Alaska debate ramps up as Northern Dynastys Pebble gets bigger

Vancouver – Even before permitting has begun, controversy surrounding Northern Dynasty Minerals (NDM-V, NAK-X) Pebble project is being raised a notch with the entry of a high profile former politician into the debate over whether mining should proceed.

Gail Phillips, a former speaker with the Alaska House of Representatives, is leading a coalition of pro-mining advocates known as The Truth About Pebble, which has launched an advertising campaign in an Anchorage daily newspaper.

Calling on Alaskans to “stand up for fairness and to embrace responsible development,” the ad campaign is being commenced as one of the world’s largest copper-gold projects just got a whole lot bigger.

Vancouver-based Northern Dynasty said recent drilling in southern Alaskas salmon-rich Bristol Bay area has raised the level of inferred mineral resources in the Pebble East deposit by nearly 90% from earlier estimates to 3.4 billion tonnes

The estimate, based on 132 core holes, means that Pebble East and the adjacent Pebble West deposit constitute one of the most significant metal accumulations in the world, the company said. Northern Dynasty spokesman Sean Magee said Pebble can now be compared with the huge Grasberg copper mine in Indonesia.

From our point of view, this is very exciting news, he said.

The project has already attracted the attention of one of the worlds leading mining groups, Rio Tinto (RTP-N), which recently acquired 19.8% of Northern Dynasty.

At a 0.60% copper equivalent cut-off, the estimated inferred mineral resource in Pebble East stands at 3.4 billion tonnes, grading 1% copper equivalent, containing 42.6 billion pounds of copper, 39.6 million oz. of gold and 2.7 billion pounds of molybdenum.

News of the estimate sent Northern Dynasty shares up 41 cents to $10.95 on the TSX Venture Exchange on February 20, the day the latest estimate was announced.

Magee said the company will likely spend $40 million this year to conduct another 250,000 ft. of drilling in a bid to define the limits of the Pebble East deposit.

It is a move that Magee said could delay any future effort by the company to seek a mining permit for the project until the end of 2008 and possibly into 2009.

However, that hasnt prevented wealthy opponents such as Alaskan money manager and sport fishing lodge operator Robert Gillam from participating in a campaign to stop the project from going ahead.

Last month, the Washington, D.C.-based environmental group Earthworks stepped into the campaign by paying between US$10,000 and US$20,000 to place a series of ads in the January, February, and March issues of National Jeweler Magazine.

Earthworks claims that the project is a threat to Alaskas Bristol Bay region, an area it described as critical habitat for 43 million salmon, as well as caribou, freshwater seals, grizzly bears and trout.

Moving to counter that effort, Truth About Pebble has issued a statement saying it is opposed to two pieces of legislation pending in Juneau that are intended to stop the Pebble project before it even applies for permits under Alaskan law.

Its bad enough that the proposed bills would deny Alaskans the opportunity to pursue the responsible development of one of the worlds most important mineral resources, said Phillips, the co-Chair of the Truth About Pebble group.

Senate Bill 67 and House Bill 134 would also foreclose economic development opportunities across millions of acres in the economically depressed Bristol Bay region.

Senate Bill 67 aims to establish a new game refuge of over 7.7 million acres of state land in Bristol Bay. Phillips said it would restrict most if not all development activities, including mining, oil and gas, other energy development and even light industrial uses.

House Bill 134, she said, would expand the protection afforded to waters in the Bristol Bay Fisheries Reserve to five massive drainages encompassing 22 million additional acres.

It would also prohibit any industrial or commercial water withdrawals, diversions, or insertions throughout the area, and restrict any alteration to stream courses or wetlands.

Meanwhile, mining officials, who are familiar with the situation in Alaska, say opposition to new projects has just become a fact of life in the U.S. state.

I just think this is normal and you have to plan for it, said Doug Nicholson, vice-president, general manager of Alaska Gold, a subsidiary of NovaGold Resources (NG-T, NG-A), which is developing a $72 million gold mine near Nome.

The Rock Creek mine has been affected by a lawsuit filed by a group of Nome residents, who argued that the decision to grant a permit was based on an environmental assessment rather then a more involved environmental impact statement.

This is something that you have to expect in this day and age, said Nicholson, adding that the lawsuit has prevented mining crews from working in the tailings impoundment area. We are going ahead with normal business, he said.

David Szumigala, a senior mineral geologist with the Alaska Department of Natural Resources said mining companies need to work harder to respond to negative attacks. There is a lot of disinformation out there that mining companies need to spend time countering, he said.

Szumigala said Northern Dynasty will have to apply for about 60 individual permits each of which provide an opportunity for public comment.

Meanwhile, Northern Dynasty President Ron Thiessen said the company is assessing the potential merits of possible participants in a consortium that would be formed to permit, finance, construct and operate what is expected to be a long-life mine.

We expect that this process will be achieved successfully because the discovery rate of large copper deposits has declined significantly and the shortage of important, major company-sized projects is likely to remain a critical issue for he worlds large copper miners going forward, he said.