Trilogy Metals Inc 10-Q for FY2024 Q3

Trilogy Metals Inc. (TMQ)

10-Q 2024-10-08 For: 2024-08-31

Added on April 11, 2026

About this 10-Q

Trilogy Metals Inc filed this 10-Q on October 8, 2024, covering the quarter ended August 31, 2024 (FY2024 Q3).

Headline figures

Quarter ended August 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $1.59M; compared with a net loss of $4.05M a year earlier
Diluted EPS: -$0.01; 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 901, 510 Burrard Street Vancouver, British Columbia Canada	V6C 3A8
(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
	August 31, 2024	November 30, 2023
	$	$
Assets
Current assets
Cash and cash equivalents	25,738	2,590
Accounts receivable	8	33
Deposits and prepaid amounts	352	259
Total current assets	26,098	2,882

Investment in Ambler Metals LLC (note 3)	108,114	135,021
Fixed assets	—	4
Right of use asset (note 5(a))	164	113
Total assets	134,376	138,020

Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 4)	391	432
Current portion of lease liability	37	33
Total current liabilities	428	465

Long-term portion of lease liability	125	—
Total liabilities	553	465

Shareholders’ equity
Share capital (note 6) – unlimited common shares authorized, no par value issued – 160,567,514 (2023 – 155,559,334)	190,200	187,886
Contributed surplus	118	118
Contributed surplus – options (note 6(a))	28,741	28,237
Contributed surplus – units (note 6(b))	3,528	3,127
Deficit	(88,764)	(81,813)
Total shareholders' equity	133,823	137,555
Total liabilities and shareholders' equity	134,376	138,020




in thousands of US dollars, except share and per share amounts
	For the three months ended			For the nine months ended
		August 31, 2024	August 31, 2023	August 31, 2024	August 31, 2023
		$	$	$	$
Expenses
Amortization		1	2	4	6
Exploration expenses		28	22	28	23
Foreign exchange loss (gain)		2	3	3	1
General and administrative		293	278	1,027	1,014
Investor relations		15	18	46	71
Professional fees		138	139	530	897
Salaries		158	191	527	621
Salaries and directors expense – stock-based compensation		506	526	3,014	3,379
Total expenses		1,141	1,179	5,179	6,012
Other items
Interest and other income		(152)	(37)	(200)	(83)
Services agreement income		(22)	—	(47)	—
Share of loss on equity investment (note 3(b))		624	2,910	2,019	5,998
Loss and comprehensive loss for the period		(1,591)	(4,052)	(6,951)	(11,927)
Basic loss per common share		(0.01)	(0.03)	(0.04)	(0.08)
Diluted loss per common share		(0.01)	(0.03)	(0.04)	(0.08)
Basic weighted average number of common shares outstanding		160,542,286	155,550,284	159,466,414	151,572,299
Diluted weighted average number of common shares outstanding		160,542,286	155,550,284	159,466,414	151,572,299


/s/ Tony Giardini, President, CEO and Director		/s/ Diana Walters, Director

Approved on behalf of the Board of Directors


				Contributed	Contributed		Total
			Contributed	surplus –	surplus –		shareholders’
	Number of shares	Share capital	surplus	options	units	Deficit	equity
	outstanding	$	$	$	$	$	$
Balance – November 30, 2022	146,225,035	182,178	122	27,352	2,638	(66,862)	145,428
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
Shares issued for private placement, net of share issue cost	5,854,545	3,115	—	—	—	—	3,115
Restricted Share Units	213,463	121	—	—	—	—	121
Deferred Share Units conversion	415,056	468	—	—	(468)	—	—
Services settled by common shares	63,533	35	—	—	—	—	35
Stock-based compensation	—	—	—	114	257	—	371
Loss for the period	—	—	—	—	—	(2,803)	(2,803)
Balance – May 31, 2023	155,269,296	187,570	121	27,986	2,590	(74,737)	143,530
Restricted Share Units	248,092	122	—	—	—	—	122
Services settled by common shares	40,816	20	—	—	—	—	20
NovaGold deferred share units conversion	1,130	3	(3)	—	—	—	—
Stock-based compensation	—	—	—	125	268	—	393
Loss for the period	—	—	—	—	—	(4,052)	(4,052)
Balance – August 31, 2023	155,559,334	187,715	118	28,111	2,858	(78,789)	140,013

Balance – November 30, 2023	155,925,990	187,886	118	28,237	3,127	(81,813)	137,555
Restricted Share Units	3,633,065	1,804	—	—	(1,804)	—	—
Joint venture contribution	143,507	112	—	—	—	—	112
Services settled by common shares	64,368	30	—	—	—	—	30
Stock-based compensation	—	—	—	318	1,681	—	1,999
Loss for the period	—	—	—	—	—	(3,601)	(3,601)
Balance – February 29, 2024	159,766,930	189,832	118	28,555	3,004	(85,414)	136,095
Restricted Share Units	353,347	155	—	—	(155)	—	—
Services settled by common shares	66,511	30	—	—	—	—	30
Stock-based compensation	—	—	—	92	417	—	509
Loss for the period	—	—	—	—	—	(1,759)	(1,759)
Balance – May 31, 2024	160,186,788	190,017	118	28,647	3,266	(87,173)	134,875
Restricted Share Units	326,020	153	—	—	(153)	—	—
Services settled by common shares	54,706	30	—	—	—	—	30
Stock-based compensation	—	—	—	94	415	—	509
Loss for the period	—	—	—	—	—	(1,591)	(1,591)
Balance – August 31, 2024	160,567,514	190,200	118	28,741	3,528	(88,764)	133,823


		in thousands of dollars
		$
November 30, 2023, Investment in Ambler Metals		135,021
Joint venture equity contribution		112
Return of capital		(25,000)
Share of loss on equity investment for the nine-month period ending August 31, 2024		(2,019)
August 31, 2024, Investment in Ambler Metals		108,114


			in thousands of dollars
	Three months ended			Nine months ended
	August 31, 2024	August 31, 2023		August 31, 2024	August 31, 2023
	$	$		$	$
Depreciation	38	38		113	113
Corporate salaries and wages	49	478		411	1,417
General and administrative	93	43		343	389
Mineral property expense	1,024	5,210		3,348	10,002
Professional fees	325	181		755	397
Foreign exchange loss	—	(6)		2	(3)
Interest and other income	(281)	(125)		(933)	(319)
Comprehensive loss	1,248	5,819		4,039	11,996


		in thousands of dollars
		$
Balance as at November 30, 2023		113
Net amortization for lease ended June 30, 2024		(113)
ROU assets recognized for lease commenced July 1, 2024		170
Net amortization for lease commenced July 1, 2024		(6)
Balance as at August 31, 2024		164


		in thousands of dollars
		August 31, 2024
Fiscal year		$
2024		13
2025		50
2026		51
2027		51
2028		30
Total undiscounted lease payments		195
Effect of discounting		(33)
Present value of lease payments recognized as lease liability		162


	in thousands of dollars, except share amounts
	Number of shares	Ascribed value
		$
November 30, 2023	155,925,990	187,886
Restricted Share Units	4,312,432	2,112
Services settled by common shares	185,585	90
Joint venture equity contribution (note 3(a))	143,507	112
August 31, 2024, issued and outstanding	160,567,514	190,200


		August 31, 2024
Risk-free interest rates		3.84%
Exercise price		CDN$0.59
Expected life		3 years
Expected volatility		65.5%
Expected dividends		Nil


		August 31, 2024
		Weighted average
		exercise price
	Number of options	CDN$
Balance – beginning of the period	12,649,400	2.15
Granted	2,775,000	0.59
Expired	(1,107,500)	2.96
Balance – end of the period	14,316,900	1.78


	Number of RSUs	Number of DSUs	Number of Fixed DSUs
Balance – beginning of the period	1,610,638	2,428,701	—
Granted	5,705,718	551,676	—
Vested/Converted	(4,498,017)	—	—
Balance – end of the period	2,818,339	2,980,377	—


	in thousands of dollars
	Total	< 1 Year	1–2 Years	2–5 Years	Thereafter
	$	$	$	$	$
Accounts payable and accrued liabilities	391	391	—	—	—
Office lease	195	50	102	43	—
	586	441	102	43	—


in thousands of US dollars, except per share amounts
	Three months ended			Nine months ended
		August 31, 2024	August 31, 2023		August 31, 2024	August 31, 2023
Selected expenses		$	$		$	$
General and administrative		293	278		1,027	1,014
Investor relations		15	18		46	71
Professional fees		138	139		530	897
Salaries		158	191		527	621
Salaries and directors expense – stock-based compensation		506	526		3,014	3,379
Share of loss on equity investment		624	2,910		2,019	5,998
Comprehensive loss for the period		(1,591)	(4,052)		(6,951)	(11,927)
Basic and diluted loss per common share		(0.01)	(0.03)		(0.04)	(0.08)


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: October 8, 2024	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:	October 8, 2024
By:	/s/ Tony Giardini
	Tony Giardini
	President and Chief Executive Officer
	(principal executive officer)