Northern Dynasty Minerals Ltd (NYSEAMERICAN: NAK) is climbing in the market this morning, and for good reason. The company announced that it plans to appeal a decision made by the United States Army Corps of Engineers that put a halt to the company’s plans at the Pebble Project. Here’s what’sgoing on:
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NAK Stock Heads Up On Appeal Announcement
In the press release, Northern Dynasty Minerals said that it’s preparing a comprehensive and substantiverequest for appeal, or RFA. The RFA is centered around the negative Record of Decision, ROD, issued by the United States Army Corps of Engineers last week.
The ROD suggested that the Pebble Project would have a negative environmental impact on the delecate Alascan environment. Which, if the decision stands, the will stop the Pebble Project from coming to fruition.
In order to keep the Pebble Project alive, NAK said it will appeal the ROD.
As a result of the ROD, the company was denied a ‘dredge and fill’ permit under the Clean Water Act. In a statement, Ron Thiessen, President and CEO at NAK, had the following to offer:
We will take a significant proportion of the time allotted to us to complete an exhaustive review of the administrative record pertinent to the Pebble Project Environmental Impact Statement (“EIS”) and ROD, to prepare a comprehensive and substantive appeal and submit an RFA to the Division Engineer.
It is our view that this decision, the process by which it was reached and the facts upon which it is based stand as a significant outlier from standard USACE precedent and practice. We believe there is a sound basis for this permitting decision to be overturned.
NAK went on to explain that under United States regulatory law, permitting decisions on major developments must be based on an ‘administrative record.’ In the case of the Pebble Project, that means that the Final EIS from the United States Army Corps of Engineers should be considered, and that report was positive.
Not only did the Final EIS suggest that there would be a minimal environmental impact, it also suggested that the project would lead to a significantly positive economic impact on the surrounding region.
The CEO at NAK went on to say:
We believe the Pebble Project as proposed can meet the high environmental standards enforced in the Clean Water Act and other federal statutes, including co-existing with the world-class subsistence, commercial and sport fisheries of Bristol Bay. Perhaps more importantly in the near-term, we believe the findings of the Record of Decision released by the USACE last week are both inconsistent with, and in places wholly contradictory to, the administrative record established for federal permitting decisions at Pebble by the Final EIS published in July 2020.
We believe the facts are on our side, and we intend to pursue every avenue of appeal available to the Company with vigor and determination.
What Are The Chances?
If you’ve read my work on Northern Dynasty Minerals in the past, you know that I have been all for the Pebble Project. The massive mine would have a huge economic impact on a relatively poor region.
Nonetheless, with the ROD suggesting that the project would have a negative impact on water quality, therefore, causing environmental damage to the region that depends on fishing, this is a hard one to call.
While I would love to see investors in NAK recoup their losses, this is going to be a very tough hurdle for the company to get over.
Sure, the Final EIS from the United States Army Corps of Engineers was positive, but upon further research, concerns became apparent. I’m not sure if NAK is able to address these concerns, which is why they are trying to lean on the Final EIS to overturn the decision.
Although I would love to say that the company will get the project permitted and that NAK investors are going to make a ton of money, I don’t believe that to be the case anymore. If Trump would have won reelection, they may have had a chance. However, this is going to be a long battle, and for the majority of it, the Biden Administration will be calling the shots. So, there’s a new nail in the coffin for NAK.
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The Bottom Line
Investors are excited because Northern Dynasty Minerals plans to appeal the ROD that blocked the permitting process. However, this appeal isn’t likely to be fruitful, at least, not in the near term. So, while the stock is up, getting in now is a very risky proposition.
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