U.S. takes 10% Trilogy stake in Alaska push

The U.S. government has closed a $35.6-million (C$49.4 million) investment giving it about 10% of Trilogy Metals (TSX, NYSE-A: TMQ), deepening Washington’s direct involvement in developing the company’s copper-rich projects in northwest Alaska.

The Department of Defense paid about $17.8 million directly to Trilogy and another $17.8 million to South32 (ASX, LSE, JSE: S32) for shares it already held. Both companies have committed the proceeds to Ambler Metals, their 50-50 joint venture advancing the Upper Kobuk mineral projects.

“The department is tirelessly working to secure the critical minerals needed to build and sustain America’s defense and economy,” George K. Kollitides II, director of the Defense Department’s Economic Defense Unit, said when the deal was finalized last month.

“This investment puts the taxpayer and our warfighters first by taking decisive action to protect our economy from manipulation, revitalize our industrial base, and create thousands of American jobs that will support our national security for decades to come.”

Trilogy’s shares more than tripled after the government stake was first announced on Oct. 6, 2025, before giving back much of that gain over the following year. Its shares fell 1.3% by early afternoon Monday in Toronto to C$4.49 apiece, valuing the company at C$775 million, as wider concerns about bond markets and artificial intelligence weighed. 

Equity option

The deal extends the Trump administration’s increasingly frequent use of government equity stakes to secure critical mineral supplies. Washington’s equity push has included a roughly 15% stake in MP Materials (NYSE: MP), the country’s only operating rare earth mine, as well as stakes in Lithium Americas (TSX, NYSE: LAC) and its Thacker Pass lithium project in Nevada.

The Energy Department last year agreed to take 5% stakes in both Lithium Americas and the Thacker Pass joint venture as part of a restructuring of its federal loan. The administration has since expanded the approach to other strategic industries and mineral companies as it seeks to reduce U.S. dependence on Chinese-controlled supply chains.

The Trilogy transaction gives the government 8.2 million newly issued shares and another 8.2 million acquired from South32.

Warrants

The newly issued shares also carry three-quarters of a 10-year warrant apiece, exercisable at 1¢ following completion of the first stage of the Ambler Road or a change of control. Washington has a separate 10-year option to acquire another 6.2 million Trilogy shares from South32 for 1¢ each under similar conditions.

Together, the warrants and options could lift the government’s economic position in Trilogy to about 17.5%.

The government can also nominate an independent director to Trilogy’s board until October 2028 and appoint a non-voting observer while it holds at least 8 million shares. Trilogy also needs government approval to take on more than $1 billion in third-party debt before 2029, unless the company changes control.

South32’s Trilogy stake fell to about 6% from nearly 11% after the transaction.

Arctic advances

The Upper Kobuk properties cover about 190,929 hectares and include the Arctic polymetallic deposit and the earlier-stage Bornite copper-cobalt deposit.

Arctic joined FAST-41 in May, putting the project into the federal program designed to coordinate permitting for major infrastructure and critical-minerals developments.

A 2023 feasibility study outlined a 10,000-tonne-per-day open pit with a 13-year mine life and initial capital costs of $1.18 billion. It forecast annual payable production averaging 149 million lb. copper, 173 million lb. zinc, 26 million lb. lead, 32,538 oz. gold and 2.8 million oz. silver.

The study estimated an after-tax net present value of $1.1 billion at an 8% discount rate and a 22.8% internal rate of return, using long-term prices including $3.65 per lb. copper and $1,650 per oz. gold.

Ambler Metals filed its Clean Water Act Section 404 application with the U.S. Army Corps of Engineers in April. The current federal schedule targets a record of decision in September 2028, with remaining federal and Alaska authorizations targeted for completion that November.

Road backing

Development of Arctic depends heavily on the proposed 340-km Ambler Road, an industrial route linking the mining district to Alaska’s Dalton Highway.

President Donald Trump directed federal agencies last year to restore approvals for the road after the Biden administration had blocked it in 2024 over environmental and subsistence concerns.

Federal agencies subsequently reinstated permits for the project, including a 50-year right-of-way across federally managed lands.

The Defense Department has also agreed to work with Alaska and the Alaska Industrial Development and Export Authority, which holds the road project, to help facilitate financing.

The road remains opposed by environmental organizations and Indigenous groups concerned about potential effects on the Western Arctic caribou herd, waterways and subsistence hunting and fishing.

For Trilogy, the transaction puts Washington on both sides of the development equation: as a shareholder in the company and as a government advancing the permitting, infrastructure and financing framework needed to open the Ambler district.