The company behind the controversial Pebble Mine in Southwest Alaska has agreed to pay nearly $6.4 million to a group of shareholders who claim they were misled by corporate leaders.
Vancouver-based Northern Dynasty Minerals Ltd. reached the settlement with the named plaintiffs, according to documents filed last week in the U.S. District Court for the Eastern District of New York.
The settlement is the product of two lawsuits, later consolidated, alleging that Northern Dynasty and the Pebble Limited Partnership had defrauded investors through false and misleading statements. Northern Dynasty is the sole owner of the Pebble Limited Partnership.
The court filings name only a few individual investors, but the lawsuit has become a class-action claim with “likely hundreds, if not thousands of potential Settlement Class Members” to share in the payment, said the settlement memorandum filed on Wednesday. If the court approves the agreement and certifies the class, others who owned Northern Dynasty securities between Dec. 21, 2017 and Nov. 25, 2020 could be eligible for payment from the settlement total, according to the memorandum.
At issue were revelations in recorded conversations released in 2020 that became known as the Pebble Tapes. In those conversations, which were recorded by an environmental organization working undercover, Northern Dynasty Chief Executive Officer Ron Thiessen and Tom Collier, then the Pebble Limited Partnership CEO, described a strategy of getting a relatively small mine plan through the permitting process and following up with a massive expansion. Additionally, the two men touted political connections that they said would ease permitting.
“When the truth emerged through a series of corrective disclosures and materializations of risks that the Pebble Project would not receive a permit, Northern Dynasty’s stock went into a tailspin, wiping out hundreds of millions of dollars in market capitalization and injuring hundreds of thousands of investors,” said the amended complaint filed in 2021 in the consolidated case.
The mine, targeting copper primarily, appears to be administratively blocked; the Environmental Protection Agency in January invoked a rarely used Clean Water Act provision that precludes permitting of the Pebble Mine or any similar mine in the specific sites targeted for development.
EPA said the Pebble Mine would have “unacceptable adverse effects” on salmon habitat in the Bristol Bay region, site of the world’s largest sockeye salmon runs, and the people and ecosystem dependent on that habitat.
Northern Dynasty, however, continues to pursue the Pebble project and is gathering information to present to the U.S. Army Corp of Engineers to support issuance of a critical permit to develop that wetlands area. The Corps denied Pebble’s permit in 2020, but in April its reviewing officers ordered a reconsideration of that decision.
In a statement sent to the Alaska Beacon on Monday, a Northern Dynasty official said the company disclosed some information about the settlement in recent financial reports and that the settlement “does not contain any admission of liability.”
“To the contrary, Northern Dynasty firmly believes that the notion of a ‘secret mine plan’ is baseless and the company denies any wrongdoing alleged by the plaintiffs. The Company is confident that it would have prevailed at trial on the merits, when the full context and facts underlying the permitting process would show the allegations to be without merit. Nonetheless, this settlement brings to an end what would have been a costly and protracted legal process, with the settlement amount representing a fraction of the expected costs of litigation to bring this case to verdict,” said the statement, from Mike Westerlund, vice president of investor relations.
Since the total is within the company’s insurance policy limits, Northern Dynasty “does not anticipate corporate funds will be used to fund the settlement,” the statement said.
According to its financial report for the first quarter of 2023, Northern Dynasty has CA$139.5 million in total assets, of which CA$127.2 million was in the company’s mineral property, plant and equipment.
The Bristol Bay Defense Fund, a coalition of community, nonprofit, Indigenous and business organizations opposed to the Pebble Mine, said the settlement “demonstrates yet again how untrustworthy Northern Dynasty Minerals is and always will be.”
“Not only did they mislead investors, they lied to the people of Bristol Bay, and since they aren’t using any corporate funds for this settlement, the Biden administration should order them to remediate the parts of the watershed they damaged and left behind polluted for the community to clean up,” the Bristol Bay Defense Fund statement said.
The Bristol Bay Defense Fund and similar organizations are calling for watershed protections that go beyond the EPA’s action. “Our elected officials must recognize the duplicity of Northern Dynasty and the recklessness of their project, and pass watershed-wide protections to protect all of Bristol Bay, our salmon and our way of life, forever,” the statement said.
The AlaskaBeacon.com is a donor-funded independent news organization in Alaska.
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