Northern Dynasty receives $12M royalty payment as government talks continue

[Redator]

Northern Dynasty Minerals (TSX: NDM) (NYSE-A: NAK) says it has received another $12 million payment from its royalty investor while it continues to have talks with the US government on the approval of the company’s flagship Pebble project in Alaska.

The payment is part of a royalty financing agreement signed with an unnamed investor in July 2022 for Pebble, touted as one of the world’s largest copper-gold-molybdenum resources. However, the proposed mine has faced stern local opposition and undergone a protracted period of review due to its location near the Bristol Bay watershed, where some of the world’s largest sockeye salmon fisheries reside.

Under the royalty agreement, the investor can make five payments to the company totalling $60 million. The latest payment represents the fourth tranche, bringing the total royalty investment to date to $48 million. The maximum payment would give the investor the right to purchase 10% of the payable gold production and 30% of payable silver production from the Pebble project.

“We appreciate the continued support from our royalty investor and are pleased to see the fourth payment of $12 million completed,” said Ron Thiessen, Northern Dynasty’s president and CEO, in a press release.

“This $12 million investment, when combined with the several million dollars of inflow from the exercise of stock options and warrants this summer, and when added to our second quarter closing cash balance of C$25.2 million ($18.5 million), gives us a strong treasury position as we move the project forward.”

Project status

The status of the Pebble project, as it stands, remains uncertain after the US Environmental Protection Agency in 2023 blocked the company’s Alaskan subsidiary from storing mine waste in the area, essentially killing the project.

In a bid to overturn that decision, Northern Dynasty filed actions against the EPA with the federal courts and is currently in talks with the Agency regarding a potential settlement. On the company’s part, it must provide an updated mine proposal to the EPA, but to date, it has yet to make a submission despite encouragement from government officials.

While it is unclear what changes to the project could appease EPA officials, any modification to the handling of mining waste could help address concerns raised since President Donald Trump’s first term in office.

“We continue to have discussions with the government about withdrawing the veto and remain optimistic for a positive outcome,” Thiessen stated in a press release on Friday. “Withdrawal of the illegal veto will be a step towards developing this very large new source of copper and rhenium, as well as significant amounts of gold, molybdenum and silver.”

If built, the Pebble mine would be the largest copper, gold and molybdenum extraction site in North America. A 2023 economic study estimated that it would produce 6.4 billion lb. of copper, 7.4 million oz. of gold and 300 million lb. of molybdenum, plus 37 million oz. of silver and 200,000 kg of rhenium, over 20 years.

Shares of Northern Dynasty closed the Friday session 5.3% higher at C$1.59 apiece, its highest in two months. The stock had plunged in mid-July following reports of insider selling and a potential stalemate with the EPA. The company’s market capitalization currently stands at C$877.3 million ($629 million).