Shares in Northern Dynasty Minerals (TSX: NDM; NYSE: NAK) plummeted Monday after the United States Supreme Court dismissed the state of Alaska’s attempt to keep the Pebble project alive after it was essentially shot down by the Environmental Protection Agency a year ago.
Alaskan lawmakers in support of the project by Northern Dynasty filed in July a motion asking the Supreme Court to overturn the EPA decision, arguing that the nation’s highest court had the authority to hear their case before lower courts reviewed the matter.
In a more typical legal process, the state must start with a lower court and then appeal any unfavorable decisions with the Supreme Court.
“Alaska tried to persuade the court that this is the rare kind of dispute that the justices should hear as a trial court, without having it go through lower courts first,” Steve Vladeck, Supreme Court analyst and professor at the University of Texas School of Law, told CNN.
“Although there’s no explanation accompanying today’s denial, it stands to reason that a majority of the justices disagreed and were willing to let the case go through ordinary litigation in the lower courts first,” he added.
The court’s dismissal comes just over two weeks after Northern Dynasty announced financings of more than $23 million for the proposed mine in the Bristol Bay area, which would have become the largest copper, gold and molybdenum extraction site in North America.
Pebble has met with nearly two decades of resistance for its potential impact on nature and the communities that depend on them and last January, the EPA sided with groups opposing Pebble by blocking Northern Dynasty Minerals from storing mine waste in the Bristol Bay watershed, home to the world’s largest sockeye salmon fisheries.
As previously announced, Northern Dynasty has also not given up and has considered legal options to challenge the EPA.
“The proposed mine for the Pebble project would provide good-paying, year-round employment for thousands of Alaskans, something desperately needed in southwest Alaska,” the company said.
Over a 20-year mine life, the Pebble mine is expected to churn out 6.4 billion lb. of copper; 7.4 million oz. of gold, 300 million lb. of molybdenum; 37 million oz. of silver and 200,000 kg of rhenium. It has a post-tax net present value of more than US$2 billion (at 7% discount rate) with an internal rate of return of roughly 15%.
Northern Dynasty’s stock plunged 38.4% to 32¢ apiece in mid-afternoon in Toronto on the latest development. The Vancouver-based miner has a market capitalization of $172.3 million. Its shares traded in a 52-week range of 28¢ and 58¢.
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