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Northern Dynasty: A Zero Or A 4-Bagger


  • Northern Dynasty's management is on the record saying they anticipate (think it is plausible) that a Final EIS and Record of Decision could be secured before the 2020 election.
  • If permitted, this stock significantly re-rates, and I would argue it would fetch $1 billion ($2 per share) to $2 billion ($4 per share) in a sale.
  • If Pebble were permitted, it possible that a Barrick Gold ($50 billion market capitalization) or a consortium of miners would be bidders.

Long-time readers and followers might recall my infamous piece, "A Stock Idea For An Upcoming Hillary Victory" (October 24, 2016). At the time of publication, shares of Northern Dynasty (NYSE:NAK) were completely off the radar and were trading at $0.77 apiece. I say infamous because, like so many professional pollsters, media heavyweights, coastal elites, and the like, I incorrectly assumed that Hillary would waltz to victory in November 2016. Oops, I was wrong. Miscalculating one of the biggest election upsets in U.S. Presidential history notwithstanding, it turns out that my Buy recommendation for NAK was a good one. Lo and behold, post election, shares of NAK went on an epic bull run, and eventually hit an apex of $3.41 per share during the first week of February 2017.

(Source: Yahoo Finance)

As the stock rose rapidly, it suddenly become en vogue, which often happens when you are the momentum stock darling of the moment. Well, as this supernova rally was starting to show signs of moderating, it quickly burned out when fairly well-known short-selling firm Kerrisdale Capital Management published a well-timed piece, "Northern Dynasty Minerals Ltd.: The Pebble Deposit Isn't Commercially Viable" (February 14, 2017). In the subsequent weeks, I went on a writing bender, when I morphed into "Elon Musk obsessive mode" and did a bunch of work on NAK and wrote a number of articles that were shared and published exclusively on SA. A few months later, circa May 2017, after all of the momentum had leaked from the balloon and permitting hurdles and roadblocks sudden sprang up, most likely set by a well-coordinated pack of environmental and special interest groups, I exited stage left, as I reluctantly concluded that the stock was dead money. At that time, I kind of concluded that company and stock would die on the vine, as legal fights

This article was written by

Idea generation, value investing, small caps and under the radar stocks.
A career wanderer and journeyman, with a passion for deep value and contrarian investing. I spent five years on the buy side in investment grade bonds on a team that managed $50 billion of assets, 3.5 years as an energy credit analyst for an energy company, and had multiple stints in corporate finance, most recently as a strategic financial analyst. I have an undergraduate degree in Finance (UMass Amherst) and earned an MBA (Babson College).

I actively invest my own capital and for a few family members.

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Analyst’s Disclosure: I am/we are long NAK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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