Northern Dynasty Minerals (NAK) Stock: Is A Buyout Coming?


Northern Dynasty Minerals Ltd (NYSEMKT: NAK) is having yet another incredible day in the market today as investors continue to track the Pebble Project. However, as I dug around today, I found an interesting concept. Many on message boards are speculating that Rio Tinto is building funds for a buyout. Today, we’ll talk about what we’ve seen from Rio Tinto, why some believe that they are preparing for an NAK takeover, and what we’ll be watching for ahead.

What We’re Seeing From Rio Tinto

As mentioned above, many investors at NAK have been under the impression that the company is gearing up for a takeover, and most believe that Rio Tinto is going to be the one to make the offer. The reason for this is relatively simple. Recent news surrounding RIO suggests that they are gearing up for something big financially.

Recently, the investment firm Macquarie said that RIO would be selling some of its assets, hoping to raise up to $10 billion. The firm said that the London-based company could bring in between $3.3 and $4.3 billion should it sell its outstanding coal operations. On top of that, Rio Tinto could raise up to $2.8 billion should it choose to sell its aluminum and smelting operations. The investment firm believes that in total, between all assets it is considering selling, it could bring in roughly $9.9 billion.

Is This To Acquire NAK?

As mentioned above, I’ve seen several messages on message boards suggesting that, at the moment, Rio Tinto is building up funds in order to acquire Northern Dynasty Minerals. First and foremost, I want to make it clear that this is currently nothing more than speculation. RIO may just be building funds to move forward with their own operations. However, it’s hard not to argue that the company would gain quite a bit from acquiring NAK.

If I were asked about a potential acquisition of NAK a year ago, I would have said it is too early in the game. However, today, things are very different. Throughout the year, things have changed in a big way with regard to the Pebble Project, and if things keep going in this direction, the project could be an overwhelmingly profitable one! The company has gotten to the point where they will be able to work toward permits for the project, which was a long fight and well won.

As a result, they are getting overwhelmingly close to beginning construction on what could be one of the largest mines in the world. So, it wouldn’t be inconceivable if a big company like RIO wants to take a piece of the pie. As to the question above, no one quite knows if Rio Tinto is raising funds to acquire Northern Dynasty Minerals, but it is definitely not out of the question.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will be keeping a close eye on RIO and NAK. In particular, we’re interested in following the asset sales at RIO and seeing if the company is indeed interested in acquiring NAK. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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