Shares of Northern Dynasty Minerals (NYSEMKT:NAK) rose nearly 16% today after the company reported that the Pebble Partnership had secured a right-of-way agreement with Alaska Peninsula Corporation.
The Pebble Partnership represents the company's Pebble Project, the largest undeveloped gold and copper mine in the world. The Alaska Peninsula Corporation is an Alaska Native village corporation, which represents hundreds of people living nearby and owns important land near the Pebble Project. The right-of-way agreement provides Northern Dynasty Minerals access to certain land and property owned by Alaska Peninsula Corporation as it proceeds with construction activities for the Pebble Project.
As of 1:23 p.m. EST, the stock had settled to a 11% gain.
Today's news marks the second positive development for Northern Dynasty Minerals in the month of November. The first came on Nov. 6 in the form of midterm election results: Alaskan voters elected a pro-development governor, and voted against a ballot measure that would have provided more protection to the state's salmon fisheries. The latter issue has in recent years become intertwined with the development of the Pebble Project, which could affect Alaska's world-leading salmon industry.
Recent developments may make investors excited, but the reality is that Northern Dynasty Minerals will need a miracle to pull off its current go-it-alone strategy for developing the Pebble Project. The $230 million company has no history of successful development of mining assets, and no major partners to de-risk the project. It exited September with $21 million in cash and cash equivalents, but will need at least an order of magnitude more capital to successfully put its prized asset into production. Therefore, investors should stay away from this gold stock until more concrete plans come to light.