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News Roundup: May 26, 2017

Recent news related to the development of the proposed Pebble mine includes reports of a new advisory committee that Pebble Limited Partnership (PLP) has created, outlook for Northern Dynasty Minerals stock, and a proposed citizen’s initiative that seeks greater protections for salmon habitat.

Pebble seats new advisory committee of supporters, skeptics and experts – KDLG, May 26 (reprinted in Bristol Bay Times)

Pebble Limited Partnership (PLP) has created an advisory board that will be able to review a new smaller mine plan and other initiatives PLP has developed. The board currently consists of five people of varying backgrounds, including a long-time Pebble opponent and a former deputy assistant secretary to the U.S. Army Corps of Engineers.

Mining News: Pebble Advisory Panel – Petroleum News, May 26

PLP seeks to “expand engagement with external parties,” partially through an advisory group that it has formed comprising of “Respected, outspoken Native, conservation, military leaders.

Why Northern Dynasty Minerals is a Ticking Time Bomb for Investors – Motley Fool, May 26, 2017

Motley Fool investment advisors argue that Northern Dynasty Minerals isn’t a good pick for investors based on two big factors: 1) Pebble is the company’s only mine, and 2) No one really knows whether it is economically viable.

Habitat protection would turn tables on miners – Alaska Dispatch News, May 25 (reprinted in Bristol Bay Times)

A new citizen’s initiative and a separate but similar House bill seek to add protections to salmon habitat.

Mining News: Pebble Door Opens – Petroleum News, May 21

Shane Lasley reports on the EPA/PLP legal settlement, addressing PLP’s efforts to reposition itself as a good neighbor, its design plans and timetable for seeking permits.

Even a smaller mine could face development hurdles – Alaska Dispatch News, May 19 (reprinted in Bristol Bay Times)

While PLP reportedly is looking to develop a smaller mine, reporter Alex DeMarban notes that the EPA already considered a smaller mine design when assessing risks to the Bristol Bay watershed.

EPA allows mine company to pursue permits near Alaska bay – Chicago Tribune, May 13

AP writer Becky Borer describes the settlement between EPA and PLP, including commentary from former EPA Regional Administrator Dennis McLerran and National Mining Assocation spokesman Luke Popovich.

EPA and PLP reach settlement terms

The U.S. Environmental Protection Agency announced today that it had reached settlement terms with the Pebble Limited Partnership (PLP) over litigation PLP had brought against the agency in 2014. That litigation focused on the EPA’s decision to apply the sparingly-used 404(c) process to limit development at the Pebble deposit site in Bristol Bay in order to protect the region’s watershed and unique wild salmon fishery.

Terms of the settlement include:

Halting the 404(c) Process

In 2014, a federal judge issued a preliminary injunction, ordering EPA to halt any work on the 404(c) process, pending outcome of the litigation. At the time, the agency was reviewing more than 671,000 public comments it had received on a “Proposed Determination” that outlined EPA’s proposed restrictions on dredge and fill activities at the Pebble deposit site. The 2017 settlement provides for EPA and PLP to ask for dismissal of the case and lifting of the injunction. EPA has agreed to withdraw the Proposed Determination and will not pursue the next step in the process, a “Recommended Determination,” until 48 months after the settlement (or until the U.S. Army Corps of Engineers issues a final environmental impact statement, whichever comes first). (See our graphic guide to the 404(c) process.) PLP would have to apply for a permit within 30 months of the settlement in order to take advantage of this forbearance.

Use of the Bristol Bay Watershed Assessment

Over a 3-year period, the EPA had developed an assessment of the Bristol Bay watershed, to include potential risks from large-scale mining in the area. PLP had long contended that the assessment was flawed. As part of the settlement, EPA will be able to use the study “without limitation.”

Fees and FOIA requests dropped

PLP agreed to drop its lawsuits and requests for fees against EPA. Additionally, it won’t file any new Freedom of Information Act (FOIA) requests during the "forbearance" period.

 

A Contrast in Approaches

The 2017 settlement comes on the heels of the new White House Administration and the appointment of a new EPA Administrator, Scott Pruitt. Regarding the settlement, Pruitt said, “We are committed to due process and the rule of law, and regulations that are 'regular'. We understand how much the community cares about this issue, with passionate advocates on all sides.  The agreement will not guarantee or prejudge a particular outcome, but will provide Pebble a fair process for their permit application and help steer EPA away from costly and time-consuming litigation. We are committed to listening to all voices as this process unfolds.”

The former EPA Administrator, Gina McCarthy, when releasing the Proposed Determination in 2014, stated: “The Bristol Bay fishery is an extraordinary resource, worthy of out-of-the-ordinary agency actions to protect it." At that time, after several visits to Bristol Bay and public hearings on the issue, EPA administration had determined that use of the 404(c) process was justified due to the unique nature of the fishery.

Administrator Pruitt has not yet visited Bristol Bay. However, within the first week of his appointment, he received  a request from the Republican Chairman of the House Committee on Science, Space and Technology to rescind the Proposed Determination, as well as a request from the ranking Democrat on the same committee asking just the opposite.

Reaction to the Settlement

Bristol Bay tribes, many of which had initially asked the EPA to invoke the 404(c) process to protect Bristol Bay, held a press conference on Thursday decrying the settlement and reemphasizing local opposition to the project.

PLP and Northern Dynasty representatives expressed gratitude to EPA Administrator Scott Pruitt and President Trump for their “commitment to the rule of law, and to the fair and equal treatment of those who would invest in job-creating industries in America.”

For investors, finalization of the settlement symbolized the high-end of short-term growth. Now that it’s complete, many investors are selling stock, leading to a 16% drop in value.

Read more

Pebble/EPA Settlement

EPA reaches deal with Pebble mine developer, Alaska Dispatch News, May 13, 2017

Bristol Bay outraged as Trump EPA Scores Backroom Deal with Pebble Mine, Alaska Native News, May 12, 2017

Why Northern Dynasty Minerals Stock Slumped 16% on Friday, Motley Fool, May 13, 2017

Can Pebble begin permitting in 2017?

Northern Dynasty Minerals (NDM), which owns 100% of the Pebble Limited Partnership (PLP), has signaled investors that it is serious about moving forward with beginning the process of permitting the Pebble mine this year. Its goals for 2017 include the “Three Rs”: resolve litigation with EPA, re-partner, and re-position itself in the public debate by developing “key Alaska and Native partnerships.”

NDM announced in March that it had selected HDR Alaska, a consultant in engineering and environment, to lead permitting efforts for the mine as it looks ahead to moving beyond its problems with the U.S Environmental Protection Agency.

PLP anticipates a favorable outcome in its 3-year litigation with the EPA, which in 2014 had proposed restrictions to large-scale mining operations at the Pebble deposit. “Active discussions between all parties involved have been positive and very constructive,” said Tom Collier, CEO of the Pebble Partnership, in a a March 20 news release.  According to NDM, the company and the EPA are talking directly and need more time to negotiate. Judge H. Russel Holland granted an extension on a previously issued stay of proceedings, and the two parties now have until May 4 to come up with an agreement for how to settle out of court.

Even if the EPA and PLP do not resolve litigation in 2017, a 404 permit application could still be submitted. EPA’s 404(c) process blocks the U.S. Corps of Engineers’ final issuance of a permit, but doesn’t prohibit the permit application from being submitted or processed.

There’s another hurdle to cross, however. Permitting is a costly endeavor, and the existing technical and engineering studies related to development of the mine have “very uncertain and perhaps little value at this time,” according to a recent presentation by NDM.

The company needs to attract a deep-pocketed project partner to help fund permitting (and any new technical studies) and development of the mine. It’s been looking ever since Anglo American announced its departure in 2013. In that time, NDM has employed various methods of staying afloat financially – from cutting PLP staff and selling surplus equipment to issuing common stock.

It still had a deficit of about US$301 million at the end of last year. The latest share offering, in January 2017, raised gross proceeds of about $37.4 million, which it will use to try and advance the project. It plans to allocate $1.11 million of that for further environmental studies to prepare for permitting. Aside from working capital ($11.26 million), the largest amount ($8.05 million) is set aside for “Enhanced outreach and engagement with political and regulatory offices in the Alaska state and U.S. federal government, among Alaska Native partners and broader regional and state-wide stakeholder groups.”

What this means for stakeholder groups in Bristol Bay is yet unclear. However, part of NDM’s strategy to improve local opinion for the project includes incentives for Native groups. According to Mike Heatwole, PLP’s vice president for public affairs, “After we secured funding, we presented a lot of different ideas to the board on ways to more fully demonstrate how we can share the benefit with residents of the region. We are now working on the plans and details to roll out those that were approved.”

2017 is a critical year for NDM, and it has set aggressive goals. If permits can be filed this year, the company predicts entering the construction phase by 2020. NDM’s annual financial filing puts the situation in stark terms, though, noting that it will need additional financing to move ahead with expenditures at the Pebble deposit after this year. That financing could come from additional debt equity or a project partner. But if it’s unable to raise the money, it may have to consider “reducing or curtailing its operations.”

Although the change in federal administration, both at the White House and at the EPA, have some individual investors optimistic about the long-term outlook for the Pebble project, others have raised questions and even divested entirely. A very critical report released in mid-February by Kerrisdale Capital Management caused NDM stock to fall from around $3.29 to $2.27 per share in one day. Today it’s trading at $1.43 per share. The report also spurred several class-action lawsuits against NDM on behalf of investors, seeking recovery of damages for alleged violations of federal securities laws. For its part, NDM is confident the claims are unfounded. 

NDM presentation to investors, March 2017

NDM end-of-year financial audit, December 2016

Pebble Watch News Roundup: March 3, 2017

Read the latest news related to development of the proposed Pebble mine.

Alaska’s Pebble Mine and the Legend of Trump’s Gold, The New Yorker, March 2, 2017

Tim Sohn writes about Northern Dynasty’s recent ups and downs, including the February 14 Kerrisdale Capital Management report that negatively affected the company’s stock value. Sohn has covered Bristol Bay and the proposed Pebble mine for Outside Magazine and The New Yorker since 2009. For this article, he interviews Sean Magee (Northern Dynasty), Sahm Adrangi (Kerrisdale), as well as Tim Bristol (SalmonState) and Alannah Hurley (United Tribes of Bristol Bay).

Anti-Pebble, pro-Trump millionaire to meet with president, E&E News, March 2, 2017

An opponent of the proposed Pebble mine, Bob Gillam, is meeting with President Trump at the Mar-a-Lago Resort in Florida. Gillam, who owns a private fishing lodge in Bristol Bay, was a classmate of Trump’s in the late 1960s at Wharton school of business.

House Science Democrats ask EPA to keep 404(c) determination against Pebble, KDLG, March 1, 2017

Eddie Bernice Johnson (D-Texas) is the ranking Democrat on the House Committee on Science, Space and Technology, which has held multiple hearings on the EPA’s efforts to limit large-scale mining activity in Bristol Bay. Congresswoman Johnson supports the EPA’s efforts and delineated her points in a letter to new EPA Administrator Scott Pruitt. Committee Chair Lamar Smith (R-Texas) also sent Pruitt a letter, although his asked that proposed EPA restrictions be rescinded.

House Resources Committee hears from United Tribes of Bristol Bay about Pebble, KDLG, February 28, 2017

The House Resources Committee recently heard from representatives of the advocacy group United Tribes of Bristol Bay about its allegations that Pebble developers have not cleaned up well enough after mining exploration activities at the site of the Pebble deposit. 

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About Pebble Watch

Pebble Watch is an impartial, educational and fact-based initiative of the BBNC Land Department to disseminate information regarding the proposed Pebble Mine project to BBNC shareholders and interested parties. 

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the BBNC Land Department

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