Northern Dynasty rallies on U.S. election results

Northern Dynasty Minerals Ltd. [NDM-TSX; NAK-NYSE] shares rallied Wednesday November 7 after the company released a statement saying Alaska voters have elected a pro-development candidate in the U.S. mid-term elections.

The inference is that the election of new Governor, Republican Mike Dunleavy, is good news for the company’s flagship Pebble Project. A former State Senator, Governor-elect Dunleavy is a strong proponent of encouraging investment and responsible development of the state’s natural resources to address the significant fiscal and economic challenges facing Alaska.

“In electing Dunleavy, Alaska voters, rejected the candidacy of a Democratic Party challenger who opposed development of the Pebble Project,” the Vancouver company said in a press release.

Investors reacted by sending Northern Dynasty shares up 28.77% or 21 cents on volume of 1.7 million.

The Pebble gold-copper project is Northern Dynasty’s principal asset, owned through its Alaska based subsidiary and other wholly-owned subsidiaries. It consists of 2,402 mineral claims in southwest Alaska.

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.

Those announcements sent Northern Dynasty back to the drawing board in its bid to find another financial backer.

On Wednesday, it implied that the election of Dunleavy as governor is positive because he has stated that permitting decisions about resource development proposals in Alaska, including the Pebble Project, should be based on objective science and comprehensive reviews led by expert state and regulatory agencies.

The company said Alaska voters on November 6, 2018 also rejected Ballot Measure 1, known as the Stand for Salmon initiative, which would have fundamentally re-written the state’s regulatory framework and habitat protections for anadromous fish, and was positioned by its supporters as a vote against the Pebble Project. Anadromous fish are born in freshwater, migrate to the ocean, then return to freshwater to spawn.

Northern Dynasty said the anti-resource development initiative was opposed by a broad coalition of Alaskans, who coalesced behind the Stand for Alaska campaign to defeat Ballot Measure 1, including the resource companies and other business interests, community and political leaders, individuals, and the majority of Alaska Native regional corporations.