Northern Dynasty raising US$6.5 million for Alaska project

Exploring Northern Dynasty’s Pebble Project in southwest Alaska. Source: Northern Dynasty Minerals Ltd.

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Northern Dynasty Minerals Ltd. [NDM-TSX; NAK-NYSE] on Wednesday June 19 said it has arranged to raise another US$6.5 million to support the advancement of the huge Pebble copper-gold project in Alaska.

The announcement comes after Northern Dynasty recently raised US$11.5 million from a bought deal share offering consisting of 17.9 million shares priced at 64 cents per share.

On Wednesday, the company said it is raising US$5 million from a bought deal offering of 12.2 million common shares priced at US41 cents per share. It said Cantor Fitzgerald Canada Corp. has agreed to lead an underwriting syndicate that has been granted an over-allotment option to purchase an additional 1.83 million shares at the same price, potentially adding another US$750,000 to the gross proceeds.

In addition, Northern Dynasty said it is proposing to undertake a non-brokered private placement to investors outside the U.S. of up to 3.66 million common shares at the issue price, a move that is expected to raise another US$1.5 million.

On Wednesday, Northern Dynasty shares eased 9.2% or $0.06 to 59 cents. The shares are trading in a 52-week range of 57 cents and $1.47.

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 Wednesday, Northern Dynasty said proceeds of the latest financing will enable the company to continue the field program at Pebble and other work needed to support the completion of the environmental impact study permitting process for the project in 2020.

Meanwhile, the company said it remains in discussions with potential partners to secure long-term financing to finalize permitting and initiate project development.


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