With an abrupt doubling of the share price since late November, Northern Dynasty Minerals
Northern Dynasty and Anglo American (OTC BB: AAUKY.PK) are equal (50%) equity partners in the monumental Pebble copper-gold-molybdenum project in southwestern Alaska. As the owners of other world-class ore deposits in North America can attest, the equity markets have a tendency to maintain heavily muted asset valuations on large-scale development projects until considerable visibility regarding mine planning, financing, and construction has been unveiled.
When the entire gold sector plummeted to ludicrous stock valuations during the financial crisis of 2008, for example, I noted that Seabridge Gold's
On the other hand, one could argue the market is well advised to keep valuations low on these high-stakes plays, where project financing, engineering, and permitting can each present daunting challenges. On a smaller scale, Taseko Mines
Because initial opposition to Northern Dynasty's Pebble project by environmentalists and the nearby salmon fishery was particularly vocal and intense, I believe the market has gone the extra mile to discount the permitting hurdle faced by the Pebble Partnership in their quest to construct this mine. Over time, however, as the timetable for selection of a specific mine plan and release of a prefeasibility study draws the project ever closer to the all-important permitting process, the stock may well attract buyers betting on eventual project approval.
The reality is that Pebble's 55 billion pounds of copper, 66.9 million ounces of gold, and 3.3 billion pounds of molybdenum (measured and indicated) are likely too vast a treasure to remain underground. The deposit is roughly comparable in scale to Ivanhoe Mines'
Along with the nearby Donlin Creek project -- which is owned jointly by NovaGold Resources
I encourage Fools to keep Northern Dynasty Minerals firmly within their sights by adding it to My Watchlist. Additionally, bookmarking this link will provide easy, ongoing access to all my musings on the sector.
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Anglo American, Northern Dynasty Minerals, NovaGold Resources, and Taseko Mines. 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 that never moves.
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