Mr. Patrick Donnelly reports

TRILOGY METALS PROVIDES UPDATE ON PROJECT ACTIVITIES

Trilogy Metals Inc. has provided an update on its current corporate and project activities.

Joint venture agreement with South32 Ltd.

On Dec. 19, 2019, the company and its joint venture partner, South32, announced that South32 had exercised its option to acquire a 50-per-cent interest in a joint venture company that will own the Upper Kobuk mineral projects (UKMP) located in northwest Alaska.

Trilogy Metals will contribute all of its assets associated with the UKMP and South32 will contribute approximately $145-million (U.S.) to the joint venture. Establishment of the joint venture is expected to occur in February, 2020, and follows an initial exploration partnership between South32 and Trilogy Metals over three field seasons to advance both parties' geological understanding of the UKMP.

The company will provide more details on the joint venture's planned work program and 2020 exploration activity following its formation. To view the Dec. 19, 2019, press release please go to the company's website.

Drilling highlights -- Arctic project

The company is also pleased to announce final assay results from the geotechnical and hydrological drill program completed at the Arctic polymetallic volcanogenic massive sulphide (VMS) deposit (the Arctic project), part of the UKMP located in the Ambler mining district of northwest Alaska.

The 2019 Arctic field season comprised advanced engineering and environmental work in support of Trilogy Metals' feasibility study for the Arctic project and permitting. These results will be incorporated into the study which is expected to be completed in the first half of 2020. Following its formation, the joint venture intends to undertake further work programs and studies for the Arctic project.

Geochemical assay results from the geotechnical and hydrological drill program follow.

At a cut-off grade of 0.5 per cent copper equivalent* the results from the new assay results at the Arctic project are as follows:

• AR19-164 intersected two mineralized intervals of:
  • 5.8 metres with a copper equivalent grade of 4.54 per cent (1.45 per cent copper, 6.24 per cent zinc, 0.83 per cent lead, 0.28 gram per tonne gold and 32.20 g/t silver);
  • 16.4 metres with a copper equivalent grade of 7.80 per cent (5.09 per cent copper, 4.82 per cent zinc, 0.53 per cent lead, 0.47 g/t gold and 47.09 g/t silver).
• AR19-165A intersected one mineralized interval of:
  • 1.8 metres with a copper equivalent grade of 2.97 per cent (1.66 per cent copper, 1.87 per cent zinc, 0.34 per cent lead, 0.52 g/t gold and 18.87 g/t silver).
• AR19-166 intersected five mineralized intervals of:
  • 5.1 metres with a copper equivalent grade of 6.70 per cent (2.95 per cent copper, 6.22 per cent zinc, 1.47 per cent lead, 0.75 g/t gold and 51.07 g/t silver);
  • 9.5 metres with a copper equivalent grade of 6.74 per cent (4.12 per cent copper, 4.78 per cent zinc, 0.46 per cent lead, 0.48 g/t gold and 40.61 g/t silver);
  • 1.6 metres with a copper equivalent grade of 7.84 per cent (2.71 per cent copper, 10.13 per cent zinc, 2.02 per cent lead, 0.25 g/t gold and 56.36 g/t silver);
  • 6.5 metres with a copper equivalent grade of 3.22 per cent (1.68 per cent copper, 2.12 per cent zinc, 0.41 per cent lead, 0.47 g/t gold and 35.65 g/t silver);
  • 8.6 metres with a copper equivalent grade of 7.51 per cent (3.62 per cent copper, 6.81 per cent zinc, 0.84 per cent lead, 0.87 g/t gold and 56.00 g/t silver).
• AR19-167 intersected one mineralized interval of:
  • 3.0 metres with a copper equivalent grade of 3.63 per cent (2.40 per cent copper, 2.60 per cent zinc, 0.10 per cent lead, 0.10 g/t gold and 16.92 g/t silver).
• AR19-169 intersected one mineralized interval of:
  • 14.4 metres with a copper equivalent grade of 3.70 per cent (2.20 per cent copper, 2.61 per cent zinc, 0.33 per cent lead, 0.30 g/t gold and 24.20 g/t silver).
• AR19-170 intersected two mineralized intervals of:
  • 13.7 metres with a copper equivalent grade of 6.24 per cent (3.36 per cent copper, 5.52 per cent zinc, 0.74 per cent lead, 0.33 g/t gold and 39.19 g/t silver);
  • 7.1 metres with a copper equivalent grade of 7.17 per cent (5.27 per cent copper, 2.57 per cent zinc, 0.02 per cent lead, 0.91 g/t gold and 38.75 g/t silver).
• AR19-171 intersected one mineralized interval of:
  • 16.6 metres with a copper equivalent grade of 6.30 per cent (3.69 per cent copper, 4.24 per cent zinc, 0.85 per cent lead, 0.45 g/t gold and 51.14 g/t silver).
• AR19-172 intersected one mineralized interval of:
  • 16.1 metres with a copper equivalent grade of 1.71 per cent (1.07 per cent copper, 1.15 per cent zinc, 0.18 per cent lead, 0.10 g/t gold and 9.08 g/t silver).

* Assumptions used for the copper equivalent calculation were metal prices in U.S. dollars of $2.90 per pound copper, $1.10/lb zinc, $0.90/lb lead, $1,250/ounce gold and $18/oz silver. The following equation was used to calculate copper equivalence: CuEq is equal to copper (per cent plus (zinc (per cent) multiplied by 0.379) plus (lead (per cent) multiplied by 0.310) plus (gold (g/t) multiplied by 0.629) plus (silver (g/t) multiplied by 0.009).

James Gowans, interim president and chief executive officer of Trilogy Metals, commented: "The latest drilling results continue to demonstrate that not only is the Arctic project one of the highest grade known polymetallic base metal projects in the world, but it is also incredibly consistent along strike and dip regardless of where you drill at the project. We believe there is the possibility of other Arctic-like deposits being discovered within the 100-kilometre-long Ambler mining district. Further drilling by the joint venture is intended to test targets across the UKMP."

At the Arctic project and as described above, the company drilled 10 holes comprising 2,422 metres of which eight holes were sampled and sent off for assay analysis. Hole AR19-165 was lost due to technical drilling issues and hole AR19-0168 did not intersect base metal mineralization as it tested the south highwall and did not target the mineralized zones. Drilling at Arctic during the 2019 field season was carried out to support mine design and the collection of further geotechnical and hydrological information. The material will be used for additional metallurgical test work in the future.

The VMS-style mineralization at Arctic was discovered by Bear Creek Mining Company in 1965 and is exposed on the east side of the north trending Arctic Ridge. The rock units exposed are typical of the Ambler Schist sequence and include quartz and/or feldspar and chlorite and/or talc schist, graphitic and graphitic quartz schist, and aphanitic and porphyritic meta-rhyolite units. Massive and semi-massive sulphide mineralization, consisting of chalcopyrite, sphalerite, galena and tetrahedrite/tennantite, occurs in 0.1-metre to 26-metre bands generally at a contact between graphitic and quartz-chlorite and/or talc schist.

Results for the 2019 drill program at Arctic are presented in the attached table at a cut-off grade of 0.5 per cent copper equivalent. All the intersected widths are close to normal to stratigraphy and therefore can be considered to be true widths.

          0.5 PER CENT CU EQ CUT-OFF* WITH MAXIMUM 3 M INTERNAL WASTE -- MINIMUM 1.5 M INTERVAL

0.5% CuEq     From (m)    To (m)  Length (m)    Cu (%)    Zn (%)    Pb (%)  Au (g/t)  Ag (g/t)  CuEq (%)*

AR19-0164      148.77    154.54        5.77      1.45      6.24      0.83      0.28     32.20      4.54
               161.27    177.68       16.41      5.09      4.82      0.53      0.47     47.09      7.80
AR19-0165A     125.11    126.95        1.84      1.66      1.87      0.34      0.52     18.87      2.97
AR19-0166      155.36    160.51        5.15      2.95      6.22      1.47      0.75     51.07      6.70
               170.18    179.65        9.47      4.12      4.78      0.46      0.48     40.61      6.74
               182.73    184.35        1.62      2.71     10.13      2.02      0.25     56.36      7.84
               194.62    201.15        6.53      1.68      2.12      0.41      0.47     35.65      3.22
               209.53    218.16        8.63      3.62      6.81      0.84      0.87     56.00      7.51
AR19-0167      197.21    200.25        3.04      2.40      2.60      0.10      0.10     16.92      3.63
AR19-0169      127.92    142.34       14.42      2.20      2.61      0.33      0.30     24.20      3.70
AR19-0170      137.77    151.49       13.72      3.36      5.52      0.74      0.33     39.19      6.24
               253.33    260.43        7.10      5.27      2.57      0.02      0.91     38.75      7.17
AR19-0171       50.87     67.42       16.55      3.69      4.24      0.85      0.45     51.14      6.30
AR19-0172      178.49    194.54       16.05      1.07      1.15      0.18      0.10      9.08      1.71

* Assumptions used in U.S. for the copper equivalent calculation were metal prices of $2.90/lb copper, 
  $1.10/lb zinc, 90 cents/lb lead, $1,250/oz gold and $18/oz silver. The following equation was used to 
  calculate copper equivalence: CuEq is equal to copper (per cent plus (zinc (per cent) multiplied by 
  0.379) plus (lead (per cent) multiplied by 0.310) plus (gold (g/t) multiplied by 0.629) plus (silver 
  (g/t) multiplied by 0.009).


  

Quality assurance/quality control program

The drill program, sampling protocol and data verification were managed by qualified persons employed by the company. Diamond drill holes were typically collared and drilled to depth HQ for the Arctic holes, except for holes AR19-0166 and AR19-170, which were collared PQ. Samples were collected using a 0.13-metre minimum length, a 2.5-metre maximum length and a 1.36-metre average sample length. Drill core recovery averaged 97 per cent for Arctic core. Three quality control samples (one blank, one standard and one duplicate) were inserted into each batch of 20 samples. The drill core was sawn, with half sent to ALS Minerals in Fairbanks for sample preparation and the sample pulps forwarded to ALS's North Vancouver facility for analysis. ALS Minerals is an independent facility certified as ISO 9001:2008 and accredited to ISO/IEC 17025:2005 from the Standards Council of Canada. The assay and QA/QC results were reviewed by a third party consultant, GeoSpark Consulting Inc. of Nanaimo, B.C., and in its opinion shows overall good quality for silver, copper, lead and gold analyses. The company submitted 5 per cent of the mineralized assay intervals to an independent check assay lab.

Arctic feasibility study

Trilogy Metals continues to progress its Arctic feasibility study which is being prepared by Ausenco Engineering Canada Inc. and John Wood Group PLC based on drill results and studies completed prior to formation of the joint venture. Trilogy Metals expects to release its Arctic feasibility study by the end of first half 2020, in advance of further work programs and studies planned to be completed by the joint venture.

Ambler mining district industrial access project (AMDIAP)

On Oct. 29, 2019, the comment period closed for the AMDIAP draft environmental impact statement (EIS). The Bureau of Land Management (BLM), which is the lead agency, is now incorporating the comments into the final EIS. The BLM is expected to provide an update on the timing of the completion of the final EIS soon. The company wishes to express its sincere appreciation to the BLM for making progress on the EIS process.

Additional staking of state claims in the UKMP

In October, 2019, Trilogy staked an additional 465 (443 160-acre claims and 22 40-acre claims) Alaska State mining claims adjacent to its existing mining claim block to bring the total mining claims on state land to approximately 75,082 hectares (185,533 acres), an increase of 66 per cent. The total land package, including the Bornite lands, is now approximately 172,675 hectares (426,690 acres). These lands will form part of the assets to be contributed by Trilogy Metals to the joint venture.

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 and scientific information in this news release and approves the disclosure contained herein.

About Trilogy Metals Inc.

Trilogy Metals is a metals exploration and development 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 and cobalt mineralization.

We seek Safe Harbor.