UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the Quarterly Period Ended August 31, 2018

2019

OR

For the Transition Period from to

Commission File Number: 1-35447

TRILOGY METALS INC.

(Exact Name of Registrant as Specified in Its Charter)

(604) 638-8088

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesxNo¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YesxNo¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨Nox

As of October 4, 2018,8, 2019, the registrant had 131,555,020140,003,741 Common Shares, no par value, outstanding.

TRILOGY METALS INC.

TABLE OF CONTENTS

PART I -FINANCIAL INFORMATION

Trilogy Metals Inc.

Consolidated Balance Sheets

(unaudited)

in thousands of US dollars

Commitments and contingencies(notes 5, 9) (note 8)

(See accompanying notes to the interim consolidated financial statements)

Approved on behalf of the Board of Directors

Trilogy Metals Inc.

Consolidated Statements of Loss and Comprehensive Loss

(unaudited)

in thousands of US dollars, except share and per share amounts

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

Consolidated Statements of Changes in Shareholders’ Equity

(unaudited)

in thousands of US dollars, except share amounts

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

Consolidated Statements of Changes in Shareholders’ EquityCash Flows

(unaudited)

in thousands of US dollars, except share amounts

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

Consolidated Statements of Cash Flows

(unaudited)

in thousands of US dollars

(See accompanying notes to the interim consolidated financial statements)

Trilogy Metals Inc.

Notes to the Consolidated Financial Statements

Trilogy Metals Inc. (“Trilogy” or the “Company”) was incorporated in British Columbia under theBusiness Corporations Act (BC)(British Columbia) on April 27, 2011. The Company is engaged in the exploration and development of mineral properties with a focus on the Upper Kobuk Mineral Projects (“UKMP”), including the Arctic and Bornite Projects located in Northwest Alaska in the United States of America (“US”).

Basis of presentation

These consolidated financial statements have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Trilogy and its wholly-owned subsidiary, NovaCopper US Inc. (dba “Trilogy Metals US”). All significant intercompany transactions are eliminated on consolidation.

All figures are in United States dollars unless otherwise noted. References to CAD$ or CDN$ refer to amounts in Canadian dollars.

TheThese unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position as of August 31, 20182019 and our results of operations and cash flows for the nine months ended August 31, 20182019 and August 31, 2017.2018. The results of operations for the nine months ended August 31, 20182019 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2018.2019.

As these interim consolidated financial statements do not contain all of the disclosures required by U.S. GAAP for annual financial statements, these unaudited interim consolidated financial statements should be read in conjunction with the annual financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended November 30, 20172018 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 2, 2018.11, 2019.

These financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on October 4,8, 2019.

Accounting standards adopted

In March 2016, the Financial Accounting Standards Board (“FASB”) issued new guidance on classifying and measuring financial instruments (“ASU 2016-01”). This update is effective for annual reporting periods beginning after December 15, 2017. The Company adopted the provisions of this guidance effective December 1, 2018. As the Company’s investments in equity instruments were previously classified at fair value with the change in fair value recorded to the statement of loss and comprehensive loss, the new guidance does not impact the Company’s accounting or reported results.

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”)FASB issued new accounting requirements for accounting for, presentation of, and classification of leases (“ASU 2016-02”). This will result in most leases being capitalized as a right of use asset with a related liability on the balance sheets. The requirements of the new standard are effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, which for usTrilogy is the first quarter of the fiscal year ending November 30, 2020. We expect the adoption will have an impact as we expect to capitalize leases and recognize lease obligations, specifically for our office leases which are not currently recognized on the balance sheets. We are in the process of analyzing the quantitative impact of this guidance on our results of operations and financial position. The impact of this adoption will increase asset and liability balances as part of recognizing the leases on the balance sheet. It will impact the statement of loss and comprehensive loss due to the recognition of depreciation on the leased assets and interest expense from the lease liability compared to the current recognition of lease expense as incurred.

In March 2016, the FASB issued new guidance on classifying and measuring financial instruments (“ASU 2016-02”). This update is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. The Company has analyzed the impactin thousands of the update and determined that the changes to classification and measurement of financial instruments are not expected to have an impact as the Company’s prior year equity investments which were held at fair value with changes recorded to the statement of loss and comprehensive loss. The remaining changes in the update do not have an effect on the Company’s accounting for financial instruments. The standard will be effective for the Company for the fiscal year ending November 30, 2019.dollars

In March 2016, the FASB issued new guidance simplifying the accounting for stock-based compensation transactions, including income tax consequences, classification of awards as equity or liabilities, forfeitures, and classification on the statement of cash flows (“ASU 2016-09”). This update is effective for annual reporting periods beginning after December 15, 2016. The Company has adopted this guidance and made the policy choice of estimating the number of awards expected to be forfeited and adjusting the estimate when it is no longer probable that the employee will fulfill the service condition. This policy choice is consistent with the Company’s previous practice and therefore, no adjustments were necessary on adoption. The remaining changes in the update do not have an effect on the Company’s accounting for stock-based compensation.

In January 2017, the FASB issued new guidance to assist in determining if a set of assets and activities being acquired or sold is a business (“ASU 2017-01”). It also provided a framework to assist entities in evaluating whether both an input and a substantive process are present, which at a minimum, must be present to be considered a business. This update is effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted in most circumstances. The standard does not have an impact to the Company’s historical recognition of asset acquisitions and business combinations. However, the Company expects there would be an impact to how the Company accounts for assets acquired in the future. The Company has adopted the standard early for the fiscal year ended November 30, 2018.

In July 2017, the FASB issued a two-part Accounting Standards Update (“ASU”), No. 2017-11, Earnings Per Share (ASC 260), Distinguishing Liabilities from Equity (ASC 480), Derivatives and Hedging (ASC 815): I. Accounting for Certain Financial Instruments with Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Under the guidance, entities will no longer consider a down round feature when determining whether a free-standing financial instrument or an embedded feature that contains a down round feature is considered indexed to the entity’s own stock under ASC 815-40 which is required for a freestanding financial instrument to be classified in shareholder’s equity and may exempt an embedded feature from bifurcation and derivative accounting. Entities will recognize the effect of a down round feature only when it is triggered.

ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 and early adoption is permitted. The Company has adopted this guidance for the fiscal year ended November 30, 2018.

On September 1, 2016, Trilogy acquired 5,000,000 common shares of GoldMining Inc. (“GMI”), formerly Brazil Resources Inc., a public company listed on the TSX-Venture exchange, and 1,000,000 warrants, with each warrant exercisable into one common share of GMI until September 1, 2018 at an exercise price of CAD$3.50, through its sale of Sunward Investments Ltd.

The common shares and warrants received have been designated as held-for-trading financial assets and classified as current investments.

in thousands of dollars

During the nine-month period ended August 31, 2018, the Company sold 2,365,000 (2017 – 1,519,000) common shares of GMI for proceeds of $2.3 million (2017 – $2.2 million) and realized a loss on sale of $0.3 million (2017 - $0.2 million). During the period, the Company recorded an unrealized gain on the common shares and warrants of GMI of Nil (2017 - loss of $1.3 million).

As at August 31, 2018, the Company held Nil (2017 – 3,371,000) common shares of GMI and 1,000,000 (2017 – 1,000,000) warrants expiring September 1, 2018 which were valued at $Nil using the Black-Scholes option pricing model at period end. All the warrants expired unexercised on September 1, 2018.

in thousands of dollars

in thousands of dollars

in thousands of dollars

in thousands of dollars

in thousands of dollars

On January 11, 2010, NovaGold Resources Inc. (“NovaGold”), through Alaska Gold Company (“AGC”), at the time a wholly-owned NovaGold subsidiary, purchased 100% of the Ambler lands in Northwest Alaska, which contains the copper-zinc-lead-gold-silver Arctic Project and other mineralized targets within the volcanogenic massive sulfide belt, through a series of cash and share payments. Total fair value of the consideration was $26.6 million. The vendor retained a 1% net smelter return royalty that the Company can purchase at any time for a one-time payment of $10.0 million.

The Ambler lands were acquired on October 17, 2011 by Trilogy Metals US through a purchase and sale agreement with AGC. On October 24, 2011, NovaGold transferred its ownership of Trilogy Metals US to the Company, then itself a wholly owned subsidiary of NovaGold, which was subsequently spun-out to NovaGold shareholders and publicly listed on April 30, 2012 (“NovaGold Arrangement”).

On October 19, 2011, Trilogy Metals US acquired the exclusive right to explore and the non-exclusive right to access and enter on the Bornite lands, and lands deeded to NANA Regional Corporation, Inc. (“NANA”) through the Alaska Native Claims Settlement Act, located adjacent to the Ambler lands in Northwest Alaska. As consideration, Trilogy Metals US paid $4 million to acquire the right to explore and develop the combined Upper Kobuk Mineral Projects through an Exploration Agreement and Option to Lease with NANA. Upon a decision to proceed with construction of a mine on the lands, NANA maintains the right to purchase between a 16%-25% ownership interest in the mine or retain a 15% net proceeds royalty which is payable after Trilogy Metals US has recovered certain historical costs, including capital and cost of capital. Should NANA elect to purchase an ownership interest, consideration will be payable equal to all historical costs incurred on the properties at the elected percentage purchased less $40 million, not to be less than zero. The parties would form a joint venture and be responsible for all future costs, including capital costs of the mine based on their pro-rata share.

NANA would also be granted a net smelter return royalty of between 1% and 2.5% upon the execution of a mining lease or a surface use agreement, the amount of which is determined by the classification of land from which production originates.

On April 10, 2017, Trilogy and Trilogy Metals US entered into an Option Agreement to form a Joint Venture with South32 Group Operations Pty Ltd. (“South32 Operations”), a wholly-owned subsidiary of South32 Limited, on the UKMP (the “Option Agreement”), which agreement was later assigned by South32 Operations to its affiliate, South32 USA Exploration Inc. (together with South32 Operations, “South32”(“South32”) on the UKMP (“Option Agreement”). Under the terms of the Option Agreement, as amended, Trilogy Metals US granted South32 the right to form a 50/50 joint venture to hold all of Trilogy Metals US’ Alaskan assets. Upon exercise of the option, Trilogy Metals US will transfer its Alaskan assets, including the UKMP, and South32 will contribute a minimum of $150 million, to a newly formed and jointly held, limited liability company (“JV LLC”), plus any amounts Trilogy Metals US spends at the Arctic Project over the next three years to a maximum of $5 million per year (the “Subscription Price”), less an amount of the initial funding contributed by South32..

To maintain the option in good standing, South32 is required to fund a minimum of $10 million per year for up to a three-year period, which funds will be used to execute a mutually agreed upon program at the UKMP. The funds provided by South32 may only be expended based onin accordance with an approved program by a technical committee with equal representation from Trilogy and South32. South32 may exercise its option at any time over the approved program. Provided that allthree-year period to enter into the exploration data and information has been made available to South32 by no later than December 3150/50 joint venture. To subscribe for 50% of each year,the JV, South32 must decide by the end of January of the following year whether: (i) to fund a further tranche ofcontribute a minimum of $150 million, plus (i) any amounts Trilogy spends on matched parallel funding to a maximum of $16 million over the three year period and (ii) $5 million if the option had been exercised between April 1, 2018 and March 31, 2019 or $10 million or (ii) to withdrawif the option is exercised between April 1, 2019 and not provide any further annual funding. If the election to fund a further tranche is not made in January,expiration date of the option, less the amount of the initial funding contributed by South32 (the “Subscription Price”). South32 has now funded the full three-year option period. South32 has until the end of MarchJanuary 2020 to exercise the option to form the JV LLC and make the subscription payment. Should South32 not make its annual minimum payment or elect to withdraw, the option will lapse and South32 will have no claim to property ownership or to the funds already spent.

During the year ended November 30, 2017, the Company received the first payment of $10.0 million and these funds were expended on the year 1 program at the Bornite Project. In October 2017, the Company received $0.4 million as a first instalment towards the year 2 program and budget to begin preparatory work. During the nine monthsyear ended August 31,November 30, 2018, the Company received payments totaling $10.4 million following the approval of the year 2 program and budget in January 2018, including a $0.80 million advance on South32’s year three funding obligation per the Option Agreement. During the quarter ended February 28, 2019, the Company received payments totaling $10.2 million following the approval of the year 3 program and budget, including an additional $1 million of funding for the approved regional exploration program. The receipt of the year 3 funding represents receipt of the final tranche of funding from South32. The Company is responsible for the disbursement of these funds in accordance with the approved program and budget and accordingly has not classified the funds as restricted cash.

As the initial option payments are credited against the future subscription price upon exercise, the Company has accounted for the paymentpayments received from South32 as deferred consideration for the purchase of the UKMP interest. At such time as the option is exercised, the initial$31.0 million of payments received to that date will be recognized as part of the consideration received for the Company’s contribution of the UKMP into JV LLC. If South 32South32 withdraws from the Option Agreement, the consideration will be recognized as income in the statement of loss at that time.

The option to form the JV LLC is recognized as a financial instrument at inception of the arrangement with an initial fair value of $nil. This option is required to be re-measured at fair value at each reporting date with any changes in fair value recorded in loss for the period. The Company determined that the fair value of the option is stillremains $nil as at August 31, 2018.2019.

The following table summarizes mineral properties expense for the noted periods.

In thousands of dollars

Mineral property expenses consist of direct drilling, personnel, community, resource reporting and other exploration expenses as outlined above, as well as indirect project support expenses such as fixed wing charters, helicopter support, fuel, and other camp operation costs. Cumulative mineral properties expense in Alaska from the initial earn-in agreement on the property in 2004 to August 31, 20182019 is $91.0$110.0 million and cumulative acquisition costs are $30.6 million totaling $121.6$140.6 million spent to date.

in thousands of dollars

Authorized:

unlimited common shares, no par value

in thousands of dollars, except share amounts

On April 30, 2012, under the NovaGold Arrangement, Trilogy committed to issue common shares to satisfy holders of NovaGold deferred share units (“NovaGold DSUs”) on record as of the close of business on April 27, 2012. When vested, Trilogy committed to deliver one Common Share to the holder for every six shares of NovaGold the holder is entitled to receive, rounded down to the nearest whole number. As of August 31, 2019, there remains 11,927 NovaGold DSUs outstanding representing a right to receive 1,988 Common Shares in Trilogy, which will settle upon certain directors retiring from NovaGold’s board.

On April 20, 2018, the Company completed a bought-deal financing for gross proceeds of $28.8$28.7 million by issuing 24,784,482 common shares at $1.16 per common share. Expenses including bank commissions, legal fees, stock exchange and other fees totaled $1.8 million for net proceeds of $26.9 million.

As of August 31, 2018, 11,927 NovaGold DSUs remain outstanding representing a right to receive 1,988 common shares in Trilogy, which will settle upon certain directors retiring from the board of NovaGold Resources Inc.

During the nine-month periodnine - months ended August 31, 2018,2019, the Company granted 2,395,0002,527,500 options (2017(2018 – 1,695,0002,395,000 options) at a weighted-average exercise price of CAD$1.15 (20172.96 (2018 – CAD$0.72)1.15) to employees, consultants and directors exercisable for a period of five years with various vesting terms between nil and two years.from immediate vesting to over a two-year period. The weighted-average fair value attributable to options granted in the period was $0.43.$1.08 (2018 - $0.43).

For the nine-monthnine - month period ended August 31, 2018,2019, Trilogy recognized a stock-based compensation charge of $0.71$2.23 million (2017– $0.31(2018 – $0.71 million) for options granted to directors, employees and service providers, net of estimated forfeitures.

The recognized fair value of the stock options recognized ingranted during the nine - month period ended August 31, 2019 has been estimated using the Black-Scholes option pricing model.

Assumptions used in the pricing model for the period are as provided below.

As of August 31, 2018,2019, there were 1,586,6761,775,005 non-vested options outstanding with a weighted average exercise price of $0.85;$1.82; the non-vested stock option expense not yet recognized was $0.64$0.63 million. This expense is expected to be recognized over the next two years.

A summary of the Company’s stock option plan and changes during the nine-monthnine - month period ended August 31, 20182019 is as follows:

The following table summarizes information about the stock options outstanding at August 31, 2018.2019.

The aggregate intrinsic value of vested share options (the market value less the exercise price) at August 31, 20182019 was $9.2$10.6 million (2017(2018 - $2.8$9.2 million) and the aggregate intrinsic value of exercised options for the nine months- month period ended August 31, 20182019 was $0.4$0.5 million (2017(2018 - $0.15$0.4 million).

The Company has a Restricted Share Unit Plan (“RSU Plan”) and a Non-Executive Director Deferred Share Unit Plan (“DSU Plan”) to provide long-term incentives to employees, officers and directors. Awards under the RSU Plan and DSU Plan may be settled in cash and/or common shares of the Company at the Company’s election with each restricted share unit (“RSU”) and deferred share unit (“DSU”) entitling the holder to receive one common share of the Company or equivalent value. All units are accounted for as equity-settled awards.

A summary of the Company’s unit plans and changes during the nine - month period ended August 31, 20182019 is as follows:

For the nine months- month period ended August 31, 2018,2019, Trilogy recognized a stock-based compensation charge of $0.56$0.78 million (2017- $0.29(2018 - $0.56 million), net of estimated forfeitures.

As part of the annual incentive payout for the 20172018 fiscal year, 300,000225,000 RSUs were granted to officers during the three – month period ended February 28, 2019, vesting immediately. In addition, 300,000 RSUs were granted to officers vesting one third immediately, one thirdhalf on the grant date and half on the first anniversary of the grant date, and one thirddate. RSUs vesting in December 2018 were settled on the second anniversary. On December 27, 2017, 800,000 RSUs vested and were settled21, 2018 through the issuance of 800,000412,501 common shares.

A summary ofDuring the Company’s warrants and changes during the nine monthsthree - month period ended August 31, 2018 is as follows:

The exercise price2019, all the outstanding warrants were exercised in advance of the share purchase warrants was adjusted downward asJuly 2, 2019 expiry date.  As a result of the financing completed on April 20, 2018 from $1.60 to $1.52. Thewarrants exercised, the Company measured the fair valueissued a total of the warrants prior to the financing6,521,740 common shares and after the financing and recorded the differencereceived cash proceeds of $90,000 as an adjustment to the warrant value and to retained earnings in shareholders equity during the period. The warrants expire on July 2, 2019.approximately $9.9 million.

The Company is exposed to a variety of risks arising from financial instruments. These risks and management’s objectives, policies and procedures for managing these risks are disclosed as follows.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities. The fair value of the Company’s financial instruments approximates their carrying value due to the short-term nature of their maturity. The Company’s financial instruments initially measured at fair value and then held at amortized cost include cash and cash equivalents, accounts receivable, deposits, and accounts payable and accrued liabilities. The Company’s investments were held for trading and were marked-to-market at each period end with changes in fair value recorded to the statement of loss.

Financial risk management

The Company’s activities expose it to certain financial risks, including currency risk, credit risk, liquidity risk, interest risk and price risk.

Currency risk is the risk of a fluctuation in financial asset and liability settlement amounts due to a change in foreign exchange rates. The Company operates in the United States and Canada. The Company’s exposure to currency risk at August 31, 20182019 is limited to the Canadian dollar consisting of cash of CAD$1.0 million, deposit amountsCDN$205,000, accounts receivable of CAD$0.1 millionCDN$62,000 and accounts payable of CAD$0.5 million.CDN$1,283,000. Based on a 10% change in the US-Canadian exchange rate, assuming all other variables remain constant, the Company’s net loss would change by approximately $0.1 million.$76,000.

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company holds cash and cash equivalents with Canadian Chartered financial institutions. The Company’s accounts receivable consists of Canadian Goods and Services Tax receivable from the Federal Government of Canada and other receivables for recoverable expenses. The Company’s exposure to credit risk is equal to the balance of cash and cash equivalents and accounts receivable as recorded in the financial statements.

Liquidity risk is the risk that the Company will encounter difficulties raising funds to meet its financial obligations as they fall due. The Company is in the exploration stage and does not have cash inflows from operations; therefore, the Company manages liquidity risk through the management of its capital structure and financial leverage.

Contractually obligated cash flow requirements as at August 31, 20182019 are as follows.follows:

in thousands of dollars

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk with respect to interest earned on cash and cash equivalents. Based on balances as at August 31, 2018,2019, a 1% change in interest rates would result in a change in net loss of $0.3$0.2 million, assuming all other variables remain constant.

Fair value accounting

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the significance of the inputs used in making the measurement. The three levels of the fair value hierarchy are as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity)

The levels in the fair value hierarchy into which the Company’s financial assetsCompany has commitments with respect to office and liabilities that are measured and recognized at fair value on a recurring basis were categorizedwarehouse leases requiring future minimum lease payments as follows:

in thousands of dollars

During the nine-month period ended August 31, 2018, the Company disposed of its remaining shares of GMI, a publicly-held mineral exploration company. The share investments were recorded as current investments and were valued using quoted market prices in active markets and as such are classified as a Level 1 financial instrument.

The Company has commitments in respect of its office lease (denominated in Canadian dollars converted at the foreign exchange rate at the end of the quarter) requiring future minimum lease payments from the date as follows:

in thousands of dollars

Trilogy Metals Inc.

Management’s Discussion and Analysis

(expressed in US dollars)

Cautionary notes

Forward-looking statements

This Management’s Discussion and Analysis contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian Securities laws, Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable securities laws (collectively, “forward-looking statements”).laws. These forward-looking statements may include statements regarding perceived merit of properties, the timing and filing of updated technical reports, the timing of permitting,exploration results and budgets, mineral reserves and resource estimates, work programs, capital expenditures, operating costs, cash flow estimates, production estimates and similar statements relating to the economic viability of a project, timelines, strategic plans, statements relating to anticipated activity with respect to the Ambler Mining District Industrial Access Project, includingregarding the Company’s plans and expectations relating to its Upper Kobuk Mineral Projects, market prices for precious and base metals, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if the property is developed.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements are based on a number of material assumptions, including those listed below, which could prove to be significantly incorrect:

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: