Northern Dynasty Minerals Ltd. · TSX:NDM
Northern Dynasty Minerals — Investor Presentation (November 2011)
52 slides from Northern Dynasty Minerals's investor presentation, November 2011
Slide 1: The Pebble Project: The Future of U.S. Mining and Metals
v (We Northern Dynasty Minerals Ltd. THE PEBBLE PROJECT The Future of U.S. Mining and Metals November 2011
Slide 2: Cautionary & Forward Looking Information
Cautionary & Forward Looking Information This presentation includes certain statements that may be deemed “forward-looking statements.” All statements in the presentation, other than historical facts, including those that address relating to the contents of the Preliminary Assessment, including but
Slide 3: Pebble is Among the World's Greatest Stores of Mineral Wealth
Pebble is Among the World’s Greatest Stores of Mineral Wealth 3 3
Slide 4: Strategically Situated in Alaska, USA
Strategically Situated in Alaska, USA Alaska State Constitution “It is the Policy of the State of Alaska to encourage…the development of its resources by making them available for maximum use consistent with the public interest” Bristol Bay Area Plan “The general resource management intent for the P
Slide 5: Existing Infrastructure at Iliamna Operations Centre
Existing Infrastructure at Iliamna Operations Centre Lake Iliamna Iliamna 5 5
Slide 6: A World Class Mineral Resource
A World Class Mineral Resource • 5.9 B tonnes of Measured & Indicated • 4.8 B tonnes of Inferred * Refer to table of Measured, Indicated and Inferred Resources in Appendix 6 6
Slide 7: Pebble Project – Core Assets
Pebble Project – Core Assets • Pebble deposit and 186 square miles of exploration lands • Senior, internationally experienced engineering team • Experienced management and permitting team in Alaska • Comprehensive environmental and stakeholder programs • Public confidence in federal/state permitting
Slide 8: Upcoming Pebble Project Milestones
Upcoming Pebble Project Milestones 2011 • Pebble Project Environmental Baseline Document • Infrastructure Outsource Negotiations 2012 • Project Update • Pre-Feasibility Study • Initiate Project Permitting Under National Environmental Policy Act (NEPA) 2015 • Feasibility Study • Project Construction
Slide 9: 2011 Preliminary Assessment Technical Report
2011 Preliminary Assessment Technical Report • Commissioned by Northern Dynasty • Prepared by Wardrop, A Tetra Tech Company • Based on engineering and technical studies completed by the Pebble Partnership and Northern Dynasty • Studies at concept, pre-feasibility and feasibility level Refer to list
Slide 10: Preliminary Assessment – Three Development Cases
Preliminary Assessment – Three Development Cases MINING SUMMARY Investment Reference Resource Item Unit Case Case Case Mine Life years 25 45 78 Mining Method Open Pit Open Pit Open Pit Strip Ratio waste : ore 1.5 2.1 2.6 Copper Eq. Grade % 0.72 0.83 0.84 Copper Grade % 0.38 0.46 0.46 Gold Grade oz 0
Slide 11: Preliminary Assessment – Three Development Cases
Preliminary Assessment – Three Development Cases CROSS SECTION OF OPEN PIT CASES A A’ Block Cave Option 11 11
Slide 12: Preliminary Assessment – Underground Block Cave
Preliminary Assessment – Underground Block Cave • Underground block caving @ 150,000 tpd • Alternative for mine development post-25 years • 11 blocks (+/- 130 M tons) extracted from three levels • 1.46 B tons grading 1.03% CuEq over 35 years of production • Capital cost is $1.39 billion over 5 year
Slide 13: Preliminary Assessment – Three Development Cases
Preliminary Assessment – Three Development Cases PROCESSING SUMMARY Item Unit Investment Case Reference Case Resource Case Mine Life Years 25 45 78 Processing Rate M ton/yr 80 84 84 Processing Rate Tons/day 219,000 229,000 229,000 Total Processed B ton 2.0 3.8 6.5 % of M+I+I Resource % 17 32 55 A Pr
Slide 14: General Mine and Site Layout
Preliminary Assessment – General Mine and Site Layout 14 14
Slide 15: Project Infrastructure
Preliminary Assessment - Project Infrastructure 15 15
Slide 16: Project Power
Preliminary Assessment – Project Power 16
Slide 17: Capital Cost
Preliminary Assessment – Capital Cost Area Cost ($M) Mining 431 Process 1,389 Other Infrastructure 422 Tailings 294 Pipelines 98 Access Road* 162 Port Infrastructure* 154 Power Generation* 534 Indirect Costs 1,407 Contingency 866 Molybdenum Autoclave 374 Net Escalation/De-escalation (121) Less: Outs
Slide 18: Financial Valuation Assumptions
Preliminary Assessment – Financial Valuation Assumptions METAL PRICES Current Metal Unit Long Term Prevailing Copper $/lb 2.50 4.00 Gold $/oz 1,050 1,350 Molybdenum $/lb 13.50 15.00 Silver $/oz 15.00 28.00 DISCOUNT RATE } Base Metal Discount Rate % 8.0 7.0 Precious Metal Discount Rate % 5.0 18
Slide 19: Three Development Cases: Revenues and Costs
Preliminary Assessment – Three Development Cases REVENUES Item Unit Investment Case Reference Case Resource Case LOM NSR $B 55 120 214 NSR $ / ton 27.45 31.91 32.78 COSTS LOM Operating Cost $B 22 44 96 Operating Cost $ / ton 11.16 11.55 14.72 C1 Copper Cost* $ / lb -0.10 -0.11 0.21 * C1 Copper Cost
Slide 20: Project Pre-Tax Financial Results
Preliminary Assessment – Three Development Cases PROJECT PRE-TAX FINANCIAL RESULTS Item Unit Investment Case Reference Case Resource Case Long Term Metal Prices NPV at 7% $B 3.8 6.1 6.8 IRR % 13.4 14.2 14.5 Payback years 6.5 6.2 6.1 Current Prevailing Metal Prices NPV at 7% $B 11.4 15.7 16.9 IRR % 2
Slide 21: 45-Year Reference Case: LOM Average Grade
Preliminary Assessment – 45-Year Reference Case LOM AVERAGE GRADE Metal Unit Reference Case Copper Eq. % 0.83 Copper % 0.46 Gold oz / ton 0.011 Molybdenum ppm 214 21 21
Slide 22: 45-Year Reference Case: LOM Metal Recoveries
Preliminary Assessment – 45-Year Reference Case LOM METAL RECOVERIES Metal Unit Reference Case Copper % 88 Gold % 71 Molybdenum % 88 22
Slide 23: 45-Year Reference Case: Annual Metal Produced
Preliminary Assessment – 45-Year Reference Case ANNUAL METAL PRODUCED ANNUAL PRODUCTION Metal Unit Average Peak Copper M lb 678 1,157 Gold k oz 673 1,127 Molybdenum M lb 32 56 23
Slide 24: Comparison of Average Annual Metal Production
Preliminary Assessment – 45-Year Reference Case COMPARISON OF AVERAGE ANNUAL METAL PRODUCTION Project Metal Unit PEBBLE OYU TOLGOI BINGHAM Copper Eq. M lbs 1,151 1,112 996 Copper M lbs 678 890 600 Gold k oz 673 447 500 Molybdenum M lbs 32 3 30 Silver M oz 3 3 4 Bingham Canyon annual average producti
Slide 25: Copper-Gold Concentrate Production
Preliminary Assessment – 45-Year Reference Case COPPER-GOLD CONCENTRATE PRODUCTION Description Unit Reference Case LOM Cu-Au Concentrate Produced M dmt 53 Copper Grade % Cu 26 Gold Grade g/dmt 16 Silver Grade g/dmt 72 Palladium Grade g/dmt 0.53 25 25
Slide 26: Molybdenum Concentrate Production
Preliminary Assessment – 45-Year Reference Case MOLYBDENUM CONCENTRATE PRODUCTION Description Unit Reference Case LOM Mo Concentrate Produced k dmt 1,240 Molybdenum Grade % Mo 52 Rhenium Grade ppm 1,100 26 26
Slide 27: Net Smelter Returns
Preliminary Assessment – 45-Year Reference Case NET SMELTER RETURNS Reference Case Description Unit 45 years NSR LOM $B 120 NSR Annual Average $B 2.7 NSR per ton milled $ / ton 31.91 NSR CONTRIBUTION Other 5% Molybdenum 16% Copper 55% Gold 24% 27 27
Slide 28: Annual Revenues vs Operating Costs/Charges
Preliminary Assessment – 45-Year Reference Case ANNUAL REVENUES vs OPERATING COSTS/CHARGES Annual Operating Cash Flows ($B) Metal Prices Annual Average Peak Long Term 1.7 3.7 Current Prevailing 3.0 5.9 28 28
Slide 29: Northern Dynasty's Reduced Capital Requirement
Northern Dynasty’s Reduced Capital Requirement Northern Dynasty’s share of capital costs reduced to $B 1.85 Total Anglo Financing $1,500 M Northern Dynasty Anglo American To Date -$325 M 50% 50% To Feasibility (Est.) -$175 M Pebble Mines Corp. (General Partner) Anglo Construction Financing (Est.) US
Slide 30: Long-Term Metal Prices: Northern Dynasty Financial Results
Preliminary Assessment – Long-Term Metal Prices NORTHERN DYNASTY FINANCIAL RESULTS Investment Reference Resource Item Unit Case Case Case Pre-Tax NPV at 7% $B 2.4 3.6 3.9 IRR % 17.3 18.0 18.4 Payback years 4.9 4.7 4.6 Post-Tax NPV at 7% $B 1.6 2.4 2.7 IRR % 14.6 15.4 15.8 Payback years 5.6 5.3 5.3 3
Slide 31: Current Prevailing Metal Prices: Northern Dynasty Financial Results
Preliminary Assessment – Current Prevailing Metal Prices NORTHERN DYNASTY FINANCIAL RESULTS Investment Reference Resource Item Unit Case Case Case Pre-Tax NPV at 7% $B 6.2 8.4 8.9 IRR % 29.5 30.2 30.4 Payback years 2.7 2.6 2.6 Post-Tax NPV at 7% $B 4.1 5.6 6.0 IRR % 24.5 25.1 25.4 Payback years 3.1
Slide 32: Northern Dynasty – Core Assets
Northern Dynasty – Core Assets • 50% partner in North America’s most important mine development • Financing in place to take Pebble through permitting and into construction • $38.3 million in cash with no financial commitments • Pebble is a modern, economically robust project (Wardrop 2011) with lar
Slide 33: Northern Dynasty Shares are Undervalued
Northern Dynasty Shares are Undervalued Listed NYSE Amex – NAK TSX – NDM Shares Out (Fully Diluted) 95 (103) Million Management Owns 10.8% Rio Tinto Owns 18.2% Working Capital $38 Million 33 33
Slide 34: Appendices
v Ve Northern Dynasty Minerals Ltd. | ——— ong ina | if oun i a ; | | —— a ee Fee -4 b, o — \ \, 2 a <a = , f wal APPENDICES
Slide 35: Directors & Management
Directors & Management Robert Dickinson Executive Chairman Mr. Dickinson is an economic geologist with more than 40 years of mineral exploration experience, is Executive Chairman of Northern Dynasty and a director of the Pebble Limited Partnership. Mr. Dickinson leads Northern Dynasty’s project deve
Slide 36: Pebble Property Captures the World's Most Extensive Mineral System
Pebble Property Captures the World’s Most Extensive Mineral System 36
Slide 37: 5.94 Billion Tonnes Measured & Indicated, 4.84 Billion Tonnes Inferred
5.94 Billion Tonnes Measured & Indicated 4.84 Billion Tonnes Inferred 37 37
Slide 38: Global Ranking of Porphyry Deposits – Contained Copper
Global Ranking of Porphyry Deposits1 – Contained Copper 38 38
Slide 39: Global Ranking of Porphyry Deposits – Contained Gold
Global Ranking of Porphyry Deposits1 – Contained Gold 39 39
Slide 40: Plan View of Open Pit Cases
Preliminary Assessment – Three Development Cases PLAN VIEW OF OPEN PIT CASES 25-Year IDC Case 45-Year Reference Case 78-Year Resource Case 40 40
Slide 41: Pit Shells
Preliminary Assessment - Three Development Cases PIT SHELLS Starter Pits 1E 1W 25-Year IDC Case 45-Year Reference Case 78-Year Reference Case 41
Slide 42: Annual Processing & Strip Ratios
Preliminary Assessment – Annual Processing & Strip Ratios PROCESSING VOLUMES & AVERAGE STRIP RATIO SUMMARY 42 42
Slide 43: Comparison of M&I&I Resources for Development Projects
Comparison of M&I&I Resources for Development Projects Resources shown above include Measured & Indicated Resources and Inferred Resources 43
Slide 44: Comparison of LOM Metal Production for Development Projects
Comparison of LOM Metal Production for Development Projects Recovered metal shown above includes Measured & Indicated Resources and Inferred Resources 44
Slide 45: 45-Year Reference Case: LOM Metal Recovered
Preliminary Assessment – 45-Year Reference Case LOM METAL RECOVERED Metal Unit Reference Case Copper Eq. B lb 54 Copper B lb 31 Gold M oz 30 Molybdenum B lb 1.4 Silver M oz 140 Rhenium M kg 1.2 Palladium k oz 907 45
Slide 46: 45-Year Reference Case: Realization Charges
Preliminary Assessment – 45-Year Reference Case REALIZATION CHARGES LOM Realization Charges $/B 11 Realization Charges per ton milled $ / ton 2.94 Assumptions Unit Amount Freight $/wmt 50 Payment Terms Copper % 96 Gold % 97 Silver % 90 Treatment and Refining Charges Concentrate Treatment Charge $/wm
Slide 47: 45-Year Reference Case: Project Pre-Tax Cash Flows
Preliminary Assessment – 45-Year Reference Case PROJECT PRE-TAX CASH FLOWS 47 47
Slide 48: Northern Dynasty Post-Tax Sensitivity Matrix
Preliminary Assessment – 45-Year Reference Case NORTHERN DYNASTY POST-TAX SENSITIVITY MATRIX Discount Rate (%) Investment Case Reference Case Resource Case Undiscounted Cash Flow 7.5 19.8 31.6 5 2.5 4.2 4.9 7 1.6 2.4 2.7 8 1.2 1.8 2.0 10 0.7 1.0 1.1 Cu / Au ($) NPV7 ($ B) IRR (%) 2.50 / 1050 2.4 15.
Slide 49: A New Economic Foundation for Southwest Alaska
A New Economic Foundation for Southwest Alaska 49 49
Slide 50: Bristol Bay Salmon Resources
Bristol Bay Salmon Resources Town Footprint 50
Slide 51: Pebble will Maintain the Productive Capacity in Local River Systems
Pebble will Maintain the Productive Capacity in Local River Systems 400 square mile area around deposit = 0.5% of Bristol Bay sockeye production 51
Slide 52: List of Qualified Persons
List of Qualified Persons Qualified Person Report Section Company Qualified Person 1.0 – Executive Summary Wardrop Hassan Ghaffari, P.Eng. 2.0 – Introduction Wardrop Hassan Ghaffari, P.Eng. 3.0 – Reliance on Other Experts Wardrop Hassan Ghaffari, P.Eng. 4.0 – Property Description and Location Wardro
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