The agreement places Cantor as the lead underwriter and sole bookrunner and, on its own behalf along with a syndicate of underwriters, is buying 15.625 million shares of Northern Dynasty at US$0.64 per piece.
Northern Dynasty is also allowing underwriters an over-allotment option that gives them the ability to buy up to 2.34 million additional offered shares at the same price. The option is available for up to 30 days after the agreement’s closing, allowing for a potential extra US$1.5 million in Northern Dynasty’s pocket. The agreement is expected to close on March 18, 2019.
Proceeds from the money raised are set to go towards general operational expenses such as engineering, environmental, permitting and evaluation expenses, and enhanced outreach and engagement with Alaskan political and regulatory offices.
Additionally, the funds will help advance the completion of an Environmental Impact Statement (EIS) by the United States Army Corps of Engineers. A draft of the EIS was recently released in late February with a public comment period running until May 31, 2019.
The company mentioned in this week’s statement that its goal was still to find a partner to help develop Pebble. Fellow miner First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) had previously entered an option agreement with Northern Dynasty to collaborate on Pebble, but withdrew from the deal in May 2018.
When the deal fell through, Northern Dynasty cited an inability to reach an agreement on the option and partnership deal as First Quantum’s reasoning for jumping ship. In First Quantum’s original press release about the option agreement in December 2017, the company applauded Pebble’s substantial resource potential but also acknowledged the project’s “environmental and social sensitivity”.
Pebble is referred to by Northern Dynasty as the “world’s largest undeveloped copper and gold resource” and “one of the greatest stores of mineral wealth ever discovered.” The asset’s current resource estimate sits at 6.5 billion tonnes in the measured and indicated categories, which include 57 billion pounds of copper, 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million ounces of silver.
As of March 12, copper was trading at US$6,509 per tonne on the London Metal Exchange (LME).
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.