Trilogy Metals Inc. (NYSE: TMQ)

Trilogy Metals Inc. engages in the exploration and development of the Upper Kobuk Mineral Projects located in the Ambler Mining District of Northwest Alaska. The company holds its interest in these projects through a wholly owned subsidiary NovaCopper US Inc. which owns a fifty percent stake in Ambler Metals LLC the joint venture with South32 Limited that holds the Arctic Project and the Bornite Project. The Arctic Project consists of a high grade polymetallic volcanogenic massive sulfide deposit containing copper zinc lead gold and silver while the Bornite Project comprises a carbonate hosted copper deposit. Exploration activities focus on expanding mineral resources and advancing technical studies including drilling metallurgical geotechnical and environmental work to support future production decisions. The field season is limited to the snow free months from late May to late September each year.

We currently do not generate revenue from mineral production as the company remains in the exploration and pre production stage. Future revenue will be derived from the sale of copper and associated metals such as zinc lead gold and silver that are expected to be produced from the Arctic and Bornite deposits once they are developed into operating mines. The company may also receive by product credits from the sale of zinc lead gold and silver and could potentially enter into streaming royalty or off take arrangements but no such revenue streams have been established to date.

The company operates through the following segments.

• Arctic Project: This segment involves the exploration and development of a high grade polymetallic volcanogenic massive sulfide deposit containing copper zinc lead gold and silver with ongoing efforts to increase the definition of mineral resources and reserves through additional drilling metallurgical geotechnical and environmental studies.

• Bornite Project: This segment focuses on the exploration and advancement of a carbonate hosted copper deposit including resource expansion through drilling and the completion of a preliminary economic assessment that outlines a potential underground mining operation with a seventeen year mine life and a six thousand tonne per day processing rate.

Trilogy Metals Inc. positions itself as a developer of high grade base metal projects in a prolific mining district that hosts some of the world's most significant undeveloped copper and zinc resources. The company faces competition from other exploration firms seeking similar assets in Alaska and from larger mining companies with greater financial resources, more operational expertise, and more advanced properties. Competitive conditions also include contention for skilled management employees, suitable contractors for drilling operations, technical and engineering resources, and necessary exploration and mining equipment. Its competitive advantages stem from the joint venture partnership with South32 which provides technical expertise, funding, and access to international markets control of a large land package through the NANA Agreement which secures surface access rights and the recent progress on securing infrastructure permits such as the Ambler Road which improves year round access to the project area and reduces logistical risks.

The company intends to sell its future metal concentrates to smelters, traders, and industrial users who require copper, zinc, lead, gold, and silver for manufacturing, construction, and infrastructure applications. While no specific customer names have been disclosed the company expects to enter into off take agreements with major metal traders and smelters once production commences. The company's location in Alaska also provides potential access to North American and Asian markets via shipping routes once the Ambler Road is operational.