Trilogy Metals Inc 10-Q for FY2023 Q1

Trilogy Metals Inc. (TMQ)

10-Q 2023-04-05 For: 2023-02-28

Added on April 11, 2026

About this 10-Q

Trilogy Metals Inc filed this 10-Q on April 5, 2023, covering the quarter ended February 28, 2023 (FY2023 Q1).

Headline figures

Quarter ended February 28, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $5.07M; compared with a net loss of $5.02M a year earlier
Diluted EPS: -$0.03; compared with -$0.03 a year earlier

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British Columbia	98-1006991
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

Suite 1150, 609 Granville Street Vancouver, British Columbia Canada	V7Y 1G5
(Address of Principal Executive Offices)	(Zip Code)


Large accelerated filer ◻	Accelerated filer ◻	Non-accelerated filer ☒	Smaller reporting company☒	Emerging growth company ☐


		Page
PART I - FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22

PART II - OTHER INFORMATION		23
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23


		in thousands of US dollars
	February 28, 2023		November 30, 2022
	$		$
Assets
Current assets
Cash	1,682		2,573
Accounts receivable	26		17
Deposits and prepaid amounts	163		320
Total current assets	1,871		2,910

Investment in Ambler Metals LLC (note 3)	141,380		142,754
Fixed assets	10		12
Right of use asset (note 5 (a))	276		319
Total assets	143,537		145,995

Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 4)	670		345
Current portion of lease liability	176		189
Total current liabilities	846		534

Long-term portion of lease liability (note 5 (b))	—		33
Total liabilities	846		567

Shareholders’ equity
Share capital (note 6) – unlimited common shares authorized, no par value Issued – 148,722,699 (2022 – 146,225,035)	183,831		182,178
Contributed surplus	121		122
Contributed surplus – options (note 6(a))	27,872		27,352
Contributed surplus – units (note 6(b))	2,801		2,638
Deficit	(71,934)		(66,862)
Total shareholders' equity	142,691		145,428
Total liabilities and shareholders' equity	143,537		145,995


in thousands of US dollars, except share and per share amounts
	For the three months ended
		February 28, 2023	February 28, 2022
		$	$
Expenses
Amortization		2	6
Exploration expenses		1	29
Foreign exchange (gain) loss		(4)	3
General and administrative		408	397
Investor relations		30	99
Professional fees		570	245
Salaries		237	414
Salaries and directors expense – stock-based compensation		2,362	1,922
Total expenses		3,606	3,115
Other items
Interest and other income		(19)	(2)
Share of loss on equity investment (note 3(b))		1,485	1,910
Loss and comprehensive loss for the period		(5,072)	(5,023)
Basic loss per common share		(0.03)	(0.03)
Diluted loss per common share		(0.03)	(0.03)
Basic weighted average number of common shares outstanding		147,768,741	145,286,456
Diluted weighted average number of common shares outstanding		147,768,741	145,286,456


/s/ Tony Giardini, President, CEO and Director		/s/ Kalidas Madhavpeddi, Director

Approved on behalf of the Board of Directors


	Trilogy Metals Inc. For the Quarter Ended February 28, 2023	3


				Contributed	Contributed		Total
			Contributed	surplus –	surplus –		shareholders’
	Number of shares	Share capital	surplus	options	units	Deficit	equity
	outstanding	$	$	$	$	$	$
Balance – November 30, 2021	145,009,811	180,820	122	25,990	1,712	(42,605)	166,039
Exercise of options	31,674	50	—	(32)	—	—	18
Restricted Share Units	391,332	650	—	—	(650)	—	—
Joint venture contribution	31,469	51	—	—	—	—	51
Stock-based compensation	—	—	—	864	1,001	—	1,865
Loss for the period	—	—	—	—	—	(5,023)	(5,023)
Balance – February 28, 2022	145,464,286	181,571	122	26,822	2,063	(47,628)	162,950

Balance – November 30, 2022	146,225,035	182,178	122	27,352	2,638	(66,862)	145,428
Exercise of options	—	—	—	—	—	—	—
Restricted Share Units	2,346,366	1,538	(1)	—	(1,537)	—	—
Joint venture contribution	143,505	111	—	—	—	—	111
Services settled by common shares	7,793	4	—	—	—	—	4
Stock-based compensation	—	—	—	520	1,700	—	2,220
Loss for the period	—	—	—	—	—	(5,072)	(5,072)
Balance – February 28, 2023	148,722,699	183,831	121	27,872	2,801	(71,934)	142,691


		in thousands of dollars
		$
November 30, 2022, Investment in Ambler Metals		142,754
Joint venture equity contribution		111
Share of loss on equity investment for the three month period ending February 28, 2023		(1,485)
February 28, 2023, Investment in Ambler Metals		141,380


		in thousands of dollars
		$
Balance as at November 30, 2022		319
Net amortization		(43)
Balance as at February 28, 2023		276


	in thousands of dollars
	Three months ended	Three months ended
	February 28, 2023	February 28, 2022
	$	$
Operating lease costs	47	47
Variable lease costs	36	35
Total lease expense	83	82


		in thousands of dollars
		February 28, 2023
Fiscal year		$
2023		149
2024		33
2025		—
Total undiscounted lease payments		182
Effect of discounting		(6)
Present value of lease payments recognized as lease liability		176


	in thousands of dollars, except share amounts
	Number of shares	Ascribed value
		$
November 30, 2022	146,225,035	182,178
Restricted Share Units	2,346,366	1,538
Services settled by common shares	7,793	4
Joint venture equity contribution (note 4(b))	143,505	111
February 28, 2023, issued and outstanding	148,722,699	183,831


		February 28, 2023
Risk-free interest rates		3.49%
Exercise price		CDN$0.78
Expected life		3 years
Expected volatility		67.7%
Expected dividends		Nil


		February 28, 2023
		Weighted average
		exercise price
	Number of options	CDN$
Balance – beginning of the period	11,225,400	2.49
Granted	3,230,000	0.78
Expired	(870,000)	1.05
Balance – end of the period	13,585,400	2.18


	Outstanding			Exercisable		Unvested
			Weighted		Weighted
	Number of	Weighted	average	Number of	average	Number of
	outstanding	average years	exercise price	exercisable	exercise price	unvested
Range of exercise price - CDN	options	to expiry	CDN$	options	CDN$	options
$0.75 to $1.00	3,230,000	4.77	0.78	1,463,328	0.78	1,766,672
$2.00 to $2.50	2,396,250	2.96	2.27	2,014,498	2.28	381,752
$2.51 to $3.00	6,411,650	2.14	2.64	6,411,650	2.64	—
$3.01 to $3.41	1,547,500	1.81	3.03	1,547,500	3.03	—
	13,585,400	2.87	2.18	11,436,976	2.39	2,148,424


	Number of RSUs	Number of DSUs
Balance – beginning of the period	257,268	1,560,734
Granted	3,699,297	760,519
Vested	(2,345,927)	—
Balance – end of the period	1,610,638	2,321,253


	in thousands of dollars
	Total	< 1 Year	1–2 Years	2–5 Years	Thereafter
	$	$	$	$	$
Accounts payable and accrued liabilities	670	670	—	—	—
Office lease	182	182	—	—	—
	852	852	—	—	—


	in thousands of US dollars, except per share amounts
		For the three months ended
		February 28, 2023		February 28, 2022
Selected expenses		$		$

General and administrative			408		397
Investor relations			30		99
Professional fees			570		245
Salaries			237		414
Salaries and directors expense – stock-based compensation			2,362		1,922
Share of loss on equity investment			1,485		1,910
Comprehensive loss for the period			(5,072)		(5,023)
Basic and diluted loss per common share			(0.03)		(0.03)


Exhibit No.		Description
3.1		Certificate of Incorporation, dated April 27, 2011 (incorporated by reference Exhibit 99.2 to the Registration Statement on Form 40-F as filed on March 1, 2012, File No. 001-35447)


3.2		Articles of Trilogy Metals Inc., effective April 27, 2011, as altered March 20, 2011 (incorporated by reference to Exhibit 99.3 to Amendment No. 1 to the Registration Statement on Form 40-F as filed on April 19, 2012, File No. 001-35447)

3.3		Notice of Articles and Certificate of Change of Name, dated September 1, 2016 (incorporated by reference to Exhibit 3.1 to the Form 8-K dated September 8, 2016)

31.1		Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a)

31.2		Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a)

32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101		Interactive Data Files

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document


Date: April 5, 2023	TRILOGY METALS INC.


	By:	/s/ Tony Giardini
		Tony Giardini

		President and Chief Executive Officer


	By:	/s/ Elaine M. Sanders
		Elaine M. Sanders

		Vice President and Chief Financial Officer

By:	/s/ Tony Giardini
	Tony Giardini
	President and Chief Executive Officer
	(principal executive officer)

By:	/s/ Elaine Sanders
	Elaine Sanders
	Vice President and Chief Financial Officer
	(principal financial officer)

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:	April 5, 2023
By:	/s/ Tony Giardini
	Tony Giardini
	President and Chief Executive Officer
	(principal executive officer)