Northern Dynasty Minerals (TSX: NDM; NYSE: NAK) announced Wednesday its 100%-owned, US-based subsidiary Pebble Limited Partnership received formal notification from the US Army Corps of Engineers (USACE) that its application for permits under the Clean Water Act and other federal statutes has been denied.
The lead federal regulator found Pebble’s ‘compensatory mitigation plan’ as
submitted earlier this month to be ‘non-compliant’, and that the project is ‘not in the public interest’.
The Washington Post cited a statement by Colonel Damon Delarosa, commander of the U.S. Army Corps of Engineers in Alaska, who said that the proposed project did not have an adequate plan to handle waste that it produced.
Northern Dynasty called the decision “politically motivated” and said it is fundamentally unsupported by the administrative record as developed by the USACE through the Environmental Impact Statement (EIS) process for the Pebble project.
With resource estimates including 6.5 billion tonnes in the measured and indicated categories containing 57 billion pounds of copper and 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million silver ounces, if permitted, Pebble would be North America’s largest mine.
But Pebble’s permitting process has been surrounded by controversy and delays. Pebble faced environmental opposition from the onset as the mine would be near the world’s largest commercial sockeye salmon-producing region, and doubts surrounding the project rose steadily over recent months.
In September, short seller J Capital Research accused Northern Dynasty management of “gaslighting investors” and said the mine plan “is on its face absurd.”
“We believe Northern Dynasty has crafted a money-losing mining plan to achieve government approvals. Since management is bonused on lobbying success instead of for producing minerals, NAK has no reason to care that the new plan is irrational: we think it will lose money, leave investors with a stranded asset, and be canceled anyway if Joe Biden is elected,” JCap’s report read.
Northern Dynasty called the report “fatuous, flimsy and fundamentally self-serving,” as well as “typical of such efforts to profit by destroying the value of honest shareholders’ investments.”
Also in September, Tom Collier, CEO of Pebble Limited Partnership, submitted his resignation in light of comments made about elected and regulatory officials in Alaska in private conversations videotaped by an environmental activist group.
Northern Dynasty said it intends to launch an administrative appeal of the USACE permitting decision within the provided 60-day window.