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 C$43 million ($32.4 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.
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 C$8 million.
“On Friday, Trump gets inaugurated -- that’s a good thing,” said John Tumazos, a Holmdel, New Jersey-based independent mining analyst, who owns Northern Dynasty shares and believes the EPA under Trump will reverse a 2014 move to prevent Pebble from obtaining a permit. Nomination hearings began Wednesday for 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.
Shifting Fortunes
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 percent of its known resources, Northern Dynasty Chief Executive Ronald Thiessen told investors in a speech last March. Thiessen declined to be interviewed, citing a packed schedule of investor meetings in Montreal, Toronto and New York.
In 2007, 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 gifte d its 19.1 percent 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.”