Alaska’s Pebble deposit presents big problems for Northern Dynasty, the junior Canadian miner that wants to cash out of its sole asset. Pebble has an eye-popping recoverable resource of 67 million ounces of gold and 55 billion pounds copper with some molybdenum thrown in for good measure which at today’s prices is worth over $300 billion in total.
The Vancouver company shares the venture with Anglo-American (LON:AAL) but the $4.7 billion development costs could be too rich even for the London-listed giant’s blood. Apart from the problem of finding a heavyweight buyer for its 50%, Dynasty also faces opposition from a $150 million a year salmon fishery near the site and local environmental protesters who have enlisted the support of Hollywood celebrities like Robert Redford.
Reuters reports the size of the project in the southwest of Alaska limits potential suitors to the ‘A’ list of diversified miners and gold majors like Rio Tinto (ASX:RIO) which already holds a 19% stake in Dynasty, BHP Billiton (ASX:BHP) or some of the gold majors including Barrick (TSE:ABX) and Newmont (NYSE:NEM).
At least picking up Dynasty itself has become a cheaper proposition this year: On a generally dismal day on the markets Friday, Dynasty closed lower at C$9.49 in Toronto. The counter has lost more 40% over the last six months and has a market value of $895 million. The stock hit an all-time high in February of C$21.89
MetalBulletin (sub required) quotes CEO Ron Thiessen: “We’re not looking to sell our interest, but it’s highly likely that someone would come along and buy Northern Dynasty. I’m not in control of a takeover bid.”
The Squamish Chief reports the commercial fisheries sector accounts for 75% of local jobs, while tourism in the form of sport fishing and subsistence harvesting of freshwater species are key to the livelihoods of the 7,500 people who live downstream of Pebble.
5 Comments
Bill Jackson
Why try to make a monster mine, with a short life? Why not make a mine that will endure for a few hundred years and have a far smaller, and more manageable, ecological footprint. We now know how to manage mines to completely contain all wastes, just build it well.
Harvey Bedard
I agree, make it smaller with Long term Employment and profitability. The Ecological Impact is more manageble also that way. Technology would also come up with better way to mine and would allow them to MIne at a lower cost!!!
Adavidcol
Heard Galactic Resources is in the mix.
Billbergman35
Like all BIG mning companies MINE fast to make the stock holders happy and get their
investment money back soonest It’s called GREED
I have been in mining for 25 years I know
Guy Smiley
@Bill – Even at monster size (100 000 tonnes per day) this mine has a life expectancy greater than 100 years. That is without exploration for additional deposits on the property.
@ Adav – No. Anglo and NDM, %50 each. NDM partially owned by RTZ i think.