For the second time in a week, the United States government has taken a stake in a Canadian

critical minerals company. As part of its drive to shore up domestic production and reduce America’s dependence on

China for critical minerals used in energy, defence and manufacturing, U.S. President

Donald Trump announced his government will invest US$35.6 million in exchange for a 10 per cent stake in Vancouver-based exploration and development company Trilogy Metals Inc.

The White House said in a release that the partnership will “support mining exploration in Alaska’s Ambler mining district,” an area rich in critical minerals such as

copper , cobalt, gallium and germanium, where Trilogy owns joint interest in the Upper Kobuk Mineral Projects.

An executive order signed by Trump on Monday also directs federal government agencies to reissue permits for the construction of a 340-kilometre industrial access road that would connect the James W. Dalton Highway to the Ambler mining district in northwestern Alaska. The Ambler Road project was approved during Trump’s first term but was subsequently rejected by former president Joe Biden’s administration over environmental concerns.

The deal also includes an option for the U.S. government to buy an additional 7.5 per cent stake in Trilogy Metals once Ambler Road construction is finished.

Trilogy and Australian miner South32 Ltd. each have a 50 per cent stake in Ambler Metals LLC, which owns 100 per cent of the Upper Kobuk Mineral Projects (UKMP). Trilogy Metal’s exploration efforts are currently focused on the Arctic and Bornite deposits, which both contain high-grade copper.

Arctic and Bornite are located within the 471,796-acre UKMP district, which also contains “numerous other polymetallic mineral deposits and prospects,” Trilogy said.

“Trilogy’s vision is to develop the Ambler Mining District into a premier North American copper producer,” the company said in a release.

The announcement had an immediate effect on Trilogy’s share price, which have more than tripled as of Wednesday. National Bank of Canada analyst Rabi Nizami said the U.S. government’s recent direct investments in companies, including miners MP Materials Corp. and

Lithium Americas Corp. and semiconductor manufacturer Intel Corp., have “led to material re-ratings that have held so far.”

“The update is thematically positive, though we continue to expect volatility,” he said in a note. “Several important details of the arrangement have yet to be clarified,” including when the deal will close, timelines for permits, the magnitude of capital required and how the road project will be funded.

The Trilogy Metals deal comes one week after the U.S. Department of Energy (DOE) announced it acquired a five per cent equity stake in Vancouver-based Lithium Americas, plus a five per cent stake in its Thacker Pass lithium joint venture with General Motors Co. in northern Nevada.

Bank of Montreal analysts said the DOE is receiving “essentially free stakes in Thacker Pass and (Lithium Americas) in return for loan repayment deferrals,” as it allowed Lithium Americas to get an advance of about US$435 million and delay US$182 million of debt service on a US$2.26-billion DOE loan for five years.

Mergers and acquisitions lawyers previously told the Financial Post that directly investing in companies is a new move for the U.S. government and is part of a larger push by countries, including China, India and Japan, to establish security over critical mineral supply chains through “equity ownership, joint-venture arrangements and/or loans and other financial support for these large-scale projects,” Curtis Cusinato, vice-chair and partner at Bennett Jones LLP, said.

The U.S. government buying stakes in Canadian miners raises questions about sovereignty at a time when the two countries are locked in disputes over tariffs and trade policies, but mining industry watchers said Ottawa won’t necessarily use national security concerns to scrutinize foreign investments if they advance North America’s critical minerals supply chain and if the company has major operations in the U.S.

And in a high-risk industry, it may appeal to some miners as a way to secure funding.

“If they’re in the right space, and it’s strategic, then that capital is available,” one veteran mergers and acquisitions adviser said. “The problem is the capital doesn’t come with no strings attached. They could … change their mind or decide to expropriate, or who knows?”

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