If a major mine were developed at Pebble it would bring substantial economic benefits to nearby communities and the region, according to Tom Hawkins, executive vice president and CEO of BBNC.

The Pebble resource analysis was prepared by Norwest Corporation, a minerals consulting firm, based on Northern Dynasty's exploration of the prospect through 2003, Thissen said.

Significantly, the Norwest study also resulted in a larger estimate of 435 million tons of higher-grade copper resources grading 0.84 percent copper. "This will play an important role in the payback of capital costs during the initial years of mine production," Thiessen said.

In a related development, the state Department of Transportation and Public Facilities has begun a reconnaissance engineering study of a possible road to the Pebble deposit from the west side of Cook Inlet.

A $500,000 contract has been let to Peratrovich, Nottingham and Drage, an Anchorage engineering consulting firm, to survey possible road routes and port sites, according to Mike McKinnon, manager for DOTPF's rural roads project. The study is to be complete by the end of the year.

It will also include an economics assessment to be done by Northern Economics Inc., an Anchorage economics firm, McKinnon said.

PN&D has done road route studies in the area before and has done a preliminary analysis of a possible route from Iniskin Bay, on Cook Inlet, to the Pebble project area.

McKinnon said DOTPF has asked the firm to consider all potential port sites on the inlet's west side, however. While the focus is on transportation access, the state has also asked PN&D to work with Northern Dynasty on its potential power needs so that utilities can be considered in the selection of a road route and port site, McKinnon said.

The road is expected to be about 75 miles long and presents no real construction challenges except near the inlet, he said. The community of Illiamna is about 15 miles south of the project. Illiamna has an airport with two 1,500-foot paved runways.

Northern Dynasty has been exploring Pebble since an agreement was reached with Cominco, the initial lease owner and explorer, with the Hunter Dickenson group, a mine management company that controls Northern Dynasty.

The agreement commited Hunter Dickenson and Northern Dynasty to exploration and gave the companies the right to buy 100 percent of Pebble for $10 million in stock or cash in November, 2004.

A similar arrangement had been struck between NovaGold Resources and Placer Gold at Donlin Creek, where Placer Dome, the initial developer, allowed NovaGold rights to buy into the project by doing $10 million in exploration at Donlin.

However, at Donlin Creek Placer retained the right to buy back 70 percent of the project by agreeing to take over mine development, an option which Placer has exercised.

No such buy-back option exists for Teck-Cominco at Pebble, however.

The agreement was reached before Cominco's merger with Teck Resources, and at the time Cominco's focus was on zinc, of which it is the world's largest producer. The merged company is now also interested in gold, and is developing the Pogo mine near Delta.

Briefing materials on the Pebble project prepared by Northern Dynasty describe the deposit as near the surface "in an area of gentle topography and low elevations, making it well suited to low-cost open-pit mining at a very low strip ratio,"which is the amount of fill to be excavated compared with ore that is mined, a key factor in the economics of open-pit mines.

"Preliminary test work by Cominco indicate good metallurgical characteristics," according to the briefing materials.

The known Pebble prospect is just part of a large mineralized system spread across about 40 square miles, all of which are controlled by Northern Dynasty.

The U.S. Geological Survey has identified the Pebble area as one of the world's largest sulphide mineral systems, according to the Northern Dynasty briefing materials.