The US subsidiary of Toronto-listed Northern Dynasty said on Monday that it had started work on a plan to meet the US Army Corps of Engineers (USACE) expectations for wetlands mitigation and that it would be ready to submit a comprehensive management plan (CMP) “within weeks”.

This comes as the USACE has announced that the controversial copper/gold mine project near Bristol Bay, in south-west Alaska, cannot be permitted as currently proposed.

The USACE stated that the project could have substantial environmental impacts within the Bristol Bay watershed and that it lacked adequate compensatory mitigation.

The Pebble Partnership said that the letter it had received from the USACE was routine and that it did not ask for a delay or pause in the permitting process.

“In fact, it clearly states that the USACE is continuing its work toward a record of decision (ROD) for the project. This is the next step in what has been a comprehensive, exhaustive two-and-a-half-year review of the project.  Nothing in the letter is a surprise to us or them,” CEO Tom Collier said, stressing that it was not a “show-stopper” as had been reported in the news.

At the weekend, several news outlets reported that the Trump Administration would block the project. The weekend’s news reports and USACE’s announcement sent Northern Dynasty’s share price plunging 38% on Monday, closing at C$1.19 a share.

US Senators Lisa Murkowski and Dan Sullivan, both R-Alaska, on Monday also issued a statement in support of the USACE’s announcement. Murkowski said that while she supported Alaska’s mining industry and the jobs, revenues and raw materials it provided, each project had to demonstrate that it could be built and operated in accordance with strict regulations and without adverse impact on the environment.

“In this instance, after years of extensive process and scientific study, federal officials have determined the Pebble project, as proposed, does not meet the high bar for large-scale development in Bristol Bay," said Murkowski.

Pebble submitted its permit application to the USACE in December 2017. The agency completed a final environmental impact statement (FEIS) for the project in July 2020. The FEIS found, among other things, that the proposed mine would impact several thousand acres of wetlands and waters, including about 120 miles of streams in the Koktuli River Watershed.

In order to provide mitigation, Pebble Partnership said it would include in its CMP a plan to preserve enough land so that multiples of the number of impacted wetlands acres were preserved. Additional mitigation would also be provided for the transportation corridor.

"We have been working on the details of a plan with the USACE and the state of Alaska since earlier in the summer.  We have had crews in the field near the site since the end of July conducting additional wetlands surveys to provide us with additional information to include in our plan,” said Collier.

He added that the Pebble Partnership was confident that its final CMP submission would satisfy all the requirements of the letter.

"Anyone suggesting a different opinion—i.e. that Pebble will not be able to comply with the letter or that such compliance will significantly delay issuing a ROD—must be ignorant of the extensive preparation we have undertaken in order to meet the requirements of the letter.”