Trilogy Metals (TMQ) Study result summary

Project Overview and Rationale

• The Bornite Preliminary Economic Assessment (PEA) demonstrates potential for a 30-year combined mine life in the Ambler Mining District by leveraging synergies with the Arctic project and existing infrastructure, with Bornite contributing 17 years after Arctic's 13 years.

• The PEA is based on mining 2.6 billion pounds of copper from high-grade South Reef, with a total inferred resource of 6,527 million pounds at 1.42% copper, and a resource grade of 2.79% copper in South Reef.

• The study assumes repurposing Arctic infrastructure after depletion, with total capital estimated at $866.9 million ($948 million including closure and reclamation).

• The PEA was prepared on a 100% ownership basis, with Trilogy's share at 50%; South32 has not reviewed the study.

• The project is positioned to supply critical minerals, including copper and cobalt, on the U.S. Critical Minerals List, supporting long-term regional development.

Engineering and Operational Highlights

• Bornite will be an underground, sublevel long-hole mining operation with a 17-year mine life, processing 6,000 tons per day, with potential to increase to 10,000 tpd.

• Ore and waste will be trucked to the Arctic site, utilizing existing facilities for milling, tailings, and camp, minimizing surface disturbance and closure costs.

• Total mined ore is 36.9 million tons at 2.61% copper, with a recovery rate of 90.9% and concentrate grade of 29.5%.

• Initial capital is $503.8 million, sustaining capital $363.1 million, and closure costs $81.2 million, with most costs tied to underground development.

• Operating costs total $3.65 billion, or $98.91 per ton milled, reflecting higher costs due to underground mining and duplicated surface facilities.

Financial Results and Sensitivities

• Base case uses a long-term copper price of $4.20/lb, resulting in pre-tax NPV (8%) of $552 million, IRR of 23.6%, and after-tax NPV (8%) of $394 million, IRR of 20%.

• Pre-tax cashflow is $1.58 billion and post-tax cashflow is $1.22 billion; payback period is 4.0 years pre-tax and 4.4 years post-tax.

• Sensitivity analysis shows post-tax NPV (8%) ranges from $259 million at $4.00/lb to $912 million at $5.00/lb copper.

• Project is highly leveraged to copper price: a 10% increase in copper price boosts NPV by 65%; a 10% decrease in operating costs increases NPV by 30%.

• Effective tax rate is about 35%, with total LOM taxes of $363.3 million and taxes as a percentage of total cash flows at 23%.