Northern Dynasty rebuts Kerrisdale attack, warns of action to protect investors

Feb 20, 2017

NDM says Kerrisdale Capital report based on "unfounded" claims, contains "numerous errors and unsupported speculation." NAK shares were driven down to $2.26 at close of trading Friday.

In this image from a Northern Dynasty Minerals press release, Pebble is shown as one of the largest copper, and copper and gold deposits, in the world.
Credit NDM

Northern Dynasty Minerals issued a response Friday to a New York hedge fund’s claims that the Pebble project is overhyped and overvalued. That report drove Northern’s share prices tumbling quickly, but the Vancouver-based mineral exploration company says they are the target of an aggressive activist short selling attempt based on "unsupported speculation."

Audio Transcript: In a lengthy press release, Northern Dynasty Minerals refuted the twenty page Kerrisdale report point-by-point, mainly referring to the hedge fund derisively as “Short Seller.” 

That Kerrisdale Capital specializes in “activist short” selling is something it openly acknowledges, saying in an interview last week that they seek out companies they believe are publicly trading too high, loudly call attention to them, and profit when the stock value drops.

That’s the main point NDM calls attention to, but the company also takes issue with Kerrisdale’s reliance on “anonymous co-authors whose mining creditionals, if any,” were not disclosed. Northern goes on to say Kerrisdale never requested or had access to the company’s technical and analytical reports, experts or executives, and questions what if anything Kerrisdale knows about the mining industry.

Kerrisdale claimed that the Pebble deposit contains "low grade" ore that will not prove profitable to extract; Northern says Pebble's mineralized concentration ranks in the top fourth of major producing and non-producing deposits. The rebuttal press release went on to lay out the merits and value of Pebble, saying it is one of the largest gold and copper resources on the planet, and will not be as technically challenging to engineer as Kerrisdale suggested.

Northern Dynasty Minerals says it is preparing a "comprehensive strategy", including possible "changes in project design", to advance the Pebble project with "public consensus" into permitting.

NDM included opinions offered by several other outside investment analysts, and added a threat of legal action if needed to protect its stakeholders.

"Permitting and developing Pebble will be a multi-year process with multi-decade or multi-generational payoff," NDM said in a statement. "We are entirely committed to advancing the political and public consensus necessary to support a positive permitting outcome ... The Company believes that its Pebble Project has a high likelihood of success."

Reach the author at dave@kdlg.org or 907-842-5281.