Independent analysis raises ante at Pebble

Northern Dynasty Minerals Ltd., owner and operator of the Pebble project in southwestern Alaska, is gearing up for a new season with a larger ownership stake in the gold-copper-molybdenum deposit and a C$36 million work program for 2005.

The company announced results March 4 of a recent independent analysis that indicated the world-class mineral system at Pebble is significantly larger than previously envisioned.

Northern Dynasty also said March 14 it agreed to acquire the remaining 20 percent ownership interest in Pebble in a stock transaction from Hunter Dickinson Group Inc., a related company.

The Pebble deposit is located about 60 miles from tidewater in Cook Inlet. Mineral deposits in the area appear to be relatively shallow with almost no internal waste over a broad area measuring almost two miles east-west and 1.25 miles north-south. A recent preliminary assessment indicates that the Pebble project could generate very attractive rates of return at production rates of 100,000 to 200,000 tonnes (metric tons) per day over a 30- to 60-year mine life, according to Northern Dynasty.

New estimate builds confidence in Pebble resources

Ronald W. Thiessen, president and chief executive of Northern Dynasty, said the new estimate shows Pebble is bigger in all respects. "The March 2005 resources estimate has increased in both the contained metal, but more importantly in the level of confidence of the resources," he said.

Prepared by Roscoe Postle Associates Inc., a leading geological and mining consultant, the analysis found that the 55-square-mile mineral system contains:

• Measured and indicated resources of 3 billion tonnes, containing 31.3 million ounces of gold, 18.8 billion pounds of copper and 993 million pounds of molybdenum, with an additional inferred resource of 1.1 billion tonnes, containing 10.8 million ounces of gold, 5.9 billion pounds of copper and 361 million pounds of molybdenum using a 0.30 percent copper-equivalent cut-off grade.

This estimate compares favorably with results of an analysis in 2004 by Norwest Corp. that pegged Pebble's measured and indicated resources at 2.74 billion tonnes, containing 26.5 million ounces of gold, 16.5 billion pounds of copper and 905 million pounds of molybdenum.

• Higher-grade measured and indicated resources of 569 million tonnes grading 0.50 grams gold per ton, 0.46 percent copper, and 0.021 percent molybdenum, or 0.88 percent copper-equivalent, with an additional inferred resource of 143 million tonnes grading 0.56 grams gold per ton, 0.40 percent copper, and 0.020 percent molybdenum, or 0.85 percent copper equivalent above a cut-off grade of 0.70 percent copper-equivalent.

The higher-grade measured and indicated resources also compared favorably with results of the 2004 Norwest study, which showed 435 million tonnes grading 0.49 grams gold per ton, 0.42 percent copper, and 0.021 percent molybdenum, or 0.84 percent copper-equivalent above a cut-off grade of 0.70 percent copper-equivalent.

The latest resource estimate is based upon drill core assay results from 70,719 meters of drilling in 265 holes, which Northern Dynasty completed during 2003 and 2004, and 19,245 meters in 118 holes completed by Teck Cominco American. (Teck Cominco American sold its ownership stake in Pebble to Northern Dynasty in 2004 for C$12 million and now holds a 5 percent interest in any net profits that Northern Dynasty realizes from the original Pebble deposit.)

Mark Rebagliati, P.Eng and Dr. Morris Beattie, P.Eng, are supervising Pebble's quality control and assurance program. Logging and sampling is completed in Northern Dynasty's facility at Iliamna and then transported to the ALS Chemex laboratory in Fairbanks for drying, weighing and crushing. Samples are shipped by airfreight to the main ALS Chemex laboratory in North Vancouver, British Columbia, for final preparation and analysis.

2005 work focuses on East Zone

Northern Dynasty's Chairman Robert A. Dickinson said March 4 the company has launched a work program for 2005, budgeted at C$36 million that will include delineation drilling of its new East Zone discovery at Pebble. The East Zone is located on the eastern flank of the deposit, where substantial open-ended volumes of higher-grade gold-copper-molybdenum mineralization have been encountered, Dickinson said.

"Comprehensive engineering, environmental, and socioeconomic programs, designed for the completion of a feasibility study and permit applications for a large scale, long-life mining operation, have been ongoing for the past year and will continue in parallel with the drill program," he said.

Company picks new feasibility director

A few days earlier, Thiessen announced the appointment of Stephen Hodgson, P.Eng, as feasibility study director for the Pebble project, effective March 15. The new hire also will serve as vice president of engineering at Northern Dynasty's related company, Hunter Dickinson Inc.

Hodgson has more than 28 years of experience in mine operations, mine development, and project engineering, most recently, as the technical director, mining and study manager for AMEC Americas Ltd. His background includes a focus on copper-gold projects and he has led study teams for projects such as Patricia Mining's Island Zone in Ontario and NovaGold's Donlin Creek in Alaska. Hodgson holds a bachelor's degree in mineral engineering (mining) from the University of Alberta and sits on the advisory committee of the British Columbia Institute of Technology's Mining Technology Program.

State, locals join in search for transportation plan

Challenges for developing Pebble include designing an efficient transportation system for getting the remote mine's ore to tidewater. The state of Alaska's Southwestern Transportation Plan includes the development of a port and a 55-mile road from Cook Inlet to the town of Iliamna, located some 16 miles to the southeast of the Pebble deposit. The Alaska Department of Transportation and Public Facilities has commissioned engineering studies for the selected road corridor and port site. Homer Electric Utility and Northern Dynasty are jointly funding a feasibility study of a power development plan to connect the deposit site to the state of Alaska's Railbelt electrical grid.

Northern Dynasty acquires nearly 100 percent mine ownership

Northern Dynasty's board of directors agreed March 14 to acquire the remaining 20 percent working interest in Pebble's exploration and resource lands from Hunter Dickinson Group for a purchase price of just over 14 million shares of Northern Dynasty common stock. The shares represent about 20 percent of the company's adjusted market capitalization, Northern Dynasty said.

In November 2004, Northern Dynasty purchased all of Teck Cominco American Inc.'s interest in the resource lands portion of Pebble by issuing US$9.94 million in common stock and recently bought Teck Cominco's residual 50 percent working interest in the exploration lands portion of the Pebble property by issuing US$4 million in common stock.

Once the latest acquisition is complete, Northern Dynasty will hold a 100 percent working interest in the entire Pebble property, subject only to a maximum 5 percent net profits interest held by Teck Cominco in the exploration lands portion of the property.