Northern Dynasty: Economic Contribution Assessment Study for Alaska's Pebble Project Shows Project Could Support Thousands of Jobs and Billions of Dollars of Economic Impact Annually While Reducing the Need for the U.S. to Import
Northern Dynasty: Economic Contribution Assessment Study for Alaska's Pebble
Project Shows Project Could Support Thousands of Jobs and Billions of Dollars of
Economic Impact Annually While Reducing the Need for the U.S. to Import
Copper to Meet its Green Energy Goals
VANCOUVER, BC / ACCESSWIRE / February 28, 2022 / Northern Dynasty Minerals Ltd.
(TSX:NDM)(NYSE American:NAK) ("Northern Dynasty" or the "Company") announces it has
released a comprehensive study authored by IHS Markit, a leading global source of critical
information and insight, entitled ‘Economic Contribution Assessment of the Proposed Pebble
Project to the US national and state economies.' Commissioned by the Company, the IHS Markit
report is an independent expert study that provides a detailed review of the significant economic
benefits the proposed Pebble Project would have both nationally and at the state level,
particularly for Alaskans. The report focuses on two potential scenarios - the Proposed Project
and the Production Year 5 Potential Expansion with Gold Plant scenario[1] - consistent with those
presented in the Company's Preliminary Economic Assessment (the "2021 PEA"), the results of
which were first published on September 9, 2021. More information on the Economic
Contribution Assessment study can be found on the Company's website at the following link
(https:// www.northerndynastyminerals.com/responsible-mining/economic-benefits/). All
currency values are presented in U.S. dollars.
"We believe that the Pebble Project would have a significant impact on the economic prosperity
of Alaska, resulting from direct high paying jobs, significant purchases of equipment and
supplies, and substantial government revenues and supply and service contracts," said Mr. Ron
Thiessen, Northern Dynasty President and CEO. "But what is also clear is that renewable energy
systems utilize roughly five to nine times more copper than conventional power generation
systems, and electric vehicles require three to four times as much as internal combustion engine
vehicles. The Pebble Project could help the U.S. reduce its dependence on imports of copper
metal as demand surges during the transition from an oil-based economy to electricity."
"It's also important to remember that the benefits of the Pebble Project are in addition to the
fishing, sport fishing and tourism industries already operating in this part of Alaska," Thiessen
said. "We have always recognized the importance of the environment at Pebble and the
importance of the Bristol Bay subsistence and commercial fishery. We accordingly have
designed our project carefully with a number of innovative approaches to protect the
environment and to ensure the project can coexist with the fishery, as was shown in the Final
Environmental Impact Statement of 2020."
Economic activity, jobs created
As summarized in the table below, IHS Markit assessed the annual average economic
contributions to employment, gross state product and other key metrics from the Proposed
Project and the Production Year 5 Potential Expansion with Gold Plant scenario. The results are
presented for three time horizons:
• The Initial capital phase, which is common to both scenarios;
• Year 1 through Year 5. Differences in the economic contributions between the scenarios
are due to the capital investments required to expand mine capacity and add the gold
plant in the Year 5 expansion scenario. For example, during this period, the Proposed
Project is estimated to support 5,698 full-time high-paying jobs across the United States;
the Production Year 5 Potential Expansion with Gold Plant scenario would support an
estimated 13,763 jobs; and
• Year 6 through Year 20, which allows for comparing the difference in "steady state"
mining operations of both scenarios. For example, the Proposed Project is estimated to
support 5,667 full-time high-paying jobs across the United States, whereas the Production
Year 5 Potential Expansion with Gold Plant scenario would support an estimated 12,774
jobs.
Significant taxes expected to be generated
The results for the Proposed Project and the Production Year 5 Potential Expansion scenario with
Gold Plant option are summarized below. As these two scenarios represent the lowest and
highest investment and production activity, these results provide an expected range of taxes that
could be generated by the Pebble Project: $43.9 million to $51.6 million annually, on average,
during the Year 1 - Year 5 time-horizon. As expanded capacity and the gold plant come online,
the total taxes generated by the Production Year 5 Potential Expansion with Gold Plant rise to
$469.0 million versus $225.6 million for the Proposed Project. The state and local taxes could
average $135.3 million and $277.0 million.
Pebble Performance Dividend could provide substantial payments to eligible and enrolled
residents in the region
Northern Dynasty, through its Pebble Partnership subsidiary, created the Pebble Performance
Dividend ("PPD") as a means to share profits from mining operations with individual residents in
southwest Alaska. As currently conceived, residents who are at least 18 years of age and have
maintained a primary residence in the following Bristol Bay communities for a minimum of
twelve months would be eligible to sign up during an enrollment window:
• Bristol Bay Borough: King Salmon, Naknek; South Naknek;
• Dillingham Census Area: Aleknagik; Clark's Point; Dillingham; Ekuk; Ekwok;
Koliganek; Manokotak; New Stuyahok; Portage Creek; Togiak; Twin Hills; and
• Lake and Peninsula Borough: Chignik; Chignik Lagoon; Chignik Lake; Egegik; Iguigig;
Iliamna; Ivanof Bay; Kokhanok; Levelock; Newhalen; Nondalton; Pedro Bay, Perryville;
Pilot Point; Pope-Vannoy Landing; Port Alsworth; Port Heiden; Ugashik.
Based on data from the 2020 United States census, there are approximately 5,000 residents of the
Bristol Bay communities that would qualify to receive the PPD. During the several year period
from the commencement of development to the point at which capital costs have been recovered,
a minimum of $3,000,000 would be distributed annually among the program participants. After
capital costs are recovered, 3% of net profits would be distributed to program participants,
annually.
For the Operations Phase (Year 1 - Year 20), IHS Markit estimates these payments as follows:
• Proposed Project: annual average PPD payments of $10.9 million. Assuming all eligible
residents enroll, each participant would receive approximately $2,175 annually; a
household of three would receive close to $6,500 annually during the Operations Phase;
and
• Production Year 5 Expansion scenario with gold plant option: annual average PPD
payments of $39.1 million. Assuming all eligible residents enroll, each participant would
receive approximately $7,825 annually; a household of three would receive almost
$23,500 annually during the Operations Phase. Over the potential 90-year lifetime of the
mine, these annual payments could average $72.0 million or $14,400 per eligible
recipient.
"The Pebble Performance Dividend would distribute payments of several thousand dollars a year
to eligible Western Alaska residents, a meaningful benefit for one of the lowest-income regions
in the U.S." Mr. Thiessen added. "This benefit is additional when there is more than one eligible
recipient in the family, making its impact even more significant."
More information on the PPD is available at (https://www.pebbledividend.com/).
About IHS Markit (www.ihs.com)
IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for
the major industries and markets that drive economies worldwide. The company delivers next-
generation information, analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep insights that lead to well-
informed, confident decisions. IHS Markit has more than 50,000 business and government
customers, including 80 percent of the Fortune Global 500 and the world's leading financial
institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable
growth.
About Northern Dynasty Minerals Ltd.
Northern Dynasty is a mineral exploration and development company based in Vancouver,
Canada. Northern Dynasty's principal asset, owned through its wholly owned Alaska-based U.S.
subsidiary, Pebble Limited Partnership, is a 100% interest in a contiguous block of 1,840 mineral
claims in Southwest Alaska, including the Pebble deposit, located 200 miles from Anchorage
and 125 miles from Bristol Bay. The Pebble Partnership is the proponent of the Pebble Project,
an initiative to develop one of the world's most important mineral resources.
Stephen Hodgson, P.Eng, a qualified person who is not in dependent of Northern Dynasty has
reviewed and approved the scientific and technical information contained in this news release.
For further details on Northern Dynasty and the Pebble Project, please visit the Company's
website at www.northerndynastyminerals.com or contact Investor services at (604) 684-6365 or
within North America at 1-800-667-2114. Review Canadian public filings at www.sedar.com
and U.S. public filings at www.sec.gov.
Ronald W. Thiessen
President & CEO
U.S. Media Contact:
Dan Gagnier
Gagnier Communications
(646) 569-5897
Forward Looking Information and other Cautionary Factors
This release includes certain statements that may be deemed "forward-looking statements" under
the United States Private Securities Litigation Reform Act of 1995 and under applicable
provisions of Canadian provincial securities laws. All statements in this release, other than
statements of historical facts, which address permitting, development and production for the
Pebble Project are forward-looking statements. The IHS Markit report is based on the production
scenarios and related assumptions as presented in the 2021 PEA which has been filed on SEDAR
and is available on EDGAR. The 2021 PEA is preliminary in nature, and includes Inferred
mineral resources that are considered too speculative geologically to have economic
considerations applied to them that would enable them to be categorized as mineral reserves.
There is no assurance that the 2021 PEA will be realized. Mineral Resources that are not mineral
reserves do not have demonstrated economic viability, and there is no assurance that the Pebble
Project mineral resources will ever be upgraded to reserves. The 2021 PEA assumes that the
Proposed Project will ultimately be able to obtain the required permits from the USACE and
state of Alaska authorities to enable development of the Proposed Project. Neither the 2021 PEA,
nor the mineral resource estimates on which the 2021 PEA is based, have been adjusted for any
risk that the Pebble Partnership may not be able to successfully appeal the record of decision
issued by the USACE on November 25, 2020 denying the granting of the required permit under
the Clean Water Act. Any changes to the production scenarios outlined in the 2021 PEA as a
result of these factors could have a material impact on the projections implied by the IHS Markit
report. These include statements regarding (i) the timing of the appeal process and the ability to
successfully appeal the negative Record of Decision and secure the issuance of a positive Record
of Decision by the USACE, (ii) the political and public support for the permitting process, (iii)
the ability of the Pebble Project to ultimately secure all required federal and state permits, (iv)
future metals prices, including the price of copper, (v) the right-sizing and de-risking of the
Pebble Project, (vi) the design and operating parameters for the Pebble Project mine plan,
including projected capital and operating costs, (vii) exploration potential of the Pebble Project,
(viii) future demand for copper and gold, (ix) the potential addition of partners in the Pebble
Project, (x) if permitting is ultimately secured, the ability to demonstrate that the Pebble Project
is commercially viable, (xi) the EPA's Proposed Determination process under the CWA and the
impact of this process on the ability of the Pebble Partnership to develop the Pebble Project, and
(xii) the ability and timetable of NDM to develop the Pebble Project. Although NDM believes
the expectations expressed in these forward-looking statements are based on reasonable
assumptions, such statements should not be in any way be construed as guarantees that the
Pebble Project will secure all required government permits, establish the commercial feasibility
of the Pebble Project, achieve the required financing or develop the Pebble Project.
Forward-looking statements are necessarily based upon a number of factors and assumptions
that, while considered reasonable by NDM as of the date of such statements, are inherently
subject to significant business, economic and competitive uncertainties and contingencies.
Assumptions used by NDM to develop forward-looking statements include the following
assumptions, all of which are subject to risks (i) the Pebble Project will ultimately obtain all
required environmental and other permits and all land use and other licenses , (ii) any feasibility
studies prepared for the development of the Pebble Project will be positive, (iii) NDM's estimates
of mineral resources will not change, and NDM will be successful in converting mineral
resources to mineral reserves, (iv) NDM will be able to establish the commercial feasibility of
the Pebble Project, (v) NDM will be able to secure the financing required to develop the Pebble
Project, and (vi) any action taken by the EPA in connection with the Proposed Determination
will ultimately not be successfully in restricting or prohibiting development of the Pebble
Project. The likelihood of future mining at the Pebble Project is subject to a large number of risks
and will require achievement of a number of technical, economic and legal objectives, including
(i) obtaining necessary mining and construction permits, licenses and approvals without undue
delay, including without delay due to third party opposition or changes in government policies,
(ii) finalization of the mine plan for the Pebble Project, (iii) the completion of feasibility studies
demonstrating that any Pebble Project mineral resources that can be economically mined, (iv)
completion of all necessary engineering for mining and processing facilities, (v) the ability of
NDM to secure a partner for the development of the Pebble Project, and (vi) receipt by NDM of
significant additional financing to fund these objectives as well as funding mine construction,
which financing may not be available to NDM on acceptable terms or on any terms at all. NDM
is also subject to the specific risks inherent in the mining business as well as general economic
and business conditions, such as the current uncertainties with regard to COVID-19. Investors
should also consider the risk factors identified in its Annual Information Form for the year ended
December 31, 2020, as filed on SEDAR and included in the Company's annual report on Form
40-F filed by the Company with the SEC on EDGAR, and the Company's Management
Discussion and Analysis for the nine months ended September 30, 2021, as filed on SEDAR and
EDGAR, for a discussion of the risks that may impact our forward-looking statements.
The National Environment Policy Act Environmental Impact Statement process requires a
comprehensive "alternatives assessment" be undertaken to consider a broad range of
development alternatives, the final project design and operating parameters for the Pebble
Project and associated infrastructure may vary significantly from that currently contemplated.
For more information on the Company, Investors should review the Company's filings with the
United States Securities and Exchange Commission at www.sec.gov and its home jurisdiction
filings that are available at www.sedar.com.
[1] The currently proposed project detailed in the 2021 PEA is the Proposed Project and is
consistent with the Project Description in the Pebble EIS, published by the US Army Corps of
Engineers ("USACE") in July 2020. It does not include an onsite gold plant. With the exception
of the Proposed Project, all development alternatives evaluated in the 2021 PEA are presented to
demonstrate the optionality inherent in the polymetallic Pebble deposit by presenting a broad
range of potential pathways for future mine development. The 2021 PEA also models other
options for potential development in the future, to show how the project life could be extended
and metal production enhanced through an expansion at different points in time or via alternative
treatment scenarios. Neither Northern Dynasty nor the Pebble Partnership has proposed or
intends to propose any of these development alternatives in the near-term for regulatory
approval. Any future development options beyond the Proposed Project would require extensive
federal, state and local permitting processes and approvals before proceeding, which would be in
addition to the initial permits and approvals required for the Proposed Project.
The Proposed Project envisions a 20-year operation, with an open pit feeding a conventional
flotation process plant at 180,000 tons per day. Over its 20-year life the plant would process 1.3
billion tons of material from the mine. Related infrastructure includes an access road to a port
facility on Cook Inlet, concentrate transport pipeline and related storage and shipping facilities at
the port, a natural gas pipeline from Cook Inlet to the mine site, and a combined cycle natural gas
fired power plant. The Production Year 5 Potential Expansion Scenario with Gold Plant would
see the process plant expanded to 270,000 tons per day, with the expanded production
commencing in Year 5. The open pit mine would be expanded to produce 8.6 billion tons of
material fed to the process plant over a 90-year life. A secondary gold recovery plant would be
added to the process plant coincident with the expansion in Year 5. The related infrastructure
would be expanded commensurate with the expanded plant throughput.
SOURCE: Northern Dynasty Minerals Ltd.