Stonegate Capital Partners Initiates Coverage on Trilogy Metals Inc. (NYSE: TMQ)

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DALLAS, TX / ACCESSWIRE / April 15, 2020 / Trilogy Metals Inc. (TMQ): The full report can be accessed by clicking on the following link: http://www.stonegateinc.com/reports/TMQ%20Initiation.pdf

COMPANY DESCRIPTION

Trilogy Metals (TMQ) is a base metals company that is committed to the exploration and development of the Upper Kobuk Mineral Projects located in the Ambler Mining District of Alaska. Trilogy's major projects are the Arctic copper-zinc-lead-gold silver project and the Bornite copper project. The Company and South32 Ltd. (ASX:S32) recently entered into a 50/50 joint venture called Ambler Metals LLC ("Ambler Metals"), which holds these assets. The Company was spun out of its parent company, NOVAGOLD LLC (NYSE:NG), in 2012 under the name NovaCopper and eventually changed the name to Trilogy Metals in 2016. Based out of Vancouver, Canada, the Company is currently working on expanding their mineral Resources and advancing their projects in Alaska.

SUMMARY

  • Trilogy's Arctic copper-zinc-lead-gold-silver project has been surveyed and explored since 1967 and as of February 2018, Trilogy has announced positive pre-feasibility study results where a 10,000 tonnes per day (tpd) mine could have a mine life of 12 years and produce 159M lbs of copper, 199M lbs of zinc, 33M lbs of lead, 3.3M oz of silver and 30,600 oz of gold annually.

  • The Company also owns 50% of the JV, Ambler Metals LLC, which owns 100% of the Bornite project and has returned impressive grades of copper and cobalt, which provides additional upside for resource growth. To this point, Trilogy has had to place limited resources into the Bornite project as an option agreement with South32 has provided most of the finances for the project.

  • Both of Trilogy's projects are located in the Ambler Mining District of Alaska, which is a lower risk mining jurisdiction with support from the local government and NANA, a regional native corporation, as well as Alaska Industrial Development Corporation & Export Authority, a state owned infrastructure bank, to help construct a road from current infrastructure to Trilogy's assets.

  • In April 2017, TMQ entered into an agreement with Australia's South32 which granted South 32 the option to purchase 50% of Trilogy's Alaskan assets in exchange for $145M. South32 continued to keep this agreement in good standing by funding up to $10M per year for up to a 3 year period. In December 2019, South32 exercised its option, which will decrease the capital needs of Trilogy going forward.

  • The Company's Arctic project currently does not have road access, which is necessary to transport critical equipment to the site and haul out concentrates (copper, zinc and lead). In Q1 2020 the final EIS for the Ambler Mining District Industrial Access Project was completed and a record of decision is expected in Q2 2020, both important catalysts for the Company.

  • Trilogy should continue to benefit from its copper rich assets as the demand for copper is expected to outpace supply over the long term.

  • Trilogy has the support of a key Alaska native corporation, NANA, which greatly increases their chances of receiving all the necessary permits and permissions for building their operations.

  • The Company has strong ownership from key shareholders and insiders. The top 4 shareholders consisting of Electrum Group (20.9%), Paulson & Co. (10.2%), Neuberger Berman (9.3%), and Baupost Group (8.66%) own approximately 49.9% of the shares outstanding.

  • Based on our DCF and Comparable Companies analysis of TMQ, we arrive at a valuation range of $2.01 to $3.94, with a midpoint of ~$2.90; see page 7 for further details.

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.

CONTACT:

Stonegate Capital Partners
Shane Martin, CFA
(214) 987-4121
shane@stonegateinc.com

SOURCE: Stonegate Capital Partners



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