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Fundamental Research has Initiated Coverage on Trilogy Metals (TSX: TMQ)

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Analyst Sid Rajeev gives Trilogy Metals a buy rating and a fair value estimate of US$1.73 per share, a premium of 84% to the US$0.94 closing price on September 29th, the day the report was issued.

Additional Information:

Company: Trilogy Metals Inc
Website: http://www.trilogymetals.com
Stock Symbol: TSX: TMQ
Date Published: Oct 25, 2017
Transcript: Available

Video Transcript:

I’m Samantha Deutscher for Investmentpitch Media

Today’s buy recommendation comes from Fundamental Research Corp.

Analyst Sid Rajeev gives Trilogy Metals a buy rating and a fair value estimate of US$1.73 per share, a premium of 84% to the US$0.94 closing price on September 29th, the day the report was issued.

Trilogy Metals, formerly NovaCopper, is focused on exploring and developing the Ambler mining district, located in northwestern Alaska.

Alaska is one of safest geopolitical jurisdictions in the world, ranked number 14th out of 104 jurisdictions worldwide by the Fraser Institute.

Exploration efforts have been focused on two deposits in the Ambler district – the Arctic VMS deposit and the Bornite carbonate replacement deposit.

Both deposits are located within the company’s land package than spans approximately 143,000 hectares.

The Arctic VMS deposit is one of the highest-grade copper deposits in the world.

It is holding indicated resources of 36 million tonnes at 3.07% copper, 4.23% zinc, 0.73% lead, 0.63 grams per tonne gold, and 47.62 grams per tonne silver.

A Preliminary Economic Assessment in 2013 indicated a post-tax Net Present Value at 8% of $537 million, at $2.90 per lb copper.

The study showed robust economics even at a copper price of $2.00 per lb.

The company has just completed an aggressive $10 million drill program to potentially expand the high-grade resource at Bornite.

The focus of the program is to target high-grade copper mineralization north and east of the identified resources, especially by the 2013 drill holes (RC13-224, RC13-231 and RC13-220).

So far, the company has identified a mineralized system over 2,500 metres long by 1,500 metres wide, with an average thickness of 100 to 200 metres.

Results from the first 3 drill holes were released on September 18, 2017 showing that the system continues to expand. Results from another 6 more holes will be announced in the coming weeks.

This program is fully funded by South32 Limited, a spin off from BHP Billiton, brought in as a financial partner in April 2017.

Due to lack of transportation infrastructure, none of the projects in the Ambler Mining District have been subject to production.

However, in February 2017, the U.S. Bureau of Land Management initiated the permitting progress on a 340 kilometre road to connect the Ambler Mining District to a major highway.

Analyst Sid Rajeev stated: “We consider Trilogy’s management/board to be one of the best in the junior resource space. Trilogy’s CEO, Rick Van Nieuwenhuyse, founded NovaGold in 1997. The company’s current Enterprise Value is just $0.009 per lb of copper versus the comparable average of $0.022 per lb. We consider Bornite’s expansion potential to be very exciting as it not only improves the attractiveness of Trilogy’s assets, but also provides more reasons for regulators to advance the Ambler Mining District Industrial Access Project and exploit the mineral potential of the Ambler Mining District.”

The shares are trading at US$1.02, well below Fundamental’s fair value price of US$1.94, and with 105.6 million shares outstanding, the company is capitalized at US$107.7 million.

For more information please visit the company’s website www.trilogymetals.com, contact Rick Van Nieuwenhuyse, President & CEO at 604-638-8088 or 1-855-638-8088 or email info@trilogymetals.com.

I’m Samantha Deutscher for Investmentpitch Media