The U.S. government has shot down Northern Dynasty Minerals Ltd.’s request to build a gold mine in the Alaska tundra because of concerns about water usage, sending shares in the junior Canadian miner into a tailspin.
The U.S. Army Corps of Engineers, or USACE, said the proposed gold and copper mine is “not in the public interest.” It added a mitigation plan recently submitted by the company to address concerns about water usage was “non-compliant.”
Shares in Northern Dynasty Northern Dynasty fell by 52 per cent Wednesday on the Toronto Stock Exchange to close at 51 cents amid record trading volume.
Its Pebble project is situated in the Bristol Bay region of Alaska, about 320 kilometres southwest of Anchorage, the biggest city in the state. Bristol Bay is home to one of the world’s biggest populations of sockeye salmon.
In a statement, Northern Dynasty said the rejection of the proposed mine was “politically motivated” and the conclusions made by the USACE are “wholly unsupported.” The company said it will appeal the decision.
While President Donald Trump had not weighed in on Pebble, local Republic senators in Alaska had voiced opposition to the project partly based on the possible effect on the fishing industry.
Vancouver-based Northern Dynasty had touted the project as one of the most promising undeveloped assets of its kind in the world. But even if Pebble had received approval to go ahead, it would have faced a number of significant hurdles.
Much more study was required to prove the deposit is profitable to mine. The deposit is classified as a “resource,” as opposed to a “reserve,” meaning its economics have not been proven. The most recent technical study on Pebble dates to 2011 and, according to Northern Dynasty, it is “outdated” and “cannot be relied upon.”
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