Northern Dynasty Minerals Sees Copper Crunch as Pebble EPA Veto Ruling Nears

Key Points

• Copper supply concerns are central to Northern Dynasty’s investment case: The company cited forecasts of a potential global copper deficit of roughly 10 million metric tons by 2035–2040, alongside declining discoveries and weakening mine output.
• The Pebble project’s future hinges on an imminent court ruling challenging an EPA veto that halted permitting. Briefing and oral arguments are complete, and the judge said she would try to issue a decision in the near term, though the outcome and timing remain uncertain.
• If the veto is overturned, Northern Dynasty plans to resume the Army Corps’ permitting process—estimated to be 80%–90% complete—and seek development partners, supported by the project’s large copper, gold, molybdenum and rhenium resources.

Northern Dynasty Minerals NYSEAMERICAN: NAK outlined its view of growing copper supply constraints and provided an update on its legal effort to advance the Pebble copper-gold project in Alaska during a presentation at a Denver Gold Group conference.

Mike Westerlund, the company’s head of investor relations, said copper demand is expected to increase as electrification expands across transportation, power infrastructure and data centers. Citing research reported by RBC and S&P Global, Westerlund said the market could face a copper deficit of about 10 million metric tons by 2035 or 2040, depending on the forecast.

Westerlund also pointed to declining copper discoveries and lower global mine supply during the first half of the year. He said supply could post its first annual decline since 2017 if the trend continues, citing weakness at Chilean producer Codelco as one contributing factor.

Pebble Resource and Location

The Pebble project is located about 200 miles from Anchorage and approximately 150 miles from the ocean, according to Westerlund. He described the deposit as the world’s largest undeveloped copper-gold project and said the site is remote, with no nearby communities within roughly 20 to 25 miles.

The company reported measured and indicated copper resources of 53 billion pounds and inferred copper resources of 23 billion pounds. It also listed 54 million ounces of measured and indicated gold resources, 28 million ounces of inferred gold resources, and additional molybdenum, silver and rhenium.

Westerlund identified copper and rhenium as particularly important to the project’s investment case. He said Pebble represents the largest undeveloped source of rhenium, a metal used in certain military and aerospace applications because of its high melting point.

He also referenced a prior BMO study that estimated Northern Dynasty could trade at about $8 per share if it became a development-stage company. Westerlund characterized that figure as a guideline rather than a current valuation target, noting that the company’s shares were trading at approximately $1.40 during the presentation.

EPA Veto Challenge Remains Central

The company’s path forward is centered on litigation challenging an Environmental Protection Agency veto affecting mining activity and fill placement within an area surrounding the Pebble project. Westerlund said Northern Dynasty, the State of Alaska and Native residents in the region have brought separate legal challenges, which have been combined before Judge Sharon Gleason in federal district court in Alaska.

According to Westerlund, the parties have completed briefing and oral arguments in the summary judgment process. He said the judge did not provide a decision timetable but remarked at the conclusion of oral arguments that she would try to issue a ruling in the “near term.”

Westerlund said a decision could arrive soon, though he acknowledged the timing remains uncertain and that Northern Dynasty could lose the case. He noted that the judge’s decisions can take months to prepare, particularly in complex matters involving extensive administrative records.

The company argues that the EPA’s veto is unlawful. Westerlund said the project’s 2020 environmental impact statement, prepared by AECOM and signed by the U.S. Army Corps of Engineers, concluded the project would have no visible impact on salmon populations located about 150 miles away. He said the company’s tailings design is intended to avoid retaining water, with water directed to a holding pool and treatment facility.

Potential Next Steps Following a Ruling

If the court removes the veto, Westerlund said Northern Dynasty would seek to have the Army Corps resume work on the project’s record of decision and permitting process. He estimated the process was 80% to 90% complete before the veto halted progress.

The company would also look for mining partners or a consortium to support future project development, he said. Westerlund stated that more than $200 million has been spent on environmental studies and more than $200 million on engineering work, including work performed with former mining partners.

As of June 30, Northern Dynasty had C$53 million in cash, Westerlund said. He added that the shareholder base was approximately 70% retail investors and 30% institutions and insiders, compared with a more institutionally weighted ownership structure before the project’s permit denial in 2020.

Kopernik Royalty Arrangement

In response to a question, Westerlund described the company’s agreement with Kopernik as financing that provided up to $60 million in several tranches when Northern Dynasty shares were trading near $0.30. In exchange, Kopernik received the right to purchase 10% of lifetime gold production and 30% of lifetime silver production at predetermined prices.

Westerlund said the arrangement represents an estimated 3% of the overall deposit’s value and allowed the company to raise capital without issuing equity. Kopernik’s interest is secured on title to the land, he said, and could also provide the fund with rights to certain damages if Northern Dynasty were to pursue a separate legal claim related to the project.

About Northern Dynasty Minerals (NYSEAMERICAN:NAK)

Northern Dynasty Minerals Ltd. is a Canadian mineral development company focused on advancing the Pebble Project in southwest Alaska. Through its subsidiary, Pebble Mines Corp., the company holds an interest in the project, which is designed to develop a large deposit containing copper, gold, molybdenum and rhenium.

The Pebble Project is located in the Bristol Bay region, near the headwaters of important salmon fisheries. Northern Dynasty's activities have centered on exploration, project engineering, environmental studies, permitting and engagement with regulators, local communities and Indigenous groups.

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