What happens when the government takes a stake in your company? As long as it isn’t in a bailout, it might be free money and a license to succeed. Shares of Canadian minerals explorer Trilogy Metals Inc. (NYSEArca: TMQ) have risen over 200% in pre-market trading after the U.S. government has announced the approval of the Ambler Road Project in Alaska.
The U.S. seems rapidly on its way to adding more company stakes into what other nations refer to as a sovereign wealth fund. Some might just say the U.S. is just taking on a partial role of private equity by taking stakes that are deemed critical to defense and prosperity — for potential windfall gains for future generations.
The White House has previously announced investments into Intel for access to chips, MP Materials for access to rare earth materials, Lithium Americas for access to lithium, and “golden share” in U.S. Steel as part of a merger agreement. And for the record, the U.S. is showing massive gains on its stakes taken in public companies.
Trilogy’s own press release shows just how the investment and projects will actually work in more detail.
Oggonomics has already addressed some of the news for investors seeking access to rare earth metals and elements. The only problem is that it’s getting hard to find easy access on the cheap as the U.S. aims to diminish its reliance upon China for rare earths.
More important is what was in the White House release — the U.S. government is announcing a partnership with Trilogy Metals by investing $35.6 million to make the U.S. government a 10% shareholder in Trilogy Metals. The deal also includes warrants for the U.S. government to purchase an additional 7.5% stake in Trilogy.
This 211-mile road approval as part of the deal is said to bring access to large deposits of copper, cobalt, gallium, germanium, and other strategic metals. The White House also said that President Trump’s overturns the Biden Administration’s 2024 rejection of the Ambler Road.
On top of being “vitally important to America’s national defense and economic prosperity,” the White House also has two additional notes showing how widespread this investment may go for many other projects as well:
- An access road is crucial to unlocking critical minerals located in this currently-inaccessible area of Alaska, which has been characterized as one of the largest undeveloped copper-zinc mineral belts in the world and contains extensive deposits of copper, silver, gold, lead, cobalt, and other strategic metals.
- The road will provide essential surface transportation access for the more than 1,700 active mining claims in the District, supporting expanded mineral exploration, mine development, and operations.
Up to this point, Trilogy Metals has produced zero in revenues.
Here is how investors are reacting. Trilogy Metals closed at $20.09 ahead of the news, with a 52-week range of $0.47 to $2.48 — but its shares were up over 200% at $6.67 in very active pre-market trading.
Now, just imagine the gains the government would be sitting on had it decided to keep its stakes from the bank bailouts during the global financial crisis.
