The Millstone Around Northern Dynasty's Neck

The miner is dragged a little bit deeper into the Bristol Bay morass with publication of the EPA's final assessment.

Jan 18, 2014 at 3:07PM

Copper and gold miner Taseko Mines (NYSEMKT:TGB) was blindsided by an erroneous assessment report issued by the Canadian Environmental Assessment Agency charging that its New Prosperity mine in British Columbia would wreak catastrophic damage on the environment because it was based upon flawed data. Rather than use the mitigation plans Taseko submitted, the agency erroneously substituted one from the country's mineral and resource agency, a plan that would lead to a horrendous outcome. 

The blatant disregard of the miner's plan in an effort to subvert the application process has thrown the whole review into question, and Taseko is challenging the flawed findings.

While perhaps not on the same level as the "unfathomable" efforts by our neighbors to the north, Northern Dynasty Minerals (NYSEMKT:NAK) is undergoing a similar trial by ordeal at its proposed Pebble mine in Alaska where the Environmental Protection Agency issued its third and final assessment yesterday of the copper and gold project on the Bristol Bay watershed. Although the miner hasn't even submitted a proposal yet, the agency has already determined Northern Dynasty will similarly cause "catastrophic effects." 

Instead of waiting for an actual plan to be devised as is routinely the case, the EPA chose to preemptively use Northern Dynasty's draft outline that it submitted to the SEC and then asked some mining experts for their opinion too. The resulting report gave the appearance of a predetermined outcome in search of a project to deny. The miner struck back at the regulatory agency, noting the hit job it did in its first two draft reports saying it had every expectation this latest version will be equally flawed.

Located on Bristol Bay at the headwaters of a major spawning ground that sees 40 million salmon swim in every year, Pebble is the single largest undeveloped copper-gold-molybdenum deposit in the world, with the potential to produce as much as 55 billion pounds of copper, 67 million ounces of gold, and 3.3 billion pounds of molybdenum over its near 80-year life. Thousands of jobs and billions of dollars in revenue and taxes are attached to its completion.

Maybe it was the mounting opposition to Pebble, or the need to conserve resources in an escalating cost environment, but Northern Dynasty Minerals has more problems than just an adversarial agency as it has also lost its partner for the mine's development and its major backer is poised to dump its stock.

This past September, Anglo American (NASDAQOTH:AAUKY) announced it was withdrawing from the project as it directed its limited capital only to priority projects as it seeks to build cash flows over the next few years. Then last month, investor Rio Tinto (NYSE:RIO) said it was considering divesting the near-20% ownership stake it has in Northern Dynasty as part of a strategic review that has come under increasing political pressure to back away from the unpopular Alaskan development scheme.

Without a partner, Northern Dynasty is unlikely to be able to move forward despite proceeding with its permitting plans. It also said the final EPA report "does not include any recommendations or regulatory actions that will affect future development of the Pebble Project."

Perhaps, but with hundreds of millions of dollars sunk into Pebble already, the project is a millstone around Northern Dynasty Minerals' neck. Nor will anyone throw it a life preserver -- the preemptive strike by the EPA ensures everyone will want to avoid any blowback.

Get ahead of the game
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Fool contributor Rich Duprey has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers