Trilogy Metals Reports Third Quarter Fiscal 2020 Financial Results
Trilogy Metals (TMQ) reported Q3 2020 results with a net loss of $3.2 million, significantly improved from a $12.5 million loss in Q3 2019, primarily due to reduced mineral properties expenses following the joint venture with South32. The Arctic Project's feasibility study shows a pre-tax NPV of $1.6 billion and an internal rate of return of 31%, confirming strong economic viability. The company maintains a strong cash position of $12.8 million. Additionally, a Joint Record of Decision for the Ambler Mining District Industrial Access Project was issued, facilitating future operations.
- Improved Q3 net loss of $3.2 million vs. $12.5 million loss in Q3 2019
- Feasibility study shows pre-tax NPV of $1.6 billion for Arctic Project
- Maintained cash balance of $12.8 million and working capital of $11.8 million
- Comprehensive earnings for Q3 2020 at -$3.2 million indicate ongoing financial strain
- Incurring a loss of $1.1 million from equity investment in Ambler Metals
VANCOUVER, BC, Oct. 7, 2020 /PRNewswire/ - Trilogy Metals Inc. (TSX: TMQ) (NYSE American: TMQ) ("Trilogy Metals", "Trilogy" or "the Company") announces its financial results for the third quarter ended August 31, 2020. 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 – Meeting Milestones While Maintaining a Strong Cash Position
- Feasibility Study results for the Arctic Project released on August 20, 2020 confirms that Arctic is an economically robust project.
- Joint Record of Decision for the Ambler Mining District Industrial Access Project ("AMDIAP" or "Ambler Access Road") was issued on July 23, 2020 following the Final Environmental Impact Statement ("EIS") that was issued on March 27, 2020.
- The Alaska Industrial Development and Export Authorty ("AIDEA") has commenced the next stages of work to move the AMDIAP forward.
- Strong working capital position of
$11.8 million and cash on hand of$12.8 million plus$142 million dedicated to advancing the Upper Kobuk Mineral Projects.
Arctic Feasibility Study
On August 20, 2020, the Company announced the positive results of its Feasibility Study ("FS") for the Arctic Copper-Zinc-Lead-Silver-Gold Project ("Arctic" or the "Arctic Project") in the Ambler mining district of Northwestern Alaska. The Arctic Project is held by Ambler Metals LLC ("Ambler Metals"), the joint venture operating company equally owned by Trilogy and South32 Limited ("South32").
The FS was prepared on a
- a pre-tax Net Present Value ("NPV")
8% of$1.6 billion and an Internal Rate of Return ("IRR") of31% ; and - an after-tax NPV
8% of$1.1 billion and after-tax IRR of27% .
On October 2, 2020, the Company filed on a voluntary basis a National Instrument 43-101 technical report summarizing the FS titled "Arctic Feasibility Study Alaska, USA NI 43-101 Technical Report" with an effective date of August 20, 2020 and a release date of October 2, 2020 with the United States Securities and Exchange Commission and the securities regulatory authorities in each of the provinces of Canada. A copy of the report is available at www.edgar.com, www.sedar.com and on the Company's website at www.trilogymetals.com. More information on the Arctic Project is available on the Company's website.
Ambler Mining District Industrial Access Project (AMDIAP)
On July 23, 2020 a Joint Record of Decision for the AMDIAP was issued by the Lead Federal Agency, the Bureau of Land Management along with the Cooperating Federal Agency, the U.S. Army Corps of Engineers. The AMDIAP will provide access to the Ambler Mining District by linking the mining district to the rest of Alaska's infrastructure. The Ambler Mining District is home to the Upper and Lower Kobuk villages, many residents of which are shareholders of NANA Regional Corporation, Inc. ("NANA"), and to the Company's projects.
On June 24, 2020, the Board of Directors of the AIDEA approved a Memorandum of Understanding with Ambler Metals which specifies how the parties will jointly establish a plan regarding the permitting, feasibility, engineering and design, construction and operation, financing and closure of the AMDIAP. Ambler Metals has committed to contribute up to
Ambler Metals Update
Activities at Ambler Metals include the hiring of Ramzi Fawaz as President and Chief Executive Officer. Mr. Fawaz joined Ambler Metals from Newmont Corporation where he was Senior Vice President Projects from February 2011 to October 2019, with responsibility for the development and execution of Newmont's major gold and copper projects globally.
Before joining Newmont, Mr Fawaz served as Senior Vice President Operations at Atomic Energy Canada Ltd. where he led all project development, refurbishment and building of the CANDU reactor projects. Prior to Atomic Energy, he was with Royal Dutch Shell, where he worked for 30 years in various senior roles. Among those, Mr Fawaz was responsible for leading the Athabasca Oil Sands Expansion Project in Canada and the Nigeria LNG Train 3 and LPG expansion project in Nigeria.
Mr. Fawaz brings to the role extensive leadership experience in US and international project development. Throughout his career, he has engaged extensively with all stakeholders related to major project developments, including executive management, boards of directors, shareholders, local communities, contractors, utilities and various regional and federal government agencies.
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 | Nine months ended | |||
Selected expenses | August 31, 2020 $ | August 31, 2019 $ | August 31, 2020 $ | August 31, 2019 $ |
General and administrative | 265 | 435 | 1,349 | 1,363 |
Mineral properties expense | - | 10,951 | 1,545 | 15,392 |
Feasibility study | 232 | - | 974 | - |
Professional fees | 165 | 414 | 1,031 | 658 |
Salaries | 170 | 272 | 620 | 835 |
Salaries – stock-based compensation | 1,064 | 402 | 3,030 | 3,005 |
Investor relations | 156 | 164 | 383 | 456 |
Gain on derecognition of assets contributed to the joint venture | - | - | (175,770) | - |
Equity in investee | 1,094 | - | 1,833 | - |
Comprehensive earnings (loss) for the period | (3,184) | (12,535) | 164,993 | (21,380) |
Basic earnings (loss) per common share | ( | ( | ( | |
Diluted earnings (loss) per common share | ( | ( | ( | |
For the three months ended August 31, 2020, Trilogy reported a loss of
The decrease in comprehensive loss is primarily due to the elimination of mineral properties expense as these expenditures became the responsibility of Ambler Metals subsequent to the formation of the joint venture with South32 on February 11, 2020. For the three-month period ended August 31, 2019, for which there are no current period comparatives, Trilogy spent
Other variances in relation to the comparative three-month period ended August 31, 2020 consists of the following: i) feasibility study expenses of
For the nine-month period ended August 31, 2020, Trilogy reported comprehensive earnings of
Other variances noted for the comparative nine-month period ended August 31, 2020 consist of the following: i) a decrease in mineral properties expenses of
Liquidity and Capital Resources
At August 31, 2020, we had
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 Upper Kobuk Mineral Projects ("UKMP") in northwestern Alaska. On December 19, 2019 South32, which is a globally diversified mining and metals company, exercised its option to form a 50/50 joint venture with Trilogy. 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, the Company's ability to fund its operations and the requirement for additional funding at Ambler Metals and the timing and amount of estimated future production, the net present value and internal rate of return at the Arctic Project, 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, 2019 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.
Cautionary Note to United States Investors
This press release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all resource and reserve estimates included in this press release have been prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)—CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended ("CIM Definition Standards"). NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the SEC, and resource and reserve information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term "resource" does not equate to the term "reserves". Under U.S. standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination.
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SOURCE Trilogy Metals Inc.
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