Trilogy Metals (TMQ) 8-K Entry into a Material Definitive Agreement

Exhibit 99.1

Trilogy Metals Inc.

Consolidated Pro Forma Balance Sheet

As at November 30, 2019

(unaudited)

     In thousands of US dollars

except share and per share amounts

	Previously reported			Proforma adjustments				Pro forma
Assets
Current assets
Cash and cash equivalents		19,174							19,174
GST and other receivables		264							264
Deposits and prepaid amounts		719			(470	)	(a)		249
		20,157			(470	)			19,687
Deposits and prepaid amount		114							114
Property, plant & equipment		715			(640	)	(a)		75
Mineral properties		30,631			(30,631	)	(a)		-
Investment in unconsolidated joint venture		-			263,450		(a)		263,450
Total assets		51,617			231,709				283,326
Liabilities
Current liabilities:
Accounts payable and accrued liabilities		2,354							2,354
		2,354							2,354
Other liabilities		31,000			(31,000	)	(b)		-
Total liabilities		33,354			(31,000	)			2,354
Shareholder's equity
Share capital		177,971							177,971
Contributed Surplus - Stock Based Compensation		21,123							21,123
Contributed Surplus		122							122
RSU's and DSU's		1,759							1,759
Deficit		(182,712	)		262,709		(a),(b)		79,997
Total shareholder's equity		18,263			262,709				280,972
Total liabilities and shareholder's equity		51,617			231,709				283,326

Trilogy Metals Inc.

Consolidated Pro Forma Statement of Operations and Deficit

For the Year Ended November 30, 2019

(unaudited)

       In thousands of US dollars

except share and per share amounts

	Previously reported			Proforma adjustments				Pro forma
Expenses
Amortization		211			(188	)	(c)		23
Corporate development		623							623
Foreign exchange gain		(19	)						(19	)
General and administrative		1,838							1,838
Mineral properties expense		19,211			(19,211	)	(c)		-
Professional fees		1,382							1,382
Salaries		1,314							1,314
Salaries - Stock-based compensation		3,845							3,845
Total expenses		28,405			(19,399	)			9,006
Other items
Interest income		(500	)						(500	)
Equity loss, unconsolidated joint venture		-			9,606		(d)		9,606
Loss for the period		27,905			(9,793	)			18,112
Deficit, beginning of period		154,807			252,917		(a),(b)		(98,110	)
Deficit, end of period		182,712			262,710				(79,998	)
Basic and diluted loss per share		$0.21							($0.13	)
Weighted average number of shares		135,225,349							135,225,349

Trilogy Metals Inc.

Notes to Pro Forma Condensed Consolidated Financial Statements

(Unaudited)

Note 1 Basis of Presentation

The accompanying unaudited pro forma consolidated financial statements of Trilogy Metals Inc. and its wholly-owned subsidiary, NovaCopper US Inc. (collectively, “Trilogy”, “Trilogy Metals” or the “Company”) were derived from the Company’s historical consolidated financial statements. The unaudited pro forma balance sheet as of November 30, 2019 was adjusted to reflect the completion of the joint venture with South32 Limited whereby the Company contributed all of its assets associated with the 172,636-hectare Upper Kobuk Mineral Projects (“UKMP”), including the Arctic and Bornite projects, while South32 contributed US$145 million, resulting in each party owning a 50% interest in the joint venture company named Ambler Metals LLC. The funds will be used to advance the Arctic and Bornite projects, along with exploration in the Ambler mining district.

All figures are in United States dollars unless otherwise noted.

The unaudited pro forma consolidated financial statements are furnished for informational purposes only and do not purport to reflect the Company’s financial position and results of operations had the dispositions occurred on the dates as indicated above. Further, these financial statements are not necessarily indicative of the Company’s future financial position and future results of operations and should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended November 30, 2019.

Note 2 Pro Forma Adjustments

The pro forma adjustments are based on preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed consolidated financial information:

(a)This adjustment reflects the gain arising from contribution of the Upper Kobuk mineral property assets, PP&E, and deposits to the JV at fair market value in exchange for a 50% equity interest in the JV. The estimated gain arising from the transaction has not been reflected in the pro forma consolidated statement of operations as it is considered to be nonrecurring in nature.

(b)To recognize previously deferred gain on purchase option associated with the Upper Kobuk mineral property assets. The estimated income has not been reflected in the pro forma consolidated statement of operations as it is considered to be nonrecurring in nature.

(c)Reflects the removal of income and expenses directly associated with the Upper Kobuk mineral property assets.

(d)Reflects Trilogy's 50% equity interest in the equity earnings (net loss) of the JV had the Transaction closed on December 1, 2018.

(e)The Company is currently evaluating the tax consequences of the transaction.