Northern Dynasty Minerals (TSX: NDM)
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Symbol: TSX: NDM / AMEX: NAK
Address:
Northern Dynasty Minerals
1020-800 West Pender Street
Vancouver, BC V6C 2V6
(604) 684-6465
www.northerndynastyminerals.com
Top Investment Highlights
- The company owns an advanced-stage world-class mining project on American soil with two major copper-gold-molybdenum deposits.
- Its flagship Pebble Project contains a 4.1 billion tonne open style pit deposit at Pebble West and a 3.4 billion tonne deposit at Pebble East.
- Pebble West is confirmed by 377 core holes, with consultants predicting the mine to have a long life and low production costs.
- Pebble East has been confirmed to be one of the world's most significant deposits of high-grade porphyry.
- The company's Alaskan location is beneficial; the state has a long history of promining legislation and the Pebble Project is in an area of favorable terrain.
- Northern Dynasty has a seasoned management team with an impressive track record.
Corporate Overview
Northern Dynasty Minerals acquired the world-class Pebble Deposit in 2001, and has since carried out extensive coppergold-molybdenum exploration there. Drilling in 2004 expanded the Pebble West deposit to 4.1 billion tonnes and upgraded 75% of those resources to "measured" and "indicated" classifications. In 2005, Pebble East was discovered, a substantial high volume underground mine opportunity. Development of both the east and west deposits have been the subject of a $59 million environmental and socioeconomic study. The results will serve to support an Integrated Development Plan that will encompass optimum development of the project's extensive mineral resources.
The company believes its flagship property to be one of the largest undeveloped projects of its type in the world. Results from drilling at Pebble East had 17 intercepts in 11 drill holes having weighted averages of 615 meters grading 0.43% g/t gold, 0.676% copper, and 0.033% molybdenum. The holes were drilled to the limits of the rig capacity, and mineralization remains open in most directions and to depth. Notably, drilling has defined a volume of mineralized rock that is at least 1,000m by 1,000m by 600m (about 6.1 billion tonnes). After recently drilling another 132 holes in the area, estimates show that Pebble East contains 42.6 billion pounds of copper, 39.6 million ounces of gold, and 2.7 billion pounds of molybdenum.
Programs and Regulations
Upon discovery of Pebble East, Northern Dynasty hired engineering, environmental, and socioeconomic specialists to help investigate and design development options for the Pebble resources. The company plans to use the assessments, including under ground and open pit recommendations and road, power, and port options in its submission of a permit application for this project. The company also plans to use local purchase and local hire to maximize the benefits of its presence for local communities. The Pebble Project is expected to provide over 2,000 new jobs during construction and 1,000 long-term operations jobs upon the commencement of production.
Once the Pebble Project is fully planned, Northern Dynasty expects to file applications for permits and trigger a public and government review of the project. Existing environmental and social conditions in the project area will be documented, as well as how those conditions will be affected by mine development. Upon receipt of operating permits, the company will begin construction. Based on a 30-month phase, operations could begin as soon as 2014.
Financial Structure
As of April 2007, Northern Dynasty had working capital of US$67 million and 92 million shares outstanding. An affiliate of Rio Tinto has invested C$181 million to purchase Northern
Dynasty shares up to a threshold of 19.8%. Management owns a 12.4% shareholding in the company.
Business Strategy
- Delineate full the Pebble East deposit and integrate it into the best overall project plan;
- Engineer, design, and permit a modern, world-class mining operation at Pebble
- Assure development adheres to strict responsible mineral development code
- Develop a consortium to finance, construct, permit, and operate a state-of-the-art mine
Location and Infrastructure
Located in Southwest Alaska, 200 miles from Anchorage near the Cook Inlet, the Pebble collection of 1,137 mineral claims on 98,600 acres of state lands is the site of Northern Dynasty's world-class property. The small community of Iliamna serves as its logistics center and base camp. A Global Mining Research report found the project's topography to be well suited for large scale development based on the presence of generally flat terrain. This will make water, tailings, and waste rock more easily managed.
The Alaskan government developed infrastructure plans for a number of areas, including the Southwest region currently host to the Pebble Project. Through this initiative, the Alaskan Department of Transportation and Public Facilities commissioned a study that identified a 138km corridor from the Pebble Project to a potential port side on the west side of Iniskin Bay. This would provide road access to the mine site. In addition, the critical issue of electrical power has been addressed in preliminary cost estimates. The project will likely require in excess of 200 megawatts of power to operate at a capacity of 200,000 tonnes per day. The company has established a partnership with Homer Electric Association, an Alaskan electric cooperative that could supply approximately 100 megawatts of power from existing generating capacity during Stage I construction and start-up.
Market Opportunity
Pebble's combination of minerals — copper (57%), gold (32%), and molybdenum (11%) — sets the project apart from many others. Metals have been in a powerful uptrend over the past five years, with price increases exceeding 400% for copper, 150% for gold, 270% for silver, and 1,030% for uranium. The drivers for the bull market in metals are obvious. Aluminum and copper have benefited from the Iraq War arms buildup, gold and silver producers from investors seeking a refuge from the prospect of inflation and political uncertainty abroad, and uranium from its value to the military, aerospace, nuclear power, and weapons systems industries. In addition to this rise in value of better known minerals, the price of molybdenum is ahead 650% since 2002 to $30 per pound, having briefly run as high as $50 in 2005. Its value is only expected to increase based on its use as a strengthening agent in gas and oil pipelines. Today, nearly two-thirds of the world's oil and gas pipelines need replacement because the steel used to produce them did not contain enough molybdenum to resist corrosion.
Timeline for Development
The company anticipates that once detailed design and engineering work is complete, the environmental permitting process will take approximately three years, at which time mine construction would then be expected to begin. Ultimately, given the scope and immense size of the project, production will likely begin in 2014.
Management
Robert Dickinson,
Executive Chairman
Bringing over 40 years of experience in exploration, Mr. Dickinson is an economic geologist leading Northern Dynasty's project development activities.
Ronald Thiessen,
President and CEO
Mr. Thiessen, an accredited public accountant, leads the company's corporate development and financing activities.
Bruce Jenkins,
COO
Mr. Jenkins brings over 30 years of experience in project and corporate management, and directs environment, government, community relations, and permitting activities for the company.
Jeffrey Mason,
Secretary and CFO
Mr. Mason is an accredited public accountant responsible for directing accounting and financing activities for the company.
Stephen Hodgson,
Vice President of Engineering
Mr. Hodgson, a professional engineer with over 30 years of experience in mine operations, mine development, and project engineering, directs all engineering activities for the Pebble Project.
This corporate profile is based upon information provided by management of Northern Dynasty Minerals. The information is not intended to be and shall not constitute, an offer to sell or solicitation of any offer to buy any security. It is intended for information only and to increase awareness of Northern Dynasty Minerals services.
Safe Harbor Statement: The statements in this document relating to future product availability, collaboration and partnership and positive direction are forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some or all of the aspects anticipated by these forward-looking statements may not, in fact, occur. Factors that could cause or contribute to such differences include, but are not limited to, contractual difficulties, demand for Northern Dynasty Minerals products, the future market price of Northern Dynasty Minerals common stock and the Company's ability to obtain necessary future financing. EQUITIES Magazine was paid by Northern Dynasty Minerals to write and print this profile. Before investing in any security, you are strongly advised to review all public filings of the issuer of such security, which can be found at www.sec.gov, as well as the warnings published by the Securities and Exchange Commission at http://www.sec.gov/investor.shtml.
