New NDM funds mostly slated for legal fees

In January, Canadian-based Northern Dynasty Minerals (NDM), sole owner of the Pebble prospect, raised C$15.5 million by selling “special warrants” (which will convert to shares) to Barbados-based Stirling Global Value Fund Inc. That investment group now owns around 15% of NDM.

As part of the process, NDM filed updated technical information and a short-form prospectus with Canadian Securities Administrators, which details how the company proposes to use the funds.

More than 60% (around $9.3 million) of the proceeds are slated for legal fees, preparation for permitting, and third-party investigations into the EPA’s 404(c) process, according to the prospectus. The rest of the proceeds are anticipated to be spent as follows:

  • $1.8 million for maintaining “an active corporate presence in Alaska to advance relationships with political and regulatory offices of government, Alaska Native partners and broader stakeholder relationships.”
  • $2.1 million for maintaining the “Pebble Project and Pebble claims in good standing and continue environmental monitoring.”
  • $1.77 million for general and administration costs and to seek a new partner.

NDM is currently operating under a negative cash flow, which it anticipates to be the case for the foreseeable future. Its 2015 priority is seeking a new partner/investor, and warns that it may need to find significant additional financing, particularly because:

  • The Canadian dollar has recently depreciated and most of the Pebble Project expenses are in U.S. dollars;
  • Additional engineering and technical expenditures may be required (over and above what is in the current budget); and
  • Legal expenditures also may exceed the current budget figures.

Learn more

You can read NDM’s short-form prospectus as well as a 2014 techinal report on the Canadian Securities Administrators document website Search for Northern Dynasty Minerals to retrieve a list of documents.