Northern Dynasty Minerals Ltd (NYSEAMERICAN: NAK) has been an interesting stock to watch over the past couple of years. A couple of years ago, I would have said that the risks were too high to get involved. However, my opinion is far different today. I now believe that the stock provides an opportunity that comes with massive potential and minimal risk. Today, we’ll talk about the potential, the fact that risk has been largely minimized, what we’re seeing from the stock today, and what we’ll be watching for with regard to NAK ahead.
The Potential Opportunity Surrounding NAK
As mentioned above, Northern Dynasty Minerals is currently offering the potential for massive long-run gains. At the end of the day, this potential revolves around the company’s primary venture known as the Pebble Project.
The Pebble Project, located in Alaska, is one of the largest stores of mineral wealth ever discovered. In fact, considering current resource estimates, the Pebble Project is the world’s largest undeveloped copper and gold resource at this time. However, these are not the only resources that the company will have access to once the mine is up and running.
In fact, current resource estimates suggest that there are billions of tonnes of copper, gold, molybdenum, and silver located under the surface at the mine. At the end of the day, if NAK does access these resources, it will be sitting on a literal and figurative gold mine with the ability to pull massive amounts of basic materials out of the earth.
This alone is a big opportunity. However, looking into NAK stock, the opportunity becomes even more clear. Over the past five years, the value of the stock has seen dramatic declines as the company battled with the EPA to obtain the ability to file for permits. While the stock has come back from lows, it is still priced at an incredible discount due to years of declines. So, not only is there an opportunity to get in on one of the world’s largest mines, that opportunity comes at a discount!
As mentioned above, if you would have asked me about Northern Dynasty Minerals a couple of years ago, I would have told you to stay away. That’s because the company was in a battle with the EPA and it seemed like they would never be able to apply for permits for the Pebble Project. However, that has changed in a big way.
Earlier this year, it was announced that NAK and the EPA had reached a settlement. Under the terms of the settlement agreement, the company was given a clear path to permitting. Essentially, the company had to prove that the Pebble Project would not have a negative effect on the environment in which it sits.
For several months, NAK has been working to prove this, and it has largely done so. Recently, the company announced plans surrounding the Pebble Project that put several environmental safeguards in place. On top of that, the company outlined the economic benefits the mine would have on the community in which it sits. Chances are that approval will be a breeze due to these plans.
On top of that, the company recently announced the hiring of Mark Hamilton. Hamilton is a key figure in the Alaskan community, and he will likely make the permitting process even easier than it seems to have become.
Finally, while the risks have been reduced greatly, they’re likely to be reduced further. Recently, Northern Dynasty Minerals has been hinting at partnerships. In fact, many, including myself, believe that the fact that the company has hired Hamilton is a sign that partnerships are all but signed, sealed, and delivered. These partnerships will further minimize risk for NAK and its shareholders.
What We’re Seeing From The Stock Today
As investors continue to await news of partnerships, excitement continues to grow. In fact, the stock is having another strong day in the market today. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:01), NAK is trading at $2.23 per share after a gain of $0.06 per share (2.76%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NAK. In particular, we’re interested in following the ongoing permitting process of the Pebble Project and excited to see the company move to the development phase. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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