Northern Dynasty Minerals (NYSEMKT:NAK) is the sole owner of the Pebble Mine, the largest undeveloped copper and gold mine in the world. Pebble is located in the Southeast portion of the state of Alaska. During the Obama administration, the EPA placed a preemptive veto on development of the Pebble Mine with the thesis that it could harm the salmon fishing business in Bristol Bay, which is greater than 100 miles from the Pebble Mine. In the years leading up to the veto, NAK had two partners, Anglo American (OTCPK:AAUKF) and Rio (NYSE:RIO). Around the time of the veto, both withdrew from the partnership and donated their shares to charity. Fast forward 6 years and the veto has been lifted by Scott Pruitt and team at President Trump's EPA.
Also noteworthy, local opposition to the Pebble Mine by native tribes and other groups has been modestly reduced as NAK has taken a number of key steps to reduce the potential environmental footprint of the project and to give a voice to the opposition. One of these steps is to form an advisory board to seek to take into account the opposing parties' viewpoints in each decision it makes. Finally, NAK leadership has opted to propose a more limited scope project with less environmental impact, at least in the beginning.
Ron Thiessen, CEO of NAK, stated publicly on June 25 that he is very comfortable saying that NAK will have a partner by the end of the 3rd quarter. That time frame puts a partnership announcement anytime between now and Sept 30. While a single partner is possible, such as Rio or Freeport (NYSE:FCX), a consortium is also equally likely, for example Rio and Freeport. In the event of a partnership, the price per share can be calculated by estimating the partnership value, specifically how much will the partner or consortium of partners contribute for a 50% ownership interest. Conservative estimates are $1.5 billion, whereas a more reasonable estimate is $2.5 to $3.0 billion. If half of Pebble is worth $2.5 to $3.0 bil, this puts the remaining half at a similar value, which translates into a per share price of approximately $6 - $9 by end of September.