An anonymous director reports

TRILOGY METALS REPORTS SECOND QUARTER FISCAL 2023 FINANCIAL RESULTS

Trilogy Metals Inc. has released its financial results for the second quarter ended May 31, 2023. 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, on SEDAR and on EDGAR. All amounts are in United States dollars unless otherwise stated.

Ambler access project

In March, 2023, the board of Ambler Metals LLC, Trilogy's 50/50 joint venture with South32 Ltd., approved a budget totalling $12.3-million for the Ambler access project -- the proposed 211-mile, industrial-use-only road from the Upper Kobuk mineral projects (UKMP) to the Dalton Highway that will enable advancing exploration and development at the Ambler mining district. The total budget of $24.6-million, financed equally by the Alaska Industrial Development and Export Authority (AIDEA) and Ambler Metals, includes financing for the 2023 field season work consisting of field studies, permitting and data collection to assist the United States Bureau of Land Management (USBLM) in completing the additional work to support the supplemental environmental impact statement (SEIS).

The fieldwork has started to utilize the Coldfoot camp from May to mid-September and the Bornite camp from mid-June to August. The planned field program will consist of cultural resource inventory surveys and testing of sites over approximately 765 acres, hydraulic and hydrology studies at 47 bridge crossings to assess conditions for area drainage, culvert placement and bridge design, collecting topographical and bathymetric survey data to support bridge data and fish passage culverts, engineering reconnaissance surveys, and fish habitat investigations on over 100 sites.

The right-of-way permits issued to AIDEA by the USBLM for the Ambler access project were suspended last year. On Nov. 15, 2022, the USBLM submitted a status report announcing that it anticipated publishing a draft SEIS in the second quarter of calendar 2023 and a final SEIS in the fourth quarter of calendar 2023. On Jan. 17, 2023, and March 20, 2023, the USBLM submitted status reports reaffirming the timing of the draft and final SEIS. On May 19, 2023, the USBLM submitted a status report revising the timeline for development of the SEIS and a subsequent record of decision.

The USBLM now anticipates publishing a draft SEIS in the third quarter of calendar year 2023, a final SEIS in the first quarter of calendar year 2024 and a record of decision within the second quarter of calendar year 2024. Its next status report to be submitted to the United States District Court for the district of Alaska is due on July 18, 2023.

Private placement

On April 25, 2023, the company completed a non-brokered private placement of 5,854,545 common shares of the company at a price of 55 cents per common share for gross proceeds of $3.2-million. After payment of legal and stock exchange fees, the company received net proceeds of $3.1-million.

Annual general meeting of shareholders

The annual general meeting of shareholders was held on May 17, 2023. All directors nominated by the company and standing for election were elected by shareholders of the company, with each director receiving greater than 97 per cent of the votes cast.

For the three-month period ended May 31, 2023, Trilogy reported a net loss of $2.8-million compared with a net loss of $4.1-million for the three-month period ended May 31, 2022. The decrease in comprehensive loss in the second quarter of 2023 compared with the same quarter in 2022 is due to the decrease in the company's share of loss of Ambler Metals, and stock-based compensation and salaries. The decrease of its share of losses of Ambler Metals is mainly due to the decrease in mineral property expenses over the comparative quarter in the prior year from the decrease in drilling, engineering and project support costs, and partially offset from the increased cost in the Ambler access project.

For the six-month period ended May 31, 2023, Trilogy reported a net loss of $7.9-million compared with a net loss of $9.1-million for the six-month period ended May 31, 2022. The difference for the six-month period ended May 31, 2023, when compared with the same period in 2022, is primarily due to a $1.3-million decrease in the company's equity pick-up of Ambler Metals' comprehensive loss in the current period as well as decreases in salaries and investor relations, and partially offset from the increase in professional fees and stock-based compensation. The decrease in Trilogy's share of losses of Ambler Metals is mainly due to the decrease in mineral property expenses over the comparable period in the prior year from decreases in drilling, engineering and project support costs as well as the Ambler access project cost.

Liquidity and capital resources

Trilogy expended $1.5-million on operating activities during the six-month period ending May 31, 2023, with the majority of cash spent on corporate salaries, professional fees related to its annual regulatory filings, and annual fees paid to the Toronto Stock Exchange and the NYSE American Exchange, along with the American and Canadian securities commissions.

As at May 31, 2023, the company had $4.2-million in cash and working capital of $3.5-million. Management continues with cash preservation strategies to reduce cash expenditures where feasible, including but not limited to reductions in marketing and investor conferences and office expenses. In addition, the company's board of directors has agreed to take all of their fees in deferred share units in an effort to preserve cash. The company's senior management team is also taking a portion of their base salaries in shares of the company to preserve cash.

All project-related costs are financed by the Ambler Metals joint venture. Amber Metals is well financed to advance the UKMP with $72.8-million in cash and $71.8-million in working capital as at May 31, 2023. There are sufficient funds at the joint venture to finance this fiscal year's budget for the UKMP and the Ambler access project. Trilogy does not anticipate having to finance the activities of Ambler Metals until the current cash balance of $72.8-million is expended.

Qualified person

Richard Gosse, PGeo, vice-president, exploration, for Trilogy Metals, 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 Inc.

Trilogy Metals is a metal exploration and development company which holds a 50-per-cent interest in Ambler Metals, which has a 100-per-cent interest in the Upper Kobuk mineral projects in northwestern Alaska. On Dec. 19, 2019, South32, 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 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 a land package that spans approximately 190,929 hectares. Ambler Metals has an agreement with Nana Regional Corp. Inc., an Alaska native corporation that provides a framework for the exploration and potential development of the Ambler mining district in co-operation with local communities. Trilogy's vision is to develop the Ambler mining district into a premier North American copper producer while protecting and respecting subsistence livelihoods.

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