Northern Dynasty tanks as EPA blocks issuance of key permit
Update: Northern Dynasty has issued a response to the EPA's announcement. Read it here.
Northern Dynasty's (TSE:NDM) share price dropped 32% on Friday after the US Environmental Protection Agency (EPA) announced that it will, for the time being, stall the permitting process of the company's proposed Pebble mine in Alaska.
The company was trading at $1.12 per share on the Toronto exchange Friday afternoon, a record low.
Citing concerns over the Bristol Bay's salmon population, the EPA initiated a process "to identify appropriate options" to protect the fish from the potential mining operation, which would develop the massive porphyry copper deposit.
"Extensive scientific study has given us ample reason to believe that the Pebble Mine would likely have significant and irreversible negative impacts on the Bristol Bay watershed and its abundant salmon fisheries," said EPA Administrator Gina McCarthy in a statement. "It’s why EPA is taking this step forward in our effort to ensure protection for the world’s most productive salmon fishery from the risks it faces from what could be one of the largest open pit mines on earth. This process is not something the Agency does very often, but Bristol Bay is an extraordinary and unique resource."
Under the Clean Water Act, the US Army Corps of Engineers usually issues permits to dredge or fill material into waterbodies. But under a rarely-used provision the EPA can revoke that right, and today the Agency initiated the first step of that process. During the subsequent steps which include public hearings and consultations with the Army Corps and the company, no permits can be granted.
At the request of native Alaskan tribes, the EPA has been looking into the Pebble mine for three years now, sparking a heated debate over whether its actions constitute a "pre-emptive veto" considering that the company behind the project, Northern Dynasty, has yet to submit an official proposal.
Last month the agency released its final assessment on how mining would impact the Bristol Bay area and concluded that the activities would put the salmon populations at risk, jeopardizing the livelihoods of tribal communities.
"The assessment indicates that the proposed Pebble Mine would likely cause irreversible destruction of streams that support salmon and other important fish species, as well as extensive areas of wetlands, ponds and lakes," the EPA wrote in a news release Friday.
The US Geological Survey lists Northern Dynasty's deposit as the most extensive mineralized system in the world, according to the company. Drilling of 1,200 holes has determined that the deposit represents 5.94 billion tonnes of measured and indicated resources.
In total $720 million has been invested in the project, though most of that came from Anglo American – the company which dropped out of the Pebble Partnership last year.
Northern Dynasty has said that it plans on initiating federal and state permitting in 2014, though it noted that a final decision on permit timing will depend on securing a new project partner.
Earlier this month the company brought on a new CEO, Thomas Collier. For what he lacks in mining knowledge, Collier makes up for in political connections: The new CEO is a former chief of staff at the US Department of the Interior during the Clinton era.