Northern Dynasty up on Alaska land use deal

By Peter Kennedy

Northern Dynasty Minerals Ltd. [NDM-TSX; NAK-NYSE] shares advanced on Wednesday November 21 after the company declared a small win in its fight to develop the giant Pebble gold-copper project in Alaska.

The company 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 in a November 21, 2018 press release. “It also represents a significant milestone in the developing relationship between Pebble and the Alaska Native people of the region,” he said.

Northern Dynasty shares advanced on the news, rising 5.05% to $1.04 on volume of 388,540. The 52-week range is $2.99 and 55 cents.

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.

However, the Vancouver company is clearly not giving up. “We have always said Pebble must be developed in partnership with the local people and institutions of southwest Alaska,” Thiessen said. “We have a lot more work to do in that regard, but the right-of-way-agreement with one of the largest Alaska Native landowners in the region goes a long way to bringing our commitment to live,” he said.

Under the agreement, Pebble would have access to about 1,400 acres of APC land to develop transportation infrastructure, including roads, pipelines, and ferry landing sites.

APC would receive annual toll payments and other fees from PLP before and during the mine’s construction and operation. It would also have preferred status on Pebble-related contracts on the corporation’s lands.

Among our leading priorities as an Alaska Native corporation is to manage and develop our lands responsibly, in a manner that creates employment opportunities for our shareholders, but also respects our subsistence values and culture,” said Brad Angasan, APC Vice-President, Corporate Affairs.

“That’s exactly what this deal represents for APC, as well as securing us an important seat at the table as the Pebble Project advances.”

The APC lands addressed in the right-of-way agreement mirror the transportation corridor identified in the PLP’s project description, as submitted to the US Army Corps of Engineers last year to initiate the Environmental Impact Statement (EIS) permitting process.

It includes land south of Lake Iliamna to link the port site of Cook Inlet to a ferry landing site west of the APC village of Kohkanok,  as well as land north of Lake Iliamna to link a ferry landing site west of the APC village of Newhalen to the site of the proposed Pebble Mine.

“APC has been an important stakeholder and business partner in the Pebble enterprise for some time, and we’re pleased to formalize that partnership today,” Thiessen said. “We expect to secure additional mutually beneficial partnership agreements with other local and Alaska Native institutions as the project moves forward.”