Investment in Ambler Metals LLC

12 Months Ended

Nov. 30, 2023

Investment in Ambler Metals LLC

Investment in Ambler Metals LLC

3)    Investment in Ambler Metals LLC

(a) Formation of Ambler Metals LLC

On February 11, 2020, the Company completed the formation of the 50/50 Joint Venture named Ambler Metals with South32. As part of the formation of the Joint Venture, Trilogy contributed all its assets associated with the UKMP, including the Arctic and Bornite Projects, while South32 contributed $145 million, resulting in each party’s subsidiaries directly owning a 50% interest in Ambler Metals.

Ambler Metals is an independently operated company jointly controlled by Trilogy and South32 through a four-member board, of which two members are currently appointed by Trilogy based on its 50% equity interest. All significant decisions related to the UKMP require the approval of both companies. We determined that Ambler Metals is a VIE because it is expected to need additional funding from its owners for its significant activities. However, we concluded that we are not the primary beneficiary of Ambler Metals as the power to direct its activities, through its board, is shared under the Ambler Metals LLC limited liability company agreement. As we have significant influence over Ambler Metals through our representation on its board, we use the equity method of accounting for our investment in Ambler Metals.

(b) Carrying value of investment in Ambler Metals

During the year ended November 30, 2023, Trilogy recognized, based on its 50% ownership interest in Ambler Metals, an equity loss equivalent to its pro rata share of Ambler Metals' net loss of $15.7 million for the year ended November

30, 2023 (2022 - $34.7 million). The carrying value of Trilogy’s 50% investment in Ambler Metals as at November 30, 2023 is summarized on the following table.

	in thousands of dollars
	$
November 30, 2021, Investment in Ambler Metals	160,063
Joint venture equity contribution	51
Share of loss on equity investment for the year ending November 30, 2022	(17,360)
November 30, 2022, Investment in Ambler Metals	142,754
Joint venture equity contribution	111
Share of loss on equity investment for the year ending November 30, 2023	(7,844)
November 30, 2023, Investment in Ambler Metals	135,021

(c) The following table summarizes Ambler Metals’ Balance Sheet as at November 30, 2023.

	in thousands of dollars
	November 30, 2023	November 30, 2022
	$	$
Total assets	97,180	114,049
Cash	63,829	80,755
Mineral properties	30,899	30,899
Total liabilities	(2,931)	(4,335)
Accounts payable and accrued liabilities	(2,500)	(3,664)
Members' equity (total assets less total liabilities)	94,249	109,714

(d) The following table summarizes Ambler Metals’ net loss for the years ended November 30, 2023, November 30, 2022 and November 30, 2021.

	in thousands of dollars
		Year ended
		November 30, 2023	November 30, 2022	November 30, 2021
		$	$	$
Depreciation		150	113	77
Corporate salaries and wages		2,068	1,664	2,381
General and administrative		547	738	991
Mineral property expense		12,822	32,083	22,720
Professional fees		547	792	1,047
Foreign exchange (gain)/loss		(2)	15	6
Interest and other income		(445)	(686)	(1,058)
Comprehensive loss		15,687	34,719	26,164

(e) Related party transactions

During the fiscal year 2023, the Company received $27,000 (2022 - $nil) related to operating expenses paid on behalf of Ambler Metals.

During the fiscal year 2022, the Company transferred a mineral claim to Ambler Metals and received net proceeds of approximately $140,000.