Mr. Tony Giardini reports

TRILOGY METALS REPORTS THIRD QUARTER FISCAL 2026 FINANCIAL RESULTS

Trilogy Metals Inc. has released its financial results for the third quarter ended Aug. 31, 2026. Details of the company's financial results are contained in the interim unaudited consolidated financial statements and management discussion and analysis, which will be available on the company's website, on SEDAR+ and on EDGAR. All amounts are in U.S. dollars unless otherwise stated.

Financial and operational highlights:

• Cash balance of $31.2-million as at Aug. 31, 2026, with adjusted working capital of $30.3-million, providing financial flexibility to finance the company's share of Upper Kobuk mineral projects (UKMP) initiatives, with the company's share of Ambler Metals LLC's fiscal 2026 budget substantially financed;
• Publication of a co-ordinated federal and state permitting schedule for the Arctic project on the federal permitting dashboard on July 13, 2026; the schedule sets an estimated 29-month integrated review timetable targeting a record of decision in September, 2028; confirms the U.S. Army Corps of Engineers (USACE) as lead federal agency; and integrates State of Alaska permitting under the first statewide FAST-41 memorandum of understanding in the nation;
• Closing of the Department of War (DOW) $35.6-million strategic equity investment subsequent to quarter-end on Sept. 11, 2026; the full proceeds received by Trilogy Metals and South32 Ltd. are committed to Ambler Metals to advance exploration and development of the UKMP in northwestern Alaska, and the DOW has committed to work in good faith to help facilitate financing required for construction of the proposed 211-mile, industrial-use-only Ambler road (or the Ambler access project) in co-ordination with the State of Alaska and the Alaska Industrial Development and Export Authority;
• Publication of the notice of intent to prepare an environmental impact statement by the USACE subsequent to quarter-end in September, 2026, formally commencing the National Environmental Policy Act (NEPA) review and public scoping phase for the Arctic project on schedule.

Tony Giardini, president and chief executive officer of Trilogy Metals, commented: "The third quarter and the weeks that followed have been transformational for Trilogy Metals. The Department of War's investment in Trilogy was successfully closed. On the permitting front, the Arctic project now has a transparent, co-ordinated federal and state schedule, and the notice of intent, published on schedule, has formally launched the NEPA review on a path to a record of decision in September, 2028. With a defined permitting timeline, the investment by the U.S. government and a clear line of sight to a record of decision, Arctic is well positioned to become a cornerstone of a secure, domestic copper supply chain."

Selected results

The following selected financial information is prepared in accordance with U.S. GAAP (generally accepted accounting principles).

For the three-month period ended Aug. 31, 2026, the company reported a net income of $200,000, compared with a net loss of $1.7-million for the three-month period ended Aug. 31, 2025. The net income was primarily driven by a mark-to-market gain arising from the change in fair value of the derivative liability related to the company's obligation to issue common shares and warrants to purchase common shares to the DOW and was offset by an increase in the company's 50-per-cent share of loss from its investment in Ambler Metals. The increase in the company's share of loss from Ambler Metals was primarily driven by budgeted exploration activities undertaken during the period.

For the nine-month period ended Aug. 31, 2026, the company reported a net loss of $13.2-million, compared with a net loss of $7.5-million for the same period in 2025. The increase in net loss was primarily driven by two non-cash items: (i) stock-based compensation expense related to the company's annual grant with higher Black-Scholes values in the current year compared with the prior year; and (ii) increased activity related to budgeted exploration activities at Ambler Metals, which resulted in a larger amount for the company's share of loss on equity investment and an increase in personnel costs due to the addition of senior staff. This was offset by a mark-to-market gain arising from the change in fair value of the derivative liability related to the company's obligation to issue the common shares and warrants to the DOW.

Closing of strategic equity investment from the U.S. Department of War

On Aug. 28, 2026, the company entered into an investment agreement with the DOW, relating to the DOW's strategic investment in the company. On Sept. 11, 2026, the company completed the strategic investment by the DOW. At closing, the company issued 8,215,570 units to the DOW at a price of $2.17 per unit for gross proceeds of approximately $17.8-million. Each unit consisted of one common share and three-quarters of one warrant, resulting in the issuance of warrants to acquire up to 6,161,678 additional common shares at an exercise price of one cent per common share. The warrants have a 10-year term and become exercisable upon the earlier of the completion of phase 1 of the Ambler access project and the achievement of certain specified usage milestones for the Ambler access project or a change of control of the company.

The company received gross proceeds of approximately $17.8-million upon closing of the strategic investment. The proceeds are specifically designated to finance an additional cash capital contribution to Ambler Metals and therefore do not represent additional liquidity available to finance the company's general corporate activities. South32 will make a corresponding contribution on a pro rata basis such that the company's 50-per-cent ownership interest in Ambler Metals will remain unchanged.

Following the issuance of the common shares to the DOW and the DOW's separate acquisition of common shares from South32, the DOW holds approximately 9.1 per cent of the company's outstanding common shares. In connection with closing, the company, through its wholly owned subsidiary, Trilogy Metals U.S., and the DOW, among other parties, also entered into a co-operation agreement (together with the investment agreement and other ancillary agreements, the DOW transaction documents). Pursuant to the DOW transaction documents, the DOW is entitled to: (i) designate one independent third party nominee for appointment to the company's board of directors; and (ii) appoint a representative to attend meetings of the company's board of directors in an observer capacity.

The closing also resulted in the settlement of the derivative liability previously recognized in connection with the company's obligation to issue common shares and warrants to the DOW. Upon settlement, the company recognized a gain of approximately $3.9-million, representing the change in the derivative liability through the closing date. The derivative liability was extinguished upon issuance of the underlying securities, and the applicable amounts were reclassified to share capital and contributed surplus. As a result, subsequent changes in the value of the common shares will no longer result in fair-value adjustments associated with this derivative liability. The gain recognized on settlement is non-cash in nature and therefore does not affect the company's cash flows.

The strategic investment represents a source of financing for the company's investment in Ambler Metals while maintaining the company's 50-per-cent ownership interest in the joint venture. Future exercise of the warrants could result in future dilution of share capital, although such exercise is subject to the specified conditions described above.

Liquidity and capital resources

During the nine-month period ended Aug. 31, 2026, the company used $4.9-million in operating activities and $17-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 $17-million for its share of financing 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 from time to time pursuant to an equity distribution agreement dated Nov. 7, 2025, and from the exercise of stock options.

As at Aug. 31, 2026, the company had cash and cash equivalents of $31.2-million and adjusted working capital of $30.3-million, which are current assets less current liabilities excluding the derivative liability, which will be settled by way of the issuance of the common shares and warrants. There is sufficient cash on hand for the next 12 months from the end of the company's most recent fiscal quarter, including financing its remaining fiscal 2026 corporate budget of $1.1-million. The company's share of Ambler Metals' fiscal 2026 budget is $17.5-million, of which $17-million had been financed as at Aug. 31, 2026.

Future cash requirements may vary materially from current expectations. Beyond the next 12 months, the company may need to raise additional funds in the future to support its operations and administration expenses. Future sources of liquidity are likely in the form of an equity financing but may include debt financing, convertible debt, exercise of options, or other means, including, but not limited to, utilizing the company's ATM (at-the-market) program.

Qualified person

Richard Gosse, PGeo, vice-president, exploration, for Trilogy Metals, is a qualified person as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects. Mr. Gosse has reviewed the scientific and technical information in this news release and approves the disclosure contained herein.

About Trilogy Metals Inc.

Trilogy Metals is a metals exploration and development company that holds a 50-per-cent interest in Ambler Metals, which owns 100 per cent of the Upper Kobuk mineral projects in northwestern Alaska. The UKMP is located within the Ambler mining district, one of the richest and most prospective known copper-dominant districts in the world. It hosts world-class polymetallic VMS (volcanogenic massive sulphide) deposits that contain copper, zinc, lead, gold and silver and carbonate replacement deposits that have been found to host high-grade copper and cobalt mineralization. Exploration has focused on two deposits in the district -- the high-grade Arctic VMS deposit and the Bornite copper-cobalt deposit -- which are located within a land package that spans approximately 190,929 hectares.

Ambler Metals operates under an agreement with Nana Regional Corp. Inc., supporting responsible exploration and development in co-operation with local communities. Trilogy's vision is to develop the Ambler mining district into a premier North American copper producer while respecting subsistence livelihoods.

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