After months of investment firms touting Northern Dynasty Minerals (NDM) stock as a good buy, Kerrisdale Capital Management bucked the trend with an in-your-face slam of Pebble stock as “worthless.” The small New York investment firm got quite a bit of attention for its report, which caused shares to fall dramatically on Tuesday before they began to move back upward. (NAK stock was around $3.29 per share on Monday morning before the report and ended Friday at $2.27, as shown in this graphic from Yahoo Finance).
Two events today might affect the stock further: NDM published a rebuttal to the article on its site, and Congress confirmed the appointment of Scott Pruitt as head of the EPA.
Pebble developers have been in litigation with EPA since 2014, after the EPA initiated a process to restrict certain mining activities at the Pebble deposit. Developers believe that administrative changes at the agency will remove these obstacles, allowing it to attract an investor and move into a permitting phase this year.
KDLG radio interviewed Kerrisdale Capital’s Sahm Adrangi, who explained that the company’s model is to find companies they believe are “overhyped or overly promotional about their prospects,” to research them and then present “contrarian views.” In doing so, their goal is to make money as the stock price dips. According to the interview, Kerrisdale Capital became interested in researching the Pebble project when NDM stock started seeing quick gains after the November 2016 election.
Allegations in the Kerrisdale report – that NDM states are unfounded – include that the company is hiding a negative project assessment that reveals the project isn’t economically viable. Since these allegations, four different law firms have filed class-action lawsuits against NDM on behalf of investors, seeking recovery of damages for alleged violations of federal securities laws. Two other firms, on behalf of NDM shareholders, are investigating whether the company adequately disclosed the commercial sustainability of the deposit.
For its part, NDM says it will do what it needs to protect the interests of its shareholders, including regulatory and legal action related to the accusations in the Kerrisdale report.
Northern Dynasty slams short-seller report as class-suit looms – Mining.com, February 17, 2017
Northern Dynasty Minerals mulls legal action against short-seller who called company ‘worthless’ – FinancialPost.com, February 17, 2017
New York Hedge Fund Slams Northern Dynasty, Pebble Mine in investor report – KDLG radio, February 16, 2017
Report: Pebble shares are ‘worthless’ – Alaskajournal.com, February 15, 2017
Developers of the proposed Pebble mine predict favorable outcomes in their litigation with the EPA, and anticipate beginning the permitting process in 2017. Meanwhile, approval of a State of Alaska Miscellaneous Land Use Permit (MLUP) needed for activity at the site has been delayed, and state legislation has been filed to require additional legislative approval during the permitting process.
“Mining News: Pebble Stars Align” Petroleum News, February 3, 2017
Shane Lasley reports on the Pebble project, its outlook under the new Trump administration, potential resolution with EPA, efforts to find new investors and move into a permitting stage.
“Legislation filed to require commissioner consensus on Pebble,” Juneau Empire, February 1, 2017
House Bill 14, introduced by Rep. Andy Josephson, D-Anchorage, aims at strengthening Ballot Measure 4, the “Bristol Bay Forever” initiative that requires legislative approval of large-scale metallic sulfide mines in the Bristol Bay Fisheries Reserve. Josephson’s bill, which requires legislative approval at each step of the permitting process, got its first hearing this week.
“Research matters: Pebble mine site jobs 2009-2012” Alaska Business Monthly, January 30, 2017
A report by the University of Alaska Institute for Social and Economic Research (ISER) by Bob Loeffler and Jennifer Schmidt takes a look at jobs and income associated with the Pebble project that Bristol Bay communities received between 2009-2012.
“Bristol Bay and Beyond,” KDLG Radio, Dillingham, January 27, 2017
KDLG’s Dave Bendinger interviews Pebble Limited Partnership CEO Tom Collier about plans for the project, as well as local leaders Kim Williams and Robin Samuelsen. The 15-minute Pebble story appears at 6 minutes, 35 seconds.
“Northern Dynasty Announces Closing Of US$37.444 Million Bought Deal Offering,” Northern Dynasty Minerals press release, January 26, 2017
Northern Dynasty Minerals, which owns 100% of the Pebble Limited Partnership, raised $37 million last week by selling 20.24 million shares of its stock. The proceeds will go toward its ongoing litigation with EPA, further environmental and engineering studies, outreach, general corporate purposes and working capital requirements.
“State Delays Renewal of Pebble Land Use Permit,” Alaskapublic.org, December 28, 2016
The Alaska State Department of Natural Resources is delaying renewal of a miscellaneous land-use permit (MLUP) because it wants to give staff more time to review “the breadth and scope of the complex issues raised” in a number of “substantive comments” it received during a public comment period in November.
“Where will Northern Dynasty Minerals be in 10 Years?” by Maxx Chatsko, The Motley Fool, February 1, 2017
“Pebble project deserves fair review, assessment,” by Tom Collier, Alaska Dispatch News, January 24, 2017
“Pebble mine is still the wrong mine in the wrong place,” by Brian Kraft, Alaska Dispatch News, January 24, 2017
Public comment is due soon on a Miscellaneous Land Use Permit (MLUP) application that Pebble Limited Partnership (PLP) has submitted to the Alaska Department of Natural Resources (DNR). The permit would allow PLP to continue operations on state-owned land at the Pebble deposit area in Bristol Bay. The current MLUP expires on December 31, 2016.
Exploratory and drilling activities that have been conducted since 1989 at the Pebble site have been possible under a series of MLUPs, which PLP has to renew regularly.
This time, PLP is requesting a two-year permit to conduct maintenance and reclamation activities in an area covering 2,402 mining claims totaling 266,356 acres of state land (claims in orange).
“Where Water is Gold” Book Review – Alaska Dispatch News, October 1, 2016
Alaskan author Nancy Lord reviews Carl Johnson’s new photo essay book, Where Water is Gold: Life and Livelihood in Alaska's Bristol Bay. Johnson’s quest, five years in the making, writes Lord, “ was to explore the Bristol Bay region and present it — both its natural environment and people — as a unique and highly valuable place that needs our concern and protection.
Northern Dynasty/Pebble Partnership Cap Legal Costs to Conclude Litigation with US EPA – Junior Mining Network, September 29, 2016
According to a press release, Northern Dynasty Minerals/Pebble Limited Partnership and its legal representative Steptoe and Johnson LLP, have agreed to cap litigation costs at $1 million, to ensure an outcome in the ongoing legal battle with the U.S. Environmental Protection Agency. They expect the court to adjudicate the issues by January 2017.
Read more: "Breaking the impasse," Petroleum News, October 9, 2016
World Conservation Congress endorses Bristol Bay Protections – Cordova Times, September 1, 2016
A group of conservationists from around the world voted to call on the International Union for Conservation of Nature (IUCN) to support efforts to prevent large-scale mining in the Bristol Bay watershed. The motion was approved along with 104 other motions related to world-wide conservation efforts.
Read more: "Conservationists Support Natives in Protection of Bristol Bay," Indian Country Today, October 6, 2016
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.