Rare earth stocks are in focus once more today, after the U.S. government announced a deal with minerals explorer Trilogy Metals Inc (NYSE:TMQ). In exchange of a $35.6 million investment, the company granted the White House a 10% stake in its business. The deal creates a domestic supply chain of rare earth minerals such as copper, cobalt, zinc, and lead, which are critical to the manufacturing and defense sectors. The Trump administration also granted Trilogy Metals permits to develop minerals in the Ambler mining district of Alaska.
TMQ is up a whopping 188.4% to trade at $6.07, blasting out of penny stock territory and earlier notching a record high of $7.96. The security is on track for its best day on record and sports a 1,216% year-over-year lead.
Analysts are yet to chime in on the partnership, but there's room for optimism; four of the five analysts in coverage still call TMQ a "hold," while the 12-month consensus target price of $2.38 is now a steep 61.2% discount to current levels. A round of upgrades and/or price-target hikes could keep the wind at the equity's back.
The stocks is seeing ramped up options activity today, with 15,000 calls and 24,000 puts exchanged so far -- 265 times the volume typically seen at this point. The most popular contracts are the October 5 put and 7.50 call, with positions opening at both.
