Trump makes Canadian mine explorer with zero revenue great again
The company showcased in this article is Northern Dynasty.
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There’s one thing Donald Trump is already making great again: a small Canadian explorer with rights to one of the world’s largest undeveloped copper and gold deposits.
Northern Dynasty Minerals Ltd. has more than tripled since the U.S. election to approach a four-year high this week amid speculation the incoming administration will allow the explorer’s long-stalled Pebble project in Alaska to move ahead. Last week, the Vancouver-based company drummed up $43-million in a secondary share offering to investors eager for a stake in a resource it estimates at more than 6 billion tons of ore.
NORTHERN DYNASTY MINERAL
That’s quite a revival for Northern Dynasty, whose sole project had appeared all but dead only a year ago. After peaking at a market value of almost $2-billion in 2011, the company’s luck turned — it was abandoned by Anglo American Plc and Rio Tinto Group amid a commodity rout, and it was obstructed by the Environmental Protection Agency after the project had already burned through more than $550-million. Northern Dynasty’s latest quarterly results showed its cash holdings had dwindled to less than $8-million.
“On Friday, Trump gets inaugurated — that’s a good thing,” said John Tumazos, a Holmdel, N.J.-based independent mining analyst, who owns Northern Dynasty shares and believes the EPA under Mr. Trump will reverse a 2014 move to prevent Pebble from obtaining a permit. Nomination hearings began Wednesday for Mr. Trump’s pick to head the agency, Scott Pruitt, a climate-change skeptic who has called for “ regulatory rollback.” That can’t happen soon enough for Northern Dynasty.
The company first began exploring the Pebble site in 2001 and discovered a deposit stunning in its scale. Each component on its own — measured, indicated and inferred resources of 81.5 billion pounds of copper, 107 million ounces of gold and 514 million ounces of silver — would be considered a major asset. Depending on the project’s plan, mining Pebble for 80 years would deplete only 55 per cent of its known resources, Northern Dynasty Chief Executive Ronald Thiessen told investors in a speech last March. Mr. Thiessen declined to be interviewed, citing a packed schedule of investor meetings in Montreal, Toronto and New York.
In 2007, Mr. Thiessen took then-Alaska Governor Sarah Palin to London to help woo BHP Billiton Ltd., Rio Tinto and Anglo American to invest, according to last year’s speech. The latter two bit — Anglo American became a partner in the project, and Rio Tinto acquired a stake in Northern Dynasty.
But in 2013, Anglo American walked away after sinking more than $500-million into the project, and Rio Tinto several months later gifted its 19.1-per-cent stake in Northern Dynasty to local charities, including one opposed to the project.
100 Rolled Into One
“This is like 100 junior gold miners rolled into one,” said Tumazos, who retains about 120,000 Northern Dynasty shares after selling a small holding recently to recoup his initial outlay. “I think it’s the most significant mining project in the world.”
Northern Dynasty rose 2.5 per cent to $3.34 Wednesday in Toronto, increasing its market value to $894.4-million and making the stake of Mr. Thiessen, a major shareholder, worth about $10.8-million. The company hasn’t reported revenue since it was listed in the U.S. in 2004.
The Pebble site, about 320 kilometres southwest of Anchorage, is nestled among the rolling tundra and pristine waters of Bristol Bay — home to the one of the world’s largest runs of sockeye salmon. That’s made it a lightening rod for opposition by environmentalists, indigenous groups, as well as commercial and sport-fishing industries. Tiffany & Co. is among retailers that have pledged not to source gold from the region. President Barack Obama declared Bristol Bay permanently off limits to oil and gas drilling and toured the region in 2015 in an effort to cement his environmental legacy.