VANCOUVER (miningweekly.com) – The TSX-listed equity of copper/gold project proponent Northern Dynasty Minerals gained about 11% on Tuesday, after the US Army Corps of Engineers (USACE) announced that it had appointed a third-party contractor to undertake an environmental-impact assessment for the controversial Pebble project, in South-West Alaska.
This follows the company's share price taking a 46% dive in January following an apparent reversal of position by the US Environmental Protection Agency (EPA) regarding the Pebble project, with administrator Scott Pruitt stating last month that "it is my judgment, at this time, that any mining projects in the region likely pose a risk to the abundant natural resources that exist there".
The EPA suspended its process to withdraw its proposed determination under Section 404(c) of the Clean Water Act (CWA) to pre-emptively veto the project, thereby clearing the way for Pebble to apply for a CWA 404 permit with the USACE, leaving the proposed restrictions in place while the EPA collects more information on the proposed mine's impact on the region's world-class fisheries and natural resources.
However, Pruitt stressed that the EPA's decision neither deters nor derails the application process of Pebble Limited Partnership's (PLP's) proposed project. "The project proponents continue to enjoy the protection of due process and the right to proceed. However, their permit application must clear a high bar, because EPA believes the risk to Bristol Bay may be unacceptable," the agency said at the time.
The announcement prompted investors to abandon the stock following growing optimism that the project will proceed under the Donald Trump administration.
Last year, Northern Dynasty made fresh progress to move the stalled project further along the value curve, first reaching an agreement in May with the EPA, through which the federal agency agreed to withdraw its pre-emptive veto.
In December, Northern Dynasty announced a framework agreement with First Quantum Minerals anticipating that an affiliate of First Quantum will subsequently execute a $150-million option agreement with Northern Dynasty, which provides for a future right to acquire a 50% interest in PLP for a further investment of $1.35-billion.
Early in January, the PLP received notice from the USACE that its CWA 404 application had been accepted and confirmed that an environmental-impact statement- (EIS-) level analysis was required to comply with its National Environmental Policy Act review of the Pebble project.
On Monday, Northern Dynasty said consulting engineering firm AECOM has been selected from a shortlist of qualified firms to complete the Pebble EIS.
The PLP has confirmed that AECOM is now under contract, and the USACE is expected to move forward to initiate the scoping process for the Pebble EIS in the months ahead. Scoping is a public process that precedes the development of a draft EIS, whereby residents of the Bristol Bay region, Alaskans and all project stakeholders will be able to provide input on the broad range of issues and concerns they would like to see addressed over the course of permitting for the Pebble project.
Public scoping meetings will be hosted by the USACE this spring, in addition to other public participation opportunities. A formal consultation and public comment process will also be facilitated by the Corps following publication of the Pebble draft EIS – expected sometime in 2019.
Estimates show that the Pebble deposit is one of the largest low-grade undeveloped mine projects in the world, comprising measured and indicated resources of 5.94-billion tonnes, grading 0.78% copper equivalent and containing 55-billion pounds of copper, 67-million ounces of gold and 3.3-billion pounds of molybdenum. The deposit also has 4.84-billion tonnes of inferred resources, grading 0.53% copper equivalent and containing 26-billion pounds of copper, 40-million ounces of gold and 2.3-billion pounds of molybdenum.
The company's TSX-listed stock rally, however, fizzled out by the afternoon session on Tuesday, showing gains of about 2.34%, to change hands at C$1.31 apiece.