors, oﬃcers, employees and service providers. The exercise price of each opon 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 the date of the opon grant. The number of Common Shares oponed to any single oponee may not exceed 10% of the issued and outstanding Common Shares at the date of grant. The opons are exercisable for a maximum of ﬁve years from the date of grant and may be subject to vesng provisions. During the year ended November 30, 2023, the Company granted 3,230,000 stock opons (2022 – 1,734,500 stock opons, 2021 – 3,374,150) at an exercise price of CDN$0.78 (2022 - CDN$2.21, 2021 – CDN$2.52) to employees, consultants and directors exercisable for a period of ﬁve years with various vesng terms from immediate vesng to over a two-year period. The fair value aributable to opons granted in 2023 was $0.27 (2022 -$0.71, 2021 - $0.84). The fair value of the stock opons recognized has been esmated using the Black-Scholes opon pricing model. Assumpons used in the pricing model for the year are as provided below. Risk-free interest rates Exercise price Expected life Expected volality Expected dividends November 30, 2023 3.49% CDN$0.78 3 years 67.7% Nil The Company recognized a stock opon expense of $0.9 million for the year ended November 30, 2023 (2022 - $1.4 million; 2021 - $3.3 million), net of forfeitures. As of November 30, 2023, there were 2,131,757 unvested opons outstanding with a weighted average exercise price of CDN$1.02. The unvested stock opon expense not yet recognized was $0.2 million. This expense is expected to be recognized over the next twelve months. A summary of the Company’s stock opon plan and changes during the year ended is as follows: Balance – beginning of the year Granted Cancelled/forfeited Expired Balance – end of the year 119 Number of opons 11,225,400 3,230,000 (636,000) (1,170,000) 12,649,400 November 30, 2023 Weighted average exercise price CDN$ 2.49 0.78 2.55 1.43 2.15 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements There were no stock opons exercised during the year ended November 30, 2023. The following table summarizes informaon about the stock opons outstanding at November 30, 2023. Range of exercise price - CDN $0.75 to $1.00 $2.01 to $2.50 $2.51 to $3.00 $3.01 to $3.41 Number of outstanding opons 3,180,000 2,220,250 5,866,650 1,382,500 12,649,400 Weighted average years to expiry 4.02 2.28 1.49 1.06 2.22 Outstanding Weighted average exercise price CDN$ 0.78 2.27 2.64 3.03 2.15 Number of exercisable opons 1,413,328 1,855,165 5,866,650 1,382,500 10,517,643 Exercisable Weighted average exercise price CDN$ 0.78 2.27 2.64 3.03 2.38 Unvested Number of unvested opons 1,766,672 365,085 — — 2,131,757 The aggregate intrinsic value of vested share opons (the market value less the exercise price) at November 30, 2023 was $nil (2022 - $nil, 2021 - $0.8 million) and the aggregate intrinsic value of exercised opons for the year ended November 30, 2023 was $nil (2022 - $0.04 million, 2021 - $1.4 million). (c) Restricted Share Units and Deferred Share Units The Company has a Restricted Share Unit Plan (“RSU Plan”) and a Non-Execuve Director Deferred Share Unit Plan (“DSU Plan”) to provide long-term incenves to employees, oﬃcers and directors. The RSU Plan and DSU Plan may be seled in cash and/or common shares at the Company’s elecon with each RSU and DSU entling the holder to receive one common share of the Company or equivalent value. All units are accounted for as equity-seled awards. There were 4,640,089 RSUs granted during the ﬁscal year ended November 30, 2023 (2022 – 1,359,349, 2021 – nil). Directors were granted 1,283,023 DSUs throughout the year ended November 30, 2023 (2022 – 283,289, 2021 – 58,925) based on their elecon to receive 100% of their annual retainer in DSUs. A summary of the Company’s RSU and DSU Plan and changes during the year ended November 30, 2023 is as follows: Balance – beginning of the year Granted Vested/Converted Balance – end of the year Number of RSUs 257,268 4,640,089 (3,286,719) 1,610,638 Number of DSUs 1,560,734 1,283,023 (415,056) 2,428,701 For the year ended November 30, 2023, Trilogy recognized a stock-based compensaon expense of $3.0 million (2022 - $2.0 million, 2021 - $0.1 million). 7) Management of capital risk The Company relies upon management to manage capital in order to accomplish the objecves of safeguarding the Company’s ability to connue as a going concern in order to pursue the development of the mineral properes, at the UKMP, through our equity investee (note 3) and maintain a capital structure which opmizes the costs of capital at an acceptable risk. The Company’s current capital consists of equity funding through capital markets. 120 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements As the Company is currently in the exploraon phase none of its ﬁnancial instruments are exposed to commodity price risk; however, the Company’s ability to obtain long-term ﬁnancing and its economic viability may be aﬀected by commodity price volality. The Company will need to raise addional funds to support its operaons and administraon expenses. Future sources of liquidity may include equity ﬁnancing, debt ﬁnancing, converble debt, or other means. To facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry condions. 8) Financial instruments The Company is exposed to a variety of risks arising from ﬁnancial instruments. These risks and management’s objecves, policies and procedures for managing these risks are disclosed as follows. The Company’s ﬁnancial instruments consist of cash, accounts receivable, deposits, and accounts payable and accrued liabilies. The fair value of the Company’s ﬁnancial instruments approximates their carrying value due to the short-term nature of their maturity. The Company’s ﬁnancial instruments inially measured at fair value and then held at amorzed cost include cash, accounts receivable, deposits, and accounts payable and accrued liabilies. Financial risk management The Company’s acvies expose them to certain ﬁnancial risks, including currency risk, credit risk, liquidity risk, interest risk and price risk. (a) Currency risk Currency risk is the risk of a ﬂuctuaon in ﬁnancial asset and liability selement amounts due to a change in foreign exchange rates. The Company operates in the United States and Canada. The Company’s exposure to currency risk at November 30, 2023 is limited to the Canadian dollar balances consisng of cash of CDN$4,000, accounts receivable of CDN$14,000 and certain trade payables and accrued personnel costs CDN$267,000. Based on a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change by approximately $18,000. (b) Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a ﬁnancial instrument fails to meet its contractual obligaons. The Company holds cash and cash equivalents with Canadian chartered ﬁnancial instuons. The Company’s only signiﬁcant exposure to credit risk is equal to the balance of cash and cash equivalents as recorded in the ﬁnancial statements. The majority of the Company’s cash and cash equivalents held at November 30, 2023 is uninsured. The Company does not consider any of its ﬁnancial assets to be impaired as of November 30, 2023. (c) Liquidity risk Liquidity risk is the risk that the Company will encounter diﬃcules raising funds to meet its ﬁnancial obligaons as they fall due. The Company is in the exploraon stage and does not have cash inﬂows from operaons; therefore, the Company manages liquidity risk through the management of its capital structure and ﬁnancial leverage. 121 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements Contractually obligated cash ﬂow requirements as at November 30, 2023 are as follows. Accounts payable and accrued liabilies Oﬃce lease (d) Interest rate risk Total $ 257 33 290 < 1 Year 1–2 Years $ 257 33 290 $ — — — 2–5 Years in thousands of dollars Thereaer $ — — — $ — — — Interest 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 balances as at November 30, 2023 a 1% change in interest rates would result in a negligible change in net loss, assuming all other variables remain constant. As we are currently in the exploraon phase none of our ﬁnancial instruments are exposed to commodity price risk; however, our ability to obtain long- term ﬁnancing and its economic viability could be aﬀected by commodity price volality. Fair value accounng Financial instruments measured at fair value are classiﬁed into one of three levels in the fair value hierarchy according to the signiﬁcance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows: Level 1 — Unadjusted quoted prices in acve markets that are accessible at the measurement date for idencal, unrestricted assets or liabilies; Level 2 — Quoted prices in markets that are not acve, or inputs that are observable, either directly or indirectly, for substanally the full term of the asset or liability; and Level 3 — Prices or valuaon techniques that require inputs that are both signiﬁcant to the fair value measurement and unobservable (supported by lile or no market acvity). The Company did not have any ﬁnancial assets and liabilies that were measured and recognized at fair value as at November 30, 2023. 122 Table of Contents 9) Income taxes Trilogy Metals Inc. Notes to Consolidated Financial Statements Income tax expense diﬀers from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. These diﬀerences result from the following items: Combined federal and provincial statutory tax rate Income tax (recovery) at statutory rate Diﬀerence in foreign tax rates Non-deducble expenditures Change in esmates in respect of prior years Change in valuaon allowance Income tax recovery (expense) November 30, 2023 November 30, 2022 in thousands of dollars November 30, 2021 $ 27.00 % (4,037) (118) 239 15 3,901 — $ 27.00 % (6,549) (252) 374 39 6,388 — $ 27.00 % (5,848) (194) 937 116 4,989 — Deferred income taxes arise from temporary diﬀerences in the recognion of income and expenses for ﬁnancial reporng and tax purposes. The signiﬁcant components of deferred income tax assets and liabilies at November 30, 2023 and 2022 are as follows: Deferred income tax assets Non-capital losses Mineral property interest Mineral property impairment Deferred interest Property, plant and equipment Lease liability Share issuance costs Other deducble temporary diﬀerences Total deferred tax assets Valuaon allowance Net deferred income tax assets Deferred income tax liabilies Investment in Ambler Metals LLC Right of use asset Deferred income tax liabilies Net deferred income tax assets November 30, 2023 $ in thousands of dollars November 30, 2022 $ 60,255 4,926 26 6,251 88 9 (5) 166 71,716 (44,456) 27,260 (27,229) (31) (27,260) — 57,236 3,061 17 6,251 86 60 6 181 66,898 (40,555) 26,343 (26,257) (86) (26,343) — The Company has loss carry-forwards of approximately $214 million that may be available for tax purposes. Certain of these losses occurred prior to the incorporaon of the Company and are accounted for in the ﬁnancial statements as if they were incurred by the Company. Prior to the NovaGold Arrangement, the Company undertook a tax reorganizaon in order to preserve the future deducbility of these losses for the Company, subject to the limitaons below. Deferred tax assets have been recognized to the extent of future taxable income and the future taxable amounts related to taxable 123 Table of Contents Trilogy Metals Inc. Notes to Consolidated Financial Statements temporary diﬀerences for which a deferred tax liability is recognized can be oﬀset. A valuaon allowance has been provided against deferred income tax assets where it is not more likely than not that the Company will realize those beneﬁts. The losses expire as follows in the following jurisdicons: 2024 2025 2026 Thereaer Non-capital losses Canada in thousands of dollars Operang losses United States $ — — — 63,192 63,192 $ 569 1,530 7,871 140,858 150,828 Future use of U.S. loss carry-forwards is subject to certain limitaons under provisions of the Internal Revenue Code including limitaons subject to Secon 382, which relates to a 50% change in control over a three-year period and are further dependent upon the Company aaining proﬁtable operaons. An ownership change under Secon 382 occurred on January 22, 2009 regarding losses incurred by AGC, of which the aributes of those losses were transferred to Trilogy Metals US with the purchase of the mineral property in October 2011. Therefore, approximately $39.4 million of the U.S. losses above are subject to limitaon under Secon 382. Accordingly, the Company’s ability to use these losses may be limited. An addional change in control may have occurred aer November 30, 2011 which may further limit the availability of losses prior to the date of change in control. Furthermore, tax reform provisions under Secon 172 allow federal net operang losses arising in tax years subsequent to December 31, 2017 to be carried forward indeﬁnitely. As at November 30, 2023 the Company has approximately $30.8 million in operang losses that can be carried forward indeﬁnitely. 10) Commitment The Company has commitments with respect to an oﬃce lease requiring future minimum lease payments as summarized in note 5(b). 11) Subsequent events On December 1, 2023, senior management and the Board of Directors were granted 358,826 RSUs and 194,819 DSUs, respecvely in selement of approximately $155,000 for management salaries and $82,750 for director fees. On December 7, 2023, the Company granted 1,566,940 RSUs for short term incenves to execuve and employees, all vesng immediately. Directors received an annual grant of 600,000 RSUs and 300,000 stock opons, all vesng immediately. Employees and consultants received an annual grant of 2,475,000 stock opons and 2,315,000 RSUs with a vesng schedule of one-third vesng immediately on the grant date, one-third to vest on the one year anniversary of the grant date and one-third to vest on the second year anniversary of the grand date. 124 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Item 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Disclosure controls and procedures are designed to ensure that informaon required to be disclosed in reports ﬁled or submied by the Company under U.S. and Canadian securies legislaon is recorded, processed, summarized and reported within the me periods speciﬁed in those rules, including providing reasonable assurance that material informaon is gathered and reported to senior management, including the Chief Execuve Oﬃcer (“CEO”) and Chief Financial Oﬃcer (“CFO”), as appropriate, to permit mely decisions regarding public disclosure. Management, including the CEO and CFO, has evaluated the eﬀecveness of the design and operaon 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 Securies Administrators, as at November 30, 2023. Based on this evaluaon, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were eﬀecve as at November 30, 2023. Internal Control over Financial Reporng Management is responsible for establishing and maintaining adequate internal control over ﬁnancial reporng as deﬁned in Rule 13a-15(f) and 15d- 15(f) of the Exchange Act and Naonal Instrument 52-109 Cerﬁcaon of Disclosure in Issuer’s Annual and Interim ﬁlings. Any system of internal control over ﬁnancial reporng, no maer how well designed, has inherent limitaons. Therefore, even those systems determined to be eﬀecve can provide only reasonable assurance with respect to ﬁnancial statement preparaon and presentaon. Management has used the Commiee of Sponsoring Organizaons of the Treadway Commission in Internal Control – Integrated Framework (2013) to evaluate the eﬀecveness of the Company’s internal control over ﬁnancial reporng. Based on this assessment, management has concluded that as at November 30, 2023, the Company’s internal control over ﬁnancial reporng was eﬀecve. Aestaon Report of the Registered Public Accounng Firm This Annual Report does not include an aestaon report of the company’s registered public accounng ﬁrm regarding internal controls over ﬁnancial reporng. Management’s report was not subject to aestaon by our registered public accounng ﬁrm pursuant to law, rules and regulaons that permit us to provide only management’s report in this Annual Report. Changes in Internal Controls There has been no change in our internal control over ﬁnancial reporng during ﬁscal year ended November 30, 2023 that has materially aﬀected, or is reasonably likely to materially aﬀect, our internal control over ﬁnancial reporng. Item 9B. OTHER INFORMATION None. Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 125 Table of Contents PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The informaon in our 2024 Proxy Statement regarding directors and execuve oﬃcers and Secon 16 reporng informaon appearing under the headings “Elecon of Directors” and “Informaon Concerning the Board of Directors and Execuve Oﬃcers” is incorporated by reference in this secon. The informaon under the heading “Execuve Oﬃcers of Trilogy” in Part I, Item 1 of this Form 10-K is also incorporated by reference in this secon. The informaon in our 2024 Proxy Statement regarding our Code of Business Conduct and Ethics under the subheading “Ethical Business Conduct” under “Statement of Corporate Governance Pracces” is also incorporated by reference in this secon. Finally, the informaon in our 2024 Proxy Statement regarding the Audit Commiee under the heading “Statement of Corporate Governance Pracces” is incorporated herein by reference. Item 11. EXECUTIVE COMPENSATION The informaon appearing in our 2024 Proxy Statement under the headings “Compensaon Commiee Interlocks and Insider Parcipaon”, “Statement of Execuve Compensaon”, and “Director Compensaon” is incorporated by reference in this secon. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The informaon appearing in our 2024 Proxy Statement under the heading “Securies Authorized For Issuance Under Equity Compensaon Plans” (which is also contained in this report in Part II, Item 5) and the informaon under the heading “Security Ownership Of Certain Beneﬁcial Owners And Management And Related Shareholder Maers” is incorporated herein by reference. Securies Authorized for Issuance under Equity Compensaon Plans The following table is as of November 30, 2023. Plan category Equity compensaon plans approved by security holders Equity compensaon plans not approved by security holders Total Number of securies to be issued upon exercise of outstanding opons, warrants and rights (a) 16,688,739 — 16,688,739 $ $ Weighted-average exercise price of outstanding opons, warrants and rights (b) 1.20 — 1.20 Number of securies remaining available for future issuance under equity compensaon plans (excluding securies reﬂected in column (a)) (c) 6,700,160 — 6,700,160 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The informaon appearing in our 2024 Proxy Statement under the heading “Independence of Directors” under the heading “Informaon Concerning the Board of Directors and Execuve Oﬃcers” and under the heading “Statement of Corporate Governance Pracces” is incorporated herein by reference. 126 Table of Contents Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The informaon appearing in our 2024 Proxy Statement regarding Audit Fees, Audit-Related Fees, Tax Fees, All Other Fees and Audit Commiee Pre- Approval Policies under the subheading “Appointment of Auditors” is incorporated herein by reference. Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES PART IV (a) Documents Filed With This Report 1. FINANCIAL STATEMENTS Report of Independent Registered Public Accounng Firm (PCAOB ID 271) Consolidated Balance Sheets Consolidated Statements of Loss and Comprehensive Loss Consolidated Statements of Shareholders’ Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements 2. FINANCIAL STATEMENT SCHEDULES None. 3. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS Page 106 108 109 110 111 112 Employment Agreement between the Registrant and Tony Giardini, dated April 20, 2020, idenﬁed in exhibit list below. Employment Agreement between the Registrant and Elaine Sanders, dated November 5, 2012, idenﬁed in exhibit list below. NovaCopper Inc. Equity Incenve Plan idenﬁed in exhibit list below. Form of NovaCopper Inc. Stock Opon Agreement idenﬁed in exhibit list below. NovaCopper Inc. 2012 Restricted Share Unit Plan idenﬁed in exhibit list below. Form of NovaCopper Inc. 2012 Restricted Share Unit Award Agreement idenﬁed in exhibit list below. NovaCopper Inc. 2012 Deferred Share Unit Plan idenﬁed in exhibit list below. Form of NovaCopper Inc. Deferred Share Unit Award Agreement idenﬁed in exhibit list below. 127 Table of Contents (b) Exhibits Exhibit No. 2.1 3.1 3.2 3.3 4.1 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 Descripon Contribuon 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) Cerﬁcate of Incorporaon (incorporated by reference to Exhibit 99.2 to the Company’s Registraon Statement on Form 40-F ﬁled on March 1, 2012) Arcles of Trilogy Metals Inc., eﬀecve April 27, 2011, as altered March 20, 2011 (incorporated by reference to Exhibit 99.3 to Amendment No. 1 to the Company’s Registraon Statement on Form 40-F ﬁled on April 19, 2012) Noce of Arcles and Cerﬁcate of Name Change, dated September 1, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated September 8, 2016) Descripon of Common Stock (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K ﬁled on February 13, 2020) Net Smelter Returns Royalty Agreement, dated eﬀecve January 7, 2010, among Kenneco Exploraon Company, Kenneco Arcc Company, Alaska Gold Company, and NovaGold Resources Inc. (incorporated by reference to Exhibit 99.1 to the Company’s Report on Form 6-K ﬁled on April 25, 2012) Exploraon Agreement and Opon to Lease, dated October 19, 2011, between NovaCopper US Inc. and NANA Regional Corporaon, Inc. (incorporated by reference to Exhibit 99.1 to the Company’s Report on Form 6-K ﬁled on April 25, 2012) Opon Agreement to Form Joint Venture, dated April 10, 2017, among the Company, NovaCopper US Inc. and South32 Group Operaons 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) Amended and Restated Limited Liability Company Agreement of Ambler Metals LLC dated February 11, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K ﬁled on February 18, 2020) NovaCopper Inc. 2012 Restricted Share Unit Plan (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K ﬁled on February 12, 2013) NovaCopper Inc. 2012 Deferred Share Unit Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K ﬁled on February 12, 2013, File No. 001-35447) Form of NovaCopper Inc. Stock Opon Agreement (incorporated by reference to Exhibit 4.5 to the Company’s Registraon Statement on Form S-8 ﬁled on April 27, 2012) NovaCopper Inc. Equity Incenve Plan (incorporated by reference to Schedule G of Exhibit 99.1 to the Company’s Registraon Statement on Form 40-F ﬁled on March 1, 2012) Employment Agreement, dated April 20, 2020, between the Company and Tony Giardini (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K ﬁled on April 20, 2020) 128 Table of Contents 10.10 10.11 21.1 23.1 23.2 23.3 23.4 23.5 23.6 31.1 31.2 32.1 32.2 96.1 96.2 Employment Agreement, dated November 5, 2012, between the Company and Elaine Sanders (incorporated by reference to Exhibit 10.5 to the Company’s Registraon Statement on Form 10-K ﬁled on February 12, 2013) Equity Incenve Plan for Ambler Metals LLC Oﬃcers and Employees (incorporated by reference to the Revised Appendix D to the Company’s proxy statement ﬁled April 30, 2021) Subsidiaries of the Registrant Consent of PricewaterhouseCoopers LLP Consent of Richard Gosse Consent of Wood Canada Limited Consent of Ausenco Engineering Canada ULC. Consent of SRK Consulng (Canada) Inc. Consent of Brown and Caldwell Cerﬁcaon of the Chief Execuve Oﬃcer required by Rule 13a-14(a) or Rule 15d-14(a) Cerﬁcaon of the Chief Financial Oﬃcer required by Rule 13a-14(a) or Rule 15d-14(a) Cerﬁcaon of the Chief Execuve Oﬃcer pursuant to 18 U.S.C. Secon 1350 Cerﬁcaon of the Chief Financial Oﬃcer pursuant to 18 U.S.C. Secon 1350 Arcc Project S-K 1300 Technical Report Summary, Ambler Mining District, Alaska (incorporated by reference to the Company’s Current Report on Form 8-K ﬁled on February 14, 2023) Technical Report Summary on the Inial Assessment of the Bornite Mineral Resource, Northwest Alaska, USA (incorporated by reference to the Company’s Current Report on Form 8-K ﬁled on February 14, 2023) 97.1 Incenve Compensaon Recovery Policy 101 The following materials from Trilogy Metals Inc.’s Annual Report on Form 10-K for the year ended November 30, 2023, formaed in Inline XBRL (eXtensible Business Reporng Language): (i) the Consolidated Statements of Operaons, (ii) the Consolidated Statements of Comprehensive Income (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, (vi) the Notes to the Consolidated Financial Statements, and (vii) Schedule II – Valuaon and Qualifying Accounts. 104 Cover Page Interacve Data File (formaed as Inline XBRL and contained in Exhibit 101). (c) Financial Statement Schedules Schedule A – The Financial Statement of Ambler Metals LLC as of November 30, 2023. 129 Table of Contents Schedule A Report of Independent Registered Public Accounng Firm To the Board of Ambler Metals LLC Opinion on the Financial Statements We have audited the accompanying balance sheets of Ambler Metals LLC (the Company) as of November 30, 2023 and 2022, and the related statements of loss and comprehensive loss, changes in members' equity and cash ﬂows for each of the three years in the period ended November 30, 2023, including the related notes (collecvely referred to as the ﬁnancial statements). In our opinion, the ﬁnancial statements present fairly, in all material respects, the ﬁnancial posion of the Company as of November 30, 2023 and 2022, and the results of its operaons and its cash ﬂows for the years then ended in conformity with accounng principles generally accepted in the United States of America. Basis for Opinion These ﬁnancial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's ﬁnancial statements based on our audits. We are a public accounng ﬁrm registered with the Public Company Accounng Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securies laws and the applicable rules and regulaons of the Securies and Exchange Commission and the PCAOB. We conducted our audits of these ﬁnancial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the ﬁnancial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the ﬁnancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the ﬁnancial statements. Our audits also included evaluang the accounng principles used and signiﬁcant esmates made by management, as well as evaluang the overall presentaon of the ﬁnancial statements. We believe that our audits provide a reasonable basis for our opinion. Crical Audit Maers The crical audit maer communicated below is a maer arising from the current period audit of the ﬁnancial statements that was communicated or required to be communicated to the audit commiee and that (i) relates to accounts or disclosures that are material to the ﬁnancial statements and (ii) involved our especially challenging, subjecve, or complex judgments. The communicaon of crical audit maers does not alter in any way our opinion on the ﬁnancial statements, taken as a whole, and we are not, by communicang the crical audit maer below, providing a separate opinion on the crical audit maer or on the accounts or disclosures to which it relates. Impairment indicator assessment of mineral properes As described in Notes 2 and 5 to the ﬁnancial statements, management assesses the possibility of impairment in the carrying value of mineral properes whenever events or changes in circumstances indicate that the carrying value may not be recoverable (impairment indicators). The carrying value of the Company's mineral properes was $30.9 million as of November 30, 2023. Management applies judgment to assess whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, giving rise to the requirement to conduct an impairment test. Events or changes in circumstances that could trigger an impairment test include (i) signiﬁcant adverse changes in the business climate including signiﬁcant decreases in copper, zinc, and other metal prices, or signiﬁcant adverse changes in legal factors, (ii) an accumulaon of costs signiﬁcantly in excess of the amount originally expected for the construcon of the mineral properes, and (iii) signiﬁcant decreases in the market prices of the mineral properes. 130 Table of Contents The principal consideraons for our determinaon that performing procedures relang to the impairment indicator assessment of mineral properes is a crical audit maer are that there was judgment by management when assessing whether there were impairment indicators related to the Company's mineral properes, speciﬁcally in regards to assessing whether there were: (i) signiﬁcant adverse changes in the business climate including signiﬁcant decreases in copper, zinc, and other metal prices, or signiﬁcant adverse changes in legal factors, (ii) an accumulaon of costs signiﬁcantly in excess of the amount originally expected for the construcon of the mineral properes, (iii) signiﬁcant decreases in the market prices of the mineral properes. This in turn led to a high degree of auditor judgment and subjecvity in performing procedures to evaluate audit evidence relang to the judgment made by management in their assessment of impairment indicators that could give rise to the requirement to conduct an impairment test, and (iv) the audit eﬀort involved the use of professionals with specialized skill and knowledge. Addressing the maer involved performing procedures and evaluang audit evidence in connecon with forming our overall opinion on the ﬁnancial statements. These procedures included, among others, (i) evaluang whether there were signiﬁcant adverse changes in the business climate including signiﬁcant decreases in copper, zinc, and other metal prices by considering external market and industry data, (ii) evaluang whether there were signiﬁcant adverse changes in legal factors with respect to tle maers by obtaining on a sample basis evidence to support the rights to the mineral properes, (iii) with the assistance of professionals with specialized skill and knowledge evaluang whether there were signiﬁcant decreases in the market prices of the mineral properes by considering the implied in situ value of recent market transacons of comparable mineral properes, and (iv) evaluang whether there was an accumulaon of costs signiﬁcantly in excess of the amount originally expected for the construcon of the mineral properes, or other factors that may indicate that the carrying values of the mineral properes may not be recoverable, through consideraon of evidence obtained in other areas of the audit. /s/PricewaterhouseCoopers LLP Chartered Professional Accountants Vancouver, Canada February 8, 2024 We have served as the Company's auditor since 2020. 131 Table of Contents Assets Current assets Cash (note 3) Deposits and prepaid Accounts receivables and other assets Total current assets Right of use asset (note 7) Property, plant and equipment (note 4) Mineral properes (note 5) Total assets Liabilies Current liabilies Accounts payable and accrued liabilies (note 6,8) Current lease liabilies (note 7) Total current liabilies Long term lease liabilies (note 7) Total liabilies Members' equity Owner contribuon - South 32 Owner contribuon - Trilogy Accumulated deﬁcit Total members' equity Total liabilies and members equity Ambler Metals LLC Balance Sheet As at November 30, 2023 and 2022 November 30, 2023 $ in thousands of US dollars November 30, 2022 $ 63,829 1,256 11 65,096 413 772 30,899 97,180 2,500 229 2,729 202 2,931 145,162 31,368 (82,281) 94,249 97,180 80,755 814 8 81,577 651 922 30,899 114,049 3,664 240 3,904 431 4,335 145,051 31,257 (66,594) 109,714 114,049 (See accompanying notes to the ﬁnancial statements) 132 Table of Contents Expenses Depreciaon Corporate salaries and wages General and administrave Mineral property expense (note 5) Professional fees Foreign exchange (gain)/loss Total expenses Other items Interest income Other income Loss and comprehensive loss for the year Ambler Metals LLC Statement of Loss and Comprehensive Loss For the Years Ended November 30 2023 $ 150 2,068 547 12,822 547 (2) 16,132 (416) (29) 15,687 2022 $ 113 1,664 738 32,083 792 15 35,405 (686) — 34,719 in thousands of US dollars 2021 $ 77 2,381 991 22,720 1,047 6 27,222 (1,058) — 26,164 (See accompanying notes to the ﬁnancial statements) 133 Table of Contents Balance - November 30, 2020 Loss for the year Balance - November 30, 2021 Owner contribuons Loss for the year Balance - November 30, 2022 Owner contribuons Loss for the year Balance - November 30, 2023 Ambler Metals LLC Statement of Changes in Members’ Equity For the Years Ended November 30 Number of units outstanding 2,000,000 — 2,000,000 — — 2,000,000 — — 2,000,000 Trilogy owner contribuon $ 31,206 — 31,206 51 — 31,257 111 — 31,368 South32 owner contribuon $ 145,000 — 145,000 51 — 145,051 111 — 145,162 In thousands of US dollars, except share amounts Deﬁcit $ (5,711) (26,164) (31,875) — (34,719) (66,594) — (15,687) (82,281) Total members' equity $ 170,495 (26,164) 144,331 102 (34,719) 109,714 222 (15,687) 94,249 (See accompanying notes to the ﬁnancial statements) 134 Table of Contents Ambler Metals LLC Statement of Cash Flows For the Years Ended November 30 Cash ﬂows from (used in) operang acvies Loss for the year Depreciaon Lease expense Lease payments Equity contribuon by Trilogy Change in working capital Increase in deposits and prepaids Decrease (increase) in accounts receivable and other assets Increase (decrease) in accounts payable and accrued liabilies Interest earned on South32 loan Interest received on South32 loan Cash used in operang acvies Cash ﬂows from (used in) ﬁnancing acvies Cash contribuon by South32 Cash from ﬁnancing acvies Cash ﬂows from (used in) invesng acvies Principle payment on South32 loan Property Staking Machinery and equipment Vehicles Furniture and equipment Cash from invesng acvies Increase (decrease) in cash Cash - beginning of the year Cash - end of the year November 30, 2023 $ November 30, 2022 $ in thousands of US dollars November 30, 2021 $ (15,687) 150 265 (267) 111 (442) (3) (1,164) — — (17,037) 111 111 — — — — — — (16,926) 80,755 63,829 (34,719) 113 264 (263) 51 (193) (6) (484) (628) 740 (35,125) 51 51 55,244 (142) (321) (47) (110) 54,624 19,550 61,205 80,755 (26,164) 77 261 (243) — (78) 8 2,703 (1,043) 1,909 (22,570) — — 2,256 (52) (67) — (35) 2,102 (20,468) 81,673 61,205 (See accompanying notes to the ﬁnancial statements) 135 Table of Contents Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted 1. Organizaon & basis of presentaon Ambler Metals LLC (the “Company” or “Joint Venture”), a Delaware limited liability company, is a 50-50 joint venture between NovaCopper US Inc., a wholly owned subsidiary of Trilogy Metals Inc. (collecvely “Trilogy”), and South32 USA Exploraon Inc., a wholly owned subsidiary of South32 Limited (collecvely “South32”). The Company is engaged in the exploraon and development of mineral properes with a focus on the Upper Kobuk Mineral Projects (“UKMP”), including the Arcc and Bornite Projects located in Northwest Alaska in the United States of America (“US” or “USA”). On February 11, 2020, pursuant to a contribuon agreement among Trilogy, South32 and the Company (the “Contribuon Agreement”), Trilogy contributed to the Company all of Trilogy’s assets associated with the Upper Kobuk Mineral Projects ("UKMP") located in northwest Alaska in exchange for a 50% membership interest in the Company. Simultaneously, South32 contributed $145 million cash in exchange for a 50% membership interest in the Company. The operaons 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 carrying value on the date of contribuon. The contribuons, including noncash contribuons, made to the Company by each respecve member on February 11, 2020 were as follows: Respecve contribuons to the Joint Venture Intangible assets: Mining rights Trilogy contributed intangible assets Tangible assets: Deposits Property, plant and equipment Trilogy contributed tangible assets Cash South32 contributed cash Total capital contributed at incepon in thousands of US dollars $ 30,587 30,587 1 618 619 145,000 145,000 176,206 As a result of these transacons, Trilogy and South32 each have equal interests in the Company and have equal representaon on the Board of the Company. Following the formaon of the Joint Venture, on March 17, 2020 the Company loaned South32 $57.5 million secured by South32’s membership interest in Ambler Metals and guaranteed by South32 Internaonal Investment Holdings Pty Ltd., a wholly owned subsidiary of South32. The loan had a 7-year maturity date and was recorded at amorzed cost. The loan repayment terms were such that quarterly payments became due from South32 on a quarterly basis beginning in 2Q 2021 based on forecasted expenditures. On June 21, 2022, South32 paid the full balance of the loan. 136 Table of Contents Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted The ﬁnancial statements have been prepared by management in conformity with generally accepted accounng principles in the United States (“U.S. GAAP”) on a going concern basis, which contemplates the realizaon of assets and the discharge of liabilies in the normal course of business for the foreseeable future. These ﬁnancial statements have been prepared pursuant to Rule 3-09 of SEC Regulaon S-X for inclusion in Trilogy’s 10-K/A, as the Company is an equity investee of Trilogy. 2. Summary of signiﬁcant accounng policies Property, plant and equipment Plant and equipment are recorded at cost and depreciaon begins when the asset is put into service. Depreciaon is calculated on a straight-line basis over the respecve assets’ esmated useful lives. Depreciaon periods by asset class are: Computer hardware and soware Machinery and equipment Furniture and equipment Vehicles Leasehold improvements Mineral properes and development costs 3 years 3 - 10 years 5 - 10 years 3 years lease term All direct costs related to the acquision of mineral property interests are capitalized. Mineral property exploraon expenditures are expensed when incurred. When it has been established that a mineral deposit is commercially mineable, an economic analysis has been completed and permits are obtained, the costs subsequently incurred to develop a mine on the property prior to the start of mining operaons are capitalized. Capitalized costs will be amorzed following commencement of producon using the unit of producon method over the esmated life of proven and probable reserves. Impairment of long-lived assets Management assesses the possibility of impairment in the carrying value of long-lived assets whenever events or changes in circumstances indicate that the carrying amounts of the asset or asset group may not be recoverable. Management applies judgment to assess impairment indicators that could give rise to the requirement to conduct a formal impairment test. Events and circumstances that could trigger an impairment test include, but are not limited to, signiﬁcant adverse changes in the business climate including signiﬁcant decreases to copper, zinc and other metal prices or signiﬁcant adverse changes in legal factors, an accumulaon of costs signiﬁcantly in excess of the amount originally expected for the acquision or construcon of the long-lived asset, and signiﬁcant decreases in the market prices for long-lived assets. Management calculates the esmated undiscounted future net cash ﬂows relang to the asset or asset group using esmated future prices, proven and probable reserves and other mineral resources, and operang, capital and reclamaon costs. When the carrying value of an asset exceeds the related undiscounted cash ﬂows, the asset is wrien down to its esmated fair value, which is usually determined using discounted future cash ﬂows. Management’s esmates of mineral prices, mineral resources, foreign exchange rates, producon levels, operang, capital and reclamaon costs are subject to risk and uncertaines that may aﬀect the determinaon of the recoverability of the long- lived asset. It is possible that material changes could occur that may adversely aﬀect management’s esmates. 137 Table of Contents Leases Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted We determine if a contractual arrangement represents or contains a lease at incepon. Operang leases are included in right of use assets and lease liabilies on our balance sheet. Assets under ﬁnance leases are included in property, plant and equipment and the related lease liabilies in lease liabilies on our balance sheet. Operang and ﬁnance lease right of use assets and lease liabilies are recognized based on the present value of the future lease payments over the lease term at the commencement date. When the rate implicit to the lease cannot be readily determined, we ulize the incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest our Company would have to pay to borrow on a collateralized basis over a similar term and the amount equal to the lease payments in a similar economic environment. The operang lease expenses are recognized on a straight-line basis over the lease term. Income taxes The Company is not a taxable enty for income tax purposes. Accordingly, no recognion is given to income taxes for ﬁnancial reporng purposes. Tax on the net income (loss) of the Company is borne by the owners through the allocaon of taxable income (loss). Net income for ﬁnancial statement purposes may diﬀer signiﬁcantly from taxable income for the owners as a result of diﬀerences between the tax basis and ﬁnancial reporng basis of assets and liabilies and the taxable income allocaon requirements under the shareholders agreement. Financial instruments Loans and receivables are recorded inially at fair value, net of transacon costs incurred, and subsequently at amorzed cost using the eﬀecve interest rate method. Loans and receivables consist of cash, deposits, and loans receivable. Esmated future credit losses are based on historical credit loss experience and forward-looking consideraons. Individual receivables are wrien oﬀ when management deem them to be uncollecble. Further details on credit risk are disclosed in note 9. Other ﬁnancial liabilies include accounts payable and accrued liabilies. Translaon of foreign currencies Foreign denominated monetary assets and liabilies are translated into United States dollars at the exchange rate in eﬀect at the balance sheet date, and non-monetary assets and liabilies at the exchange rate in eﬀect at the me of acquision or issue. Income and expenses are translated at rates approximang the exchange rate in eﬀect at the me of transacons. Exchange gains or losses arising on translaon are included in income or loss for the period. The funconal currency of the Company and the Company’s reporng currency is the United States dollar. 3. Cash As of November 30, 2023, included in cash is $0.2 million (2022 - $0.3 million) denominated in Canadian dollars and $63.6 million (2022 - $80.5 million) denominated in United States dollars. The Company holds cash with a single US Financial Instuon and the majority of the cash is uninsured. 138 Table of Contents Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted 4. Property, plant and equipment A summary of property, plant and equipment as of November 30, 2023 and November 30, 2022, is as follows: in thousands of US dollars Machinery and equipment $ 601 321 (206) 716 922 — (304) 618 Computer hardware and soware $ 12 — (12) — 12 — (12) — Furniture and Equipment $ 35 110 (9) 136 145 — (23) 122 Vehicles $ 67 47 (44) 70 114 — (82) 32 Total $ 715 478 (271) 922 1,193 — (421) 772 November 30, 2022 $ 26,899 4,000 30,899 Addions $ — — — in thousands of US dollars November 30, 2023 $ 26,899 4,000 30,899 Cost at November 30, 2021 Addions Accumulated Depreciaon Net book value at November 30, 2022 Cost at November 30, 2022 Addions Accumulated Depreciaon Net book value at November 30, 2023 5. Mineral properes Ambler Bornite a) Ambler On February 11, 2020, the Ambler lands in Northwest Alaska, which contains the copper-zinc-lead-gold-silver Arcc Project and other mineralized targets within the volcanogenic massive sulﬁde belt, were contributed to Ambler Metals LLC pursuant to the Contribuon Agreement. The Ambler lands are subject to a 1% net smelter return (“NSR”) royalty that can be purchased at any me for a one-me payment of $10 million. There were no mineral property addions during the period ended November 30, 2023. b) Bornite On 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 NANA Regional Corporaon, Inc. (“NANA”) through the Alaska Nave Claims Selement Act, located adjacent to the Ambler lands in Northwest Alaska, were contributed to Ambler Metals LLC pursuant to the Contribuon Agreement. Upon a decision to proceed with construcon of a mine on the Ambler or Bornite lands, NANA maintains the right to purchase between a 16%-25% ownership interest in the mine or retain a 15% net proceeds royalty which is payable aer Ambler Metals LLC has recovered certain historical costs, including capital and cost of capital. Should NANA elect to 139 Table of Contents Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted purchase an ownership interest, consideraon will be payable equal to all historical costs incurred on the properes at the elected percentage, not to be less than zero. The pares would form a joint 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 execuon of a mining lease or a surface use agreement, the amount of which is determined by the classiﬁcaon of land from which producon originates. c) Mineral properes expense The following table summarizes mineral properes expense incurred for the year ended November 30, 2023, November 30, 2022 and November 30, 2021. Lease expense for the warehouse previously classiﬁed as general and administrave of approximately $81 thousand for the years ended November 30, 2021 were reclassiﬁed to mineral property expense under project support in order to align with the current period presentaon. Ambler Access Project Community Drilling Engineering Environmental Geochemistry and geophysics Land and perming Project support Safety and risk Wages and beneﬁts Mineral property expense 6. Accounts payable and accrued liabilies Accounts payable Accrued salaries and vacaon Accrued liabilies Accounts payable and accrued liabilies November 30, 2023 $ 8,422 90 323 954 341 97 841 430 20 1,304 12,822 November 30, 2022 $ 6,822 219 7,396 2,002 692 1,172 800 8,613 562 3,805 32,083 in thousands of US dollars November 30, 2021 $ 2,880 114 3,898 1,508 621 975 1,266 8,432 230 2,796 22,720 November 30, 2023 $ 153 1,152 1,195 2,500 in thousands of US dollars November 30, 2022 $ 1,031 845 1,788 3,664 140 Table of Contents 7. Leases (a) Right of use assets Opening balance Amorzaon Right of use asset Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted November 30, 2023 $ 651 (238) 413 in thousands of US dollars November 30, 2022 $ 877 (226) 651 In December 2020, the Company commenced a lease for their headquarters oﬃce in Anchorage, Alaska and recognized the right of use asset approximately $816 thousand. In August 2021, the Company commenced a new lease for a warehouse in Fairbanks, Alaska and recognized the right of use asset of approximately $231 thousand. (b) Lease liabilies The headquarters and warehouse leases are operang leases ending in 2025 and 2024, respecvely. There is an opon to renew for both lease agreements. Lease expense for the headquarters is recorded within general and administrave expense and for the warehouse is recorded within mineral property expense and was comprised of the following components: Operang lease costs Variable lease costs Operang lease costs November 30, 2023 $ 265 5 270 in thousands of US dollars November 30, 2022 $ 264 3 267 Variable lease costs consist primarily of the Company’s poron of common area maintenance fees including taxes. As of November 30, 2023, the remaining lease term was 25 months for the headquarters oﬃce and 8 months for the warehouse. Supplemental cash and non-cash informaon relang to our leases during the period ended November 30, 2023, are as follows: ● Cash paid for amounts included in the measurement of lease liabilies was approximately $267 thousand. ● Non-cash amounts included in the measurement of lease liabilies was $nil. 141 Table of Contents Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted Future minimum payments relang to the lease recognized in our balance sheet as of November 30, 2023 are as follows: 2024 to 2025 Total undiscounted lease payments Eﬀects of discounng Present value of lease payments recognized as lease liability 8. Related party transacons in thousands of US dollars November 30, 2023 $ 453 453 (22) 431 During the year ended November 30, 2023, the Company incurred $39 thousand related to support from Trilogy (2022 – $nil), $27 thousand was paid and the remaining $12 thousand were included in accounts payable and accrued liabilies. During the year ended November 30, 2023, the Company earned interest of $nil (2022 - $0.6 million) from South32. 9. Financial risk management (a) Currency risk Currency risk is the risk of a ﬂuctuaon in ﬁnancial asset and liability selement amounts due to a change in foreign exchange rates. The Company operates 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, 2023 is limited to the Canadian dollar balances consisng of cash of approximately CDN $250 thousand and accounts payable of CDN $36 thousand. Based on a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net change would be approximately $17 thousand. (b) Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a ﬁnancial instrument fails to meet its contractual obligaons. The Company holds cash with a single US Financial Instuon. The Company’s only signiﬁcant exposure to credit risk is equal to the balance of cash as recorded in the ﬁnancial statements. The majority of the Company’s cash held at November 30, 2023 is uninsured. The Company does not consider any of its ﬁnancial assets to be impaired as of November 30, 2023. (c) Liquidity risk Liquidity risk is the risk that the Company will encounter diﬃcules raising funds to meet its ﬁnancial obligaons as they fall due. The Company is in the exploraon stage and does not have cash inﬂows from operaons; therefore, the Company manages liquidity risk through the terms of the LLC Agreement. 142 Table of Contents Ambler Metals LLC Notes to Financial Statements expressed in U.S. dollars, unless otherwise noted Contractually obligated cash ﬂow requirements as of November 30, 2023 are as follows: Accounts payable and accrued liabilies Warehouse and oﬃce lease (d) Interest rate risk Total $ 2,500 453 2,953 <1 year $ 2,500 246 2,746 1-2 year $ — 191 191 in thousands of US dollars There aer $ — — — 2-5 years $ — 16 16 Interest 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 of November 30, 2023, a 1% change in interest rates would result in a negligible change in cash, over a 12-month period, assuming all other variables remain constant. As we are currently in the exploraon phase, none of our ﬁnancial instruments are exposed to commodity price risk; however, the ability for our Owners to obtain long-term ﬁnancing and its economic viability could be aﬀected by commodity price volality. 10. Commitments and conngencies The Company has commitments with respect to a warehouse and oﬃce lease requiring future minimum lease payments as summarized in note 7. 11. Members’ equity The Company has been established as a limited liability company. Under the terms of the LLC Agreement, unless otherwise provided for in the LLC Agreement, all membership interests are entled to the same beneﬁts, rights, dues and obligaons and vote on all maers. The Company is authorized to establish a capital account for each member equal to that member’s inial capital contribuon, represented by units. The units are vong and subject to transfer restricons as deﬁned in the LLC Agreement. As of November 30, 2023 and 2022, the Company had 2 million units, with each of South32 and Trilogy owning 1 million units each, in exchange for the contribuons made to the Company at incepon. 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 its Membership Interest or any economic interest, (including its right to receive distribuons of cash or property from the Company). Any such transfer is subject to the sasfacon of certain condions, and the relevant purchase price is determined pursuant to speciﬁc formulas, all as set forth in the LLC Agreement. 143 Table of Contents Item 16. FORM 10-K SUMMARY None. 144 Table of Contents Pursuant to the requirements of Secon 13 or 15(d) of the Securies Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGNATURES TRILOGY METALS INC. By: /s/ Tony Giardini Name: Tony Giardini Title: President and Chief Execuve Oﬃcer Date: February 9, 2024 Pursuant to the requirements of the Securies Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacies and on the dates indicated: Signature Title /s/ Tony Giardini Tony Giardini /s/ Elaine Sanders Elaine Sanders /s/ James Gowans James Gowans /s/ William Hayden William Hayden /s/ William Hensley William Hensley /s/ Gregory Lang Gregory Lang /s/ Janice Stairs Janice Stairs /s/ Diana Walters Diana Walters President and Chief Execuve Oﬃcer (Principal Execuve Oﬃcer) and Director Chief Financial Oﬃcer (Principal Financial Oﬃcer and Principal Accounng Oﬃcer) Director Director Director Director Director Director 145 Date February 9, 2024 February 9, 2024 February 9, 2024 February 9, 2024 February 9, 2024 February 9, 2024 February 9, 2024 February 9, 2024 Name of Subsidiary Jurisdicon of Organizaon SUBSIDIARIES OF THE REGISTRANT NovaCopper US Inc. (dba Trilogy Metals US) Ambler Metals LLC (50% owned by NovaCopper US Inc.) 995 Exploraon Inc. Delaware Delaware Delaware Exhibit 21.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Exhibit 23.1 We hereby consent to the incorporaon by reference in the Registraon Statements on Form S-8 (No. 333-275828, No. 333-181020, No. 333-188950, No. 333-205102, No. 333-208149, No. 333-234417 and No. 333-257095) of Trilogy Metals Inc. of (i) our report dated February 8, 2024, relang to the consolidated ﬁnancial statements of Trilogy Metals Inc., and (ii) our report dated February 8, 2024 relang to the ﬁnancial statements of Ambler Metals LLC, which appear in this Form 10-K. /s/ PricewaterhouseCoopers LLP Chartered Professional Accountants Vancouver, Canada February 8, 2024 CONSENT OF RICHARD GOSSE Exhibit 23.2 I hereby consent to the inclusion in this Annual Report on Form 10-K, which is being ﬁled with the United States Securies and Exchange Commission, of references to my name and to the use of the scienﬁc and technical informaon included in Trilogy Metals Inc.’s Annual Report on Form 10-K for the year ended November 30, 2023. I also consent to the incorporaon by reference in Trilogy Metals Inc.’s Registraon Statements on Form S-8 (No. 333-181020, No. 333-188950, No. 333-205102, No. 333- 208149, No. 333-234417, No. 333-257095 and No. 333-275828) and the Registraon Statement on Form S-3 (No. 333-234164) of references to my name and to the use of the scienﬁc and technical informaon included in the Annual Report on Form 10-K as described above. DATED: February 6, 2024 /s/ Richard Gosse Name: Richard Gosse CONSENT OF WOOD CANADA LIMITED Exhibit 23.3 In connecon with the Trilogy Metals Inc. Annual Report on Form 10-K for the year ended November 30, 2023 and any amendments or supplements and/or exhibits thereto (collecvely, the “Form 10-K”), the undersigned consents to: i. ii. iii. iv. the use of the technical report summary tled Technical Report Summary on the Inial Assessment of the Bornite Mineral Resource, Northwest Alaska, with a report date of November 30, 2022 (the “Bornite TRS”) as referenced in the Form 10-K; the use of the technical report summary tled Arcc Project, Technical Report Summary, Ambler Mining District, Alaska, with a report date of November 30, 2022 (the “Arcc TRS”) as referenced in the form 10-K; the use of and references to our name, including our status as a third-party ﬁrm comprising mining experts, (as described in Subpart 1300 of Regulaon S-K promulgated by the Securies and Exchange Commission), in connecon with the TRS, Form 10-K and the Registraon Statements on Form S-8 (No. 333-275828, No. 333-257095, No. 333-234417, No. 333-208149, No. 333-205102, No. 333-188950 and No. 333-181020) (the “Registraon Statements”); and any extracts or summaries of the Bornite TRS and Arcc TRS included or incorporated by reference in the Form 10-K and the use of any informaon derived, summarized, quoted or referenced from the Bornite TRS and Arcc TRS, or porons thereof, that was prepared by us, that we supervised the preparaon of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and which is incorporated by reference in the Registraon Statements. Wood Canada Limited is responsible for authoring, and this consent pertains to, all Chapters of the Bornite TRS and Chapters 1.5, 1.6, 1.7, 1.8, 1.10, 1.11, 1.12, 1.14.5, 1.20.1, 1.20.2, 2.3, 2.4, 2.5, 2.6, 5.3.9, 6, 7.1, 7.2.1, 7.2.2, 7.2.3, 7.2.5, 7.2.6, 7.2.7, 7.2.8, 8.1.1, 8.1.3, 8.1.4, 8.1.5, 8.1.6, 8.2.1, 8.2.2, 8.2.3, 8.2.4, 8.3, 9, 11, 12, 13.1, 13.2, 13.3, 13.4, 13.5, 13.6, 13.7, 13.8, 13.10, 18.1.6, 18.2.2, 18.2.3, 22.3, 22.4, 22.6, 22.7, 22.8, 23.2, 23.3, 25 of the Arcc TRS. Date: February 7, 2024 /s/ Greg Gosson Greg Gosson, Technical Director, Geology & Compliance Wood Canada Limited Exhibit 23.4 CONSENT OF AUSENCO ENGINEERING CANADA ULC. In connecon with the Trilogy Metals Inc. Annual Report on Form 10-K for the year ended November 30, 2023 and any amendments or supplements and/or exhibits thereto (collecvely, the “Form 10-K”), the undersigned consents to: i. ii. iii. the use of the technical report summary tled Arcc Project, Technical Report Summary, Ambler Mining District, Alaska, with a report date of November 30, 2022 (the “Arcc TRS”) as referenced in the Form 10-K; the use of and references to our name, including our status as an expert or “qualiﬁed person”, (as described in Subpart 1300 of Regulaon S-K promulgated by the Securies and Exchange Commission), in connecon with the TRS, Form 10-K and the Registraon Statements on Form S-8 (No. 333-275828, No. 333-257095, No. 333-234417, No. 333-208149, No. 333-205102, No. 333-188950 and No. 333-181020) (the “Registraon Statements”); and any extracts or summaries of the Arcc TRS included or incorporated by reference in the Form 10-K and the use of any informaon derived, summarized, quoted or referenced from the Arcc TRS, or porons thereof, that was prepared by us, that we supervised the preparaon of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and which is incorporated by reference in the Registraon Statements. Dated February 7, 2024 /s/ Ausenco Engineering Canada ULC. Ausenco Engineering Canada ULC. CONSENT OF SRK CONSULTING (CANADA) INC. Exhibit 23.5 In connecon with the Trilogy Metals Inc. Annual Report on Form 10-K for the year ended November 30, 2023 and any amendments or supplements and/or exhibits thereto (collecvely, the “Form 10-K”), the undersigned consents to: i. ii. iii. the use of the technical report summary tled Arcc Project, Technical Report Summary, Ambler Mining District, Alaska, with a report date of November 30, 2022 (the “Arcc TRS”) as referenced in the Form 10-K; the use of and references to our name, including our status as an expert or “qualiﬁed person”, (as described in Subpart 1300 of Regulaon S-K promulgated by the Securies and Exchange Commission), in connecon with the TRS, Form 10-K and the Registraon Statements on Form S-8 (No. 333-275828, No. 333-257095, No. 333-234417, No. 333-208149, No. 333-205102, No. 333-188950 and No. 333-181020) (the “Registraon Statements”); and any extracts or summaries of the Arcc TRS included or incorporated by reference in the Form 10-K and the use of any informaon derived, summarized, quoted or referenced from the Arcc TRS, or porons thereof, that was prepared by us, that we supervised the preparaon of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and which is incorporated by reference in the Registraon Statements. Date: February 6, 2024 /s/ SRK Consulng (Canada) Inc. SRK Consulng (Canada) Inc. Exhibit 23.6 CONSENT OF BROWN AND CALDWELL In connecon with the Trilogy Metals Inc. Annual Report on Form 10-K for the year ended November 30, 2023 and any amendments or supplements and/or exhibits thereto (collecvely, the “Form 10-K”), the undersigned consents to: i. ii. iii. the use of the technical report summary tled Arcc Project, Technical Report Summary, Ambler Mining District, Alaska, with a report date of November 30, 2022 (the “Arcc TRS”) as referenced in the Form 10-K; the use of and references to our name, including our status as an expert or “qualiﬁed person”, (as described in Subpart 1300 of Regulaon S-K promulgated by the Securies and Exchange Commission), in connecon with the TRS, Form 10-K and the Registraon Statements on Form S-8 (No. 333-275828, No. 333-257095, No. 333-234417, No. 333-208149, No. 333-205102, No. 333-188950 and No. 333-181020) (the “Registraon Statements”); and any extracts or summaries of the Arcc TRS included or incorporated by reference in the Form 10-K and the use of any informaon derived, summarized, quoted or referenced from the Arcc TRS, or porons thereof, that was prepared by us, that we supervised the preparaon of, and/or that was reviewed and approved by us, that is included or incorporated by reference in the Form 10-K and which is incorporated by reference in the Registraon Statements. DENNIS FINK / BROWN AND CALDWELL is responsible for authoring, and this consent pertains to, the following Secons of the Arcc TRS related to the water treatment plant: 1.14.9, 1.20.7, 2.3, 15.9, 17.3.4, 17.3.6.2, 18.1.9.1, 18.2.6, 23.8, and 25. Dated February 6, 2024 /s/ Brown and Caldwell Brown and Caldwell CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Exhibit 31.1 I, 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, in light 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 Rules 13a-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 that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which 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, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted 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 the disclosure 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 control over financial reporting; and 5. 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’s auditors 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 to adversely 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 financial reporting. Date: February 9, 2024 By: /s/ Tony Giardini Tony Giardini Chief Executive Officer CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Exhibit 31.2 I, Elaine Sanders, cerfy 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, in light 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 informaon included in this report, fairly present in all material respects the ﬁnancial condion, results of operaons and cash ﬂows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other cerfying oﬃcer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as deﬁned in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal control over ﬁnancial reporng (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 that material informaon relang to the registrant, including its consolidated subsidiaries, is made known to us by others within those enes, parcularly during the period in which this report is being prepared; (b) Designed such internal control over ﬁnancial reporng, or caused such internal control over ﬁnancial reporng to be designed under our supervision, to provide reasonable assurance regarding the reliability of ﬁnancial reporng and the preparaon of ﬁnancial statements for external purposes in accordance with generally accepted accounng principles; (c) Evaluated the eﬀecveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the eﬀecveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluaon; and (d) Disclosed in this report any change in the registrant's internal control over ﬁnancial reporng 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 control over ﬁnancial reporng; and 5. The registrant’s other cerfying oﬃcer(s) and I have disclosed, based on our most recent evaluaon of internal control over ﬁnancial reporng, to the registrant’s auditors and the audit commiee of the registrant’s board of directors (or persons performing the equivalent funcons): (a) All signiﬁcant deﬁciencies and material weaknesses in the design or operaon of internal control over ﬁnancial reporng which are reasonably likely to adversely aﬀect the registrant’s ability to record, process, summarize and report ﬁnancial informaon; 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 ﬁnancial reporng. Date: February 9, 2024 By: /s/ Elaine Sanders Elaine Sanders Chief Financial Oﬃcer CERTIFICATION PURSUANT TO 18 U.S.C. §1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.1 In connecon with the Annual Report of Trilogy Metals Inc. (the “Company”) on Form 10-K for the year ended November 30, 2023, as ﬁled with the Securies and Exchange Commission on the date hereof (the “Report”), I, Tony Giardini, Chief Execuve Oﬃcer of the Company, cerfy that: 1. The Report fully complies with the requirements of Secon 13(a) or 15(d) of the Securies Exchange Act of 1934; and 2. The informaon contained in the Report fairly presents, in all material respects, the ﬁnancial condion and results of operaons of the Company. Date: February 9, 2024 By: /s/ Tony Giardini Tony Giardini Chief Execuve Oﬃcer CERTIFICATION PURSUANT TO 18 U.S.C. §1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Exhibit 32.2 In connecon with the Annual Report of Trilogy Metals Inc. (the “Company”) on Form 10-K for the year ended November 30, 2023, as ﬁled with the Securies and Exchange Commission on the date hereof (the “Report”), I, Elaine Sanders, Chief Financial Oﬃcer of the Company, cerfy that: 1. The Report fully complies with the requirements of Secon 13(a) or 15(d) of the Securies Exchange Act of 1934; and 2. The informaon contained in the Report fairly presents, in all material respects, the ﬁnancial condion and results of operaons of the Company. Date: February 9, 2024 By: /s/ Elaine Sanders Elaine Sanders Chief Financial Oﬃcer TRILOGY METALS INC. INCENTIVE COMPENSATION RECOVERY POLICY Exhibit 97.1 1. Introducon. The Board of Directors of Trilogy Metals Inc. (the “Company”) believes that it is in the best interests of the Company and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Company's compensaon philosophy. The Board has therefore adopted this policy, which provides for the recovery of erroneously awarded incenve compensaon in the event that the Company is required to prepare an accounng restatement due to material noncompliance of the Company with any ﬁnancial reporng requirements under the federal securies laws (the “Policy”). This Policy is designed to comply with Secon 10D of the Securies Exchange Act of 1934, as amended (the “Exchange Act”), related rules and the lisng standards of the NYSE American or any other securies exchange on which the Company’s shares are listed in the future. 2. Administraon. This Policy shall be administered by the Board or, if so designated by the Board, the Compensaon Commiee (the “Commiee”), in which case, all references herein to the Board shall be deemed references to the Commiee. Any determinaons made by the Board shall be ﬁnal and binding on all aﬀected individuals. 3. Covered Execuves. Unless and unl the Board determines otherwise, for purposes of this Policy, the term “Covered Execuve” means a current or former employee who is or was idenﬁed by the Company as the Company’s president, principal ﬁnancial oﬃcer, principal accounng oﬃcer (or if there is no such accounng oﬃcer, the controller), any vice-president of the Company in charge of a principal business unit, division, or funcon (such as sales, administraon, or ﬁnance), any other oﬃcer who performs a policy-making funcon, or any other person (including any execuve oﬃcer of the Company’s subsidiaries or aﬃliates) who performs similar policy-making funcons for the Company. “Policy- making funcon” excludes policy-making funcons that are not signiﬁcant. “Covered Execuves” will include, at minimum, the execuve oﬃcers idenﬁed by the Company pursuant to Item 401(b) of Regulaon S-K of the Exchange Act. For the avoidance of doubt, “Covered Execuves” will include at least the following Company oﬃcers: Chief Execuve Oﬃcer and Chief Financial Oﬃcer. This Policy covers Incenve Compensaon received by a person aer beginning service as a Covered Execuve and who served as a Covered Execuve at any me during the performance period for that Incenve Compensaon. 4. Recovery: Accounng Restatement. In the event of an “Accounng Restatement,” the Company will recover reasonably promptly any excess Incenve Compensaon received by any Covered Execuve during the three completed 1 ﬁscal years immediately preceding the date on which the Company is required to prepare an Accounng Restatement, including transion periods resulng from a change in the Company’s ﬁscal year as provided in Rule 10D-1 of the Exchange Act. Incenve Compensaon is deemed “received” in the Company’s ﬁscal period during which the Financial Reporng Measure speciﬁed in the Incenve Compensaon award is aained, even if the payment or grant of the Incenve Compensaon occurs aer the end of that period. (a) Deﬁnion of Accounng Restatement. For the purposes of this Policy, an “Accounng Restatement” means the Company is required to prepare an accounng restatement of its ﬁnancial statements ﬁled with the Securies and Exchange Commission (the “SEC”) due to the Company’s material noncompliance with any ﬁnancial reporng requirements under the federal securies laws (including any required accounng restatement to correct an error in previously issued ﬁnancial statements that is material to the previously issued ﬁnancial statements, or that would result in a material misstatement if the error were corrected in the current period or le uncorrected in the current period). The determinaon of the me when the Company is “required” to prepare an Accounng Restatement shall be made in accordance with applicable SEC and naonal securies exchange rules and regulaons. An Accounng Restatement does not include situaons in which ﬁnancial statement changes did not result from material non-compliance with ﬁnancial reporng requirements, such as, but not limited to retrospecve: (i) applicaon of a change in accounng principles; (ii) revision to reportable segment informaon due to a change in the structure of the Company’s internal organizaon; (iii) reclassiﬁcaon due to a disconnued operaon; (iv) applicaon of a change in reporng enty, such as from a reorganizaon of enes under common control; (v) adjustment to provision amounts in connecon with a prior business combinaon; and (vi) revision for stock splits, stock dividends, reverse stock splits or other changes in capital structure. (b) Deﬁnion of Incenve Compensaon. For purposes of this Policy, “Incenve Compensaon” means any compensaon that is granted, earned, or vested based wholly or in part upon the aainment of a Financial Reporng Measure, including, for example, bonuses or awards under the Company’s short and long-term incenve plans, grants and awards under the Company’s equity incenve plans, and contribuons of such bonuses or awards to the Company’s deferred compensaon plans or other employee beneﬁt plans. Incenve Compensaon does not include awards which are granted, earned and vested without regard to aainment of Financial Reporng Measures, such as me-vesng awards, discreonary awards and awards based wholly on subjecve standards, strategic measures or operaonal measures. 2 (c) Financial Reporng Measures. “Financial Reporng Measures” are those that are determined and presented in accordance with the accounng principles used in preparing the Company’s ﬁnancial statements (including non-GAAP ﬁnancial measures) and any measures derived wholly or in part from such ﬁnancial measures. For the avoidance of doubt, Financial Reporng Measures include stock price and total shareholder return. A measure need not be presented within the ﬁnancial statements or included in a ﬁling with the SEC to constute a Financial Reporng Measure for purposes of this Policy. (d) Excess Incenve Compensaon: Amount Subject to Recovery. The amount(s) to be recovered from the Covered Execuve will be the amount(s) by which the Covered Execuve’s Incenve Compensaon for the relevant period(s) exceeded the amount(s) that the Covered Execuve otherwise would have received had such Incenve Compensaon been determined based on the restated amounts contained in the Accounng Restatement. All amounts shall be computed without regard to taxes paid. For Incenve Compensaon based on Financial Reporng Measures such as stock price or total shareholder return, where the amount of excess compensaon is not subject to mathemacal recalculaon directly from the informaon in an Accounng Restatement, the Board will calculate the amount to be reimbursed based on a reasonable esmate of the eﬀect of the Accounng Restatement on such Financial Reporng Measure upon which the Incenve Compensaon was received. The Company will maintain documentaon of that reasonable esmate and will provide such documentaon to the applicable naonal securies exchange. (e) Method of Recovery. The Board will determine, in its sole discreon, the method(s) for recovering reasonably promptly excess Incenve Compensaon hereunder, subject to applicable law. Such methods may include, without limitaon, subject to applicable law: (i) (ii) (iii) requiring reimbursement of compensaon previously paid; forfeing any compensaon contribuon made under the Company’s deferred compensaon plans, as well as any matching amounts and earnings thereon; oﬀseng the recovered amount from any compensaon that the Covered Execuve may earn or be awarded in the future (including, for the avoidance of doubt, recovering amounts earned or awarded in the future to such individual equal to compensaon paid or deferred into tax–qualiﬁed plans or plans subject to the Employee Rerement Income Security Act of 3 1974 (collecvely, “Exempt Plans”); provided that, no such recovery will be made from amounts held in any Exempt Plan of the Company); (iv) taking any other remedial and recovery acon permied by law, as determined by the Board; or (v) some combinaon of the foregoing. 5. No Indemniﬁcaon or Advance. Subject to applicable law, the Company shall not indemnify, including by paying or reimbursing for premiums for any insurance policy covering any potenal losses, any Covered Execuves against the loss of any erroneously awarded Incenve Compensaon, nor shall the Company advance any costs or expenses to any Covered Execuves in connecon with any acon to recover excess Incenve Compensaon. 6. Interpretaon. The Board is authorized to interpret and construe this Policy and to make all determinaons necessary, appropriate or advisable for the administraon of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Secon 10D of the Exchange Act and any applicable rules or standards adopted by the SEC or any naonal securies exchange on which the Company's securies are listed. 7. Eﬀecve Date. The Board adopted this Policy on October 13, 2023. This Policy applies to Incenve Compensaon received by Covered Execuves on or aer October 2, 2023 (the “Eﬀecve Date”) that results from aainment of a Financial Reporng Measure based on or derived from ﬁnancial informaon for any ﬁscal period ending on or aer the Eﬀecve Date. In addion, this Policy is intended to be and will be incorporated as an essenal term and condion of any Incenve Compensaon agreement, plan or program that the Company establishes or maintains on or aer the Eﬀecve Date. 8. Amendment and Terminaon. The Board may amend this Policy from me to me in its discreon, and shall amend this Policy as it deems necessary to reﬂect changes in regulaons adopted by the SEC under Secon 10D of the Exchange Act and to comply with any rules or standards adopted by the NYSE American or any other securies exchange on which the Company’s shares are listed in the future. 9. Other Recovery Rights. The Board intends that this Policy will be applied to the fullest extent of the law. Upon receipt of this Policy, each Covered Execuve is required to complete the Receipt and Acknowledgement aached as Schedule A to this Policy. The Board may require that any employment agreement or similar agreement relang to Incenve Compensaon received on or aer the Eﬀecve Date shall, as a condion to the grant of any beneﬁt thereunder, require a Covered Execuve to agree to abide 4 by the terms of this Policy. Any right of recovery under this Policy is in addion to, and not in lieu of, any (i) other remedies or rights of compensaon recovery that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, or similar agreement relang to Incenve Compensaon, unless any such agreement expressly prohibits such right of recovery, and (ii) any other legal remedies available to the Company. The provisions of this Policy are in addion to (and not in lieu of) any rights to repayment the Company may have under Secon 304 of the Sarbanes-Oxley Act of 2002 and other applicable laws. 10. Impraccability. The Company shall recover any excess Incenve Compensaon in accordance with this Policy, except to the extent that certain condions are met and the Board has determined that such recovery would be impraccable, all in accordance with Rule 10D-1 of the Exchange Act and the NYSE American or any other securies exchange on which the Company’s shares are listed in the future. 11. Successors. This Policy shall be binding upon and enforceable against all Covered Execuves and their beneﬁciaries, heirs, executors, administrators or other legal representaves. 5 Schedule A INCENTIVE-BASED COMPENSATION CLAWBACK POLICY RECEIPT AND ACKNOWLEDGEMENT I, __________________________________________, hereby acknowledge that I have received and read a copy of the Incenve Compensaon Recovery Policy. As a condion of my receipt of any Incenve Compensaon as deﬁned in the Policy, I hereby agree to the terms of the Policy. I further agree that if recovery of excess Incenve Compensaon is required pursuant to the Policy, the Company shall, to the fullest extent permied by governing laws, require such recovery from me up to the amount by which the Incenve Compensaon received by me, and amounts paid or payable pursuant or with respect thereto, constuted excess Incenve Compensaon. If any such reimbursement, reducon, cancelaon, forfeiture, repurchase, recoupment, oﬀset against future grants or awards and/or other method of recovery does not fully sasfy the amount due, I agree to immediately pay the remaining unpaid balance to the Company. Signature Date 6

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