Shares of copper and gold miner Northern Dynasty Limited (NYSEMKT:NAK) rose a dramatic 30% at the open of trading on May 29. Although the stock quickly settled down, by 10 a.m. EDT, it was still up an impressive 18%. An update on the company's efforts to get its Pebble mine project approved was the reason for today's share price fireworks.
Northern Dynasty Limited is a miner with one main asset, the Pebble project, which hasn't been built yet. In fact, it hasn't even gotten all of the approvals it needs to be built. And that's a big problem, since Northern Dynasty has faced material government, business, and resident pushback. After getting things moving in a positive direction in 2019, the company has had a number of successes this year as it seeks to start building a mine that it believes could hold among the largest untapped gold and copper reserves in the world.
The most recent news, shared via a company release on May 29, was that a letter issued by the U.S. Environmental Protection Agency (EPA) confirmed that "the Environmental Impact Statement (EIS) process for the proposed Pebble mine currently being led by the US Army Corps of Engineers (USACE) is proceeding well, and effectively addressing all issues and concerns raised by EPA, the US Fish and Wildlife Service (USFWS) and other cooperating agencies..." Equally important, the EPA allowed a deadline for imposing strict guidelines under the Clean Water Act to pass without action. That, in effect, means Pebble won't face the additional scrutiny that some had feared it might.
On the whole, this is all very good news for Northern Dynasty Limited and the price jump makes sense. However, there's still a very long way to go before the Pebble project is complete and the company has a working mine. In fact, a final investment decision on the mine isn't expected to be made until 2022. If the project does proceed, it won't be operational until maybe 2026. Those dates, meanwhile, assume everything goes according to the company's current plans. There's still material uncertainty here and only aggressive investors should be looking at Northern Dynasty Minerals. There's a lot of work and potential stock volatility to come.