Northern Dynasty and Anglo update Pebble resource

Vancouver – As a joint-venture between Northern Dynasty Minerals (NDM-T) and Anglo American (AAUK-N, AAL-L) moves the massive copper-gold-molybdenum Pebble property 500 km southwest of Anchorage, Alaska towards prefeasibility, the two companies have produced an updated resource estimate.

Previously Northern Dynasty and Anglo had divided the Pebble project into separate resource estimates: the potentially open-pitable Pebble West area and the underground Pebble East area.

But with a comprehensive mine plan in mind, the joint-venture, using a 476-hole database that included new 2008 drill results, has lumped the two areas together.

Now the latest resource estimate pegs Pebble at 5.1 billion measured and indicated tonnes grading 0.43% copper, 0.35 grams gold per tonne and 0.0256% molybdenum. That translates to 49 billion lbs. copper, 57.2 million oz. gold and 2.9 billion lbs. moly.

In addition the joint-venture reports an inferred resource estimate of 4 billion tonnes grading 0.27% copper, 0.29 grams gold and .022% moly for 23.7 billion lbs. copper, 36.9 million oz. gold and 1.9 billion lbs. moly.

Northern Dynasty president and CEO Ron Thiessen says in a prepared statement, “A modern, long-life mine at Pebble could produce one-quarter of America’s domestic copper supply for 50-plus years.”

By way of comparison Freeport McMoRan’s (FCX-N) Grasberg mine complex in Indonesia holds the world’s largest recoverable gold reserves weighing in at 2.8 billion tonnes grading 1.04% copper and 0.9 gram gold per tonne for 64 billion lbs. copper and 89 million oz. gold.

Northern Dynasty acquired Pebble from Teck Cominco in 2001 and subsequently earned a 100% interest. Following drilling between 2002 and 2004 the company produced its first resource estimate for Pebble West. Then in 2005 it discovered Pebble East.

With the mineralization ballooning in size Northern Dynasty caught the eye of majors in 2007. First Rio acquired a 19.8% stake in Northern Dynasty in January and then Anglo entered into a 50-50 joint venture agreement with Northern Dynasty that summer.

To get its 50% interest Anglo must spend about US$1.4 billion towards developing Pebble into a mine. The first stage of the agreement stipulates that Anglo spend a minimum US$125 million towards a prefeasibility study. The second stage has Anglo committing US$275 million more on a feasibility study and mine development.

If it decides to go ahead with construction, Anglo is then on the hook for up to US$1.4 billion in expenditures. Thereafter the project goes forward on a 50-50 basis.

At this point the joint venture is vying to have the mine production-ready in 2015.

On news of the updated resource Northern Dynasty’s share price rose 8¢ to close at $3.04.