Northern Dynasty Minerals Ltd (NYSEAMERICAN: NAK) made yet another step toward the development of the Pebble Project today after announcing a Right-of-Way Agreement signed with Iliamna Natives Limited. As a result of the news, the stock was up as much as 4% early in the trading session.
Diving Into The Right-of-Way Agreement
The Right-of-Way Agreement is an important step in the development of the Pebble Project as it gives the company an access route to the land on which the mine will sit. The land owned by Ilimna Natives Limited (INL) is extensive and situated proximal to the Pebble Project. INL currently represents more than 150 Alaska Native shareholders.
In exchange for use of the land, Pebble Limited Partnership will make annual toll payments to INL. The company will also pay additional fees prior to and during project construction and operation. INL will also be granted ‘Preferred Contractor’ status at Pebble. This will provide a preferential opportunity to bid on Pebble-related contracts located on INL lands.
Finally, INL and Pebble Limited Partnership will negotiate a profit sharing agreement that will ensure that INL and its shareholders benefit directly from profits generates by mining activities in the region.
This Is The Second Agreement Of Its Kind Entered Into By NAK
The news follows an agreement that was announced last November. Under this Right-of-Way Agreement, Northern Dynasty Minerals gained access to land holdings both north and south of Lake Iliamna. This agreement was signed with Alasca Peninsula Corporation.
However, today’s announcement is an important one. In fact, it will provide Northern Dynasty Minerals and its Pebble Partnership with an alternative ferry landing site and road/utility corridor on the north side of Lake Iliamna. The agreement also provides greater flexibility as the project advances toward a final Record of Decision on the federal Envirnmental Impact Statement (EIS) permitting process next year.
More On The EIS Permitting Process
NAK has been working for years to obtain permits to begin construction on the Pebble Project. However, this has not been an easy process. The land on which the company intends on building the mine is highly protected.
Nonetheless, the company has been making incredible progress. In February 2019, the United States Army Corps of Engineers released the Draft EIS for the Pebble Project. This was an important step along the way as it confirmed that there were no data gaps or other outstnading information requirements with potential to block or delay regulatory approval.
Importantly, the Draft EIS suggests that the Pebble Project will be able to proceed without harm to the salmon fisheries of western Alaska. The impact on salmon in the region was a primary source of the argument against the development of the Pebble Project. With the Army Corps of Engineers coming to the conclusion that there will be no impact on salmon population, the Draft EIS is a big win.
In this Draft EIS, there were several transportation corridors identified. The INL lands addressed in the Right-of-Way Agreement reflct one of these transportation corridors.
Important Factors To Take Away From Today’s News
Today’s news was important for the following reasons:
- NAK Is Already Addressing Opportunities In The Draft EIS – With the Draft EIS suggesting that there will be no potential harm to the salmon population or other harm to the environment, there’s a good chance that permitting is going to take place. As a result, NAK is hitting the ground running, creating opportunities for access as stipulated by the Draft EIS.
- NAK Is Following Through – Early on, Northern Dynasty Minerals made it a point to talk about the economic impact for the communities around the Pebble Project. This agreement is the second of its kind that will ultimately lead to economic benefit for the communities surrounding the Pebble site.
- The Obvious – Of course, we should mention the obvious here in the fact that access is key. Should the company receive regulatory approval, it won’t be able to do anything with that approval unless it has access to the land on which the Pebble Mine will sit. This agreement, gives the Pebble Partnership the access that it needs.
Today’s news is an important step along the way to the development of the Pebble Project. However, it’s important to remember that the road to development here is long. We strongly suggest reading our full report here.