Northern Dynasty Minerals (TSX: NDM, NYSE: NAK) announced Wednesday that Tom Collier, chief executive of its U.S.-based subsidiary Pebble Limited Partnership, has submitted his resignation in light of comments made about elected and regulatory officials in Alaska in private conversations videotaped by an environmental activist group.
The announcement comes as doubts about the proposed Pebble copper-gold-molybdenum mine have steadily risen in recent months.
In September, short-seller J Capital Research accused Northern Dynasty management of “gaslighting investors” and said the mine plan “is on its face absurd.”
The Trump administration in July proposed approving a permit for the mine, which would be located near the world’s largest commercial sockeye salmon-producing region.
Opponents of the project have long feared its discharges could contaminate local waters, causing irreparable damage to the aquatic habitat.
Northern Dynasty has named former Pebble Partnership chief executive John Shively, who most recently served as chairman of the Pebble Partnership’s general partner, Pebble Mines Corp., as interim CEO pending a leadership search.
The company said Collier’s comments embellished both his and the Pebble Partnership’s relationships with elected officials and federal representatives in Alaska, including Governor Dunleavy, Senators Murkowski and Sullivan and senior representatives of the U.S. Army Corps of Engineers (USACE).
Conversations with Collier, as well as others with Northern Dynasty president and chief executive Ron Thiessen, were secretly videotaped by two unknown individuals posing as representatives of a Hong Kong-based investment firm with links to a Chinese state-owned enterprise (SOE), the company said.
A Washington DC-based environmental group, the Environmental Investigation Agency, released the tapes online on Sept. 21, after obscuring the voices and identities of the individuals posing as investors.
A former Commissioner of the Alaska Department of Natural Resources, senior executive with NANA Regional Corporation, and current Alaska Railroad Corporation Director, John Shively said the Pebble Project is too important to the region and the state not to proceed.
“My priority is to advance our current plan through the regulatory process so we can prove to the state’s political leaders, regulatory officials and all Alaskans that we can meet the very high environmental standards,” Shively said in a statement.
Pebble’s permitting process has been engulfed in controversy and delays. Perhaps one of the most publicized issues was the U.S. Environmental Protection Agency’s (EPA) decision in 2014 to propose restricting the discharge of mining waste and other material in the area.
The project’s resource estimate stands at 6.5 billion tonnes in the measured and indicated category containing 57 billion lb. copper and 71 million oz. gold, 3.4 billion lb. molybdenum and 345 million oz. silver.
If permitted, Pebble would be North America’s largest mine, with a mine life of at least 20 years.
Mining analyst Mike Kozak who covers Northern Dynasty for Cantor Fitzgerald wrote in a research note that the secretly recorded meetings “exposed and embellished Mr. Collier’s political connections in Alaska and Washington, D.C., and were clearly insulting to state and federal officials and senior representatives of the U.S. Army Corps of Engineers.”
Kozak also said the project’s permitting timeline likely will be affected and delayed.
“Mr. Collier was the architect of the project’s permitting plan and the primary liaison between Pebble and the USACOE,” he wrote. “In our view, his resignation while completely warranted, may now delay completion of the compensatory mitigation plan, and likely push the Record of Decision (ROD) beyond the U.S. presidential election in November.”