An anonymous director reports

TRILOGY METALS REPORTS THIRD QUARTER FISCAL 2018 FINANCIAL RESULTS

Trilogy Metals Inc. has released its third quarter results for the period ended Aug. 31, 2018. Details of the company's financial results are contained in the unaudited interim consolidated financial statements and management's discussion and analysis, which will be available on the company's website, on SEDAR and on EDGAR. All amounts are in United States dollars unless otherwise stated.

Third quarter 2018 highlights:

• Strong cash position of $30.5-million and working capital of $27.2-million.
• On June 5, 2018, the company announced a maiden cobalt resource of 182.4 million tonnes grading 0.019 per cent Co for 77 million pounds of inferred resources.
• On July 20, 2018, the company announced the filing of an updated technical report for the Bornite project incorporating the cobalt resource and updates from the 2017 drill program at the Bornite project.
• On Aug. 23, 2018, the company announced an expansion of the Bornite drilling program, with its partner, South32 Ltd., financing an additional $800,000 for the company to add two drill rigs, which have subsequently completely four holes totalling approximately 2,170 metres.

The 2018 program and budget at the Bornite project, which were originally $10-million, include infill and offset drilling to better define and expand the high-grade copper resources at Bornite, were increased during the quarter to $10.8-million with a focus on adding additional drilling toward the end of the field program. Camp opened during mid-May and a seismic program was completed in early June. Results from the seismic program have now been received and the technical teams at the company and South32 intend to meet later this year to review and analyze the information collected.

Three drill rigs started up in June to complete a planned field program of approximately 8,000 metres of drilling. Two drill rigs were added toward the end of the field season for an additional 2,170 m of drilling. Initial assay results from hole RC18-0247 were released in a press release dated Aug. 23, 2018, with results from the remainder of the drilling program anticipated to be released throughout the fall. Drilling at the Bornite project completed on Sept. 19, 2018.

The 2018 program and budget at the Arctic project of $6.7-million include the work performed to date on the Arctic prefeasibility study and work to advance the Arctic project toward feasibility and permitting. In May, 2018, the company completed an ore sorting test at the Steinert facility in Walton, Ky., and a summary report has been received from Steinert. The company and Ausenco are reviewing operating and capital cost implications of incorporating ore sorting into the overall design to decide if ore sorting will be included into the final feasibility design or not. Results from this review are expected by the end of the year. One drill started up in June at Arctic to collect feasibility level geotechnical and hydrological data for the tailings dam and waste storage facility sites identified in the Arctic PFS. Approximately 695 metres of geotechnical and hydrological drilling were completed. Engineering studies are planned to include additional metallurgical, tailings and waste dump design, water treatment, and water balance studies to support permitting and the feasibility study. In addition, the company continues to collect baseline environmental data on hydrology, meteorology and archeology. The company is preparing for the submission of permits for the Arctic mine in 2019.

The company will be continuing to work closely with The Alaska Industrial Development and Export Authority (AIDEA) (the proponent for the Ambler mining district industrial access project (AMDIAP)) to advance the permitting process on the AMDIAP throughout 2018. On April 30, 2018, the Bureau of Land Management (BLM) released the Ambler Road environmental impact statement scoping summary report. Permitting of the AMDIAP under the National Environmental Policy Act's environmental impact statement (EIS) process has now concluded the scoping phase of permitting and has moved to the draft EIS phase. Per the BLM's website, the draft EIS is scheduled to be released for public comment by the end of March, 2019.

Selected results

The selected financial information in the table is prepared in accordance with U.S. generally accepted accounting principles.

                                             SELECTED RESULTS
                                     (in thousands, except per share)

                                                 Three months ended Aug. 31     Nine months ended Aug. 31
Selected expenses                                       2018           2017           2018           2017

General and administrative                              $376           $273         $1,175         $1,050
Mineral properties expense                             9,051          8,471         12,657         10,407
Professional fees                                         13             86            286            404
Salaries                                                 286            218            738            683
Salaries -- stock-based compensation                     204            104          1,277            603
Investor relations                                        59            107            261            263
Loss and comprehensive loss for the period             9,920          8,992         16,530         14,378
Basic and diluted loss per common share                $0.08          $0.09          $0.14          $0.14

For the three months ended Aug. 31, 2018, Trilogy reported a net loss of $9.9-million (or eight-cent basic and diluted loss per common share) compared with a net loss of $9.0-million for the corresponding period in 2017 (or nine-cent basic and diluted loss per common share). This variance was primarily due to the difference in mineral properties expense due to the size and timing of the field programs. An increase of $600,000 of mineral property expenses occurred during the three months ended Aug. 31, 2018, compared with the three months ended Aug. 31, 2017.

Other differences noted for the comparable periods were: i) an increase in general and administrative expenses to support the increased field program at the UKMP; ii) a slight decrease in professional fees as legal fees associated with an equity financing in the second quarter have all been capitalized under share issue costs; iii) an increase in salaries and stock-based compensation due to new hires in the quarter as well as the granting of additional stock options; and iv) a decrease in investor relations expenses as costs associated with the analyst tours of the projects have been captured under general and administrative expenses.

The basic and diluted loss per common share of eight cents for the three months ended Aug. 31, 2018, has decreased from the basic and diluted loss per common share of nine cents for the three months ended Aug. 31, 2017, due primarily by the activities affecting the loss for the period as described above, offset by an increase in the weighted average number of shares outstanding for the three months ended Aug. 31, 2018.

For the nine months ended Aug. 31, 2018, Trilogy reported a net loss of $16.5-million (or 14-cent basic and diluted loss per common share) compared with a net loss of $14.4-million for the corresponding period in 2017 (or 14-cent basic and diluted loss per common share). This variance was primarily due to the increased activity level at the company's projects which are recorded as mineral properties expense. An increase of $2.3-million of mineral property expenses occurred during the nine months ended Aug. 31, 2018, compared with the nine months ended Aug. 31, 2017, due to the work performed for the Arctic PFS in 2018 with no comparable activity in 2017. Similar to the activity levels for the three months ended Aug. 31, 2018, other differences noted relate to: i) a small increase in general and administrative expenses; ii) a decrease in professional fees as legal costs related to the financing completed on April 20, 2018, are recorded as issuance costs in shareholders equity; iii) and a slight increase in salaries due to new hires as well as a significant increase in stock-based compensation due to the accelerated amortization of new options that were granted during the nine-month period ended Aug. 31, 2018.

The basic and diluted loss per common share of 14 cents for the nine months ended Aug. 31, 2018, is consistent with the basic and diluted loss per common share of 14 cents for the nine months ended Aug. 31, 2017. The operating activities increasing the loss as described above have been offset by the dilutive effect of an increase in the weighted average number of shares outstanding for the nine months ended Aug. 31, 2018.

Bornite project

On June 5, 2018, the company announced a maiden cobalt resource with the following highlights:

• At a base case 0.50-per-cent-copper cut-off grade, and within the combined indicated and inferred Cu resource pit shell, the Bornite project is estimated to contain in-pit inferred resources of 124.6 million tonnes grading 0.017 per cent Co for 45 million pounds of contained cobalt.
• Below the resource limiting pit shell and at a base case cut-off grade of 1.5 per cent copper, the Bornite project is estimated to contain additional inferred resources of 57.8 million tonnes grading 0.025 per cent Co for 32 million pounds of contained cobalt.
• Total inferred resources (in pit and below pit) of 182.4 million tonnes grading 0.019 per cent Co for 77 million pounds of contained cobalt.

                ESTIMATE OF COBALT MINERAL RESOURCES FOR THE BORNITE DEPOSIT
   
Type             Cut-off (Cu %)  Tonnes (M)  Average grade Co (%)  Contained metal Co (Mlb)

In pit                     0.5       124.6                 0.017                        45
Below pit                  1.5        57.8                 0.025                        32
Total inferred                       182.4                 0.019                        77

(1) Resources stated as contained within a pit shell developed using a metal price of 
$3/pound Cu, mining costs of $2/tonne, milling costs of $11/tonne, general and 
administrative cost of $5/tonne, 87-per-cent metallurgical recoveries and an average pit 
slope of 43 degrees.
(2) Mineral resources are not mineral reserves and do not have demonstrated economic 
viability. There is no certainty that all or any part of the mineral resources will be 
converted into mineral reserves.                                                     
(3) It is reasonably expected that the majority of inferred mineral resources could be 
upgraded to indicated mineral resources with additional exploration.

Qualified persons

Andrew W. West, certified professional geologist, exploration manager, for Trilogy Metals, is a qualified person as defined by National Instrument 43-101. Mr. West has reviewed the technical information in this news release and approves the disclosure contained herein.

About Trilogy Metals Inc.

Trilogy Metals is a metals exploration company focused on exploring and developing the Ambler mining district located in northwestern Alaska. It 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 VMS deposits that contain copper, zinc, lead, gold and silver, and carbonate replacement deposits which have been found to host high-grade copper mineralization.

We seek Safe Harbor.