Trilogy Metals Inc. reported a net income of $0.2 million for the third quarter ended August 31, 2026, reversing a $1.7 million loss in the same period last year. The profit was driven by a mark-to-market gain on a derivative liability tied to a strategic investment from the U.S. Department of War, which closed on September 11, 2026.
The Department of War completed a $35.6 million investment in Trilogy Metals and South32 Limited. Trilogy Metals issued 8,215,570 units to the Department of War at $2.17 per unit, generating gross proceeds of approximately $17.8 million. Each unit included one common share and three-quarters of a warrant, allowing for the purchase of up to 6,161,678 additional shares at an exercise price of $0.01 per share. The warrants have a ten-year term and become exercisable upon the completion of Phase 1 of the Ambler Access Project or specific usage milestones.
The full proceeds from the investment are committed to Ambler Metals LLC to fund exploration and development of the Upper Kobuk Mineral Projects in northwestern Alaska. South32 Limited made a corresponding pro-rata contribution, maintaining Trilogy Metals' 50% ownership interest in Ambler Metals. Following the share issuance and a separate acquisition from South32, the Department of War holds approximately 9.1% of Trilogy Metals' outstanding common shares.
Regulatory progress accompanied the financial results. On July 13, 2026, a coordinated federal and state permitting schedule was published for the Arctic Project. The schedule sets an estimated 29-month integrated review timetable targeting a Record of Decision in September 2028. The U.S. Army Corps of Engineers serves as the lead federal agency, integrating State of Alaska permitting under the first statewide FAST-41 Memorandum of Understanding in the nation. In September 2026, the U.S. Army Corps of Engineers published a Notice of Intent to prepare an Environmental Impact Statement, formally commencing the National Environmental Policy Act review.
For the nine months ended August 31, 2026, Trilogy Metals reported a net loss of $13.2 million, compared to a $7.5 million loss in the prior year period. The increase was primarily driven by stock-based compensation expense and a higher share of loss from Ambler Metals due to budgeted exploration activities and senior staff additions. These losses were offset by mark-to-market gains on the derivative liability.
The company's cash balance stood at $31.2 million as of August 31, 2026, with adjusted working capital of $30.3 million.
Tony Giardini, President and CEO of Trilogy Metals, stated that the Department of War's investment closed successfully and that the permitting front now features a transparent schedule. He noted that the Notice of Intent launched the environmental review on a path to a Record of Decision in September 2028, positioning the Arctic Project as part of a domestic copper supply chain.