Northern Dynasty’s Pebble East keeps on growing

An updated resource estimate for Pebble East confirms the claims of Northern Dynasty Minerals (NDM-T, NAK-X) that its copper-gold-molybdenum deposit in southwestern Alaska is one of the most significant in the world.

The new resource estimate is based on 47,854 metres of drilling in 36 holes last year.

At a 0.60% copper equivalent cut-off, the newly estimated inferred resource in the Pebble East deposit is 3.9 billion tonnes grading 0.99% copper equivalent, containing 49 billion lbs. copper, 45 million oz. gold, and 2.8 billion lbs. molybdenum.

At a 1% copper equivalent cut-off, the inferred resource is 1.5 billion tonnes grading 1.32% copper equivalent, containing 27 billion lbs. copper, 24 million oz. gold and 1.2 billion lbs. molybdenum.

Cut-offs in the range of 0.60% copper equivalent are typically used for bulk underground mining operations at copper porphyry deposits around the world.

A preliminary geotechnical assessment has shown that Pebble East is amenable to low cost, bulk underground mining.

The Pebble project made up of two immense deposits — is about 380 km from Anchorage and 27 km north of Lake Iliamna.

Pebble East, which is open to the north and south, is adjacent to the 4.1 billion tonne Pebble West deposit. The near-surface deposit is viewed as a potential open-pit operation.

Pebble West hosts a measured and indicated resource of 3 billion tonnes grading 0.28% copper, 0.32 gram gold per tonne and 0.015% molybdenum using a 0.3% copper-equivalent cutoff grade, with contained metal at 18.8 billion lbs (8.5 million tonnes) copper, 31.3 million oz. gold and 993 million lbs. molybdenum.

Using the same cut-off grade, Pebble West also contains 1.1 billion inferred tonnes averaging 0.25% copper, 0.3 gram gold and 0.015% molybdenum.

In late July, major Anglo American (AAUKD-Q, AAL-L, AGL-J), through a wholly owned subsidiary, became a 50% partner in the Pebble project in return for staged cash investments over several years adding up to US$1.425 billion.

Rio Tinto (RTP-N, RIO-L) holds 19.8% of Northern Dynasty Minerals and Japan’s Mitsubishi Corp. owns 9.1%.

Since 2001, Northern Dynasty has invested US$180 million to discover and develop the 396 sq. km. Pebble project.

Co-product revenues for the project are expected to be in the range of 60% copper, 30% gold and 10% molybdenum at metal prices of US$1 per lb. copper, US$400 per oz. gold and US$6 per lb. molybdenum.

The company plans to complete a pre-feasibility study by December, a feasibility study by 2011 and commence commercial production by 2015.

On Feb. 13, Northern Dynasty kicked off an additional 47,854-metre infill and delineation drill program at Pebble East. The new program is designed to upgrade the classification of a portion of Pebble East to an indicated mineral resource in preparation for this year’s pre-feasibility mine planning studies, and also to determine the full extent of the deposit which is still open.

At mid-day, Northern Dynasty’s shares on the Toronto Stock Exchange were down 19 apiece to $12.01 on a trading volume of 87,064.

The company’s 52-week trading range is $9.28 to $16.75. It has 92.5 million shares outstanding.