Northern Dynasty wins EPA reprieve, stock soars

Northern Dynasty Minerals Ltd. [NDM-TSX; NAK-NYSE] shares soared this week after the Trump administration said it would lift an Obama-era restriction on the company’s Pebble gold and copper project in Alaska.

The Pebble project ranks as one of the world’s largest undeveloped gold-copper resources.

On July 30, 2019, investors reacted to the news by sending the value of Northern Dynasty shares up 67% to $1.20, the highest level since March 2019. However, on Wednesday July 30, investors took some profits off the table, sending the shares down 12.5% or 15 cents to $1.05.

Under former President Barack Obama, the U.S. Environmental Protection Agency in 2014 proposed limits on large scale mining in Alaska’s Bristol Bay watershed, citing environmental concerns.  Under President Donald Trump, the EPA has dismantled scores of environmental rules and Trump rejects mainstream climate science.

The proposed restrictions are based on hypothetical scenarios that were different from Northern Dynasty’s submitted permit application, the EPA said in a statement. However, the company will still need to go through a permit application process.

“Today’s announcement means the Environmental Impact Statement (EIS) and permitting process for the Pebble Project currently being led by the US Army Corps of Engineers may advance to a final Record Date of Decision in 2020 without the cloud of uncertainty created by EPA’s unprecedented, pre-emptive regulatory action,” said Northern Dynasty President and CEO Ron Thiessen in a press release on July 30, 2019.

“The Corps expects to finalize the Pebble EIS in early 2020 and issue a final Record of Decision by the middle of next year,” he said.

The decision was welcomed by Tom Collier, CEO of the Pebble Partnership, a wholly-owned Northern Dynasty subsidiary, which was established to design, permit and operate a mine at Pebble.  “Finally, this Administration has reversed the outrageous federal government overreach inflicted on the State of Alaska by the Obama Administration,” he said.

In a June 26, 2019 press release, he said the restrictions, as proposed, pose a threat to investment in responsible resource development throughout the United States.

“The idea that development projects can be vetoed before they are even proposed or a comprehensive permitting process has been undertaken, is one that should not take root in this country,” Collier said.

“We have every confidence that the Pebble Project as proposed will meet the rigorous environmental standards enforced in Alaska and the [United States] and that the EIS permitting process now under way will demonstrate that compliance through an open, objective, transparent and science-driven review,” he said recently.

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.

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