Northern Dynasty Slides On Anglo American Partnership Announcement

Shares in Northern Dynasty Minerals (NAK) were down almost 9% Wednesday morning after trading resumed on the stock, after the company announced that Anglo American plc (AAUKD), through a wholly owned subsidiary, will pay up to US$1.4-billion to become a 50% partner in the Northern Dynasty-owned Pebble Copper-Gold-Molybdenum Project in southwestern Alaska.

Trading volumes in Northern Dynasty, which was halted Tuesday afternoon in anticipation of Wednesday's announcement, have spiked considerably since July 23, with the company's share price rising more than 20% from C$13.50 to C$16.10 at Tuesday's close.

The Pebble Project is widely regarded as one of the biggest mining projects in the world, with key assets including the 4.1 billion tonne, open pit style Pebble West deposit and the deeper and higher grade 3.4 billion tonne Pebble East deposit. Anglo American becomes the second international mining giant to jump on board the Pebble project, following Australian-based Rio Tinto plc (RTP), which has a 20% stake in Northern Dynasty.

Peter Grandich, who has been a Northern Dynasty shareholder almost from the beginning, said the company has faced an "uphill battle" from the start including financing itself via non-broker placements. But with two major mining firms now endorsing the Pebble project, the author of the The Grandich Letter said Northern Dynasty is finally getting the recognition it deserves.

"For far too long, Northern Dynasty was an orphan among the institutional community but with Anglo as a partner and Rio as a major shareholder, I fully anticipate Northern vaulting towards the top of most mining share institutional shopping lists."

Mr. Grandich added that he believes Northern Dynasty could end up being worth C$25.

NAK 1-yr chart:

Comments

[jt:]

The "slide" to me was a selloff by those jumping in hoping for a quick profit...ie, a buyout. This will take a lot longer to get the money out, but as Peter states, a buyout could STILL come of NAK's 50%. Either way, this selloff is temporary as even $2+ dollars higher, shareprice doesn't even begin to do justice to the value of the rock. jt

2007 Aug 02 09:19 AM

[neilo:]

I think the shareholders were expecting a takeover and therefore didn't like the stepped cash infusion by Anglo vs immediate benefits of say a $25.00/ share in their jeans.
neil

2007 Aug 02 09:33 AM

[dipps:]

WestWind and Raymond James target NDM / NAK to reach $25 to $29 smackers.
These are not small potatoes talking.
Guy D.

2007 Aug 03 01:24 AM

[dipps:]

Another stake (over 6%) has just come on Nothern Dynasty. SEC 13D (Securities & Exchange Commission) was just filed by Mitsubishi Corporation, this can only now lead to an eventual takeover of "NAK" with Rio Tinto and Anglo American already on board.

2007 Dec 10 09:58 PM