Some lucky investors just struck gold at Northern Dynasty Minerals. Image source: Getty Images.

What happened

The past six months have seen shares of Northern Dynasty Minerals Ltd. (NAK 7.27%) roughly quintuple in value, continually rising day to day from about $0.44 per share in July to today's closing price $2.28.

Most days, Northern Dynasty shares have risen without much news to justify a rise. Friday, however, was different. Friday, Northern Dynasty shares surged 9.1% higher on what many would consider negative news.

So what

Specifically, Northern Dynasty Minerals announced late Thursday that it has increased the size of its previously announced secondary share offering to 17.6 million shares, and added a further 2.6 million shares available to its underwriters to buy as an "overallotment option." In total, that makes for 20.2 million new Northern Dynasty shares coming onto the market -- a fact that management hailed as an indication of "strong demand" for the offering.

But here's the thing: Northern Dynasty is selling all these shares at $1.85 per share.

Now what

On the one hand, selling these shares promises to raise roughly $37.4 million (before fees) in new cash for Northern Dynasty, helping to bolster the company's liquidity. That fact might explain the offering's popularity.

On the other hand, another reason the offering might be so popular is because buyers are getting the chance to buy Northern Dynasty stock at a 19% discount to its market price. In theory, at least, this raises the possibility that they will soon be able to turn around and sell the stock for a quick 23% profit.

That's a nice deal if you can get it. As for people who already own the stock, however, not only will they not get a chance to make that profit -- they also will see their ownership stake in the company diluted by nearly 8%.