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
www.NorthernDynasty.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

Even more gold and copper at Pebble as Rio Tinto cements interest in Alaskan mega deposit

Northern Dynasty Minerals (NDM-TSX-V $9.51, NAK-AMEX $8.07)

Rhona O’Connell
'26-JAN-07 17:00'
LONDON (Mineweb.com) --Northern Dynasty is about to undergo a partial change in its shareholder base and has also reported its latest drill results, which have led to an expansion of its Pebble East deposit in Alaska. Pebble is regarded as the largest unmined gold and copper resource in North America.

Northern Dynasty Minerals Ltd is listed on the TSXV and on AMEX under ticker symbol NDM and is held currently as to 20.7% by Galahad Gold Ltd. Galahad is listed on AIM, ticker symbol GLA and in pursuance of its announcement at the end of November 2006, in which it said that it was evaluating its options with respect to its holding in NDM, has stated that it has entered into an agreement to sell half of its NDM holding to QIT-Fer et Titane Inc., an affiliate of Rio Tinto plc.

Galahad stated at end-November that the exercise was part of the intention to reduce or remove the discount to net asset value that was prevailing over Galahad’s stock price in order to improve shareholder value. Galahad’s other primary interests are a 79% holding in International Molybdenum plc, which is carrying out a pre-feasibility study on the Malmbjerg molybdenum deposit in eastern Greenland, and an 11.6% shareholding in UraMin, a uranium development company with interests in South Africa, Namibia, Central African Republic and Canada.

Payment on completion, which is due on 1st February, will be C$94 million (£40.3 million or US$79 million) in cash. This represents a purchase price equivalent to C$10 per share, a premium of 6.8% to NDM’s closing price on 25th January. There are additional terms to the transaction, which would resulting Rio Tinto paying Galahad part of any profit that it might realise in the event of a third party offer for all of the Northern Dynasty stock, and also a partial payment to Galahad should Rio Tinto acquire further stock at prices in excess of C$10.

The Pebble deposit has obviously exercised the imagination of Rio Tinto, one of the world’s largest copper producers. Pebble is an advanced stage copper-gold-molybdenum projects. Located in southwest Alaska and covering 153 square miles, there are two major deposits on the property; Pebble West is a 4.1 billion tonne open pittable deposit, while Pebble East had been estimated as a 1.8 billion tonne bulk underground deposit with the scope for expansion.

The 2006 drill programme has done precisely that. The programme completed 74,000 feet of core drilling in 9 holes with a view to determining the overall size, geometry and copper-gold-molybdenum grade distribution of the deposit.

Pebble East now extends over 7,000 feet north-south by 4,000 feet east-west with grades in excess of 1% copper equivalent and it remains open to both the north and the south. The company reports that “importantly”, there were significant amounts of high-grade copper mineralisation in both the northernmost and southernmost holes, indicating their proximity to mineralising centres that not only look to be open, but to be strengthening to the north and the south. Drilling is due to recommence in the first half of this February.

Highlights from the drill programme include the following:

Hole 6338 intersected 1,225 feet grading 1.29% copper equivalent (CuEQ) comprising 0.45% Cu, 1.03 g/t Au, 0.040% Mo, including a 527 foot interval grading 1.72% CuEQ (0.55% Cu, 1.64 g/t Au, 0.035% Mo).

Hole 6339 intersected 2,051 feet grading 1.32% CuEQ (0.84% Cu, 0.49 g/t Au, 0.032% Mo) including a 661 foot interval grading 2.04% CuEQ (1.44% Cu, 0.78g/t Au, 0.024% Mo).

Hole 6348 intersected 949 feet grading 1.92% CuEQ (1.24% Cu, 0.74 g/t Au, 0.042% Mo) before the hole was unfortunately lost in high grade (1.82% CuEQ) mineralisation. This hole is located at the southern end of the area drilled. Plans are to drill this hole to deeper levels early in 2007 along with completing additional holes further to the south.

The 2007 drill programme will also focus on Pebble East and will comprise delineation and infill drilling. The former is planned to amount to approximately 100,000 feet and will concentrate on extending the deposit to both north and south as well as defining the eastern and western limits; the latter will be approximately 150,000 feet and will concentrate on upgrading the resource classification of the highest grade one billion tonnes of the deposit.

The company also commenced preliminary engineering in 2006 with a view to assessing Pebble East as an underground mine; the results to date have been most encouraging, with copper and molybdenum recoveries of 95% and 75% respectively, and gold recoveries of 50%, giving a 32% copper concentrate. The schedule for 2007 will focus on determining the best project parameters and to start the Integrated Development plan for Pebble East and Pebble West, with the study due for completion in early 2008.

This is already understood to be a world class deposit. The fact that Rio Tinto is becoming involved may well stir up some further interest.

CHRYSOTHERAS CAVEAT: Do your own due diligence before taking a position and parting with your hard earned cash to buy stocks!