VANCOUVER, BC, July 7, 2021
/PRNewswire/ - Trilogy Metals Inc. (TSX: TMQ) (NYSE
American: TMQ) ("Trilogy", "Trilogy Metals" or "the Company")
announces its financial results for the second quarter ended
May 31, 2021. Details of the
Company's financial results are contained in the interim unaudited
consolidated financial statements and Management's Discussion and
Analysis which will be available on the Company's website at
www.trilogymetals.com, on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov. All amounts are in United
States dollars unless otherwise stated.
Highlights
- Strong working capital position of $8.1
million and cash on hand of $8.4
million.
- Ambler Access Project budget for 2021 field season totalling
$13 million approved by AIDEA and
Ambler Metals LLC.
- Summer exploration program at the Upper Kobuk Mineral Projects
has commenced.
Ambler Access Project – 2021 Budget Approved
In a press release dated April 19,
2021, the Company announced that the Alaska Industrial
Development and Export Authority ("AIDEA") had formally approved
the proposed plan and budget for the 2021 summer field season
activities, detailed engineering and environmental and field work
of up to $13 million for the Ambler
Access Project ("AAP"). The cost will be shared 50/50 by AIDEA and
the Company's 50% owned joint venture, Ambler Metals LLC ("Ambler
Metals"). The Board of AIDEA has authorized up to $6.5 million for field season activities. These
funds will 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 parties, resulting 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.
2021 Exploration Season for the Upper Kobuk Mineral
Projects
In a press release dated May 17,
2021, the Company announced that Ambler Metals had finalized
the details of the 2021 exploration field program at the UKMP for
the previously approved $27 million
exploration budget. The exploration program is aligned with a
strategy developed by the Company and our joint venture partner,
South32 Limited ("South32") which prioritizes the exploration
budget within the UKMP. The strategy defines a program that
advances the highest priority projects and exploration targets,
both volcanogenic Massive Sulphide ("VMS") and Carbonate-Hosted
Copper ("CHC"), ranging from early-stage geophysical anomalies that
were identified during the 2019 airborne Versatile Time Domain
Electromagnetic ("VTEM") survey to advanced VMS and CHC prospects
with historical resources.
The UKMP project camp opened on June 1,
2021 following stringent COVID-19 safety protocols.
Mandatory COVID-19 testing is conducted with negative tests
required both prior to traveling to the site and prior to departure
from the site. Upon arrival all personnel must follow safety
protocols, including additional protocols implemented in response
to the pandemic. Drilling has commenced with three drill rigs
deployed.
Annual General Meeting of Shareholders
The Annual General Meeting of shareholders was held on
May 19, 2021. At the Annual General
Meeting, all directors nominated by the Company and standing for
election were elected by shareholders of the Company, with each
director receiving no less than 99.77% of the votes cast.
Selected Results
The following selected financial information is prepared in
accordance with U.S. GAAP.
in thousands of dollars,
except for
per share amounts
|
Three months
ended
|
Six months
ended
|
Selected
expenses
|
May 31,
2021
$
|
May 31,
2020
$
|
May 31,
2021
$
|
May 31,
2020
$
|
General and
administrative
|
306
|
407
|
669
|
998
|
Mineral properties
and feasibility study expenses
|
-
|
-
|
-
|
1,545
|
Professional
fees
|
275
|
198
|
504
|
866
|
Salaries
|
407
|
226
|
845
|
450
|
Salaries –
stock-based compensation
|
524
|
770
|
2,672
|
1,966
|
Investor
relations
|
116
|
101
|
270
|
227
|
Gain on derecognition
of assets contributed to joint venture
|
-
|
-
|
-
|
(175,770)
|
Share of loss on
equity investment
|
1,700
|
561
|
2,820
|
739
|
Comprehensive (loss)
earnings for the period
|
(3,413)
|
(3,002)
|
(7,929)
|
168,177
|
Basic (loss) earnings
per common share
|
(0.02)
|
(0.02)
|
(0.05)
|
1.20
|
Diluted (loss)
earnings per common share
|
(0.02)
|
(0.02)
|
(0.05)
|
1.13
|
For the three-month period ended May 31,
2021, Trilogy reported a net loss of $3.4 million (or $0.02 basic and diluted loss per common share).
For the comparable period in 2020, we reported a net loss of
$3.0 million (or $0.02 basic and diluted loss per common share).
This second quarter difference is primarily due to a $1.1 million increase in our 50% pro rata share
of Ambler Metals' comprehensive loss. This was offset by a one-time
amount of $0.7 million in feasibility
study costs incurred during the second quarter of 2020. The share
of loss in equity investment is higher versus the comparative
period as the current quarter includes costs incurred to ready the
camp for the 2021 field season. These set up costs were not
incurred in the comparative period as the 2020 field season had
been cancelled due to the COVID-19 pandemic.
Other variances noted for the comparable period were: i) a
decrease in general and administrative expenses of $0.10 million primarily due to recruiting fees
incurred in the comparative period for which there are no current
period costs as well as the elimination of travel costs due to
COVID-19 travel restrictions; ii) an increase of $0.07 million in professional fees primarily
driven by an increase of $0.12
million for geological consulting, offset by $0.04 million in savings for auditing and legal
services as the comparative period included charges for new
accounting standard implementation and joint venture set up; iii)
an increase of $0.18 million in
salaries as the current period cost reflects additions to the
executive team during the third quarter of 2020 for which there are
no prior year second quarter comparatives; and iv) a decrease of
$0.30 million in stock-based
compensation driven primarily by RSUs that vested during the second
quarter of 2020, for which there are no current quarter
comparatives.
For the six-month period ended May 31,
2021, Trilogy reported a net a loss of $7.9 million (or $0.05 basic and diluted loss per common share).
For the comparable period in 2020, we reported net earnings of
$168 million (or $1.20 basic and $1.13 diluted earnings per common share). The
difference for the six-month period ended May 31, 2021, when compared to the same period in
2020, is primarily due to the $176
million gain on derecognition of mineral property assets
contributed to Ambler Metals upon formation of the joint venture on
February 11, 2020. This variance is
offset by $1.5 million of mineral
property expenses and $0.7 million of
feasibility study cost incurred during the comparable prior period
for which there are no current period comparatives. Furthermore,
our share of loss on equity investment was $2 million higher for the six-month period ended
May 31, 2021, and reflects costs
incurred by Ambler Metals to ready the project site for the 2021
field season. These set up costs were not incurred by Ambler Metals
in 2020 as the field season was cancelled due to the COVID-19
pandemic.
Liquidity and Capital Resources
As of May 31, 2021, we had
$8.4 million in cash and working
capital of $8.1 million, which is
sufficient to fund our ongoing operations for at least the next 12
months. The projects are fully funded by Ambler Metals and we do
not anticipate needing to fund our 50% share of future expenditures
to advance the projects until the subscription price paid by
South32 into Ambler Metals of $145
million is spent.
Qualified Persons
Richard Gosse, P.Geo., Vice
President Exploration for Trilogy Metals Inc., is a Qualified
Person as defined by National Instrument 43-101. Mr. Gosse
has reviewed the technical information in this news release and
approves the disclosure contained herein.
About Trilogy Metals
Trilogy Metals Inc. is a metals exploration and development
company which holds a 50 percent interest in Ambler Metals LLC
which has a 100 percent interest in the UKMP in northwestern
Alaska. The UKMP is located within
the Ambler Mining District which is one of the richest and
most-prospective known copper-dominant districts located in one of
the safest geopolitical jurisdictions in the world. It hosts
world-class polymetallic volcanogenic massive sulphide ("VMS")
deposits that contain copper, zinc, lead, gold and silver, and
carbonate replacement deposits which have been found to host
high-grade copper and cobalt mineralization. Exploration efforts
have been focused on two deposits in the Ambler mining district -
the Arctic VMS deposit and the Bornite carbonate replacement
deposit. Both deposits are located within land package that spans
approximately 172,636 hectares. The Company has an agreement with
NANA Regional Corporation, Inc., a Regional Alaska Native
Corporation that provides a framework for the exploration and
potential development of the Ambler mining district in cooperation
with local communities. Our vision is to develop the Ambler mining
district into a premier North American copper producer.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes certain "forward-looking
information" and "forward-looking statements" (collectively
"forward-looking statements") within the meaning of applicable
Canadian and United States
securities legislation including the United States Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical fact, included herein, including,
without limitation, statements relating to the planned expenditures
and the anticipated drilling, the Company's ability to fund its
operations, the requirement for additional funding at Ambler Metals
and the perceived merit of the Company's properties are
forward-looking statements. Forward-looking statements are
frequently, but not always, identified by words such as "expects",
"anticipates", "believes", "intends", "estimates", "potential",
"possible", and similar expressions, or statements that events,
conditions, or results "will", "may", "could", or "should" occur or
be achieved. Forward-looking statements involve various risks and
uncertainties. There can be no assurance that such statements will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company's expectations include the
uncertainties involving success of exploration activities,
permitting timelines, requirements for additional capital, risks
pertaining to the outbreak of the coronavirus (COVID-19),
government regulation of mining operations, environmental risks,
prices for energy inputs, labour, materials, supplies and services,
uncertainties involved in the interpretation of drilling results
and geological tests, unexpected cost increases and other risks and
uncertainties disclosed in the Company's Annual Report on Form 10-K
for the year ended November 30, 2020
filed with Canadian securities regulatory authorities and with the
United States Securities and Exchange Commission and in other
Company reports and documents filed with applicable securities
regulatory authorities from time to time. The Company's
forward-looking statements reflect the beliefs, opinions and
projections on the date the statements are made. The Company
assumes no obligation to update the forward-looking statements or
beliefs, opinions, projections, or other factors, should they
change, except as required by law.
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SOURCE Trilogy Metals Inc.