Trilogy Metals Inc 10-Q for FY2022 Q1

Trilogy Metals Inc. (TMQ)

10-Q 2022-04-06 For: 2022-02-28

Added on April 11, 2026

About this 10-Q

Trilogy Metals Inc filed this 10-Q on April 6, 2022, covering the quarter ended February 28, 2022 (FY2022 Q1).

Headline figures

Quarter ended February 28, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $5.02M; compared with a net loss of $4.52M 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	24
Item 4.	Controls and Procedures	24

PART II - OTHER INFORMATION		26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	27


		in thousands of US dollars
	February 28, 2022		November 30, 2021
	$		$
Assets
Current assets
Cash and cash equivalents	4,847		6,308
Accounts receivable	17		19
Deposits and prepaid amounts	242		285
	5,106		6,612

Investment in Ambler Metals LLC (note 3)	158,204		160,063
Fixed assets	23		29
Mineral properties	119		119
Right of use asset (note 5 (a))	443		482
	163,895		167,305
Liabilities
Current liabilities
Accounts payable and accrued liabilities (note 4)	571		852
Current portion of lease liability	186		179
	757		1,031

Long-term portion of lease liability (note 5 (b))	188		235
	945		1,266
Shareholders’ equity
Share capital (note 6) – unlimited common shares authorized, no par value Issued – 145,464,286 (2021 – 145,009,811)	181,571		180,820
Contributed surplus	122		122
Contributed surplus – options (note 6(a))	26,822		25,990
Contributed surplus – units (note 6(b))	2,063		1,712
Deficit	(47,628)		(42,605)
	162,950		166,039
	163,895		167,305


	in thousands of US dollars, except share and per share amounts
		For the three months ended
		February 28, 2022		February 28, 2021
		$		$
Expenses
Amortization			6	17
Amortization of exploration expenses			29	—
Foreign exchange loss			3	35
General and administrative			397	401
Investor relations			99	154
Professional fees			245	229
Salaries			414	439
Salaries and directors expense – stock-based compensation			1,922	2,148
Total expenses			3,115	3,423
Other items
Share of loss on equity investment (note 3(b))			1,910	1,120
Interest and other income			(2)	(5)
Services agreement income			—	(22)
Comprehensive loss for the period			(5,023)	(4,516)
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			145,286,456	144,163,869
Diluted weighted average number of common shares outstanding			145,286,456	144,163,869


/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, 2022	3


				Contributed	Contributed		Total
			Contributed	surplus –	surplus –		shareholders’
	Number of shares	Share capital	surplus	options	units	Deficit	equity
	outstanding	$	$	$	$	$	$
Balance – November 30, 2020	144,137,850	179,746	122	23,303	1,585	(20,945)	183,811
Exercise of options	76,635	334	—	(334)	—	—	—
Stock-based compensation	—	—	—	2,112	36	—	2,148
Earnings for the period	—	—	—	—	—	(4,516)	(4,516)
Balance – February 28, 2021	144,214,485	180,080	122	25,081	1,621	(25,461)	181,443

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


		in thousands of dollars
		$
November 30, 2021, Investment in Ambler Metals		160,063
Joint venture equity contribution		51
Share of loss on equity investment for the three-month period ending February 28, 2022		(1,910)
February 28, 2022, Investment in Ambler Metals		158,204


		in thousands of dollars
		$
Balance as at November 30, 2021		482
Net amortization		(39)
Balance as at February 28, 2022		443


	in thousands of dollars
	Three months ended	Three months ended
	February 28, 2022	February 28, 2021
	$	$
Operating lease costs	47	38
Variable lease costs	35	35
Total lease expense	82	73


		in thousands of dollars
		February 28, 2022
Fiscal year		$
2022		155
2023		212
2024		35
Total undiscounted lease payments		402
Effect of discounting		(28)
Present value of lease payments recognized as lease liability		374


	in thousands of dollars, except share amounts
	Number of shares	Ascribed value
		$
November 30, 2021	145,009,811	180,820
Exercise of options	31,674	50
Restricted Share Units	391,332	650
Joint venture equity contribution (note 3(b))	31,469	51
February 28, 2022, issued and outstanding	145,464,286	181,571


		February 28, 2022
Risk-free interest rates		1.07%
Exercise price		CDN$2.20
Expected life		3 years
Expected volatility		60.6%
Expected dividends		Nil


	February 28, 2022
		Weighted average
		exercise price
	Number of options	CDN$
Balance – beginning of the period	10,539,324	2.54
Granted	1,734,500	2.21
Exercised	(31,674)	0.70
Balance – end of the period	12,242,150	2.50


	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
$0.50 to $1.00	50,000	0.19	0.94	50,000	0.94	—
$1.01 to $1.50	870,000	0.77	1.05	870,000	1.05	—
$2.01 to $2.50	2,599,500	4.10	2.26	1,676,498	2.29	923,002
$2.51 to $3.00	6,925,150	3.20	2.64	5,530,314	2.66	1,394,836
$3.01 to $3.41	1,797,500	2.82	3.03	1,797,500	3.03
	12,242,150	3.15	2.50	9,924,312	2.51	2,317,838


	Number of RSUs	Number of DSUs
Balance – beginning of the period	—	1,277,445
Granted	648,600	160,740
Vested	(391,332)	—
Balance – end of the period	257,268	1,438,185


	in thousands of dollars
	Total	< 1 Year	1–2 Years	2–5 Years	Thereafter
	$	$	$	$	$
Accounts payable and accrued liabilities	571	571	—	—	—
Office lease	402	207	195	—	—
	973	778	195	—	—


		in thousands of dollars,
		except per share amounts
	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020
	02/28/22	11/30/21	08/31/21	05/31/21	02/28/21	11/30/20	08/31/20	05/31/20
	$	$	$	$	$	$	$	$
Interest and other income	2	2	4	5	5	5	8	12
Mineral properties and feasibility study expenses	—	—	—	—	—	91	232	742
Operating expenses	3,115	1,879	1,596	1,718	3,401	2,209	2,098	2,453
Share of loss on equity investment	1,910	4,190	6,072	1,700	1,120	1,022	1,094	561
Loss for the period	(5,023)	(6,067)	(7,664)	(3,413)	(4,516)	(3,226)	(3,184)	(3,002)
Loss per common share – basic	(0.03)	(0.05)	(0.05)	(0.02)	(0.03)	(0.04)	(0.02)	(0.02)
Loss per common share – diluted	(0.03)	(0.05)	(0.05)	(0.02)	(0.03)	(0.01)	(0.01)	(0.02)


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 6, 2022	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 6, 2022
By:	/s/ Tony Giardini
	Tony Giardini
	President and Chief Executive Officer
	(principal executive officer)