Northern Dynasty to Reap Benefits as Alaska Backs Minerals over Salmon
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Markets have not yet realized just how positive the news is for Northern Dynasty Minerals Ltd. (NAK) after Alaskan voters sided this week against a ballot measure that could have thrown the state’s regulatory system into upheaval, according to a financial analyst who calculates a huge upside to the company’s stock.
In a note published Thursday morning, Raymond James analyst Tom Meyer wrote:
We recommend buying Northern Dynasty shares. In our opinion the shares were oversold leading into the Ballot and still remain depressed following the defeat of Measure 4.
Ballot Measure No. 4 would have placed new restrictions on the ability of large mining projects to release harmful pollutants into streams used by salmon or humans. The hotly-contested fight was aimed at Northern Dynasty’s Pebble Project, a massive copper-gold deposit in southern Alaska’s richest salmon area.
Opponents of the initiative ultimately prevailed with 57% of the vote.
Mr. Meyer wrote:
With Measure 4 defeated we do not expect the opposition to the Pebble project to fall away but we do anticipate the market to view the news as evidence that a rational permitting process can begin in due course.
Noting that Pebble partner Anglo American plc (AAUK) is funding much of the cost of evaluating and building the mine, Mr. Meyer said the numbers suggest Northern Dynasty is severely undervalued.
He wrote:
Its shares trade at a P/NAV of 0.17 times versus the peer group of development companies at 0.66 times. We view the shares as a bargain at current levels.
Mr. Meyer has set a share target price of C$24 – a 260% premium over Wednesday’s close – with a “strong buy” rating.
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This article has 8 comments:
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PAUL&$HARK
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3 Comments
Aug 29 07:07 AMNAK is losing money for all of the last 10 years,it's assets were worth only 690,000$ in 2002,even today it's book value is 0.55$ per share,negative earnings growth of 60% since last year when price of metals was flying,return on assets for the last 5 years negative 185%,return on investments last 5 years negative 210%,rturn on equity last 5 years egative 218%,NAK stock price in 2002 was 0.25$ so this year high of 13.87$ means an increase of 55 times when at the same time price of Gold increased 3 times,which meand that for each 1% of Gold NAK historically moves 17%.
Bottom line:
Decrease of Gold of 20% means that stock price of NAK is about it's book value of 0.55$ which I believe what NAK is worth at best.
Stocks don't move on some fantastic prospects,stocks move on fundamentals long term so I promise you that NAK whatever price of Gold will be will never reach it's previous high.I have seen many mining stocks in my life as I invested in those in 1998 and those were the best companies in the Gold/Silver industry,even today they are not far away from their 1998 prices.Stay away from NAK as it is worthless investment.If you believe Gold is going higher buy 100oz today worth 83,500$ so you can make money or lose it but you will have real asset not a colourful prospectus.
In my opinion all the Gold/Silver sector stocks are very overvalued,you are paying at least 3 times more for mining blue chips as even they lose money.So why to overpay when buying Gold/Silver/Platinum/P... is real value at any price whatever it is?
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dazza
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2 Comments
Aug 29 11:06 AMNAKs assets include the biggest Au/Cu discovery in North America in recent history. At 64m oz of gold, 60billion oz of Cu confirmed resources, this will be one of the largest mines in the world, and now has the go-ahead. NAK sold Anglo American 50% for $1.4billion worth of funding, which was the cost of mine development meaning that NAK is virtually free carried.
The gold/silver junior mining shares are at most oversold level since 01, for a value investor they have never been better value, they are at huge lows, and NAK is trading 1/4 price/ net asset value (NAV) of its peers.
Technically NAK has just sharply broken out of a french curve downtrend, and looks for a sharp rebound on both fundamentals and tecnhicals.
Paul&shark are you sure you are not caught short, or sold out at the bottom???
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dazza
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2 Comments
Aug 29 11:12 AM-
chux08
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42 Comments
Aug 29 12:57 PMC'MON what kind of headline sensationalism is that?? I'd prefer to say:
"Alaska Voters Say Minerals AND Fish Can Co-Exist" (just like in a lot of other places)
Somebody must've forgotten they aren't working for the NY Times anymore...
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GMiki
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328 Comments
Aug 29 01:36 PMToday, miners are much more environmentally careful--which I note with another holding of mine, Kalimantan Gold, which has campaigned against the use of cyanide. (I actually know these people and they are sincere and sincere in working for the citizens of Kalimantan.)
NAK has powerful interests behind it, including a big investment by Mitsubishi. Plus it's the elephant that many analysts say are no longer being found.
These NAK mines will come to fruition and make shareholders a lot of money, in my opinion. But, as I said, I do hold a number of shares.
As for Kalimantan Gold, not all that far from Grasburg, the company also has mining rights for coal in the area, a very astute move.
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j man
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4 Comments
Dec 09 08:32 PM-
j man
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4 Comments
Dec 09 08:34 PM-
j man
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4 Comments
Dec 09 08:34 PM