Northern Dynasty Minerals Ltd., the Vancouver miner blindsided by a short-seller’s scathing report, fired back on Friday, saying the polemic is “unsupported speculation” from a “troubled organization” that doesn’t understand mining.
Kerrisdale Capital Management, a New York investment firm, hammered Northern Dynasty’s stock on Tuesday when it published a report arguing the miner is “worthless” because its undeveloped copper and gold resource in Alaska is not commercially viable.
In response, Northern Dynasty said Kerrisdale’s analysis contains numerous errors and misunderstandings. “Their report isn’t worth the paper it’s written on,” Northern Dynasty chief executive Ron Thiessen said in an interview.
For instance, while Kerrisdale dismisses the Pebble deposit as “very large” but “relatively low grade,” the levels of copper in the ore body are much higher than at many properties currently in production, such as Gibraltar, a Taseko Mines Ltd. operation in south-central British Columbia. “This is not a low-grade deposit,” Mr. Thiessen said.
A pair of analysts who follow Northern Dynasty also shrugged off the report. They observed that it contains two key arguments – that the Pebble project faces stiff political opposition to winning a permit for development and that the project may require too much capital investment to ever produce a profit.
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