Commercial viability of Pebble project in spotlight

Investment firm says value is negative, Northern Dynasty cries foul

A report released on Feb. 14 by a private investment firm questions the value of Canada’s Northern Dynasty Minerals, saying that company’s key asset, the Pebble prospect, is not commercially viable.

Northern Dynasty, a subsidiary of the diversified global mining group Hunter Dickinson, in a quick response, called the report from Kerrisdale Capital Management “a short and distort campaign” and said it would respond quickly to expose inaccuracies and misstatements in that report.

The Alaska Miners Association was not immediately available for comment.

Northern Dynasty is working to attract new investors in its effort to get the Pebble prospect permitted to develop a massive mine near the headwaters of the Bristol Bay watershed, a move opposed by the commercial and sport fishing industries.

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Meanwhile three separate law firms said they have commenced investigations of Northern Dynasty Minerals concerning possible violations of federal securities laws.

The new spotlight on Northern Dynasty, which has invested millions of dollars toward eventually developing its copper, gold and molybdenum prospect in the Bristol Bay watershed area of Southwest Alaska, came when Kerrisdale, with acknowledged short shares of Northern Dynasty stock, issued a lengthy report questioning the value of the Pebble deposit.

Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is motivated by the belief that a security’s price will decline, enabling it to be bought back at a lower price to make a profit.

Short selling may be prompted by speculation, or by the desire to hedge the downside risk of a long position in the same security or a related one.

Short selling is a common practice in the investment industry.

“Kerrisdale believes Northern Dynasty’s former partners concluded that the Pebble project had a negative present value – an assessment that Northern Dynasty has spent years trying to conceal from public,” the report said.  “Frenzied investor enthusiasm over the benefits that Trump presidency will bring to the Pebble project overlooks the ineradiable threat of veto from either the Alaskan government

or future Democratic White House.”

“Northern Dynasty’s Pebble Project is indisputably one of the world’s largest undeveloped copper/gold deposits with a potential mine life which is measured in decades,” Northern Dynasty fired back. “Investors should not rely on the Kerrisdale report and should await the company’s detailed response now in progress,” the Canadian firm said.

Levi & Korsinsky LLP, Bronstein, Gewirtz and Grossman LLC and Rosen Law Firm announced their own investigations into potential securities claims on behalf of shareholders of Northern Dynasty.

Levi & Korsinsky said in its shareholder alert that shares of Northern Dynasty stock plummeted following a report alleging that “Northern Dynasty is worthless.”

Bronstein, Gerwirtz & Grossman issued its own shareholder alert, voicing concerns of possible violations of the Securities Exchange Act of 1934, Sections 10 (b) and 20 (a), and Rosen Law Firm said it was also investigating allegations that Northern Dynasty may have issued materially misleading business information to the investing public.