"This was unexpected, but now that we have discovered the new ore body, we must include it in our assessment," Northern Dynasty chief operating officer Bruce Jenkins told the Resource Development Council's annual conference Nov. 17.

The Pebble project is located near Iliamna on the Alaska Peninsula.

Following the discovery, announced in September, the company is continuing an exploration drilling program into late December and will continue drilling the new deposit next summer, Jenkins said. The company's board has approved a budget of $20 million for the 2006 exploration drilling program, he told the RDC conference.

Results from drilling test holes into the new ore deposit show that it has a value three times that of the original deposit explored by Northern Dynasty, although the new ore zone is deeper.

Northern Dynasty has been planning development of a large low-grade deposit of copper, gold and molybdenum at the Pebble location and is working to bring a major mining company into the project as a partner.

Plans are still to complete a pre-feasibility study in early 2006 on the development of an open-pit mine at the original ore deposit. However, Northern Dynasty's board is studying the implications of the new discovery and may decide to revamp the feasibility study to include producing the deeper ore, Jenkins said. This could change many aspects of the current plan, including the width and depth of the mining pit and the mine's power requirements.

The deeper ore deposit might be produced more efficiently by underground mining, for example. The mine tunnels would probably be built from the bottom of an open-pit mine, Jenkins said.

If the board decides to change the company's approach it could push the timetable for permit applications into 2007, Jenkins said. The current plan is for Northern Dynasty to apply for state and federal permits in late 2006.

Northern Dynasty is spending $30 million in its 2005 work program at Pebble, mostly on drilling related to geotechnical work, continuing environmental studies and engineering. In 2004 the company spent $25 million, Jenkins told the RDC. In the four years Northern Dynasty has been working on Pebble it has spent $68 million, Jenkins said.

If Pebble is developed it will be one of North America's largest copper and gold mines, and would employ about 2,000 in construction and 1,000 in production, Northern Dynasty has said. The mine would require a capital investment of $2 billion or more, Jenkins told the RDC.

Pebble was originally discovered by Cominco (now TeckCominco) in the mid-1980s, but was later sold to Northern Dynasty.