Northern Dynasty raises US$11.5 M for Alaska project

Northern Dynasty Minerals Ltd. [NDM-TSX; NAK-NYSE] said Monday March 18 that it has raised US$11.5 million from a share offering that was completed on a bought deal basis.

The offering consisted of 17.9 million common shares priced at 64 cents a share and was completed under an agreement with an underwriting syndicate led by Cantor Fitzgerald Canada Corp. The syndicate included both BMO Capital Markets, H.C. Wainwright & Co. LLC, and TD Securities Inc.

On Monday, Northern Dynasty shares rose 3.41% to 91 cents on volume of 680,025. The 52-week range is $1.47 and 55 cents.

Northern Dynasty’s principal asset, owned through its wholly-owned Alaska-based U.S. subsidiary, Pebble Limited Partnership, is a 100% interest in a contiguous block of 2,402 mineral claims in southwest Alaska, including the Pebble deposit.

First discovered in 1989, it has been described as one of the greatest stores of mineral wealth on the planet.

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.

However, the project has been a lightning rod for global environmentalists who expressed concerns about the impact of such a large mining operation on local salmon runs.

First Quantum Minerals Ltd. [FM-TSX] recently terminated a proposed framework deal that would have given it the right to earn a 50% interest in the Pebble Project.

First Quantum was seen as a possible replacement for Anglo American [AAL-NYSE], which had the right to earn a 50% interest in Pebble. But it withdrew from the project in September 2013 after investing US$541 million.

On Monday, Northern Dynasty said proceeds of the US$11.5 million offering are expected to be used for operating expenses, including engineering, environmental, permitting and evaluation expenses associated with the Pebble Project and the advancement of completion of the United States Army Corps of Engineers Environmental Impact Study.

Proceeds will also be used for enhanced outreach and engagement with political and regulatory offices in the Alaska state and U.S. federal government, Alaska Native partners and regional and state-wide stakeholder groups, as well as for general corporate purposes.

“It remains one of the company’s goals to partner the Pebble Project,” Northern Dynasty said in a press release on Monday.

The announcement comes after the company recently declared a small win in its fight to develop the giant Pebble gold-copper project.

In a November 2018 press release, Northern Dynasty said its Pebble Limited Partnership (PLP) subsidiary has finalized a right-of-way agreement with the Alaska Peninsula Corp. (APC), securing the right to use defined portions of APC lands for the construction and operation of transportation infrastructure associated with the Pebble Project.

APC is an Alaska Native village corporation with extensive land holdings located near the proposed Pebble site, and more than 900 shareholders. Many of them live in the nearby village of Newhalen and Kokhanok.

“Today’s agreement not only secures access to the Pebble Project site for construction and operation of the proposed mine,” said Northern Dynasty President and CEO Ron Thiessen. “It also represents a significant milestone in the developing relationship between Pebble and the Alaska Native people of the region,” he said.