Trilogy Metals Inc.

Previous wording

This Management’s Discussion and Analysis (“MD&A”) contains “forward-looking information” and “forward-looking statements” within the meaning of 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. These forward-looking statements may include statements regarding the Company’s (as defined below) work programs and budgets; the aggregate value of common shares that may be issued pursuant to the Nov ATM Program and the anticipated use of net proceeds; perceived merit of properties; exploration results and budgets; the Company and Ambler Metals’ funding requirements; 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 regarding Ambler Metals’ plans and expectations relating to its Upper Kobuk Mineral Projects (the “UKMP”, as defined below); sufficiency of the Ambler Metals’ cash to fund the UKMP; the anticipated timing of permitting at the UKMP; the anticipated benefits of recent management appointments; market prices for precious and base metals; statements regarding the Ambler Access Project (also known as the Ambler Mining District Industrial Access Project, “AMDIAP”); 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.

Current wording

This Management’s Discussion and Analysis (“MD&A”) contains “forward-looking information” and “forward-looking statements” within the meaning of 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. These forward-looking statements may include statements regarding the Company’s (as defined below) work programs and budgets; the aggregate value of common shares that may be issued pursuant to the Company’s at-the-market equity program (the “Nov ATM Program”) and the anticipated use of net proceeds; perceived merit of properties; exploration results and budgets; the Company and Ambler Metals’ funding requirements; 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 regarding Ambler Metals’ plans and expectations relating to its Upper Kobuk Mineral Projects (the “UKMP”, as defined below); sufficiency of the Ambler Metals’ cash to fund the UKMP; statements regarding timing and planned undertakings of the 2026 field program; the anticipated timing of permitting at the UKMP, including predicted outcomes and benefits of the FAST-41 program; timing of the transaction with the U.S. Department of War; market prices for precious and base metals; statements regarding the Ambler Access Project (also known as the Ambler Mining District Industrial Access Project, “AMDIAP”); 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.

Previous wording

We are a base metals exploration company focused on the exploration and development of mineral properties, through our equity investee, in the Ambler mining district located in Alaska, U.S.A. We conduct our operations through a wholly owned subsidiary, NovaCopper US Inc., which is doing business as Trilogy Metals US (“Trilogy Metals US”). The UKMP were contributed into a 50/50 joint venture named Ambler Metals LLC (“Ambler Metals”) between Trilogy and South32 Limited (“South32”) on February 11, 2020 (see below). The projects contributed to Ambler Metals consist of: i) the Ambler lands which host the Arctic copper-zinc-lead-gold-silver project (the “Arctic Project”); and ii) the Bornite lands being explored under a collaborative long-term agreement with NANA Regional Corporation, Inc., a regional Alaska Native Corporation, which hosts the Bornite carbonate-hosted copper project (the “Bornite Project”) and related assets. The Company may also conduct early-stage exploration through a wholly owned subsidiary, 995 Exploration Inc.

Current wording

We are a base metals exploration company focused on the exploration and development of mineral properties, through our equity investee, in the Ambler mining district located in Alaska, U.S.A. We conduct our operations through a wholly owned subsidiary, NovaCopper US Inc., which is doing business as Trilogy Metals US (“Trilogy Metals US”). The UKMP were contributed into a 50/50 joint venture named Ambler Metals LLC (“Ambler Metals”) between Trilogy and South32 Limited (“South32”) on February 11, 2020. The projects contributed to Ambler Metals consist of: i) the Ambler lands which host the Arctic copper-zinc-lead-gold-silver project (the “Arctic Project”); and ii) the Bornite lands being explored under a collaborative long-term agreement with NANA Regional Corporation, Inc., a regional Alaska Native Corporation, which hosts the Bornite carbonate-hosted copper project (the “Bornite Project”) and related assets. The Company may also conduct early-stage exploration through a wholly owned subsidiary, 995 Exploration Inc.

Previous wording

Trilogy – Operating Results Compared to Budget

Current wording

Trilogy Financial Results Compared to Budget

Previous wording

The Company has a 2026 fiscal year budget totaling $22.5 million, which is comprised of $5.0 million for corporate activities and $17.5 million for funding project activities at Ambler Metals. For the three-month period ended February 28, 2026, the Company recorded a net loss of $7.1 million, compared with a budgeted loss of $4.8 million. The variance was primarily driven by non-cash expenses that were not included in the budget, partially offset by lower than planned expenditures from Ambler Metals. During the quarter, the Company recorded a $1.5 million non-cash mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to a U.S. government department. The Company also recognized $3.1 million of stock-based compensation expense associated with the current fiscal year’s annual equity grant. These two non-cash expenses were not included in the budget and

Current wording

The Company has a 2026 fiscal budget of $5.0 million. For the three-month period ended May 31, 2026, the Company recorded a net loss of $6.3 million, compared with a budgeted loss of $3.5 million. The $2.8 million variance was primarily driven by a $2.3 million mark-to-market adjustment related to the derivative liability associated with our obligation to issue shares and warrants to the United States Department of War and the remainder due to stock-based compensation expense associated with the current fiscal year’s annual equity grant. These two non-cash expenses were not included in the budget.

Previous wording

On March 30, 2026, the Company, South32, Ambler Metals and the United States Department of War agreed to enter into an amendment to the previously disclosed binding letter of intent (“LOI”) dated October 6, 2025. The amendment extends the deadline for the completion of the transaction from March 31, 2026 to May 31, 2026, to accommodate the completion of remaining procedural steps under the LOI. All other terms and conditions of the original LOI remain unchanged.

Current wording

On May 30, 2026, the Company, South32, Ambler Metals and the United States Department of War agreed to a second amendment to the binding letter of intent (“LOI”) dated October 6, 2025. The second amendment extends the deadline for the completion of the transaction from May 31, 2026 to July 31, 2026.

Previous wording

For the three-month period ended February 28, 2026, we reported a net loss of $7.1 million compared to a net loss of $3.6 million for the three-month period ended February 28, 2025. The increase in net loss is primarily driven by two non-cash items: i) the mark-to-market fair value adjustment of $1.5 million for the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War; and ii) stock-based compensation charges as a result of our annual grant with higher Black-Scholes values in the current year compared with the prior year. The loss is also impacted by an increase in activity at Ambler Metals which resulted in a larger amount for our share of loss on the equity investment and an increase in personnel costs due to the addition of senior staff.

Current wording

For the six-month period ended May 31, 2026, we reported a net loss of $13.4 million, compared to a net loss of $5.8 million for the same period in 2025. The increase in net loss was primarily driven by two non-cash items: i) the mark-to-market fair value adjustment for the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War; and ii) stock-based compensation expense related to our annual grant with higher Black-Scholes values in the current year compared to the prior year. The net loss was also impacted by an increase in activity at Ambler Metals which resulted in a larger amount for our share of loss on equity investment and an increase in personnel costs due to the addition of senior staff.

Previous wording

During the three-month period ended February 28, 2026, we used $2.7 million in operating activities, used $2.5 million in investing activities, and raised $1.3 million in financing activities. Operating expenditures were driven primarily by corporate salaries, professional fees and annual regulatory filing fees with the U.S. and Canadian securities commissions. In addition, the Company contributed $2.5 million for our share of funding to Ambler Metals. These cash outflows were offset by $1.3 million in proceeds from financing activities, primarily from the Company’s at-the-market equity program through which the Company may offer and issue up to $200 million of common shares of the Company from time to time pursuant to an equity distribution agreement dated November 7, 2025, and from the exercise of stock options.

Current wording

During the six-month period ended May 31, 2026, we used $3.8 million in operating activities, used $10.5 million in investing activities, and raised $1.4 million in financing activities. Operating expenditures were driven primarily by corporate salaries, professional fees and annual regulatory filing fees with the U.S. and Canadian securities commissions. In addition, the Company contributed $10.5 million for our share of funding to Ambler Metals. These cash outflows were offset by $1.4 million in proceeds from financing activities, primarily from the Company’s at-the-market equity program through which the Company may offer and issue up to $200 million of common shares of the Company from time to time pursuant to an equity distribution agreement dated November 7, 2025, and from the exercise of stock options.

Previous wording

As at February 28, 2026, we had cash and cash equivalents of $47.8 million and adjusted working capital of $47.3 million, which are current assets less current liabilities excluding the derivative liability which will be settled by way of the issuance of shares and warrants. There is sufficient cash on hand to fund the Company’s fiscal 2026 budget of $5.0 million and our share of Ambler Metals’ fiscal budget of $17.5 million.

Current wording

As at May 31, 2026, we had cash and cash equivalents of $38.8 million and adjusted working capital of $38.3 million, which are current assets less current liabilities excluding the derivative liability which will be settled by way of the issuance of shares and warrants. There is sufficient cash on hand for the next twelve months from the end of our most recent fiscal quarter, including funding the Company’s remaining fiscal 2026 corporate budget of $5.0 million. Our share of Ambler Metals’ fiscal 2026 budget is $17.5 million, of which $10.5 million had been funded as at May 31, 2026. Subsequent to May 31, 2026, the Company funded an additional $6.5 million to Ambler Metals, bringing total funding to $17.0 million as of the date of this MD&A.

Previous wording

As at April 2, 2026, we had 172,545,639 common shares issued and outstanding. As April 2, 2026, we had 9,935,250 stock options outstanding with a weighted-average exercise price of CDN$2.01, 3,580,862 deferred share units and 951,670 restricted share units outstanding. Upon the exercise of all convertible securities, the Company would be required to issue an aggregate of 14,467,782 common shares.

Current wording

As at July 7, 2026, we had 172,745,639 common shares issued and outstanding. As at July 7, 2026, we had 9,835,250 stock options outstanding with a weighted-average exercise price of CDN$2.01, 3,581,653 deferred share units and 851,670 restricted share units outstanding. Upon the exercise of all convertible securities, the Company would be required to issue an aggregate of 14,268,573 common shares.

Previous wording

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. The standard is effective beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2026, and subsequent interim periods, with early adoption permitted. The Company is evaluating the impact of ASU 2023-09 on its disclosure in the annual consolidated financial statements.

Current wording

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. The standard is effective beginning with the Company’s Annual Report on Form 10-K for the fiscal year ended November 30,

Previous wording

The most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our equity method investment in Ambler Metals LLC, fair value measurement of derivative liability and valuation of stock‐based compensation.

Current wording

The most critical accounting estimates upon which our financial status depends are those requiring estimates of the recoverability of our equity method investment in Ambler Metals LLC, fair value measurement of the derivative liability related to our obligation to issue shares and warrants to the U.S. Department of War and valuation of stock‐based compensation.