Trilogy Metals Soared on U.S. Government Stake. Insiders Are Selling Stock.

President Donald Trump signed an executive order to authorize the Ambler Road mining project in Alaska on Oct. 6, causing shares of Trilogy Metals to jump more than 200%. (Jim Watson / AFP / Getty Images)

Key Points

• Trilogy Metals’ shares surged 523% this year and 1,173% over the past 12 months, with a 211% increase on Oct. 7.
• The U.S. government’s $36.5 million investment in Trilogy Metals includes warrants to purchase an additional 7.5% of its stock.
• Several Trilogy Metals directors, including the CFO, sold shares totaling millions of dollars between Oct. 8 and Oct. 9.

Shares of Trilogy Metals popped after the U.S. government said it was taking a stake in the Canadian mining company, and now insiders appear to be cashing out.

Several company directors made transactions between Oct. 8 and Oct. 9, according to forms filed with the Securities and Exchange Commission. The highest-ranking individual to sell stock was Elaine Sanders, the company’s chief financial officer and corporate secretary.

Sanders exercised an option to buy 450,000 shares for $1.81 each on Oct. 8, which she then sold in two separate transactions of 50,599 shares for $6.91 apiece and 399,000 shares for around $6.84 each, or just under $3.1 million in total.

After the transactions, Sanders directly owned 3.15 million shares, according to a Form 4 filed with the SEC, which were valued at some $2.7 million as of Wednesday’s closing price.

She wasn’t the only insider to make a sale. Willie Hensley, a former Alaska state representative, exercised an option to buy 100,000 shares for $1.81 each on Oct. 8 before selling the same number of shares for $6.39 each. Following the sale, he directly owned 43,638 shares valued at $369,177.

Gregory Lang, CEO and president of NovaGold Resources , another Canadian miner, donated 30,000 shares to charity on Oct. 8. The following day, he exercised an option to acquire 50,000 shares for $1.80 apiece. He then sold a total of 169,181 shares for more than $1.1 million the same day. Following the sale, he directly owned 252,000 shares of common stock, worth more than $2.1 million.

Another notable name was Diana Walters, former president of Liberty Metals and Mining, who also serves on the board of other companies including NuScale Power . Walters exercised an option to buy 100,000 shares for $1.81 each on Oct. 8, which she sold for $7.03 each. She directly owned 51,302 shares after the sale.

Two other company directors, Janice Stairs and Hayden Beckwith, sold a combined 484,088 shares for $2.1 million between Oct. 8 and Oct. 9.

Trilogy Metals didn’t respond to requests for comment regarding the transactions.

Trilogy is a small-cap mining company developing projects in Alaska. It has yet to generate revenue. Shares have been trading on the U.S. market since 2012, when they were listed on the New York Stock Exchange. The stock trades under the same ticker symbol in Canada.

Trilogy shares are up 523% this year and 1,173% over the past 12 months. Most of those gains kicked off on Oct. 7, hours after the White House said it was investing $36.5 million to support mining exploration in Alaska and taking warrants to purchase an additional 7.5% of Trilogy stock.

The announcement came as part of the Trump administration’s approval of the Ambler Road Project, a proposed industrial road stretching hundreds of miles to the Ambler Mining District, which contains deposits of metals like copper and gallium. Trilogy has a 50% interest in the mining project.

News of the government’s involvement sent Trilogy shares skyrocketing, causing it to close up 211% on Oct. 7. It set record intraday and closing highs on Oct. 14 at $11.29 and $10.60, respectively.

The administration’s investment in Trilogy, which gave the Defense Department an equity stake in the company, is part of a pattern. The Defense Department recently became the largest shareholder of rare-earth miner MP Materials, while the Energy Department took a stake in lithium miner Lithium Americas earlier this month.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com