Junior Chipolpolo went down 1-0 to Mali in their tournament opener, but Chilombo was encouraged with how well they played.
"I would have loved to win but we lost despite playing well. That's the nature of football but we are not out," he said.
"We have to recover and work hard in the next game [against Ghana].
"We must collect maximum points to qualify for the semi-finals.
"It will be tough but with the right attitude we can get a positive result.
"We are down but not out," Chilombo said in his post-match press conference.
Team captain Lubambo Musonda was disappointed with the loss and that he limped off with an injury mid-way through the first half.
"It's painful to get injured in a crucial match. I'm hoping to be fit for the next game," Lubambo said
"We have learnt lessons and we hope to beat Ghana as anything less than a win could be disastrous."
Football Association of Zambia (FAZ) president, Kalusha Bwalya told SuperSport that he is still confident the Zambian Under-20s will qualify.
"It was a tough match for us. We were unlucky to concede through a free kick but there are still six points to play for," Kalusha said.