Northern Dynasty gets Alaska boost

VANCOUVER -- Shares in a Canadian miner with a potential blockbuster deposit in Alaska shot up on Wednesday after that state's voters chose gold over salmon in a hotly debated citizen ballot initiative.

Northern Dynasty Minerals Ltd. gained more than 20% after Alaskans narrowly rejected the measure, which would have created potentially punishing new environmental restrictions on mining.

The small Vancouver-based company and global mining giant Anglo American PLC are partners on the Pebble project, a massive copper-gold-molybdenum find that has stoked strident backlash from fishermen and lodge owners. They say its development will bring catastrophic consequences for some of the world's richest salmon runs in southeastern Alaska.

Their efforts produced the ballot measure, which was designed to strengthen environmental protection for salmon and aimed specifically at Pebble. The mining sector, which decried the measure as so vaguely worded that it jeopardized the development of all new mines, breathed a sigh of relief when it became clear on Tuesday night that 57% of voting Alaskans agreed.

"I didn't pop any corks or anything, but I'll tell you I was very pleased with the outcome. There's no question about that," said Ron Thiessen, Northern Dynasty president and chief executive, whose company is doing pre-feasibility work on Pebble and expects to seek permits in late 2009 or 2010.

"We think the existing [environmental] rules and regulations are very adequate, and I think this vote is an endorsement of that. So from my standpoint, I think this is good for Pebble."

Other Canadian companies also pursuing mining projects in Alaska include Barrick Gold Inc., Teck Cominco Ltd. and NovaGold Resources Inc., whose CEO said the outcome represents sustained confidence in Alaskan mining.

But he argued there is no reason mines and fish can't co-exist.

"Salmon is an extremely important resource in Alaska and that certainly is recognized by the mining industry," said Rick Van Nieuwenhuyse. "Nobody wants to have bad water quality."

Yet even if a slim majority of voters agreed, the road to production for the Pebble project, in particular, is likely to be littered with opposition. Since it acquired the property in 2001, Mr. Thiessen says Northern Dynasty has focused more on socio-environmental issues than on either engineering or geology.

"We believe that the Pebble project has spent more money on environmental and socio-economic matters than pretty much any other industrial project in the world," Mr. Thiessen said. "Our intention is to get it right."

That spending is likely to continue, however, as the company wrangles with how to protect the fish and an opposition that has promised it has only just begun.

Northern Dynasty shares jumped 21% to $6.67 yesterday on the Toronto Stock Exchange. NovaGold, Teck and Barrick also closed up slightly.