Name of the Project
Pebble copper/gold/molybdenum/silver/rhenium project.

Location
South-west Alaska, in the US.

Project Owner/s
Pebble Limited Partnership, a subsidiary of Northern Dynasty Minerals.

Project Description
A preliminary economic assessment (PEA) published in September 2021 has provided updated production, financial and cost estimates for the proposed project.

The 2021 PEA also examines three potential mine-expansion scenarios and potential alternative strategies for gold recovery that could form the basis for future permit applications and reviews.

The proposed project envisages a 20-year openpit mining operation with a processing rate of 180 000 t/d. Life-of-mine (LoM) metal production for this scenario is estimated at 6.4-billion pounds of copper, 7.3-million ounces of gold, 300-million pounds of molybdenum, 37-million ounces of silver and 230 000 kg of rhenium.

Average metal production is forecast at 320-million pounds a year of copper, 363 000 oz/y of gold, 15-million pounds a year of molybdenum, 1.8-million ounces a year of silver and 12 000 kg/y of rhenium.

The three expansion scenarios are modelled on a concept identified by Northern Dynasty’s Pebble Limited Partnership in a request for information submission to the US Army Corps of Engineers (USACE) during the federal permitting process.

The first expansion would expand the Pebble process plant from 180 000 t/d to 250 000 t/d, following the 20-year project life envisioned in the proposed project, with the subsequent mining and processing of an additional 6.3-billion tons of mineralised material.

The second and third expansions would expand the Pebble process plant to 270 000 t/d in production Year 5 and production Year 10, and to 250 000 t/d in Year 21.

All three scenarios process the same 8.6-billion tons of mineralised material over the LoM.

In November 2022, Northern Dynasty updated the PEA for the project to evaluate the impact of the recently announced royalty financing on the project. The 2022 PEA updated the 2021 PEA to examine the impact from the $12-million tranche of the previously completed royalty investment and the potential impact of a $60-million royalty investment if all five tranches are fully committed.

The 2022 PEA highlights that the project remains robust and while the royalty has the potential to be valuable, the impact on the forecasted economics of the project are minimal while strengthening the company’s balance sheet position.

The 2022 PEA also assesses the royalty’s impact on the projected results for the three potential mine expansion scenarios and potential alternative strategies for gold recovery that were also presented in the 2021 PEA, and could form the basis for future permit applications and review.

Potential Job Creation
The project could create 750 to 1 000 direct jobs for Alaskans and 2 000 jobs overall.

Net Present Value/Internal Rate of Return
At forecast long-term metal prices, the project has an after-tax net present value (NPV), at a 7% discount rate, of $2.3-billion and an internal rate of return (IRR) of 15.8%, with a payback of 4.7 years.

At prevailing metal prices, the project has an after-tax NPV, at a 7% discount rate, of $4.8-billion and an IRR of 23.8%.

The expansion studies have an IRR of between 18.2% and 21.5%, and an NPV of between $5.8-billion and $8.5-billion.

Without a royalty, the 2022 PEA calculates an after-tax NPV, at a 7% discount rate, of $2.28-billion and an IRR of 15.7%. Calculating for a 6% silver royalty, the NPV remains virtually unchanged, at $2.45-billion, and the IRR at 15.6%. Working on a 10% gold and 30% silver royalty, the NPV is $2.01-billion and the IRR 15.1%.

Capital Expenditure
Initial capital costs for the proposed project are estimated at $6.05-billion, and do not include the projected costs of any of the expansion scenarios. Additional capital expenditures would be required to facilitate the addition of an on-site gold plant and development of the various expansion scenarios.

Planned Start/End Date
Not stated.

Latest Developments
Northern Dynasty Minerals has raised doubts about its ability to continue if it is unable to raise the necessary capital for the Pebble copper project.

The company is exploring and evaluating the project and has not yet determined whether it contains mineral reserves that are economically recoverable.

The project has been through a roller coaster of regulations for the past 15 years.

Former US President Barack Obama opposed the project, and his successor Donald Trump ultimately did, too, after deciding it was too risky.

Current US President Joe Biden has also long opposed the project and took steps upon taking office in 2021 to permanently protect Alaska's Bristol Bay.

To continue operations, Northern depends entirely upon the existence of these economically recoverable mineral reserves and its ability to obtain financing to complete the exploration and development of the project.

The company will require additional financing to progress any material expenditures at the Pebble project and for working capital requirements.

In January the US Environmental Protection Agency said it plans to take steps to block the proposed project by preventing Northern Dynasty from storing mine waste in the state's vast watershed.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Northern Dynasty Minerals, tel +1 604 684 6365 or email info@northerndynasty.com.
Pebble Limited Partnership, tel  +1 907 339 2600 or email receptionist@pebblepartnership.com.