Since acquiring the Pebble Project in 2001, Northern Dynasty has delineated and advanced one of the world's greatest stores of mineral wealth.
Located on American soil in southwest Alaska, the Pebble deposit is remarkable for both its size and composition. Current resource estimate includes 5.94 billion tonnes in the measured and indicated category containing 55 billion lb copper, 66.9 million oz gold and 3.3 billion lb molybdenum; and 4.84 billion tonnes in the inferred category, containing 25.6 billion lb copper, 40.4 million oz gold and 2.3 billion lb molybdenum. Quantities of silver, palladium and rhenium also occur in the deposit.
In 2007, a wholly-owned affiliate of Northern Dynasty entered a 50:50 partnership with a wholly-owned subsidiary of Anglo American plc to permit, construct and operate a modern, long-life mine at Pebble. Based on Anglo American's staged investment of $1.425 to $1.5 billion, both companies share equal ownership, board representation and rights in the Alaska-based Pebble Limited Partnership.
Since 2007, Rio Tinto has a 19.6 per cent equity holding in Northern Dynasty Minerals which owns a 50 per cent share in the Pebble Joint Venture (Rio Tinto share in Pebble: 9.8 percent). Northern Dynasty Minerals is advancing the Pebble copper-gold-molybdenum deposit in south western Alaska, which includes an orebody amenable to block caving.
On February 17, 2011, Wardrop, A Tetra Tech Company issued an independent NI 43-101 compliant Preliminary Assessment Technical Report of the Pebble Project. The Preliminary Assessment is based on concept, pre-feasibility and feasibility-level technical and engineering studies completed by the Pebble Partnership and Northern Dynasty. Wardrop's Preliminary Assessment describes and assigns potential economic value to three successive mine development cases comprising 25, 45 and 78 years of open pit mining and a nominal processing rate of 200,000 tons per day. Wardrop selected the 45-Reference Case as the base case for its study. 
For the Pebble Project, the 45-year Reference Case yields a 14.2% pre-tax IRR, a 6.2-year payback on initial capital investment of $4.7 billion and a $6.1 billion pre-tax NPV at a 7% discount rate and long-term metal prices. At current prevailing metal prices, the 45-year Reference Case yields a 23.2% pre-tax IRR, a 3.2-year payback on initial capital investment and a $15.7 billion pre-tax NPV at a 7% discount rate. For Northern Dynasty's 50% share of the project, the 45-year Reference Case yields an 18% pre-tax and 15.4% post-tax IRR, a 4.7-year pre-tax and 5.3-year post-tax payback on initial capital investment and a $3.6 billion pre-tax and $2.4 billion post-tax NPV at a 7% discount rate and long-term metal prices. At current prevailing metal prices, the 45-year Reference Case yields a 30.2% pre-tax and 25.1% post-tax IRR, a 2.6-year pre-tax and 3.1-year post-tax payback on initial capital investment and an $8.3 billion pre-tax and $5.6 billion post-tax NPV at a 7% discount rate for Northern Dynasty's 50% interest.
Under the leadership of the Pebble Partnership, the Pebble Project is on a path to development. Key project strengths include:
- a known mineral resource with the tonnes, grade, metallurgy and geometry to support a modern, long-life mine;
favorable terrain - low elevation;
a stable and predictable regulatory environment;
ready human and financial resources; and,
broad public support for responsible resource development in Alaska. |