Northern Dynasty’s Last Stand – by Tommy Humphreys ( – August 13, 2015)

Pebble’s new backers bet on EPA compromise and new JV partner for the world’s largest undeveloped copper-gold deposit

Two experienced mining financiers are making a $4.7 million bet that one of the world’s largest and most controversial minerals deposits is about to turn a major corner.

Frank Giustra and Gord Keep’s Cannon Point Resources (CNP.TSXv) is being acquired by Northern Dynasty Minerals (NDM.T) for a touch over its cash value (C$4.7 million). Pro forma, the deal would give Cannon Point about 8% of Northern Dynasty.

Northern Dynasty owns 100% of the Pebble Deposit in Alaska. The project saw over C$750 million of investment over the past decade and contains a jaw-dropping 107 million ounces of gold, 80 billion pounds of copper, 5 billion pounds of molybdenum, and over 500 million ounces of silver* and showed robust economics at $1050 gold and $2.50 copper in a February 2011 PEA.

Pebble is also vehemently opposed by the EPA, which began a process to veto the project in February 2014 and more recently has tried to impose development restrictions.

This is a simple bet on a settlement with the EPA, according to Keep. His advisors, with USA permitting and EPA experience, did due diligence before advising there is a potential likelihood that the EPA will compromise from its previous position.

Through Freedom of Information Act proceedings, Northern Dynasty has obtained thousands of internal EPA documents. Some of the documents suggest potential collusion between the agency and environmental lobbyists (see WSJ, WaPo coverage) leading to allegations the EPA was helping to coordinate local opposition to the mine.

Pebble is pursuing multiple legal, administrative, political and media strategies to unblock the threat of a potential veto and or restrictions, which would allow the project to pursue the normal permitting process.

Keep says there’s no guarantees the EPA will settle but feels the risk is justified for the “spectacular upside potential” of one of the world’s largest minerals deposits. A long term thinking major or state-supported end user may be interested in developing Pebble, Keep believes.

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