The Windfall: How a Government Investment in Mining Sparked a Stock Surge and Raised Questions About Political Connections

In a striking display of how government policy can dramatically affect financial markets, the federal government’s recent $35.6 million investment for a 10% stake in Trilogy Metals, a small Vancouver-based mining company, has created an extraordinary windfall for its investors. Most notably among them is billionaire John Paulson, a longtime supporter of Donald Trump. The investment, coupled with the White House’s authorization of a 211-mile access road to Alaska’s remote Ambler mining district, sent Trilogy’s stock soaring by an astonishing 245% when markets opened after the announcement. This remarkable surge transformed Paulson’s 8.7% stake from approximately $30 million to $100 million virtually overnight. The timing and nature of this deal have raised eyebrows, particularly as it comes after the Biden administration had previously blocked the construction of the proposed Ambler Road due to concerns about its impact on Native American communities in the area. Trump’s White House statement celebrated the agreement as a move to “prioritize economic growth and national security,” but notably omitted any mention of the substantial personal benefit for one of his most loyal allies in the financial world.

The relationship between Paulson and Trump spans back to the former president’s first campaign in 2016, when the hedge fund manager joined Trump’s economic policy team. Paulson’s support for Trump has remained steadfast; in April 2024, he hosted a fundraiser at his Palm Beach home that raised $50.5 million for Trump’s campaign, and he was even rumored to be under consideration for Treasury Secretary during last year’s transition before Scott Bessent ultimately secured the position. Paulson’s investment in Trilogy dates back to its IPO in May 2012, when it was called NovaCopper. Over the years, he gradually increased his holdings to 14.3 million shares by June 2019, a position he has maintained since then according to quarterly SEC filings. This long-term investment strategy has now paid off spectacularly, though Paulson himself has not commented publicly about the recent deal that so dramatically increased the value of his holdings.

Trilogy Metals and Australian mining firm South32 jointly own Ambler Metals LLC, which manages the Upper Kobuk Mineral Projects – a vast 472,000-acre expanse in northwestern Alaska rich in copper, cobalt, and other metals increasingly vital to modern technology and infrastructure. Despite its potential, the project remains in the development and exploration stage, with Trilogy yet to generate any revenue. The company’s journey has been tumultuous since its 2012 market debut when it closed at $3.73 on its first day of trading. The stock experienced dramatic swings, plummeting to just 16 cents per share in January 2016 – a period during which Paulson opportunistically added to his position at bargain prices. Though it recovered to more than $3 in 2019, it later retreated to a mere 37 cents in April 2024 as the Biden administration created obstacles for the Alaska project’s development plans. The day after Trump’s election victory last year, anticipation of a more mining-friendly administration propelled the stock up by 79%, foreshadowing the even more dramatic gains to come.

Tuesday’s extraordinary 245% surge took Trilogy’s shares to an all-time high of $7.25, though they settled somewhat to $6.04 by mid-morning – still representing a 184% increase for the day and pushing the company’s market capitalization to $1.2 billion. This remarkable valuation is particularly striking for a company with just five full-time employees, zero revenue, and a net loss of $9.2 billion in the preceding 12 months. What it did have, however, was a powerful connection to the administration making decisions about its future. The stock has now soared by an incredible 1,000% since Election Day last year, highlighting how political shifts can dramatically transform the fortunes of companies positioned in sectors favored by incoming administrations. While this isn’t the first time the Trump government has moved markets through direct investment in stocks this year – with stakes in Intel, MP Materials, and Lithium Americas – none of these previous investments produced gains as significant as those seen with Trilogy, the smallest company among the group.

For Paulson, whose net worth is estimated at $4 billion, Tuesday’s stock movement adds to what has already been an exceptional year for his investment portfolio. A well-known gold enthusiast, he owns significant stakes in gold miners Perpetua Resources, Agnico Eagle Mines, and Novagold Resources. These holdings were collectively valued at approximately $600 million as of his second-quarter filing and could now be worth upwards of $1 billion if he has maintained his positions during gold’s summer rally. While all three of these gold mining stocks have more than doubled in value over the past year – impressive returns by any standard – they now pale in comparison to Trilogy’s explosive growth. The irony of the situation is not lost on observers: had Paulson accepted the Treasury Secretary position he was reportedly considered for, ethics laws would have required him to divest from these highly profitable assets. Instead, remaining in the private sector has allowed him to reap extraordinary financial rewards as the administration led by his preferred candidate implements policies that directly benefit his investment portfolio, raising questions about the interplay between political power, policy decisions, and personal financial gain in America’s highest circles of influence.