Shares in junior gold miner Northern Dynasty Minerals Ltd. (NYSEMKT: NAK) got slammed late on Friday following an announcement by the U.S. Environmental Protection Agency (EPA) that the agency is beginning a review of the potential impact of the company’s proposed Pebble Mine on the sockeye salmon fishery in Alaska’s Bristol Bay. The decision prevents the Army Corps of Engineers from approving a permit to begin work on the mine.
The EPA’s review will consist of four steps:
- Consultation with the Corps of Engineers and Northern Dynasty.
- Publication of a “Proposed Determination” in the Federal Register. This would include proposed prohibitions and restrictions on mining the Pebble deposit and seek public comment and hearings.
- Review public comments and develop a “Recommended Determination.”
- Further consultation with the Corps of Engineers and Northern Dynasty officials and development of a “Final Determination” including any prohibitions or restrictions.
According to Northern Dynasty, the Pebble deposits are one of the largest ever discovered, comprising a measured and indicated deposit of 5.94 billion metric tons of copper, 67 million ounces of gold, and 3.3 billion pounds of molybdenum. Studies also infer an additional 26 billion metric tons of copper, 40 million more ounces of gold, and 2.3 billion pounds of molybdenum. Silver, palladium, and rhenium are also present.
The EPA released an assessment of mining impacts on Bristol Bay in January that “documents the significant ecological resources of the region and the potentially destructive impacts to salmon and other fish from potential large-scale copper mining in the Pebble deposit. The study indicated that the proposed mine would “likely cause irreversible destruction of streams that support salmon and other important fish species, as well as extensive areas of wetlands, ponds, and lakes.”
Last Thursday, the Canadian government rejected a copper/gold mining project proposed by another junior miner, Taseko Mines Ltd. (NYSEMKT: TGB). The New Prosperity project proposed for central British Columbia includes a measured and indicated resource containing 5.3 billion pounds of copper and 13.3 million ounces of gold. Canada’s environmental ministry said that the project likely would cause significant adverse environmental effects that cannot be mitigated, and has determined that the effects are “not justified in the circumstances.”
Northern Dynasty shares plunged nearly 33% on Friday to close at $1.00 after posting a new low of $0.96. The 52-week high is $3.63.