Copper is an essential resource. Everything wired needs copper. Even though the entire electrified world needs and uses copper, supply and demand are rather concentrated in a few countries. North America is very rich in commodities, including untapped copper deposits. While it is self-sufficient in energy production, wouldn’t it make strategic sense to unlock these domestic copper supplies to secure future needs? You bet. But there’s an issue of a similar color.
Summary and key takeaways from today’s Weekly
– The U.S. has one of the largest undeveloped copper deposits on its own soil.
– Vast resources seem lucrative, but that’s not everything to look at.
– The project owner’s stock is extremely volatile and dependent on political decisions — the most recent was a major blow.
Everything electrified — from EVs and renewables to power grids and data centers — depends on it. As the world races toward electrification (even though the pace of adoption might be up for a debate), global demand for copper surges.
Yet supply remains concentrated in just a handful of countries. Top producers like Chile, Peru, DRC, China, and Indonesia dominate this sphere.
Just these names together account for roughly 60% of global mine output (see here).
The forecasts see further rising demand and a future shortage of copper. I do not want to discuss at this point whether the gap will come or not and how big it could be. Instead, on American soil, there’s a huge untapped copper deposit ready to be unlocked.
Big picture, it sits in a historically mining-friendly region.
But there’s a copper-colored issue preventing the huge resource to enter production. The owner is a publicly listed company. Could this be a lucrative bet, if a strategic shift occurs?
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per 25 February 2026 market close – since August 2022
Lucrative catch or fishy setup?
Northern Dynasty Minerals (ISIN: CA66510M2040, ticker: NAK) is the owner of North America’s largest undeveloped copper deposit, the Pebble mine. Gold is a potentially lucrative by-product, especially at current prices, but copper is what counts in this case for its strategic value.
The stock is very volatile due to the underlying topic being highly politically sensitive.
The development is currently blocked for environmental reasons by the EPA, the Environmental Protection Agency, under the Clean Water Act (see here). On the chart below, we can see a few wild swings, where shares multiplied, but eventually fell back again.
The main reason is the location is home to a big sockeye salmon population.
The affected area next to the Pebble Mine is a protected fishery area of the name Bristol Bay. It’s not just “a” fishery — Bristol Bay upstreams ~50% of global commercial sockeye catch.
The EPA Administrator has the authority to restrict or, like in this case, to prohibit the “use” of waters as disposal sites. Mining produces plenty of waste and also toxins. Due to understandably unacceptable adverse effects on fishery areas like in this case, the undertaking is effectively blocked.
Already under the first Trump administration, as the chart above shows, there were hopes that the mine would eventually be green-lighted. This didn’t happen and the subsequent democrat-led government practically put a nail in the coffin.
With Trump 2.0, new hopes emerged. This time, it’s about strategic resources and resource independence. While this topic is primarily associated with rare earths, copper likewise officially counts as a strategic mineral (see here).
Not judging the decision by itself, the setup from an investor’s perspective is a binary one. Either the mine gets green-lighted or not.
Depending on what kind of news makes the headlines, everything seems possible.
Last week, for example saw an almost 40% haircut after another disappointing piece of news hit the ticker.
More further below.
Besides the fact that the fate of shareholders lies in the hands of political authorities, there are a few other risks — say, the rather typical mining risks — worth considering.
Northern Dynasty Minerals, a Canadian company with listings in Canada and the U.S., is focused on developing the Pebble Project in southwestern Alaska that it acquired in 2001. The deposit itself was already discovered in 1989.
So it’s a really long-term in-progress story.
Northern Dynasty currently owns a 100% interest in the deposit. It has completed significant mineral exploration, environmental data collection, and engineering studies to advance the project. Pebble contains on an absolute basis huge estimated copper, gold, molybdenum, silver, and rhenium resources.
In total, we are talking about estimated recoverable metal of almost 53 billion pounds of copper (Cu B lb) of the category “measured and indicated”. A further potential 23 billion pounds of the “inferred” category come on top.
Just hypothetically, this resource base would be sufficient to approximately supply U.S. copper demand for the next 13–15 years — based on current demand figures.
From this one mine.
However, here the first issues begin for me. Despite the huge total size of the project and its estimated resources, these are just resources, not reserves.
Might sound like an unimportant nuance, but the opposite is the case.
The difference is that resources are of lower certainty. They can be upgraded to more bullet-proof reserves after more testing and developing is done for a higher-confidence vote so to speak. But this step also includes the risk of a “less than expected” outcome. This could be the case if the lower layers surprisingly contain less minerals than is the case above them.
Besides this, admittedly, more speculative aspect from my side, the mineral grades as shown are quite low. As a rule of thumb, for copper and gold each, 1g per tonne is a number that every investor in these commodities should be aware of.
Less than 1% copper and 1 gram per ton gold is not much.
NAK shows about 0.3–0.4% copper and 0.34 grams per ton for gold (note: not CuEq = copper equivalent!).
The problem I have is there’s an interplay between lower grades and higher production costs. And it makes sense as more rock needs to be moved to extract certain total volumes of pure precious metals versus waste compared to higher-grade deposits. Regarding silver, which however is not a key commodity here, 1.7 grams per tonne are equally pretty low, if not absurdly low. Just as a side note.
Until here, we have the risk of resource-to-reserve conversion and low-grade minerals inside an overall huge deposit. This by itself is no deal-breaker, but it cools my euphoria for this case, as I prefer higher-grade, world-class projects, if I invest in minerals.
Else, the risk to deal with high-cost producers is higher.
Which leads us to our second aspect, estimate development costs. From the updated technical report, we can see on page 24 that the estimated development costs were 6.8 billion USD.
This number alone is huge, compared to NAK’s comparatively tiny market cap of not even a billion USD after the recent share price collapse. It doesn’t rule out that the project comes online someday, but it is a considerable mismatch for shareholders. Capital requirements are huge.
Please take into account that this report is from 2023, almost three years old.
In practice, likely development costs would be higher, north of 7 billion USD, if not 8 billion USD. In other words, the longer it takes to get things going — if at all — costs tend to rise at the expense of shareholders of NAK.
We haven’t talked about the timeframe.
In the 2023 report, an estimated 4.5 years was mentioned. So assuming the best case, no accidents and unforeseen interruptions and a final go to start construction soon (more on that below), production realistically won’t commence before 2030, if not 2031 — at the very earliest.
Just to get a feel for the time component.
In other words, it is even possible that not only the current administration, but also the next one will not be in office anymore when this thing pours first minerals.
With this, let’s talk about the deciding factor now which is politics. It is impossible to circumvent politics for this case.
Traditionally, Alaska has been known as a mining-friendly jurisdiction, with strong state-level backing for resource development.
However, not so regarding the Pebble deposit.
In September 2020, Northern Dynasty issued a technical report (see here) about the Pebble Project, documenting recent rhenium studies and estimating its mineral resources. Earlier data showed palladium in parts of the deposit, too, but not enough analyses existed for a firm resource estimate.
Fast forward and several follow-up technical reports filed since, with the latest Preliminary Economic Assessment (PEA) completed effective August 2023. It covered permitting status, production, costs, timeline estimates, and other project details. All the above-shown.
In January 2023 (see here), the EPA issued its Final Determination under the Clean Water Act, restricting and effectively blocking large-scale development of the Pebble Project. Northern Dynasty is challenging this block in court, but success is not guaranteed.
If not unlikely.
This is a major, practically the biggest risk factor and the driver in this case. If NAK succeeds, the stock is very likely a multi-bagger. Likely even regardless of when the mine comes online and at which costs.
If the challenge fails, though, the company may be unable to develop the project as planned (costs, time, scope) — or even at all.
Last week, the undertaking experienced a major setback.
As of February 2026, litigation continues, with recent DOJ (Department of Justice) filings DEFENDING the EPA’s decision.
This was the one that sent NAK stock down into the shaft by almost 40% last week.
The last piece of news is a huge blow to the project and of course the company and its shareholders. This doesn’t mean the project is done for good. Political winds can change quickly again (or hopes of investors firm again, as shares are up again by 10% as of writing).
But this latest event should make it clear that the future of NAK practically comes close to a coin flip.
Let’s also briefly talk about some key financials. NAK per last count had 44 million CAD in cash on the balance sheet. With cash burn of around 20 million CAD, back-the-envelope, cash runway should last for about two years to “sit things out” in hope for a positive outcome (permit).
In July 2022, Northern Dynasty announced the purchase of a royalty for the Pebble Project, giving the royalty holder the right to a portion of the gold and silver production from the mine. The final tranche has been received post quarter end (see here), so cash runway might last one or two quarters longer, based on my high-level estimates.
So, no immediate financial stress for the company.
But self-explanatory, after a successful permit, should it be given, NAK would need to raise a huge amount of capital and / or decide about partnering for this gigantic project.
What I also find interesting, as the final piece for this case, is the estimated net asset value (NAV) for the project. The assumptions are long-term metal prices of copper 3.90 USD / lb and gold 1,700 USD / oz (fine print on the following slide).
Of course, prices now are significantly higher, while the assessment was done in 2023. However, in the meantime costs will have increased meaningfully, too. From a conservative perspective, I would not be too optimistic by just scaling up the assumed commodity prices towards current spot rates.
The given NAV post tax is 2.2 billion USD (not CAD).
This is roughly 3x the current market cap.
Honestly, for such a huge project and all the potential risks involved — in addition to the unclear permitting procedure — this is not a high enough upside for my taste. NAK in its current form will not be able to shoulder development while at the same time not diluting shareholders too much.
Historical share count of course is of little use, but I just wanted to make the point that dilution should be expected — either way. And not little.
It is a more complex guesstimate, but assuming the project will be permitted and NAK stock jumps strongly by 200% (tripling), they will have reached the estimated NAV — before even having started to put a shovel in the ground.
Even at 3x the current price, the company would need to raise, depending on potential partnering structures, at the minimum its entire market cap, if not 2x or 3x.
So, better expect big dilution to lower the realistic upside.
Of course, we don’t know where the price of the metals, especially copper, will be. But, let’s not entirely rule out a recession with copper falling. Will the project then still proceed development?
In other words, I hope I was able to express in an understandable way that the stock seems to have relatively high expectations already priced in. In a first reaction, the stock would likely jump post permit. But even in the best case, the project’s potential production is so far away into the future, it has multiple risk factors, and financing will likely bring strong dilution, at the minimum doubling share count, if not much more.
If no permit comes, the downside can be anything from 30% to even 80%. Or more.
Without the perspective for a realistic business — NAK has no other business — I see no reason why the stock should not fall back to a level of 0.20–0.30 USD where it traded not too long ago, before the wave of hope arose.
I see huge realistic downside. Northern Dynasty has no control over its own fate.
That’s why I stay on the sideline.
I choose the salmon.
Conclusion
The U.S. has one of the largest undeveloped copper deposits on its own soil.
Vast resources seem lucrative, but that’s not everything to look at.
The project owner’s stock is extremely volatile and dependent on political decisions — the most recent was a major blow.
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