Trilogy Metals loss widens on US funding charge

Canadian miner Trilogy Metals (TSX, NYSE-A: TMQ) posted a sharply wider fiscal 2025 net loss after booking a non-cash charge tied to a $17.8 million strategic investment from the US government.

The company reported a net loss of $42.2 million, or $0.26 per share for the year ended Nov. 30, 2025, compared with a net loss of $8.6 million, or $0.05 per share, a year earlier. 

Trilogy ended 2025 with $51.6 million in cash, which it said provides flexibility as it advances the Upper Kobuk Mineral Projects (UKMP) in northwestern Alaska through its 50:50 joint venture with South32 (ASX, LON, JSE: S32), Ambler Metals.

The larger loss stemmed mainly from the treatment of the proposed US government’s investment as a derivative financial instrument under US GAAP rules. Trilogy recorded an initial $8.2 million liability and later increased the derivative by $22.6 million to reflect changes in fair value, resulting in a non-cash loss for the year. The accounting impact had no effect on cash and is expected to resolve once the applicable conditions are met.

Chief executive Tony Giardini called fiscal 2025 a landmark year, citing a strengthened balance sheet and closer alignment with US federal and state stakeholders focused on critical mineral supply chains.

He noted the company expanded its senior management and advisory team during the year to support permitting and oversight of Ambler Metals, alongside increased personnel commitments from South32.

Paving the road

Trilogy entered in October into a binding letter of intent with the US Department of War for a conditional $17.8 million investment in exchange for a 10% stake in the company, once construction of the access road to the Ambler project is complete. The Trump administration also received warrants that could raise its stake by a further 7.5%.

The agreement reflects Washington’s push to secure domestic supplies of copper and other critical minerals, including zinc, silver, cobalt and germanium.

The US government restored approvals originally granted in 2020 but revoked under the Biden administration in 2024 and it has also agreed to work with the State of Alaska to help facilitate financing for the road.

Trilogy and South32 approved in December a $35 million budget for Ambler Metals for fiscal 2026, with Trilogy funding $17.5 million. The program will focus on re-staffing, initiating mine permitting for the Arctic copper-silver-zinc-lead-gold deposit and advancing technical work to support long-term development. 

Ambler Metals aims to submit mine permit applications this year and may seek to use the federal FAST-41 framework to streamline the review process, subject to project readiness.

Exploration will centre on the Arctic deposit, including geotechnical and condemnation drilling to support mine design, infrastructure placement and future production planning. 

The joint venture also plans to open the Bornite camp during the 2026 summer field season for geotechnical and exploration drilling and to prepare the site for multi-year use.

Cautious

Analyst sentiment remains cautious. Trilogy carries an average “hold” rating, with four hold recommendations and no buy or sell ratings, compared with a “buy” consensus for the broader diversified mining peer group. 

Over the past year, the stock has climbed more than 200% in Toronto, trading between C$1.59 and C$15.21 and giving the company a market capitalization of about C$976 million ($714 million).