A shareholder of Northern Dynasty Minerals is filing a class-action suit against the company and its directors for allegedly misleading shareholders about the viability of the proposed Pebble Mine. People who bought stocks between Dec. 21, 2017 and Nov. 25, 2020 have until Feb. 2, 2021 to join the lawsuit as lead plaintiffs.
Canadian-based Northern Dynasty is the parent company of the Pebble Limited Partnership, which has been promoting the mine to investors for more than a decade.
The U.S. Army Corps of Engineers last month denied Pebble a federal permit. It said that the project went against Clean Water Act guidelines, as well as the public interest.
The lawsuit holds that the company did not disclose to its investors that the proposed mine was contrary to the guidelines and public interest. The lawsuit also cites the secretly-recorded Pebble Tapes, which the Environmental Investigation Agency, an environmental group, released in September. In the tapes, Northern Dynasty CEO Ron Thiessen and former Pebble CEO Tom Collier said that once the mine went into production, the company planned to pursue a larger mine and extend its lifespan beyond what was being proposed.
Because of that, it alleges, Northern Dynasty misled the public and violated the Securities Exchange Act of 1934. The act is aimed at promoting greater transparency and requires that companies disclose relevant financial information.
The suit claims that in concealing its intentions, Northern Dynasty artificially inflated its stock prices. It holds that had investors been aware of the situation, they would not have bought shares at that price, or at all.
Northern Dynasty declined to comment for this story.
The months leading up to Pebble’s permit denial were rocky for the company, which its stock prices reflected. The suit claims that damaged investors.
When the Army Corps announced in August that Pebble needed to submit a new plan to mitigate its impact to wetlands, the lawsuit points out Northern Dynasty shares dropped by almost 38%. When the Army Corps denied Pebble a federal permit at the end of November, stocks dropped almost 50%, to 40 cents a share. As of Friday, they were at 34 cents a share.
The next annual Northern Dynasty shareholder meeting is on Dec. 17 in Vancouver.
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