Feb 5, 2007

Northern Dynasty Minerals – The End Game is Under Way

What follows is a Special Alert newsletter from Peter Grandich regarding Northern Dynasty Minerals (*)

It’s been my firm belief that NDM is the number one target on the shopping lists of the top five or so mining companies in the world today. As hard as it is to imagine this mammoth deposit can get much bigger, the most recent drill results, including the highest grade intersect to date, strongly suggest that when it’s all said and done, the Pebble can be the biggest deposit in the world.
(See http://www.alaskajournal.com/stories/020407/nat_20070204023.shtml).

Simply put, I believe it’s a “must own” for companies like Anglo American, BHP, Newmont, Rio Tinto and other giant mining companies. I have little doubt that several of them have been pursuing it via a lengthy due diligence process.
These companies’ “window of opportunity” was dramatically reduced when Rio Tinto announced it has increased its ownership of NDM shares to 20%.
(See http://biz.yahoo.com/iw/070130/0209057.html).

While such ownership gives them zero interest in the project itself (a key point to grasp), it does give them a leg up. It also should make it clear that Rio is very serious and also believes in the ability for the project to end up being built.

So, on the assumption that there is at least one other interested party, what are the possible scenarios that can unfold?
  • Another company makes a bid for all of NDM shares.
  • Another company enters into a strategic relationship with NDM whereupon it agrees to pay all further costs, carry NDM throughout and NDM retains a 50% or so interest (thereby leaving that ownership still open for purchase).
  • NDM issues new shares to market at a substantial premium that allow the buyer to have similar or equal ownership to Rio’s present ownership.
While all three scenarios are okay, the second is better than the first because I believe someone eventually buys NDM’s share of the project. The last one is the best, as it would signal to the whole world that a bidding war is coming.

There remain risks, including the ability for the project to eventually get permitted, a big decline in metals prices and other unknowns, but I personally believe these potential negatives are down the road and NDM is just days or weeks from one of the three scenarios actually unfolding.

Technically, NDM is a little overbought in the short-term but it’s close to breaking out above key resistance in the 10 ½ - 11 area. As you can see, it’s been making higher lows since October and pressing up closer to key resistance.

Please Note – While Grandich Publications hasn’t been engaged by NDM since July of 2005, it is engaged by other Hunter-Dickinson companies.
Copyright 2007, Grandich Publications, LLC., Peter Grandich • Phone 732-642-3992
February 5, 2007 (www.Grandich.com)

(*) Northern Dynasty Minerals, Ltd. 1020-800 West Pender Street Vancouver, BC Canada, V6C 2V6
Toll Free: 1-800-667-2114
Phone: (604) 684-6365
Fax: (604) 684-8092
Email: info@hdgold.com

TSX-V: NDM $ca 9.85
AMEX: NAK $us 8.32
as of 10:15 a.m. EST

Share Structure: (at December 31, 2006)
Common Authorized Unlimited
Issued: 91,685,519
Fully Diluted: 94,048,890

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