The federal stake in Trilogy Metals closes, terms made public

The federal government now owns roughly a tenth of Trilogy Metals, the company developing Alaska's Ambler mining district, and for the first time the terms of that investment are public.

The deal gives the government a 10 percent stake in Trilogy plus warrants that could raise its share to 17.5 percent, according to the company's closing filing and a White House fact sheet. Trilogy told the SEC on Sept. 14 that the investment had closed three days earlier. The money is going toward the Upper Kobuk copper and zinc deposits in the Northwest Arctic, which the company said the proceeds would fund "in full."

The government paid about $17.8 million to Trilogy for shares and 10-year warrants priced at a penny each, and a parallel purchase from Trilogy's partner South32 brings the total to about $35.6 million. The closing also added two agreements that let the government buy into future stock sales and register its holding.

Two key terms can now be read in full. One, "Restricted Entity," triggers the deal's national security provisions and names China by name. The other decides when the penny warrants can be cashed in: only once the first phase of the Ambler road is finished, or once ore trucks are actually using it.

That road doesn't exist yet, and it's the whole premise. President Donald Trump approved the state development authority's bid to proceed with the 211-mile Ambler Access Project and ordered agencies to reissue its permits. The White House projects the finished road would support about 2,730 jobs and generate more than $1.1 billion in Alaska revenue.

The filing is careful to say the government isn't endorsing or guaranteeing the company, and that the deal creates no obligation for further federal money or permits.

One oddity runs through the paperwork: Trilogy names the federal buyer as the Department of War throughout its filings, while South32's filing called it the Department of Defense. Markets treated the closing as a formality, with Trilogy shares barely moving.