JOHANNESBURG (miningweekly.com) – Shares in Northern Dynasty dropped like a stone on Tuesday, after a US government draft environmental report raised concerns about the contentious Pebble copper project in Alaska, of which it owns half.
The Pebble project, which the Vancouver-based company jointly owns with Anglo American, is located near Bristol Bay and has come under heavy criticism from environmental and community groups who say it threatens salmon populations in the area.
The 339-page Environmental Protection Agency (EPA) report concluded that large-scale mining would, at a minimum, “cause the loss of spawning and rearing habitat for multiple species of anadromous and resident fish”.
The agency stressed that the draft document studied the potential impacts of large mining developments in the area on salmon and other fish, wildlife, and native Alaskan cultures.
It was not an assessment of any specific development proposal, the authors said.
The publication had a damaging effect on Northern Dynasty’s share price on Tuesday, when the TSX opened following the Victoria Day long weekend.
Its stock dropped 34.7% to end the day at C$2.60 – the lowest level since November 2008.
Northern Dynasty CEO Ron Thiessen struck out at the report, questioning how the EPA could, in one year, “meaningfully study a region of some 20 000 square miles and assess the effects of a project for which a final design is not yet complete”, adding it was “pure hubris” to suggest so.
“We have every expectation that the deep flaws in the draft Bristol Bay watershed assessment report will be exposed during the scientific peer review and public comment processes to come over the next several months,” he said in a media release.
The Pebble Partnership, the jointly owned operator of the project, also issued a strongly worded statement slamming the draft report as “rushed and inadequate”.
In February, the company released an environmental baseline document for the project, which took stock of the flora and fauna in the area, as well as geological and water conditions.
The partners approved a $107-million 2012 work programme for Pebble earlier in May, which would go towards continuing environmental studies, drilling, workforce and business development initiatives.
The permitting process for the project is expected to last into late 2016, with public consultation set to start later this year.
Assuming Pebble received the go-ahead, first production would arrive only in 2020.
A 2011 preliminary economic assessment forecast copper-equivalent output of 1.15-billion pounds yearly.