Trilogy Metals was literally on a road to nowhere before President Donald Trump's Monday announcement that the U.S. will authorize construction of a 211-mile road in Alaska's Ambler Mining District and will take a 10% stake in the Canadian mining company. TMQ stock more than tripled overnight on the transformative news.
Trump gave a green light to the project for the second time. He had also done so in his first term. However, former President Joe Biden quashed that approval last year over concerns about the impact on wildlife and Alaska Native tribes dependent on hunting and fishing.
U.S. Investment In Trilogy Metals
Trilogy Metals said the Department of War will invest $35.6 million to advance exploration and development of the copper-rich Upper Kobuk Mineral Projects in northwest Alaska. The U.S. government will get a 10% equity stake in Trilogy, which has a 50% interest in the mining project. Plus, upon completion of the Ambler Road to provide access to and from the mine, the U.S. will be able to cash in warrants for an additional 7.5% stake.
There's little doubt that Trump has breathed life into Trilogy Metals stock, which was a penny stock before it surged 79% on Nov. 6 after his election victory. TD Securities said it sees TMQ stock's jump as justified based on the higher likelihood of project advancement, according to a write-up at The Fly investment news site.
TD Securities boosted its price target by 144% to around 4 in U.S. dollar terms, but shares soared to 6.60 in Tuesday morning stock market action.
TMQ Stock
TMQ stock surged 228% to 6.84 in Tuesday stock market action, putting its market value north of $1 billion.
Explosive action in stocks tied to rumored or actual Trump equity investments has some analysts dialing down expectations, implying possible overheating in the sector.
USA Rare Earth added 12.5% on Tuesday and is now up 72% in October amid word that it has been talking with the White House.
Be sure to read IBD's The Big Picture column after each trading day to get the latest on the prevailing stock market trend and what it means for your trading decisions.
