Introducing Northern Dynasty Minerals.
Their Pebble project, a very large un-mined deposit of Gold, Copper and Molybdenum in north america.
Measured + Indicate resources of 55B lb Copper, 66.9M oz Gold, and 3.28B lb Molybdenum. At current prices, that’s a M+I Gold equivalent reserve of 261.5M ounces!
Now, the project is a 50/50 joint venture between NDM and Anglo American, but that’s still 130.75M Gold equivalent ounces belonging to NDM.
Now, for Anglo American to retain their 50%, they must spend at least $1.425 billion throughout the development of Pebble. NDM has $38.9 million in working capital, but does not need to spend a cent on pebble until Anglo American’s $1.425 billion has been spent. *Hunter Dickinson, has a history of developing projects and selling them on, so there’s a good chance Anglo American will acquire NDM, quite possibly before NDM spends a cent on Pebble. So, don’t expect any share dilution for the forseeable future.
*The companies parent company, Hunter Dickinson, has a business model, which is to develop projects, and sell them on realising a large profit. They are also responsible for Taseko mines and Continental Minerals. https://goldstocktrader.wordpress.com/2010/11/28/continental-minerals-kmk-v/
The downside – NDM’s shareholding is not a controlling one. There is also much environmental controversy surrounding the Pebble deposit, and environmental concerns can stop development right in its tracks in these first world countries. Just take a look at Taseko Mines Prosperity project in British Columbia, which was refused federal authorisation to proceed. Share price opens nearly 50% lower the next day.
How much is Northern Dynasty worth?
Whatever someone will pay for it. Currently, at friday’s closing price of $13.41, with 93.9 million shares outstanding, NDM costs $9.64 per Gold equivalent ounce.
Comparing Continental Minerals, which was acquired by Jinshan for $21.26 per Gold equivalent ounce, We could reasonably expect an offer in the higher twenties.
As mentioned, NDM is not a controlling shareholder, and a deposit of this size will likely go for a discount compared to a smaller deposit. However, Continental Minerals acquisition price was below market expectations due to it’s remote location. Whereas, the Pebble deposit is in the much more competitive location of Alaska. Therefore, the higher twenties is still a reasonable target price for NDM.
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