Northern Dynasty Minerals - Massive Alaska Copper Project Faces Permitting Hurdles

• Pebble project in Alaska is one of the world's largest undeveloped copper and gold deposits with over 10 billion tons containing billions of pounds of copper and molybdenum, millions of ounces of gold and silver, plus millions of kilograms of rhenium.
• The project has been extensively studied over the past 20 years with nearly $1 billion spent on engineering and environmental studies. Deposit size and grades are well established.
• Pebble is located in a remote part of Alaska, requiring major infrastructure investment (est. $6.4 billion CapEx with $4 billion self-funded).
• Permitting has been challenging due to environmental concerns around mining's impact on important salmon fisheries. After earlier denial, permit decision has been remanded and could potentially be approved in 12-18 months.
• Near-term milestones include Supreme Court decision, potential new strategic partners, final engineering studies. Longer term funding options still available despite delays.

About Northern Dynasty Minerals

Northern Dynasty Minerals is a mineral exploration company focused on advancing the Pebble Project, located in Alaska. The company wholly owns the Pebble Limited Partnership, which holds the rights to develop the Pebble deposit - considered one of the world's largest undeveloped copper, gold, molybdenum, silver and rhenium resources.

Northern Dynasty is currently going through the federal permitting process for the proposed Pebble mine. The company aims to design, permit, construct and operate a modern mine that can provide economic benefits to Alaska while minimizing environmental impacts. If approved and developed, the Pebble Project has the potential to become a major copper and gold producing operation. However, the project has faced opposition from groups concerned about possible impacts on the Bristol Bay watershed. Northern Dynasty maintains that the mine can coexist with sustainable salmon fisheries in the region through mitigation strategies and modern mining practices. The Pebble permitting process continues to unfold amid debate over balancing resource development and conservation in Alaska.

Interview with President & Chief Executive Officer, Ron Thiessen

The Pebble Deposit: One of the World's Largest Undeveloped Copper Resources

According to CEO Ron Thiessen, the Pebble deposit is arguably the largest undeveloped copper-gold resource in the world. Measurements indicate the Pebble deposit contains over 10 billion tons of mineralized material with estimated recoverable reserves of:

• 5.3 billion pounds of copper
• 5.4 million ounces of gold
• 2.8 billion pounds of molybdenum
• 250 million ounces of silver
• Additional palladium

The deposit is particularly valuable given its polymetallic nature, containing significant quantities of multiple metals. Engineering studies indicate the Pebble deposit could support a mine producing over 300,000 ounces of gold and 300 million pounds of copper annually for 20 years. The project also has major expansion potential as current plans focus on only 10% of the known mineralized area.

In terms of economics, Northern Dynasty estimates the Pebble Project has:

• $2.3 billion net present value (NPV) at 7% discount rate
• 16% internal rate of return (IRR)
• 4 year payback on $6.4 billion estimated capital investment

Permitting Difficulties: Environmental Concerns and Legal Challenges

While the Pebble Project resource is clearly world-class, Northern Dynasty has faced significant difficulties in securing permits for mine development. Environmental groups and local stakeholders have raised concerns about potential impacts on the important Bristol Bay salmon fishery. Bristol Bay is located around 200 miles from the Pebble deposit but indirectly connected via an extensive watershed.

To address environmental concerns, Northern Dynasty has proposed extensive mitigation measures including $500 million of water treatment infrastructure. The US Army Corps of Engineers (USACE) conducted a lengthy Environmental Impact Study (EIS) process from 2017-2020. The final EIS published in 2020 found Northern Dynasty's mitigation measures sufficient and that risks of environmental harm were minimal.

However, in November 2020 the USACE denied Pebble's permit applications in a decision Northern Dynasty contends was driven by political factors rather than science. Northern Dynasty has filed legal appeals challenging the permit denial. Most significantly, the State of Alaska has petitioned the US Supreme Court, arguing the US Environmental Protection Agency (EPA) overstepped its authority by preemptively vetoing Pebble permits for a large area surrounding the deposit.

Conclusion

Northern Dynasty faces considerable legal and political challenges in bringing the Pebble Project into production. Investors should not expect permits, project financing and mine construction to happen quickly.

However, Pebble also represents a truly world-class mining opportunity. Alaska's strong mineral endowment and need for economic development bode well for an eventual compromise, even if that takes many years. Northern Dynasty indicates major mining companies have expressed interest in Pebble, albeit waiting for clearer permitting visibility.

With $60 million in recent royalty financing, Northern Dynasty has the resources to continue its legal fight and make incremental progress. Near-term milestones like the State of Alaska's Supreme Court appeal could clarify the outlook and potentially attract takeover interest. Speculative investors with patience and high risk tolerance may consider taking a small position.

For most investors, caution is still warranted given the uncertainty over if and when the Pebble Project will ever be built. But the massive value of Pebble's resources means Northern Dynasty will likely find ways to unlock value, whether through a negotiated permitting solution, a takeover, or asset sales. Investors should keep an eye on Pebble's legal and political battles as a potentially massive copper and gold resource hangs in the balance.