Northern Dynasty Minerals Ltd (NYSEAMERICAN: NAK) isn’t having the best of days in the market today. However, I don’t look at this as a reason to have the blues. In fact, the declines may represent a discounted opportunity to get in on what may become an incredibly profitable trade. That all seems to hinge on one key word – partnership. Before we get into the details here, we’d like to extend a thank you to our partners at Trade Ideas for always being the first to alert us to movement in the market. At the moment (11:09), NAK is trading at $1.88 per share after a loss of $0.06 per share (2.84%) thus far today.
NAK Is Almost Guaranteed To Get Permit Approval
Northern Dynasty Minerals has been an incredibly interesting stock to watch. In the past, many (including myself) didn’t believe that the company would ever achieve permitting for the Pebble Project. The company even found itself in a legal battle with the EPA over its rights to even file for permits. However, after negotiating a settlement that would allow them to apply for a permit, the idea of the dream Pebble Project mine coming together is becoming more of a reality. In fact, in light of recent news, it’s hard to argue the fact that the Pebble Project mine will achieve permit approval.
Ultimately, my opinion on this lies around the recent plan unveiling done by NAK. The company has greatly reduced the mine’s footprint, adding several environmental safeguards that even the most hard-pressed opponents of the mine will likely enjoy seeing, which could cause them to change their mind. Some of the most important of these new safeguards include eliminating any mining in the Upper Talarik watershed region and not using cyanide in the recovery process. The company also outlined incredible economic benefits that make it even harder to decline the permit application.
With Approval In Sight, Partnerships Are Key
At the end of the day, permit approval is becoming less and less of a concern for NAK and its investors. Now, it’s time to get down to the nitty gritty of the process, actually building and operating the mine. Think about it, that’s going to cost a ton of money, and chances are that Northern Dynasty Minerals will have a hard time doing it on their own. Nonetheless, it seems that NAK already has this covered as well. In fact, Thiessen recently explained that the Pebble Project is “more likely a consortium of developers to share costs and risks.” So partnerships are key to the process. Furthermore, the company is already in talks with various other companies to put these partnerships together.
While Northern Dynasty Minerals hasn’t said who they are in talks with as of yet, there are rumors circling the topic. Some of the most likely to be involved in the Pebble Project turned Pebble Partnership will be Rio Tinto and Anglo American, as the company has already had previous discussions with the two and these discussions are likely to hit the table again.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on NAK. In particular, we’re interested in following the Pebble Project, as this could prove to be one incredibly profitable venture as the partners come on. Considering the information that is available to the public as we speak, it’s hard to imagine that NAK would have any issues receiving permit approvals or getting necessary partners involved. At this point, it’s more a matter of time than a matter of ability. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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