Is company backing Pebble Project financially healthy? Developers, opponents disagree

Published: Dec. 6, 2019 at 12:18 PM AKST
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Northern Dynasty Minerals - the company behind the Pebble Project - continues to show financial losses in its most recent financial report as it pushes toward regulatory approval.

Northern Dynasty’s third-quarter financial report shows a loss of about $40 million since the beginning of the year, with about $14 million in the past three months alone.

Taryn Kiekow Heimer, Senior Advocate for the National Resources Defense Council, which opposes the mine, said a lot of the numbers represent a continuation of previous reports.

“Every time I see an issue or report (from Northern Dynasties), I'm just struck by the language,” she said over the phone. “What you see is substantial doubt.”

Heimer says that the burn rate - the rate a company spends money over its income - was “exceptionally” high at about $14 million in the last three months, and their cash on hand was low, about $10 million.

The expenses aren’t entirely surprising though, considering that the company hasn’t started taking any minerals from the ground and since Pebble is the sole project that the company invests in.

Mike Heatwole, spokesperson for the Pebble Partnership, called media outlets’ coverage of the most recent numbers “making a mountain of a molehill” and said it was very similar to previous financial reports.

“We haven't generated a penny of money because we're not mining,” he said.

A list of risks to investors included in the report was similar to previous financial reports, such as the fact that the company hasn’t confirmed any ore reserves or any known body of economic mineralization. Those risks are required to be listed in financial statements as part of Canadian stock exchange requirements.

Heatwole said that the company hasn’t been able to complete an economic feasibility study due to resource limitations, something that Heimer said was duplicitous.

“On the one hand it's admitting to investors 'Don't count on this, it's not feasible,' and on the other and of course they have to use that language, otherwise they'll be sued by investors for false promises, but then it's asking the Army Corps, on the other hand, to trust that this fantasy mining plan is really viable,” she said.

Heimer also noted that this is the first time she has seen the company mention that it had entered a commitment letter for an unsecured, non-revolving loan of up to $3.5 million, which Heimer said suggests that the company is having trouble attracting investors. Heatwole said he believed that this was the first time the company had solicited such a loan.

The Northern Dynasty stock price peaked at $3.36 per share in February of 2017 amid optimism from investors that the newly-inaugurated Trump administration would be more friendly to the project, which is opposed by environmentalists and some Native groups because it is located near a sensitive salmon-spawning area. Since then, the stock price has dropped - more or less staying stable around $0.50 per share since about mid-2018.

Stock prices dropped a couple cents today from $0.54 to $0.52.

Still, Heatwole said that he’s optimistic about the prospect.

“People are investing in this company because they believe that long term there could be a significant opportunity there. That's been the case since the prospect was discovered in the 1980s.”

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