Trilogy Metals Soars After US Government Takes 10% Stake
Shares surged over 100% in after-hours trading following a $35.6 million investment to advance a strategic mining project in Alaska.
Trilogy Metals Inc. (AMEX: TMQ) saw its shares skyrocket in after-hours trading on Monday, following a major strategic investment by the U.S. government. The company's stock surged by as much as 150% after the White House announced plans to acquire a roughly 10% stake in the mining firm to advance its Upper Kobuk Mineral Projects (UKMP) in Alaska.
The U.S. Department of War is investing approximately , a move seen as a strong endorsement of Trilogy's role in developing a domestic supply chain for critical minerals. This investment is aimed at facilitating access to key resources such as copper, cobalt, gallium, and germanium, which are vital for national security and advanced manufacturing.
A significant part of the government's action includes reversing a previous decision that had blocked the construction of the 211-mile Ambler Road, a vital piece of infrastructure needed to access the rich mineral deposits in the Ambler Mining District. is a critical catalyst for Trilogy and its partners.
Under the terms of the deal, the Department of War will invest about $17.8 million directly into Trilogy Metals in exchange for over 8.2 million units, priced at $2.17 each. An additional $17.8 million will be used to acquire existing Trilogy shares from its partner, South32 Limited. The government will also receive warrants that could increase its ownership stake by an additional 7.5% in the future.
Investors reacted swiftly to the news, with TMQ shares experiencing extremely elevated trading volume in the post-market session. The direct investment from the federal government is a significant vote of confidence in Trilogy's Alaskan mining projects, which have faced regulatory hurdles in the past. detailed the structure of the investment, highlighting the long-term nature of the partnership.
This strategic move underscores a broader push by the U.S. to secure domestic sources of minerals essential for the green energy transition and defense industries, reducing reliance on foreign supply chains. The development of the Ambler Mining District is now poised to accelerate, with Trilogy Metals at the forefront of this nationally significant project.