Rare Earth Stock Picks: The Government-Backed Pattern

The rare earth stock story of the past year has a new organizing principle: government equity stakes. Matt McCall’s “Trump’s $16 Trillion Chess Move” presentation documents the pattern with three verified cases (Lithium Americas, Trilogy Metals, USA Rare Earth), each moving hundreds of percent when Washington appeared on the shareholder register, and then argues the pattern has a next and biggest beneficiary.

Here is the pattern, the evidence behind it, and how to evaluate rare earth stocks against it honestly.

The Three Documented Cases

Lithium Americas (LAC), September 30, 2025. The government restructured its Thacker Pass loan support into a roughly 10% equity stake; the pitch says the stock ran “up 204% in less than a month.” Thacker Pass is the largest known U.S. lithium deposit.

Trilogy Metals (TMQ), October 6, 2025. The government stake connected to the Ambler Access Project, the road that would unlock Trilogy’s copper-rich Alaskan district; “shares shot up 440 percent” (the pitch also says “407% in one week” elsewhere; both figures appear in the transcript).

USA Rare Earth (USAR), January 2026. The Commerce Department stake for the Round Top deposit in Texas, which the pitch calls “the largest rare earth metals deposit outside of China”; “shares went vertical.”

Each of these is a real, documented transaction; the percentage moves are roughly consistent with reported rallies. MP Materials’ earlier Department of Defense deal pioneered the structure.

Why the Pattern Exists

The pattern is not a stock promotion; it is a policy shift with portfolio consequences. The U.S. is rebuilding the critical-minerals supply chain it offshored to China (roughly 90% of rare earth refining) over three decades, and it has decided that loan guarantees are not enough: equity aligns the government’s interest with the project’s completion, and offtake commitments guarantee the demand. Executive Order 14285 extends the same logic to the seabed, directing feasibility work on stockpiling and offtake agreements for polymetallic nodules. We walk through the full story in our “Mountain Pass Mine: The Mine China Almost Took” article.

The pattern’s investment content is real but specific: it identifies which minerals Washington considers strategically essential (lithium, copper, rare earths, cobalt, nickel) and which projects are advanced enough to be financeable with public money. What it does not do is promise the next stake’s timing or target.

The Pitch’s Next Name

McCall’s main pick is the pattern applied to the ocean: a roughly-$5 deep-sea mining company holding nodule rights (“the largest single concentration of critical minerals ever discovered anywhere on Earth,” per the pitch’s framing of the Clarion-Clipperton Zone deposits), with EO 14285’s U.S.-flagged-vessel language matching, per the pitch, the only American-flagged harvesting vessel in existence, which the company owns. The identification evidence points toward The Metals Company, which our fingerprint piece covers in detail; the pitch never names the company, so treat the identification as unconfirmed. Our deep-sea mining explainer covers the deposit and the harvesting technology.

Why Government Stakes Move These Stocks So Hard

The mechanics of the triple-digit moves deserve a moment, because they explain both the opportunity and the trap. A development-stage miner’s value is mostly the discounted probability that its project gets financed, permitted, and built. A government equity stake changes the first term decisively: financing risk collapses because the government does not invest to lose, and permitting risk eases because the government does not invest in projects it intends to block. When those probabilities reprice, small-cap stocks reprice violently, because their valuations are narratives with numbers attached rather than cash flows. The trap is the same mechanism in reverse: the moves front-run announcements that may never come, and “the pattern says next” is not a catalyst, it is a hope with a chart. That is why the honest evaluation checklist below leads with contracts, not narratives.

Where Each Name Sits on the Chain

Applying the checklist to the pitch’s own named companies shows the spectrum. MP Materials is furthest along: an operating mine, rebuilt separation capacity, magnet plans, and a signed government relationship with price floors. Lithium Americas has an operating-adjacent mega-project with government equity and construction underway, sitting one step earlier. USA Rare Earth and the pitch’s seabed candidate sit at the development end: defined resources and strategic narratives, with the processing and offtake steps still ahead. The government-stake pattern has touched all three stages, which is exactly why it is compelling as a screen and why it is dangerous as a promise: each stage has different failure modes, and the triple-digit moves that came before do not price the ones that come after. The chain is the lesson; any single link is a bet. For more on that, see our “China’s Rare Earth Monopoly: The 90% Problem Explained” piece.

How to Evaluate a Rare Earth Stock Honestly

Whoever you evaluate in this sector, the checklist is the same. What is the deposit’s grade and scale, and is it proven by drilling rather than story? Where does the material get refined, since refining capacity, not geology, is the bottleneck? Is the project financeable through to production, and what does the capex do to the share count? Is the government relationship an actual contract or a hopeful narrative? And does the valuation already price in a government stake that has not happened? McCall’s own candor block is the right discipline for all five questions: “Nobody knows for sure if Trump will ultimately back this company. Nothing is final until that ink is dry.”

For the analyst behind these calls, see our profile of Matt McCall; for the sibling campaign, our XAI Boom review.

The full presentation is available through this link.

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