Three micro caps with Greenland projects jump on news of security deal over territory
Shares of three companies with mining and energy projects in Greenland have surged after Trump announced a security agreement with Denmark and its Arctic territory / Photo: Unsplash / Hector John Periquin
Shares of three U.S. micro caps with projects in Greenland surged 30-150% in the first minutes of premarket trading on Monday. The rally came after U.S. President Trump announced that he had reached an agreement with Denmark giving the U.S. “permanent control over security” in Greenland. He had previously said he wanted to annex the territory.
Details
The three stocks surged in late trading on Friday and early trading on Monday after Trump announced the agreement with Denmark on Truth Social on Friday. Under the deal, the U.S. will participate in securing Greenland, prevent adversaries from “establishing military bases” there or making sensitive investments without U.S. approval, and expand its military presence on the island, Trump said.
The full terms of the agreement have not yet been released. It is expected to be signed during the U.N. General Assembly, which opens Tuesday in New York. Investors likely expect an expanded U.S. presence to bring greater political support, infrastructure investment, and financing opportunities to Greenland’s resource sector, Seeking Alpha notes. The article emphasizes that the security agreement does not include any announced funding, permits, or commercial agreements for the three companies.
Three beneficiaries
Greenland Energy, which explores for oil and gas in Greenland’s Jameson Land Basin, has soared almost 164% on Monday to nearly $3.20 apiece as of this writing. Greenland stopped issuing new exploration licenses in 2021 because of environmental concerns but left existing licenses in effect, Seeking Alpha notes. Greenland Energy has such licenses. Its project remains at an early stage: the company must first discover commercial oil reserves and then obtain approval to drill. The stock’s surge therefore appears to reflect speculative interest, Seeking Alpha writes. Only one Wall Street analyst covers the small cap, according to MarketWatch data. The analyst has a “buy” rating at a target price of $6 per share, implying 400% upside from the last close.
Greenland Mines, a gold miner, has jumped 86% to $5.30 apiece. The company owns the Skaergaard project in Greenland, which contains gold, palladium, and platinum. It recently acquired a rare-earth deposit containing elements used to make permanent magnets for electric vehicles, wind turbines, and military equipment. Greenland Mines also has only a single Wall Street rating, a “buy.”
Critical Metals, which owns the Tanbreez rare-earth deposit, has gained 30% to $8.75 apiece. The company describes Tanbreez as one of the world’s largest known deposits of heavy rare-earth elements. Critical Metals has a 15-year agreement to supply U.S.-based REalloys with rare-earth concentrate. Meanwhile, the U.S. Export-Import Bank is considering providing Critical Metals with a $120 million, 15-year loan to develop Tanbreez as part of efforts to counter China’s dominance of the industry. Investors may view the pending security agreement as reducing geopolitical uncertainty surrounding Tanbreez and improving its prospects for U.S. government assistance, Seeking Alpha notes. Two Wall Street analysts have a "buy" recommendation on Critical Metals, while one has a "hold." The average target price is $15.33 per share, for 130% upside.
Context
Trump first became interested in gaining control of Greenland for national-security purposes in 2018 and returned to the idea in January. The White House was supposedly considering “a range of options” to acquire Greenland, including “utilizing the U.S. military,” Karoline Leavitt, then the White House press secretary told CNBC at the time. Trump later said, “I don’t have to use force. I don’t want to use force. I won’t use force,” to gain control of the Danish territory, but called for “immediate negotiations” to acquire Greenland.
The new agreement recognizes Denmark’s “sovereignty and territorial integrity,” while Greenland will remain part of Denmark, Danish Prime Minister Mette Frederiksen says.
