Pebble prospect owners might have new investor
The owners of the Pebble project are one step closer to securing the investment partner that will be key to advancing the contentious mine, according to Dec. 18 announcements.
Vancouver-based Northern Dynasty Minerals Ltd. has inked what a company press release characterizes as a “framework agreement” with fellow Canadian mining company First Quantum Minerals Ltd.
“The option agreement contemplates an option payment of $150 million (U.S.) staged over four years which option will entitle First Quantum to acquire the right to earn a 50 percent interest in the Pebble Limited Partnership for $1.35 billion,” a Northern Dynasty release stated.
First Quantum can also extend the option and make the payments over an additional two years, according to the company.
Northern Dynasty is the sole owner of Pebble after previous partners, Anglo American and Rio Tinto walked away from the controversial copper and gold project several years ago.
Northern Dynasty leaders have said they will start filing environmental permit applications for Pebble by the end of the year. At the same time, they have acknowledged the company needs a new partner to help fund permitting and development.
“We have made good progress in the partnering process and are very pleased to be in advanced-stage discussions with First Quantum, an industry leader in mine development and management,” Northern Dynasty CEO Ron Thiessen said in a formal statement.
As soon as the agreement is finalized, First Quantum will make a $37.5 million payment to Northern Dynasty to fund permitting, according to a company release.
First Quantum operates six mines worldwide primarily producing gold, copper and zinc.
Thiessen added that Northern Dynasty will initiate state and federal permitting “in the very near term.”
According to a release from First Quantum the company is still conducting a due diligence review of the potential partnership and will finalize the agreement contingent upon a favorable review.
First Quantum CEO Philip Pascall said his company remains primarily focused on advancing a copper project in Panama, but Pebble could provide long-term growth for the mine developer.
“We are well aware of the environmental and social sensitivity of (the Pebble) project and will utilize the lengthy option period to apply our extensive project development and operating expertise to ensure that this project can be developed with the support of stakeholders,” Pascall said further.
Opposition stakeholders from the Bristol Bay region quickly responded with statements that they will continue to fight Pebble development and First Quantum should follow Northern Dynasty’s ex-partners and stay out of the project.
“An overwhelming majority of Bristol Bay residents — fearful of the threat large-scale mining poses to their livelihoods and their way of life — are strongly against the Pebble project,” House Speaker Bryce Edgmon, D-Dillingham, said. “As their representative in the state House, it is my clear responsibility to oppose development of the proposed Pebble mine and the unacceptable risks it represents for the Bristol Bay watershed and the many communities I serve. A new investor in Northern Dynasty’s venture does nothing to change that.”
The Pebble Limited Partnership unveiled high-level plans in early October for a smaller Pebble mine aimed at lessening the project’s environmental impacts and appeasing skeptics.
Pebble CEO Tom Collier said the company might eventually look to expand the project but noted that would require another thorough permitting examination.
A Northern Dynasty investor presentation from earlier this year states the company estimates the Pebble prospect holds 1.9 percent of all the gold ever mined in recorded history.
Elwood Brehmer can be reached at [email protected].