Northern Dynasty Minerals Ltd. (NYSEAMERICAN:NAK) is sitting on a game-changing mine. Or at least it will be, should permission to develop the mine proceed. Right now it is wrapped up in regulatory red tape, with no guarantee Northern Dynasty will ever be able to break ground. In fact, with the president and environmental activists lined up in opposition, the odds aren’t great that Northern Dynasty’s Pebble Project will be approved. But if it is, anyone who invested in NAK stock now is going to be celebrating.
This isn’t just any (proposed) mine. The Pebble Project in Alaska is described as “the most significant undeveloped copper and gold resource in the world.”
NAK stock currently has a ‘B’ rating in Portfolio Grader. The company has been avoiding debt, but its future is all about the Pebble Project. It has no revenue, only proposals. If Northern Dynasty is successful, NAK stock will take off. If not, the company will circle the drain. The good news is that with shares at 61 cents, investors can take a chance without risking a lot of their capital.
Northern Dynasty Minerals has been working on the Pebble Project for two decades. Located near Bristol Bay in Alaska, the site is in an environmentally sensitive area. Its proximity to the Bristol Bay salmon fishery means Northern Dynasty is pitted against environmentalists, the Environmental Protection Agency and local native tribes that rely on the fishery.
If approved, the Pebble Project would result in a mining pit roughly one mile by one mile and over 650 feet deep. When operational, it would reportedly be North America’s largest mining operation.
It’s what Northern Dynasty is mining for that makes the Pebble Project so enticing for investors. Measured reserves at the site include 57 billion pounds of copper and 71 million ounces of gold. In addition, there are 345 million ounces of silver and 3.4 billion pounds of molybdenum. In all, it’s estimated to contain over $400 billion worth of copper, gold and other metals.
Hope that Donald Trump would win re-election and approve the mine pushed NAK stock to near the $2 level last summer. Joe Biden will be a much tougher sell. In fact, the current president pledged to block the mine during his campaign. That negativity from high levels has pushed NAK stock back to penny stock status.
At this point, Northern Dynasty has an appeal filed with the U.S. Army Corp of Engineers (USACE) as the company continues to seek approval to go ahead with the project.
Demand for Copper and Gold Keeps Rising
The reason for the excitement over the Pebble project is the site’s copper and gold deposits. The silver and molybdenum are just gravy.
Copper has been in high demand for years and continues to be. Copper is essential in anything electric and the move toward EVs is only going to increase demand. Now selling for $4.34 per pound, copper is once again near all-time highs and is worth seven times what it was in 2000.
Gold is currently going for around $1,715 per ounce. Besides its value for traditional uses like jewelry, gold is widely used in electronics. This is an area where demand is only going to grow. Nearly a decade ago, the United Nations University published a study showing consumer electronics including PCs and smartphones used $21 billion worth of gold and silver annually. The use has only increased since then. In 2017, the amount of gold used in technology was estimated at nearly 367 tons.
In short, the Pebble Project — the most significant undeveloped copper and gold resource in the world — will be an incredibly lucrative mine, should it be approved.
Bottom Line on NAK stock
Back in March, InvestorPlace contributor Will Ashworth wrote “buy Northern Dynasty Minerals stock if you have money to lose.” I think that’s good advice.
The odds are stacked against the company when it comes to developing its Pebble Project in Alaska. However, appeals are still underway. Until they are all exhausted, hope remains. If Northern Dynasty beats the odds, the payoff of a copper and gold mine of this scale would be huge. It would also be long-lasting. Not a bad bet for 61 cents per share.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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