Northern Dynasty faces Biden administration road block

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Northern Dynasty Minerals Ltd. (NDM-TSX, NAK-NYSE) shares fell in active trading Friday following reports that the U.S. Environmental Protection Agency’s proposed environmental protections for Alaska’s Bristol Bay area may end the company’s proposed Pebble copper-gold project.

A Wall Street Journal report said the Biden administration is promising sweeping environmental protections for Bristol Bay in southwest Alaska. If the plan goes ahead, it could permanently block the development of the controversial project.

In an Alaska federal district court filing, the U.S. Department of Justice asked that the court vacate a 2019 decision by the Trump-era Environmental Protection Agency to remove protection form the Bristol Bay watershed.

On Friday, Northern Dynasty shares eased 3.3% or $0.02 to 58 cents on volume of 557,690. The shares are trading in a 52-week range of $1.67 and 38.5 cents.

First discovered in 1989, the Pebble project ranks as one of the world’s largest undeveloped gold-copper resources.

At a 0.3% copper equivalent cut-off, the Pebble project is estimated to contain 6.456 billion tonnes in the combined measured and indicated categories at a grade of 0.40% copper, 0.34 g/t gold, 240 ppm molybdenum, containing 57 billion pounds of copper, 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million ounces of silver.

The project has been through a roller coaster of regulation over the past 13 years. Republican President Donald Trump revived the project early in his term after the Obama administration blocked it, but opposition from prominent politicians saying it would harm the state’s billion-dollar salmon industry prompted an about-face from the outgoing Trump administration.

On September 9, 2021, the company announced the results of a 2021 preliminary economic assessment that included update production, financial and cost estimates for the proposed Pebble Project.

It said the 2021 PEA examines three potential mine expansion scenarios and potential strategic alternative strategies for gold recovery that could form the basis for future permit applications and review.

The PEA envisages 20 years of open pit mining with a processing rate of 180,000 tons per day and life of mine metal production of 6.4 billion pounds of copper, 7.3 million ounces of gold, 300 million pounds of molybdenum, 37 million ounces of silver and 230,000 kilograms of rhenium.

Average annual metal production is forecast at 320 million pounds of copper, 363,000 ounce of gold, 15 million pounds of molybdenum, 1.8 million ounces of silver and 12,000 kilograms of rhenium.

The 2021 Pebble Project PEA is an update to a technical report completed in 2011, which included an economic analysis that was considered out of date, mainly due to the revisions to the project as submitted in its permit application amendments.

However, neither Northern Dynasty nor the Pebble Partnership has proposed or intends to propose any of these development alternatives in the near-term for regulatory approval, the company said in a press release.

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