The lucrative investment made by the federal government in Trilogy Metals has proven profitable for billionaire John Paulson, a significant supporter of Donald Trump. The government allocated $35.6 million to acquire a 10% stake in the Vancouver-based mining company, leading to massive gains for its investors.
Key Details of the Investment
Paulson, who owned an 8.7% stake in Trilogy Metals as of June, saw his investment grow substantially following the announcement. After the deal was disclosed, Trilogy’s stock surged, tripling in after-hours trading and soaring 245% during Tuesday’s market opening. This spike increased the value of his shares from $30 million to $100 million.
Background of Trilogy Metals
- Founded: Originally established as NovaCopper in May 2012, Trilogy has transitioned into its current state post-spinoff from NovaGold Resources.
- Location: The company operates in the Ambler mining district of Alaska, covering 472,000 acres known for copper, cobalt, and other minerals.
- Ownership: Trilogy, together with the Australian mining firm South32, co-owns Ambler Metals LLC, which manages the mineral projects in the area.
Impact of Government Investment
The Biden administration previously halted the construction of the Ambler Road due to its potential negative impact on local Native American communities. However, Trump’s administration, taking a contrasting stance, claimed the investment would prioritize economic growth and strengthen national security.
Paulson’s Role and Financial Impact
John Paulson, founder of Paulson & Co., was an early financial supporter of Trump, joining his economic policy team during the 2016 presidential campaign. His fundraising efforts included a notable event in April 2024, generating over $50 million for Trump.
Trilogy’s Stock Performance
Trilogy’s stock has experienced considerable fluctuations. After starting at $3.73 when it went public, the price fell to 16 cents in January 2016. Despite these challenges, it rebounded, reaching significantly higher valuations over time, and has now gained over 1,000% since last year’s election.
Current Financial Standing
As of a recent report, Trilogy’s market capitalization now exceeds $1.2 billion, despite the company having no revenue and reporting a net loss of $9.2 billion in the last year. This situation highlights the volatility and risks associated with investing in emerging mining ventures.
Additional Investments by the Government
Trilogy isn’t isolated in benefiting from government investments. The federal government has also invested in other companies, including Intel and MP Materials. However, none have experienced the dramatic stock surge seen with Trilogy Metals.
For John Paulson, this investment marks a strong chapter in his financial portfolio, further amplifying his estimated net worth of $4 billion. Paulson, a known advocate for gold investments, has also seen substantial gains in his stakes in other mining companies.
