Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Feb. 28, 2021 | Apr. 07, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Feb. 28, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-35447 | |
Entity Registrant Name | TRILOGY METALS INC. | |
Entity Incorporation, State or Country Code | A1 | |
Entity Tax Identification Number | 98-1006991 | |
Entity Address, Address Line One | Suite 1150, 609 Granville Street | |
Entity Address, City or Town | Vancouver | |
Entity Address, State or Province | BC | |
Entity Address, Country | CA | |
Entity Address, Postal Zip Code | V7Y 1G5 | |
City Area Code | 604 | |
Local Phone Number | 638-8088 | |
Title of 12(b) Security | Common Shares | |
Trading Symbol | TMQ | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 144,292,774 | |
Current Fiscal Year End Date | --11-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001543418 | |
Amendment Flag | false |
Interim Consolidated Balance Sh
Interim Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Feb. 28, 2021 | Nov. 30, 2020 |
Current assets | ||
Cash and cash equivalents | $ 9,631 | $ 11,125 |
Accounts receivable (note 3) | 24 | 129 |
Deposits and prepaid amounts | 217 | 184 |
Total Current Assets | 9,872 | 11,438 |
Investment in Ambler Metals LLC (note 4) | 172,025 | 173,145 |
Fixed assets (note 5) | 189 | 206 |
Right of use asset (note 7 (a)) | 448 | 476 |
Total Assets | 182,534 | 185,265 |
Current liabilities | ||
Accounts payable and accrued liabilities (note 6) | 551 | 888 |
Current portion of lease liability | 166 | 158 |
Current liabilities | 717 | 1,046 |
Long-term portion of lease liability (note 7 (b)) | 374 | 408 |
Total Liabilities | 1,091 | 1,454 |
Shareholders' equity | ||
Share capital (note 8) - unlimited common shares authorized, no par value Issued - 144,214,485 (2020 - 144,137,850) | 180,080 | 179,746 |
Contributed surplus | 122 | 122 |
Contributed surplus - options (note 8(a)) | 25,081 | 23,303 |
Contributed surplus - units (note 8(b)) | 1,621 | 1,585 |
Deficit | (25,461) | (20,945) |
Total Shareholders' Equity | 181,443 | 183,811 |
Total Liabilities and Shareholders' Equity | $ 182,534 | $ 185,265 |
Interim Consolidated Balance _2
Interim Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 28, 2021 | Nov. 30, 2020 |
Interim Consolidated Balance Sheets (unaudited) | ||
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares, Issued | 144,214,485 | 144,137,850 |
Interim Consolidated Statements
Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Expenses | ||
Amortization | $ 17 | $ 42 |
Foreign exchange loss | 35 | 23 |
General and administrative | 401 | 651 |
Investor relations | 154 | 126 |
Mineral properties expense (note 4(a)) | 1,545 | |
Professional fees | 229 | 668 |
Salaries | 439 | 224 |
Salaries - stock-based compensation | 2,148 | 1,196 |
Total expenses | 3,423 | 4,475 |
Other items | ||
Gain on derecognition of assets contributed to joint venture (note 4(a)) | (175,770) | |
Share of loss on equity investment (note 4(b)) | 1,120 | 178 |
Interest and other income | (5) | (62) |
Services agreement income (note 4(e)) | (22) | |
Comprehensive (loss) earnings for the year | $ (4,516) | $ 171,179 |
Basic (loss) earnings per common share | $ (0.03) | $ 1.22 |
Diluted (loss) earnings per common share | $ (0.03) | $ 1.16 |
Basic weighted average number of common shares outstanding | 144,163,869 | 140,616,672 |
Diluted weighted average number of common shares outstanding | 144,163,869 | 147,649,507 |
Interim Consolidated Statemen_2
Interim Consolidated Statements of Changes in Shareholders' Equity (unaudited) - USD ($) $ in Thousands | Share capital | Contributed surplus | Contributed surplus - options | Contributed surplus - units | Deficit | Total |
Beginning Balance at Nov. 30, 2019 | $ 177,971 | $ 122 | $ 21,123 | $ 1,759 | $ (182,712) | $ 18,263 |
Beginning Balance (Shares) at Nov. 30, 2019 | 140,427,761 | |||||
Exercise of options | $ 6 | (6) | ||||
Exercise of options (Shares) | 19,514 | |||||
Restricted Share Units | $ 330 | (330) | ||||
Restricted Share Units (Shares) | 212,501 | |||||
Stock-based compensation | 1,155 | 41 | 1,196 | |||
Loss for the period | 171,179 | 171,179 | ||||
Ending Balance at Feb. 29, 2020 | $ 178,307 | 122 | 22,272 | 1,470 | (11,533) | 190,638 |
Ending Balance (Shares) at Feb. 29, 2020 | 140,659,776 | |||||
Beginning Balance at Nov. 30, 2020 | $ 179,746 | 122 | 23,303 | 1,585 | (20,945) | 183,811 |
Beginning Balance (Shares) at Nov. 30, 2020 | 144,137,850 | |||||
Exercise of options | $ 334 | (334) | ||||
Exercise of options (Shares) | 76,635 | |||||
Stock-based compensation | 2,112 | 36 | 2,148 | |||
Loss for the period | (4,516) | (4,516) | ||||
Ending Balance at Feb. 28, 2021 | $ 180,080 | $ 122 | $ 25,081 | $ 1,621 | $ (25,461) | $ 181,443 |
Ending Balance (Shares) at Feb. 28, 2021 | 144,214,485 |
Interim Consolidated Statemen_3
Interim Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Cash flows used in operating activities | ||
(Loss) earnings for the period | $ (4,516) | $ 171,179 |
Adjustments to reconcile net loss to cash flows in operating activities | ||
Amortization | 17 | 42 |
Right of use asset amortization and lease accretion | 38 | 60 |
Office lease payments | (49) | (54) |
Loss on working capital written-off upon joint venture formation | 18 | |
Gain on derecognition of assets (note 4(a)) | (175,770) | |
Loss on equity investment in Ambler Metals LLC (note 4(b)) | 1,120 | 178 |
Unrealized foreign exchange loss | 14 | 25 |
Stock-based compensation | 2,148 | 1,196 |
Net change in non-cash working capital | ||
Decrease (increase) in accounts receivable | 105 | (154) |
Decrease (increase) in deposits and prepaid amounts | (33) | 419 |
(Decrease) increase in accounts payable and accrued liabilities | (337) | (1,080) |
Decrease in cash from operating activities | (1,493) | (3,941) |
Effect of exchange rate on cash and cash equivalents | (1) | (16) |
Cash and cash equivalents - beginning of period | 11,125 | 19,174 |
Cash and cash equivalents - end of period | $ 9,631 | $ 15,217 |
Nature of operations
Nature of operations | 3 Months Ended |
Feb. 28, 2021 | |
Nature of operations | |
Nature of operations | 1) Nature of operations Trilogy Metals Inc. (“Trilogy” or the “Company”) was incorporated in British Columbia under the Business Corporations Act (BC) |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Feb. 28, 2021 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2) Summary of significant accounting policies Basis of presentation These interim 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 intercompany transactions are eliminated on consolidation. For variable interest entities (“VIEs”) where Trilogy is not the primary beneficiary, we use the equity method of accounting. All figures are in United States dollars unless otherwise noted. References to CAD$ refer to amounts in Canadian dollars. The unaudited interim consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position as of February 28, 2021 and our results of operations and cash flows for the three months ended February 28, 2021 and February 29, 2020. The results of operations for the three months ended February 28, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2021. 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, 2020, filed with the U.S. Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities on February 12, 2021. These interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on April 6, 2021. |
Accounts receivable
Accounts receivable | 3 Months Ended |
Feb. 28, 2021 | |
Accounts receivable | |
Accounts receivable | 3) Accounts receivable in thousands of dollars February 28, 2021 November 30, 2020 $ $ GST input tax credits 23 15 Ambler Metals LLC 1 114 Accounts receivable 24 129 The balance due from Ambler Metals LLC (see note 4 below) consists of services rendered by Trilogy and reimbursements for invoices paid by Trilogy on behalf of Ambler Metals LLC per a service agreement. The balance was paid in full by Ambler Metals LLC subsequent to the quarter end. |
Equity method investment
Equity method investment | 3 Months Ended |
Feb. 28, 2021 | |
Equity method investment | |
Equity method investment | 4) Equity method investment (a) Formation of Ambler Metals LLC On February 11, 2020, the Company completed the formation of a 50/50 joint venture named Ambler Metals LLC with South32 Limited (“South32”). As part of the formation of the joint venture, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite Projects, while South32 contributed US$145 million, resulting in each party’s subsidiaries directly owning a 50% interest in Ambler Metals LLC. To assist Ambler Metals during the initial set up phase, Trilogy was paying all of Ambler Metals LLC’s invoices and being reimbursed pursuant to a services agreement (the “Services Agreement”) between Trilogy and Ambler Metals LLC until the back office was fully transitioned to a new permanent team employed by the joint venture. The Services Agreement ended on December 31, 2020. Ambler Metals LLC is an independently operated company jointly controlled by Trilogy and South32 through a four-member board, of which two members are appointed by Trilogy based on its 50% equity interest. All significant decisions related to the UKMP require the approval of both companies. We determined that Ambler Metals LLC is a VIE because it is expected to need additional funding from its owners for its significant activities. However, we concluded that we are not the primary beneficiary of Ambler Metals LLC as the power to direct its activities, through its board, is shared under the Ambler Metals LLC limited liability company agreement. As we have significant influence over Ambler Metals LLC through our representation on its board, we use the equity method of accounting for our investment in Ambler Metals LLC. Our investment in Ambler Metals LLC was initially measured at its fair value of $176 million upon recognition. Our maximum exposure to loss in this entity is limited to the carrying amount of our investment in Ambler Metals LLC, which, as at February 28, 2021, totaled $172 million. The following table summarizes the gain on recognition of the UKMP assets upon transfer to the Ambler Metals LLC joint venture on February 11, 2020. in thousands of dollars $ Fair value ascribed to Ambler Metals LLC interest 176,000 Less: carrying value of contributed /eliminated assets Mineral properties (30,631) Property, plant and equipment (618) Elimination of Fairbanks warehouse right of use asset (93) Elimination of prepaid State of Alaska mining claim fees (303) Add: Reimbursement of claims staking 44 Demobilization costs of drills 278 Cancellation of Fairbanks warehouse lease liability 93 Fair value of mineral properties purchase option 31,000 Gain on derecognition 175,770 No additional mineral properties expenses were incurred subsequent to February 11, 2020 as upon the formation of the joint venture with South 32, all mineral properties previously held by the Company were contributed to Ambler Metals LLC. Prior to the formation of the joint venture, the Company had also incurred $0.7 million in Arctic Project feasibility costs that are included in the mineral properties expense balance of $1.5 million for the three-month period ended February 29, 2020. (b) Carrying value of equity method investment During the three-month period ending February 28, 2021, Trilogy recognized, based on its 50% ownership interest in Ambler Metals LLC, an equity loss equivalent to its pro rata share of Ambler Metals LLC's comprehensive loss of $2.2 million for the three month period ending February 28, 2021. The carrying value of Trilogy’s 50% investment in Ambler Metals LLC as at February 28, 2021 is summarized on the following table. in thousands of dollars $ November 30, 2020, investment in Ambler Metals LLC. 173,145 Share of loss on equity investment for the three month period ending February 28, 2021 (1,120) February 28, 2021, investment in Ambler Metals LLC. 172,025 (c) The following table summarizes Ambler Metals LLC's Balance Sheet as at February 28, 2021. in thousands of dollars February 28, 2021 November 30, 2020 $ $ Current assets: Cash, deposits and prepaid expenses 79,576 82,226 Non - current assets: Property, equipment and mineral properties 32,038 31,287 Loan receivable from South32 58,747 58,478 Current liabilities: Accounts payable and accrued liabilities (1,310) (1,445) Non - current liabilities: Lease obligation (795) (51) Net assets 168,256 170,495 (d) The following table summarizes Ambler Metals LLC's comprehensive loss for the three-month period ending February 28, 2021. in thousands of dollars Period ending Period ending February 28, 2021 February 29, 2020 $ $ Amortization 16 12 Mineral properties expense 1,400 167 General and administrative expense 1,095 219 Interest income (272) (43) Comprehensive loss 2,239 355 (e) Related party transactions - services agreement income The Company charged $22,151 of expenses related to technical services, including geological, engineering, environmental and human resources, and accounting services in connection with the Services Agreement. In addition, the Company received payments of $4,053 related to operating expenses paid on behalf of Ambler Metals during the three-month period ending February 28, 2021. |
Fixed assets
Fixed assets | 3 Months Ended |
Feb. 28, 2021 | |
Fixed assets | |
Fixed assets | 5) Fixed assets in thousands of dollars February 28, 2021 Accumulated Cost amortization Net $ $ $ British Columbia, Canada Furniture and equipment 63 (45) 18 Leasehold improvements 253 (82) 171 Computer hardware and software 115 (115) — 431 (242) 189 in thousands of dollars November 30, 2020 Accumulated Cost amortization Net $ $ $ British Columbia, Canada Furniture and equipment 63 (41) 22 Leasehold improvements 253 (69) 184 Computer hardware and software 115 (115) — 431 (225) 206 |
Accounts payable and accrued li
Accounts payable and accrued liabilities | 3 Months Ended |
Feb. 28, 2021 | |
Accounts payable and accrued liabilities. | |
Accounts payable and accrued liabilities | 6) Accounts payable and accrued liabilities in thousands of dollars February 28, 2021 November 30, 2020 $ $ Trade accounts payable 275 226 Accrued liabilities 166 198 Accrued salaries and vacation 110 464 Accounts payable and accrued liabilities 551 888 |
Leases
Leases | 3 Months Ended |
Feb. 28, 2021 | |
Leases | |
Leases | 7) Leases (a) Right-of-use asset in thousands of dollars $ ASC transition as at December 1, 2019 681 Amortization (162) Lease accretion 50 Derecognition of Fairbanks warehouse lease (93) Balance as at November 30, 2020 476 Amortization (38) Lease accretion 10 Balance as at February 28, 2021 448 (b) Lease liabilities The Company’s lease arrangements primarily consist of an operating lease for our office space ending in June 2024. There are no extension options. Total lease expense recorded within general and administrative expenses was comprised of the following components: in thousands of dollars Three months ended Three months ended February 28, 2021 February 29, 2020 $ $ Operating lease costs 38 50 Variable lease costs 35 34 Total lease expense 73 84 Variable lease costs consist primarily of the Company’s portion of operating costs associated with the office space lease as the Company elected to apply the practical expedient not to separate lease and non-lease components. As of February, 28, 2021, the weighted-average remaining lease term was 3.3 years and the weighted-average discount rate is 8% . Significant judgment was used in the determination of the incremental borrowing rate which included estimating the Company’s credit rating. Supplemental cash and non-cash information relating to our leases during the three months ended February 28, 2021 are as follows: ● Cash paid for amounts included in the measurement of lease liabilities was $48,830 . Future minimum payments relating to the lease recognized in our balance sheet as of February 28, 2021 are as follows: in thousands of dollars February 28, 2021 Fiscal year $ 2021 151 2022 206 2023 212 2024 126 Total undiscounted lease payments 695 Effect of discounting (155) Present value of lease payments recognized as lease liability 540 |
Share capital
Share capital | 3 Months Ended |
Feb. 28, 2021 | |
Share capital. | |
Share capital | 8) Share capital Authorized: unlimited common shares, no par value in thousands of dollars, except share amounts Number of shares Ascribed value $ November 30, 2019 140,427,761 177,971 Exercise of options 3,297,588 1,133 Restricted Share Units 412,501 642 November 30, 2020 144,137,850 179,746 Exercise of options 76,635 334 February 28, 2021, issued and outstanding 144,214,485 180,080 (a) Stock options During the three-month period ended February 28, 2021, the Company granted 3,374,150 options (2020 - 2,050,000 options) at a weighted-average exercise price of CAD$2.52 (2020 - CAD$3.02) to employees, consultants and directors exercisable for a period of five years with various vesting terms from immediate vesting to vesting over a two-year period. The weighted-average fair value attributable to options granted in the period was $0.84 (2020 - $0.99). For the three-month period ended February 28, 2021, Trilogy recognized a stock-based compensation charge of $2.10 million (2019 – $1.16 million) for options granted to directors, employees and service providers, net of estimated forfeitures. The fair value of the stock options recognized in the period has been estimated using the Black-Scholes option pricing model. Assumptions used in the pricing model for the three-month period ended February 28, 2021 are as provided below. February 28, 2021 Risk-free interest rates 0.31% Exercise price CAD$2.52 Expected life 3 years Expected volatility 64.4% Expected dividends Nil As of February 28, 2021, there were 3,374,150 non-vested options outstanding with a weighted average exercise price of $2.07; the non-vested stock option expense not yet recognized was $1.63 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 three-month period ended February 28, 2021 is as follows: February 28, 2021 Weighted average exercise price Number of options $ Balance – beginning of the period 8,647,500 1.88 Granted 3,374,150 1.98 Exercised (381,373) 1.97 Cancelled (120,000) 2.42 Balance – end of the period 11,520,277 1.90 The following table summarizes information about the stock options outstanding at February 28, 2021. 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 price options to expiry $ options $ options $0.55 to $1.00 1,705,627 1.34 0.69 1,705,627 0.69 — $1.01 to $1.50 75,000 1.81 1.15 75,000 1.15 — $1.51 to $2.00 4,277,150 4.54 1.95 2,779,483 1.94 1,497,667 $2.01 to $2.50 5,425,000 3.72 2.24 3,618,330 2.28 1,806,670 $2.51 to $3.00 37,500 3.23 2.68 37,500 2.68 — 11,520,277 3.66 1.90 8,215,940 1.82 3,304,337 The aggregate intrinsic value of vested share options (the market value less the exercise price) at February 28, 2021 was $3.3 million (2020 - $5.9 million) and the aggregate intrinsic value of exercised options for the three months ended February 28, 2021 was $0.17 million (2020 - $0.04 million). (b) Restricted Share Units and Deferred Share Units 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 three-month period ended February 28, 2021 is as follows: Number of DSUs Balance – beginning of the period 1,218,520 Granted 19,992 Balance – end of the period 1,238,512 For the three-month period ended February 28, 2021, Trilogy recognized a stock-based compensation charge of $0.04 million (2020- $0.04 million), net of estimated forfeitures. The Company did not issue any RSU grants during the three-month period ended February 28, 2021. As of February 28, 2021, there were no outstanding RSU grants. |
Financial instruments
Financial instruments | 3 Months Ended |
Feb. 28, 2021 | |
Financial instruments | |
Financial instruments | 9) Financial instruments 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. 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. (a) Currency 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 February 28, 2021 is limited to the Canadian dollar balances consisting of cash of approximately CDN$78,000, accounts receivable of approximately CDN$29,000 and accounts payable of approximately CDN$413,000. 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 $24,000. (b) Credit risk 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. (c) Liquidity risk 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 February 28, 2021 are as follows: in thousands of dollars Total < 1 Year 1–2 Years 2–5 Years Thereafter $ $ $ $ $ Accounts payable and accrued liabilities 551 551 — — — Office lease 694 201 421 72 — 1,245 752 421 72 — (d) Interest rate risk 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 February 28, 2021, a 1% change in interest rates would result in a $200 change in net loss, assuming all other variables remain constant. |
Commitment
Commitment | 3 Months Ended |
Feb. 28, 2021 | |
Commitment | |
Commitment | 10) Commitment The Company has commitments with respect to an office lease requiring future minimum lease payments as summarized in note 7(b) above. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 3 Months Ended |
Feb. 28, 2021 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation These interim consolidated financial statements have been prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of Trilogy and its wholly owned subsidiary, NovaCopper US Inc. (dba “Trilogy Metals US”). All intercompany transactions are eliminated on consolidation. For variable interest entities (“VIEs”) where Trilogy is not the primary beneficiary, we use the equity method of accounting. All figures are in United States dollars unless otherwise noted. References to CAD$ refer to amounts in Canadian dollars. The unaudited interim consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s financial position as of February 28, 2021 and our results of operations and cash flows for the three months ended February 28, 2021 and February 29, 2020. The results of operations for the three months ended February 28, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2021. 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, 2020, filed with the U.S. Securities and Exchange Commission (“SEC”) and Canadian securities regulatory authorities on February 12, 2021. These interim consolidated financial statements were approved by the Company’s Audit Committee on behalf of the Board of Directors for issue on April 6, 2021. |
Accounts receivable (Tables)
Accounts receivable (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Accounts receivable | |
Schedule of account receivable | in thousands of dollars February 28, 2021 November 30, 2020 $ $ GST input tax credits 23 15 Ambler Metals LLC 1 114 Accounts receivable 24 129 |
Equity method investment (Table
Equity method investment (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Equity method investment | |
Schedule of gain on transfer of assets | in thousands of dollars $ Fair value ascribed to Ambler Metals LLC interest 176,000 Less: carrying value of contributed /eliminated assets Mineral properties (30,631) Property, plant and equipment (618) Elimination of Fairbanks warehouse right of use asset (93) Elimination of prepaid State of Alaska mining claim fees (303) Add: Reimbursement of claims staking 44 Demobilization costs of drills 278 Cancellation of Fairbanks warehouse lease liability 93 Fair value of mineral properties purchase option 31,000 Gain on derecognition 175,770 |
Schedule of equity investment | in thousands of dollars $ November 30, 2020, investment in Ambler Metals LLC. 173,145 Share of loss on equity investment for the three month period ending February 28, 2021 (1,120) February 28, 2021, investment in Ambler Metals LLC. 172,025 |
Schedule of Ambler Metals LLC's Balance Sheet | in thousands of dollars February 28, 2021 November 30, 2020 $ $ Current assets: Cash, deposits and prepaid expenses 79,576 82,226 Non - current assets: Property, equipment and mineral properties 32,038 31,287 Loan receivable from South32 58,747 58,478 Current liabilities: Accounts payable and accrued liabilities (1,310) (1,445) Non - current liabilities: Lease obligation (795) (51) Net assets 168,256 170,495 |
Schedule of Ambler Metals LLC's comprehensive loss | in thousands of dollars Period ending Period ending February 28, 2021 February 29, 2020 $ $ Amortization 16 12 Mineral properties expense 1,400 167 General and administrative expense 1,095 219 Interest income (272) (43) Comprehensive loss 2,239 355 |
Fixed assets (Tables)
Fixed assets (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Fixed assets | |
Schedule of Fixed assets | in thousands of dollars February 28, 2021 Accumulated Cost amortization Net $ $ $ British Columbia, Canada Furniture and equipment 63 (45) 18 Leasehold improvements 253 (82) 171 Computer hardware and software 115 (115) — 431 (242) 189 in thousands of dollars November 30, 2020 Accumulated Cost amortization Net $ $ $ British Columbia, Canada Furniture and equipment 63 (41) 22 Leasehold improvements 253 (69) 184 Computer hardware and software 115 (115) — 431 (225) 206 |
Accounts payable and accrued _2
Accounts payable and accrued liabilities (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Accounts payable and accrued liabilities. | |
Schedule of accounts payable and accrued liabilities | in thousands of dollars February 28, 2021 November 30, 2020 $ $ Trade accounts payable 275 226 Accrued liabilities 166 198 Accrued salaries and vacation 110 464 Accounts payable and accrued liabilities 551 888 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Leases | |
Schedule of right-of-use asset | in thousands of dollars $ ASC transition as at December 1, 2019 681 Amortization (162) Lease accretion 50 Derecognition of Fairbanks warehouse lease (93) Balance as at November 30, 2020 476 Amortization (38) Lease accretion 10 Balance as at February 28, 2021 448 |
Schedule of lease expenses | in thousands of dollars Three months ended Three months ended February 28, 2021 February 29, 2020 $ $ Operating lease costs 38 50 Variable lease costs 35 34 Total lease expense 73 84 |
Schedule of future minimum payments | in thousands of dollars February 28, 2021 Fiscal year $ 2021 151 2022 206 2023 212 2024 126 Total undiscounted lease payments 695 Effect of discounting (155) Present value of lease payments recognized as lease liability 540 |
Share capital (Tables)
Share capital (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Share capital. | |
Schedule of common stock outstanding roll forward | in thousands of dollars, except share amounts Number of shares Ascribed value $ November 30, 2019 140,427,761 177,971 Exercise of options 3,297,588 1,133 Restricted Share Units 412,501 642 November 30, 2020 144,137,850 179,746 Exercise of options 76,635 334 February 28, 2021, issued and outstanding 144,214,485 180,080 |
Schedule of assumptions used in the pricing model | February 28, 2021 Risk-free interest rates 0.31% Exercise price CAD$2.52 Expected life 3 years Expected volatility 64.4% Expected dividends Nil |
Summary of the company's stock option plan | February 28, 2021 Weighted average exercise price Number of options $ Balance – beginning of the period 8,647,500 1.88 Granted 3,374,150 1.98 Exercised (381,373) 1.97 Cancelled (120,000) 2.42 Balance – end of the period 11,520,277 1.90 |
Summary of information about stock options | 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 price options to expiry $ options $ options $0.55 to $1.00 1,705,627 1.34 0.69 1,705,627 0.69 — $1.01 to $1.50 75,000 1.81 1.15 75,000 1.15 — $1.51 to $2.00 4,277,150 4.54 1.95 2,779,483 1.94 1,497,667 $2.01 to $2.50 5,425,000 3.72 2.24 3,618,330 2.28 1,806,670 $2.51 to $3.00 37,500 3.23 2.68 37,500 2.68 — 11,520,277 3.66 1.90 8,215,940 1.82 3,304,337 |
Schedule of restricted share Units and deferred share units plans | Number of DSUs Balance – beginning of the period 1,218,520 Granted 19,992 Balance – end of the period 1,238,512 |
Financial instruments (Tables)
Financial instruments (Tables) | 3 Months Ended |
Feb. 28, 2021 | |
Financial instruments | |
Schedule of contractually obligated cash flow requirements | in thousands of dollars Total < 1 Year 1–2 Years 2–5 Years Thereafter $ $ $ $ $ Accounts payable and accrued liabilities 551 551 — — — Office lease 694 201 421 72 — 1,245 752 421 72 — |
Accounts receivable (Details)
Accounts receivable (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | Nov. 30, 2020 |
Accounts receivable | ||
GST input tax credits | $ 23 | $ 15 |
Ambler Metals LLC | 1 | 114 |
Accounts receivable | $ 24 | $ 129 |
Equity method investment - Narr
Equity method investment - Narrative (Details) - USD ($) | Feb. 11, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | Nov. 30, 2020 |
Schedule of Equity Method Investments [Line Items] | ||||
Comprehensive loss | $ (4,516,000) | $ 171,179,000 | ||
Loss on equity investment in Ambler Metals LLC (note 4(b)) | 1,120,000 | 178,000 | ||
Mineral property expense | 1,545,000 | |||
Service agreement | ||||
Related party transactions - services agreement income | ||||
Amount charged for expenses | $ 22,151 | |||
Ambler Metals LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership | 50.00% | 50.00% | ||
Comprehensive loss | $ 2,200,000 | |||
Fair value ascribed to Ambler Metals LLC interest | $ 176,000,000 | $ 173,145,000 | ||
Loss on equity investment in Ambler Metals LLC (note 4(b)) | 1,120,000 | |||
Related party transactions - services agreement income | ||||
Amount charged for expenses | $ 4,053 | |||
Upper Kobuk Mineral Projects | South32 | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership | 50.00% | |||
Upper Kobuk Mineral Projects | South32 | Ambler Metals LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment contribution | $ 145,000,000 | |||
Arctic Project | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Feasibility costs | $ 700,000 |
Equity method investment - Gain
Equity method investment - Gain on recognition of the UKMP assets upon transfer to the Ambler Metals LLC joint venture (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | Nov. 30, 2020 | Feb. 11, 2020 |
Less: carrying value of contributed /eliminated assets | |||
Property, plant and equipment | $ 189 | ||
Ambler Metals LLC | |||
Table summarizes the gain on recognition of the UKMP assets upon transfer to the Ambler Metals joint venture | |||
Fair value ascribed to Ambler Metals LLC interest | $ 173,145 | $ 176,000 | |
Less: carrying value of contributed /eliminated assets | |||
Mineral properties | (30,631) | ||
Property, plant and equipment | (618) | ||
Elimination of Fairbanks warehouse right of use asset | (93) | ||
Elimination of prepaid State of Alaska mining claim fees | (303) | ||
Add: | |||
Reimbursement of claims staking | 44 | ||
Demobilization costs of drills | 278 | ||
Cancellation of Fairbanks warehouse lease liability | 93 | ||
Fair value of mineral properties purchase option | 31,000 | ||
Gain on derecognition | $ 175,770 |
Equity method investment - Fina
Equity method investment - Financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Feb. 28, 2021 | Feb. 29, 2020 | Nov. 30, 2020 | Feb. 11, 2020 | |
The carrying value of Trilogy's 50% investment in Ambler Metals LLC | ||||
Share of loss on equity investment for the three month period ending February 28, 2021 | $ (1,120) | $ (178) | ||
February 28, 2021, investment in Ambler Metals LLC. | 172,025 | $ 173,145 | ||
Ambler Metals LLC's Balance Sheet and Comprehensive loss | ||||
Total Assets | 182,534 | 185,265 | ||
Amortization | 17 | 42 | ||
General and administrative expense | 401 | 651 | ||
Ambler Metals LLC | ||||
The carrying value of Trilogy's 50% investment in Ambler Metals LLC | ||||
November 30, 2020, investment in Ambler Metals LLC. | 173,145 | $ 176,000 | ||
Share of loss on equity investment for the three month period ending February 28, 2021 | (1,120) | |||
February 28, 2021, investment in Ambler Metals LLC. | 172,025 | $ 176,000 | ||
Ambler Metals LLC's Balance Sheet and Comprehensive loss | ||||
Current assets: Cash, deposits and prepaid expenses | 79,576 | 82,226 | ||
Non - current assets: Property, equipment and mineral properties | 32,038 | 31,287 | ||
Loan receivable from South32 | 58,747 | 58,478 | ||
Current liabilities: Accounts payable and accrued liabilities | (1,310) | (1,445) | ||
Non - current liabilities: Lease obligation | (795) | (51) | ||
Total Assets | 168,256 | $ 170,495 | ||
Amortization | 16 | 12 | ||
Mineral properties expense | 1,400 | 167 | ||
General and administrative expense | 1,095 | 219 | ||
Interest income | 272 | 43 | ||
Comprehensive loss | $ (2,239) | $ (355) |
Fixed assets (Details)
Fixed assets (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | Nov. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Cost | $ 431 | $ 431 |
Accumulated amortization | (242) | (225) |
Assets derecognized note 4(a) | 189 | |
Net | 189 | 206 |
Furniture and equipment | British Columbia, Canada | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 63 | 63 |
Accumulated amortization | (45) | (41) |
Assets derecognized note 4(a) | 18 | |
Net | 22 | |
Leasehold improvements | British Columbia, Canada | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 253 | 253 |
Accumulated amortization | (82) | (69) |
Assets derecognized note 4(a) | 171 | |
Net | 184 | |
Computer hardware and software | British Columbia, Canada | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 115 | 115 |
Accumulated amortization | $ (115) | $ (115) |
Accounts payable and accrued _3
Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | Nov. 30, 2020 |
Accounts payable and accrued liabilities. | ||
Trade accounts payable | $ 275 | $ 226 |
Accrued liabilities | 166 | 198 |
Accrued salaries and vacation | 110 | 464 |
Accounts payable and accrued liabilities | $ 551 | $ 888 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Feb. 28, 2021 | Nov. 30, 2020 | Nov. 30, 2019 | |
Leases | |||
Right-of-use asset | $ 448,000 | $ 476,000 | $ 681,000 |
Weighted-average remaining lease term | 3 years 3 months 18 days | ||
Weighted-average discount rate | 8.00% | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 48,830 | ||
Derecognition of right of use asset | $ 93,000 |
Leases - Right of use asset (De
Leases - Right of use asset (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Feb. 28, 2021 | Nov. 30, 2020 | |
Leases | ||
Balance, beginning | $ 476 | $ 681 |
Amortization | (38) | (162) |
Lease accretion | 10 | 50 |
Derecognition of Fairbanks warehouse lease | (93) | |
Balance, ending | $ 448 | $ 476 |
Leases - Lease liabilities (Det
Leases - Lease liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | $ 38 | $ 50 |
Variable lease costs | 35 | 34 |
Total lease expense | $ 73 | $ 84 |
Office Space | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, Operating Lease, Existence of Option to Extend [true false] | false |
Leases - Future minimum payment
Leases - Future minimum payments (Details) $ in Thousands | Feb. 28, 2021USD ($) |
Future minimum payments | |
2021 | $ 151 |
2022 | 206 |
2023 | 212 |
2024 | 126 |
Total undiscounted lease payments | 695 |
Effect of discounting | (155) |
Present value of lease payments recognized as lease liability | $ 540 |
Share capital - Narrative (Deta
Share capital - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||||
Feb. 28, 2021USD ($)$ / sharesshares | Feb. 28, 2021USD ($)$ / shares$ / sharesshares | Feb. 29, 2020USD ($)$ / sharesshares | Feb. 29, 2020USD ($)$ / shares | Nov. 30, 2020shares | Nov. 30, 2019shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares, conversion | shares | 1 | |||||
Stock-based compensation | $ | $ (2,148) | $ (1,196) | ||||
Non-vested stock options outstanding | shares | 11,520,277 | 11,520,277 | ||||
Weighted average exercise price options outstanding | $ / shares | $ 1.90 | $ 1.90 | ||||
Aggregate intrinsic value, vested options | $ | $ 3,300 | $ 3,300 | 5,900 | $ 5,900 | ||
Aggregate intrinsic value, options exercised | $ | $ 170 | 40 | ||||
Share capital | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock committed for issuance | shares | 144,214,485 | 144,214,485 | 144,137,850 | 140,427,761 | ||
Nonvested Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Non-vested stock options outstanding | shares | 3,374,150 | 3,374,150 | ||||
Weighted average exercise price options outstanding | $ / shares | $ 2.07 | $ 2.07 | ||||
Stock option expense not yet recognized | $ | $ 1,630 | $ 1,630 | ||||
Period for recognition of stock compensation expense | 2 years | |||||
NovaGold DSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted units | shares | 19,992 | |||||
Stock Compensation Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | $ | $ 40 | $ 40 | ||||
Employees, Consultants And Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted, expiration period | 5 years | |||||
Stock options granted | shares | 3,374,150 | 2,050,000 | ||||
Vesting period | 2 years | |||||
Weighted-average exercise price | $ / shares | $ 2.52 | $ 3.02 | ||||
Stock options granted, weighted average fair value | $ / shares | $ 0.84 | $ 0.99 | ||||
Directors Employees And Services Providers | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation | $ | $ 2,100 | $ 1,160 |
Share capital - Common shares i
Share capital - Common shares issued and outstanding (Details) - Share capital - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Feb. 28, 2021 | Nov. 30, 2020 | |
Beginning balance, Number of shares | 144,137,850 | 140,427,761 |
Beginning balance, Ascribed value | $ 179,746 | $ 177,971 |
Exercise of options, Number of shares | 76,635 | 3,297,588 |
Exercise of options, Ascribed value | $ 334 | $ 1,133 |
Restricted share units, Number of shares | 412,501 | |
Restricted share units, Ascribed value | $ 642 | |
Ending balance, Number of shares | 144,214,485 | 144,137,850 |
Ending balance, Ascribed value | $ 180,080 | $ 179,746 |
Share capital - Assumptions use
Share capital - Assumptions used in the pricing model (Details) | 3 Months Ended |
Feb. 28, 2021$ / shares | |
Share capital. | |
Risk-free interest rates | 0.31% |
Exercise price | $ 2.52 |
Expected life | 3 years |
Expected volatility | 64.40% |
Expected dividends |
Share capital - Stock options p
Share capital - Stock options plans and changes (Details) | 3 Months Ended |
Feb. 28, 2021$ / sharesshares | |
Balance - end of year, number of options | shares | 11,520,277 |
Balance - end of year, weighted average exercise price | $ / shares | $ 1.90 |
Stock option | |
Balance - beginning of the year, number of options | shares | 8,647,500 |
Balance - beginning of the year, weighted average exercise price | $ / shares | $ 1.88 |
Number of options, Granted | shares | 3,374,150 |
Weighted average exercise price, Granted | $ / shares | $ 1.98 |
Number of options, Exercised | shares | (381,373) |
Weighted average exercise price, Exercised | $ / shares | $ 1.97 |
Number of options, Cancelled | shares | (120,000) |
Weighted average exercise price, Cancelled | $ / shares | $ 2.42 |
Balance - end of year, number of options | shares | 11,520,277 |
Balance - end of year, weighted average exercise price | $ / shares | $ 1.90 |
Share capital - Stock options o
Share capital - Stock options outstanding (Details) | 3 Months Ended |
Feb. 28, 2021$ / sharesshares | |
Number of outstanding options | shares | 11,520,277 |
Weighted average years to expiry | 3 years 7 months 28 days |
Weighted average exercise price options outstanding | $ 1.90 |
Number of exercisable options | shares | 8,215,940 |
Weighted average exercise price exercisable | $ 1.82 |
Number of unvested options | shares | 3,304,337 |
Range 1 | |
Exercise price lower range limit | $ 0.55 |
Exercise price upper range limit | $ 1 |
Number of outstanding options | shares | 1,705,627 |
Weighted average years to expiry | 1 year 4 months 2 days |
Weighted average exercise price options outstanding | $ 0.69 |
Number of exercisable options | shares | 1,705,627 |
Weighted average exercise price exercisable | $ 0.69 |
Number of unvested options | shares | 0 |
Range 2 | |
Exercise price lower range limit | $ 1.01 |
Exercise price upper range limit | $ 1.50 |
Number of outstanding options | shares | 75,000 |
Weighted average years to expiry | 1 year 9 months 21 days |
Weighted average exercise price options outstanding | $ 1.15 |
Number of exercisable options | shares | 75,000 |
Weighted average exercise price exercisable | $ 1.15 |
Number of unvested options | shares | 0 |
Range 3 | |
Exercise price lower range limit | $ 1.51 |
Exercise price upper range limit | $ 2 |
Number of outstanding options | shares | 4,277,150 |
Weighted average years to expiry | 4 years 6 months 14 days |
Weighted average exercise price options outstanding | $ 1.95 |
Number of exercisable options | shares | 2,779,483 |
Weighted average exercise price exercisable | $ 1.94 |
Number of unvested options | shares | 1,497,667 |
Range 4 | |
Exercise price lower range limit | $ 2.01 |
Exercise price upper range limit | $ 2.50 |
Number of outstanding options | shares | 5,425,000 |
Weighted average years to expiry | 3 years 8 months 19 days |
Weighted average exercise price options outstanding | $ 2.24 |
Number of exercisable options | shares | 3,618,330 |
Weighted average exercise price exercisable | $ 2.28 |
Number of unvested options | shares | 1,806,670 |
Range 5 | |
Exercise price lower range limit | $ 2.51 |
Exercise price upper range limit | $ 3 |
Number of outstanding options | shares | 37,500 |
Weighted average years to expiry | 3 years 2 months 23 days |
Weighted average exercise price options outstanding | $ 2.68 |
Number of exercisable options | shares | 37,500 |
Weighted average exercise price exercisable | $ 2.68 |
Number of unvested options | shares | 0 |
Share capital - Stock units pla
Share capital - Stock units plans and changes (Details) | 3 Months Ended |
Feb. 28, 2021shares | |
Number of RSU's | |
Balance - end of year | 0 |
NovaGold DSUs | |
Balance - beginning of the period | 1,218,520 |
Granted | 19,992 |
Balance - end of period | 1,238,512 |
Financial instruments - Narrati
Financial instruments - Narrative (Details) | 3 Months Ended | ||
Feb. 28, 2021USD ($) | Feb. 28, 2021CAD ($) | Nov. 30, 2020USD ($) | |
Accounts receivable | $ 24,000 | $ 129,000 | |
Change in interest rate | 1.00% | 1.00% | |
Currency risk | |||
Cash | $ 78,000 | ||
Accounts receivable | 29,000 | ||
Accounts payable | $ 413,000 | ||
Change in foreign exchange rate | 10.00% | 10.00% | |
Foreign exchange (gain) loss | $ 24,000 |
Financial instruments - Contrac
Financial instruments - Contractually obligated cash flow requirements (Details) $ in Thousands | Feb. 28, 2021USD ($) |
Total | $ 1,245 |
Within 1 Year | 752 |
1 - 2 Years | 421 |
2 - 5 Years | 72 |
Thereafter | 0 |
Accounts payable and accrued liabilities | |
Total | 551 |
Within 1 Year | 551 |
1 - 2 Years | 0 |
2 - 5 Years | 0 |
Thereafter | 0 |
Office lease | |
Total | 694 |
Within 1 Year | 201 |
1 - 2 Years | 421 |
2 - 5 Years | 72 |
Thereafter | $ 0 |