Pebble permit applications deferred

Vancouver, British Columbia-based Northern Dynasty Minerals Ltd. will defer permit applications for its Pebble project near Iliamna on the Alaska Peninsula for at least one year while it evaluates the ramifications of its adjacent new east zone discovery, according to Bruce Jenkins, chief operating officer of Northern Dynasty Mines Inc. (Alaska).

The company will pursue a new feasibility study that includes the new porphyry copper-gold system discovery it announced in September, Jenkins told Mining News Dec. 8.

"Why permit a plan that is going to be obsolete?" Jenkins said.

Based on exploratory drilling, the east zone deposits are deeper and richer than the company's originally proposed open pit mine, Jenkins said.

Northern Dynasty's original plan was to complete a feasibility study for the mine in late 2005, and to apply for state and federal permits in late 2006. Now the company will take additional time and expand the feasibility study to include the study of producing the deeper ore to the east, Jenkins said.

Jenkins said the company extended its 2005 drilling program with six additional holes into the east zone in December, wrapping up drilling for the season Dec. 18.

Northern Dynasty is planning a very aggressive and extensive drilling program in the east zone in 2006, Jenkins said, adding that the company will spend $20 million or more on exploration drilling at Pebble in 2006, an amount roughly double what it spent in 2005.

Jenkins said the deeper nature of the east deposit will require upgrades of equipment in 2006 to reach much deeper levels than the company has tested in its exploratory drilling program to date.

The east zone looks to be much more than a tidbit on the edge of the original open pit, and in fact will drive a rethinking of the entire project, Jenkins said. The project and all of its components are subject to redesign and resizing, with possible changes in mining techniques and improved economies of scale. The change in scale will likely alter many aspects of the current plan such as mining pit size and mine power requirements.

Grades in the east zone are so high, it might be cost effective for Northern Dynasty to consider an underground mine there, Jenkins said.

"Block caving is a concept that is being looked at," Jenkins said. "Entry from the pit to an underground operation is a possibility at this point."

Jenkins said nothing is cast in stone at this point, and that underground mining is just one of many options the company is considering.

Jenkins said Northern Dynasty is now targeting 2007 for permit applications but the permitting schedule is contingent on 2006 drilling results. The company is prepared to bump the permitting date into the future if more time is needed to delineate its new east zone discovery.