FM “Framework” Pending Due Diligence. The option agreement contemplates an option payment of US$150 million staged over four years which option will entitle First Quantum to acquire the right to earn a 50% interest in the Pebble Limited Partnership (the “Pebble Partnership”) for US$1.35 billion. The option period may be extended for up to 2 years by First Quantum making payments to be agreed upon which amounts will be offset against the $1.35 billion additional investment amount. Within five business days of the execution of the framework agreement, First Quantum will make an early option payment of US$37.5 million (“Early Option Price Installment”) to Northern Dynasty. The Early Option Price Installment will be applied solely for the purpose of progressing the permitting of the Pebble Project.
*Someone still has to finance the other portion of the construction cost of up to potentially $5 billion assuming FM’s 50% buy-in of $1.35 billion is directed to construction. No feasibility study so no detailed capital cost estimate. NDM has stated the project could cost $5 billion to construct with no caveat for a “smaller mine plan”.