The following press release is courtesy of Earthworks:
VANCOUVER & WASHINGTON D.C. — Today the Justice and Corporate Accountability Project (JCAP), on behalf of Earthworks, filed a request for a compliance investigation into Northern Dynasty Minerals (TSX: NDM, NYSE American: NAK). The letters to the British Columbia Securities Commission and the U.S. Securities and Exchange Commission raise serious issues concerning misleading claims about the proposed Pebble Mine in Bristol Bay, Alaska.
“Northern Dynasty refuses to accept that the Pebble Mine is a losing proposition,” said Bonnie Gestring, Earthworks’ Northwest Program Director. “Four major mining companies have already walked away from it. Now Northern Dynasty, which lacks the financial resources to build the mine, is trying to drum up cash by providing incomplete and misleading information to investors.”
The complaint shows that Northern Dynasty is misleading investors in four major ways:
- Misrepresentation of the amount of the mineral resource available for the Pebble mine project.
- Misrepresentation by the use of overly promotional language, such as “world class” and “generational opportunity.”
- Lack of disclosure concerning Alaska Native corporation’s ownership of subsurface rights along the proposed underground gas pipeline and stated refusal to grant Northern Dynasty access.
- Lack of disclosure concerning Alaska Native opposition and failure to secure social license.
Northern Dynasty’s investor materials promote a “world class” 11 billion tonne deposit, but the mine plan under review by the U.S. Army Corps of Engineers will extract only a small fraction of the mineral resource (11%). According to Dr. David Chambers, a geophysicist and mining expert who submitted a professional opinion with the complaint, the company’s plan to backfill the pit with mine waste and let it flood with wastewater after 20 years (the lifespan of the mine) will prevent any further mining in the open pit, and could deny access to all of the remaining 89% of the deposit.
“Northern Dynasty is touting a world class resource, but is proposing an unrealistic mine plan, and it isn’t being straight with investors,” Dr. Chambers said. “The company has also failed to provide the essential economic analysis to support its extravagant claims,” he added, pointing to the lack of a pre-feasibility or feasibility study to demonstrate economic viability.
The complaint also points to Northern Dynasty’s failure to disclose to its investors the subsurface rights held by the Bristol Bay Native Corporation (BBNC) along the mine’s proposed underground gas pipeline, and BBNC’s refusal to grant access to Northern Dynasty for pipeline development, which it stated in a 2018 letter to the Pebble Limited Partnership, a wholly-owned subsidiary of Northern Dynasty.
“The Pebble Mine is the only significant asset of Northern Dynasty, so these types of glaring misrepresentations and omissions must be investigated and properly disclosed to investors,” said Shin Imai, JCAP lawyer and professor emeritus at Osgoode Hall Law School in Toronto.
The complaint also highlights Northern Dynasty’s failure to secure social license for Pebble from the indigenous peoples of Bristol Bay, including opposition from the United Tribes of Bristol Bay, a consortium of 15 Bristol Bay tribal governments that account for nearly 80% of the Bristol Bay Native population.
“A Pebble mine, big or small, cannot co-exist with our traditional way of life,” said Alannah Hurley, Executive Director of United Tribes of Bristol Bay, a consortium of 15 Bristol Bay tribal governments. “For almost two decades our people have stood against this mine. We have no intention, now or ever, to compromise our Native values for this destructive project.”
The Pebble mine plan is controversial because it is located at the headwaters of Alaska’s Bristol Bay watershed, which produces roughly half of the world’s supply of wild sockeye salmon. The Draft Environmental Impact Statement predicts that over 70 miles of rivers and streams will be permanently lost, and the resulting open pit will contain more contaminated water (estimated 61 billion gallons) than the Berkeley Pit (estimated 50 billion gallons) – one of the largest Superfund sites in the United States.
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