Trilogy Metals enters LOI for Upper Kobuk exploration

Executive Summary

• The U.S. Department of War (DOW) will invest approximately $35.6 million in Trilogy Metals and its joint‑venture partner South32 to advance the Upper Kobuk mineral projects (UKMP) in Alaska.
• DOW will acquire ~10 % ownership of Trilogy Metals through two parallel transactions: $17.8 M for 8,215,570 units at $2.17 per unit (each unit = one common share + three‑quarters of a 10‑year warrant) and $17.8 M for 8,215,570 South32‑held shares plus a call option on an additional 6,161,678 shares.
• The funds are earmarked for exploration, development, and construction of the Ambler Access (Ambler Road) project; DOW will also obtain the right to appoint one independent director to Trilogy’s board.

Key Details

• Investment Amount: Approx. $35.6 million total.
• Equity Stake: DOW to hold ~10 % of Trilogy Metals post‑transaction.
• Unit Purchase (Trilogy): 8,215,570 units @ $2.17 per unit = $17.8 M; each unit = 1 common share + 0.75 of a 10‑year warrant (exercisable at $0.01 after Ambler Access completion).
• South32 Share Purchase: DOW to pay $17.8 M for South32’s 8,215,570 Trilogy shares and receive a 10‑year call option for an additional 6,161,678 shares at $0.01 per share (exercisable after Ambler Access completion).
• Use of Proceeds: Advance exploration & development of UKMP; assist financing and construction of the 211‑mile Ambler Road to connect the district to the Dalton Highway.
• Governance Rights: DOW may appoint one independent third‑party director to Trilogy’s board for three years.
• Debt Covenant: Trilogy cannot incur indebtedness > $1 billion aggregate without DOW’s written consent until Jan 1 2029.
• Regulatory Conditions: Transaction subject to regulatory and stock‑exchange approvals, U.S. foreign ownership review, and re‑authorization of the Defence Production Act; LOI terminates if conditions not met by Mar 31 2026.
• Strategic Context: The partnership is positioned as a milestone for domestic critical‑mineral supply, supporting U.S. energy, technology, and national security priorities.

Notable Quotes

“This proposed partnership with the U.S. government represents a significant milestone for Trilogy Metals and for the development of a secure, domestic supply of critical minerals for America in Alaska.” – Tony Giardini, President & CEO, Trilogy Metals.