Vancouver — Following a positive preliminary assessment,
The independent study outlines three possible production rates for the large porphyry deposit: 100,000 tonnes per day, 200,000 tonnes per day, and a phased expansion from 100,000 to 200,000 tonnes daily (with the mine rate doubling in year six).
The first of these scenarios, 100,000 tonnes per day, would entail mining the 2.1-billion-tonne resource over a life span of about 62 years. During that time, Pebble would be expected to produce 276,000 oz. gold, 199 million lbs. copper, 1.1 million oz. silver and 7 million lbs. molybdenum at an estimated cash production cost of US42 per lb. copper (net of gold, silver and molybdenum credits).
For the second and third scenarios (200,000 tonnes per day and the phased expansion from 100,000 to 200,000 tonnes), a mining life of 31 and 33 years, respectively, are projected. Life-of-mine annual production estimates under the second model are 543,000 oz. gold, 392 million lbs. copper, 2.1 million oz. silver and 14 million lbs. moly, whereas the third model would see 510,000 oz. gold, 368 million lbs. copper, 1.9 million oz. silver and 13 million lbs. moly. Cash production costs for copper (net of all other credits) are US29 and US30 per lb., respectively.
Pebble has a remarkably low stripping ratio of 0.23-to-1, well below industry averages in large-scale open-pit operations.
An inferred mineral resource at Pebble was calculated earlier this year, showing 2.74 billion tonnes grading 0.3 gram gold per tonne, 0.27% copper, and 0.015% molybdenum, or 0.55% copper-equivalent.
The preliminary assessment outlines development by large-scale open-pit methods in four stages. Anticipated processing of mill feed would produce a flotation copper sulphide concentrate with gold and silver values as well as a separate molybdenum concentrate. Metal recoveries are estimated at 88% for copper, 76% for gold and silver, and 60% for moly. A concentrate pipeline would transport the slurry to a tidewater port facility.
Total construction capital costs are pegged at US$1 billion for the first scenario and US$1.5 billion for the second. Operating costs are estimated at US$5.06 and US$4.36 per tonne of mill feed.
A financial analysis shows internal rates of return (IRRs) of 15.3% and 20.3%, with net present values (NPVs), discounted at 5%, of US$1.05 billion and US$2.09 billion, respectively, in the first and second scenarios. These calculations are based on metal values of US95 per lb. copper, US$395 per oz. gold, US$5 per oz. silver and US$5 per lb. moly.
In 2005, Northern Dynasty intends to carry out a bankable feasibility study and secure environmental permits.
Infrastructure at Pebble will include a 138-km road to Cook Inlet and construction of a deep-sea port. The company and the state of Alaska are discussing the possibility of developing an access corridor to the town of Iliamna, about 27 km away.
Power requirements are also being examined. Two possible routes include a 66-km submarine line from the Kenai Peninsula and an overland route, some 300 km from Beluga, along the west side of Cooke Inlet.
As well, Northern Dynasty is examining its financing options for advancing Pebble.
The company recently secured a listing on the American Stock Exchange (AMEX) under the symbol nak. The listing will increase Northern Dynasty’s exposure in the U.S. and may assist the company in future financing options.
In 2001, Northern Dynasty, indirectly through the Hunter Dickinson group, entered into an option agreement with
Northern Dynasty has 45.1 million shares outstanding and a market capitalization of $315 million. It was recently trading at $7 per share.
London-based and AIM-listed
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