8	Acquisition of Sunward Resources Ltd.

On June 19, 2015, the Company closed a definitive agreement to acquire all of the issued and outstanding common shares of Sunward, by way of a court-approved plan of arrangement (the “Sunward Arrangement”). Under the terms of the Sunward Arrangement, Sunward shareholders received 0.3 of a Trilogy common share for each Sunward common share held. On June 19, 2015, the Company issued 43,116,312 common shares of Trilogy (“Common Shares”) to Sunward shareholders and holders of Sunward deferred share units pursuant to the Sunward Arrangement. Each Sunward stock option outstanding was exchanged for a fully-vested option (“Sunward Arrangement Option”) to purchase Trilogy Common Shares for a period of 90 days, with the number of shares issuable and exercise price adjusted based on an exchange ratio of 0.3 Trilogy options for each of Sunward’s 8,350,000 options outstanding immediately prior to completion of the arrangement. As a result, 2,505,000 Sunward Arrangement Options were exchanged for the Sunward options and all have subsequently been exercised or expired. Consideration transferred to consummate the Sunward Arrangement comprised of the issuance of 43,116,312 Common Shares valued at $22.9 million and 2,505,000 Sunward Arrangement options valued at $0.1 million. The value of the Common Shares issued was calculated based on the closing price of Trilogy Common Shares on June 18, 2015 of $0.53, the date of last trading prior to the closing of the acquisition. The fair value of the Sunward Arrangement Options was determined using the Black-Scholes option pricing model.

Assumptions used in the pricing model in the measurement of the fair value of the Sunward Arrangement Options are as follows:

Risk-free interest rates	0.62	%
Exercise price	CDN$0.54-6.27
Expected life	0.245 years
Expected forfeiture rate	0	%
Expected volatility	50.2	%
Expected dividends	Nil

This acquisition was accounted for as a business combination under ASC 805. The Company incurred $0.8 million in acquisition costs related to the Sunward Arrangement which are included in professional fees on the consolidated statement of loss and comprehensive loss for the year ended November 30, 2015.

The following summarizes the consideration and the fair value of assets acquired and liabilities assumed as of the date of acquisition:

in thousands of dollars

			$
Consideration:
Common shares issued (43,116,312 at $0.53 per share)			22,851
Sunward Arrangement Options			108
Total consideration			22,959

Fair value of net assets acquired:
Cash			19,399
Accounts receivable			19
Deposits and prepaid amounts			104
Plant and equipment			343
Mineral properties and developments costs			3,264
Accounts payable and accrued liabilities			(170)
Net Assets			22,959

The consolidated financial statements included herein reflect the results of operations of Sunward since the June 19, 2015 acquisition date. Following the announcement of the sale of Sunward Investments outlined in note 7, the operations were classified as discontinued operations.