Trilogy Metals Secures $35.6M U.S. Government Investment

By Philip Seaworth • Monday, August 31 10:48 • Permanent Link

Trilogy Metals said it has signed definitive agreements with the U.S. Department of War for a strategic equity investment of about $35.6 million tied to its Upper Kobuk Mineral Projects in northwestern Alaska, clearing what it called the final major step before closing.

The financing is split into two pieces. The U.S. government will invest about $17.8 million directly in Trilogy Metals for 8,215,570 units at $2.17 each. Each unit includes one common share plus three-quarters of a 10-year warrant. Trilogy said the warrant, when fully assembled, can be exercised for $0.01 per share after either completion of phase 1 of the Ambler Access Project or a change of control.

The second $17.8 million portion will go to South32 in exchange for 8,215,570 Trilogy shares that South32 currently holds, plus a 10-year call option for another 6,161,678 Trilogy shares at $0.01 per share under the same trigger conditions. Trilogy said all proceeds from both sides will be reinvested in Ambler Metals, the 50/50 joint venture between Trilogy and South32.

On completion, the U.S. government is expected to own about 10% of Trilogy on a non-diluted basis. South32’s stake would drop from 18,595,311 shares, or about 10.7% of Trilogy, to 10,379,741 shares, or about 6.0%.

The company said the transaction values the South32 portion at US$17,827,787, equivalent to about C$24.7 million or C$3.01 a share using the Bank of Canada exchange rate cited in the release.

Trilogy also said the government will have the right to designate one independent third-party director to its board until Oct. 6, 2028, and, while it holds at least 8 million shares, a non-voting board observer. In addition, Trilogy agreed not to take on more than US$1 billion of third-party indebtedness before Jan. 1, 2029, or a change of control, without written approval.

The company said the key pre-closing steps are done: the foreign ownership, control or influence review has been completed, and U.S. Congress has authorized or reauthorized the relevant authorities. Trilogy expects closing in September 2026. Following these announcements, the company's shares moved 0.0%, and are now trading at a price of $3.62. For more information, read the company's full 8-K submission here.

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