By Tim Sohn  

Last summer, I walked alone across a magnificent slice of southwest Alaska, over hilly tundra pocked with lakes and ponds and sliced through by meandering creeks. There were caribou and eagles, wolves and bears, and just then millions of sockeye salmon were surging up from Bristol Bay to spawn in one of the world’s last great wild nurseries. But there were also metal pipes jutting out of the ground every few hundred yards, scattered like tombstonesacross the landscape. They marked the locations of some of the thirteen hundred exploratory holes that Northern Dynasty Minerals, a Canadian mining company, began boring in 2004. The holes revealed huge deposits of copper, gold, and molybdenum worth, in Northern Dynasty’s accounting, potentially hundreds of billions of dollars. In the past decade, the company has advanced plans to excavate an immense open-pit mine, the Pebble Mine, right near the headwaters of some of Bristol Bay’s major salmon rivers. Predictably, the project has encountered stiff opposition from local fishermen, Alaskan Native groups, and their environmental and political allies around the country. Early last year, the combination of bad P.R., spooked investors, declining copper prices, logistical and infrastructural challenges, unresolved court battles, and a proposed intervention by the Environmental Protection Agency seemed to have rendered Pebble an extreme long shot. Northern Dynasty’s stock, worth twenty-one dollars a share five years earlier, bottomed out at twenty-one cents.

But then the Presidential election happened, and the project began to look as though it might make a comeback. On November 9th, the day after Donald Trump won, Northern Dynasty’s share price jumped twenty-five per cent; by early February of this year, it had more than quadrupled in value. Soon the company was being touted as a virtual sure thing in investor newsletters and chat rooms—“Trump’s gold” became a popular refrain. The financial press echoed the storyline. The Alaska Journal of Commerce titled one article “Pebble Revived,” while the Globe and Mail headlined a Bloomberg story with “Trump Makes Canadian Mine Explorer with Zero Revenue Great Again.” In January, Northern Dynasty’s C.E.O., Ron Thiessen, leveraged the moment, giving investor presentations in New York, Montreal, and Vancouver, and telling interviewers along the way that the Trump Administration had “a desire to permit Pebble” and that the E.P.A. situation would be resolved within a hundred days. That month, the company raised $37.4 million with a special sale of secondary shares. Thiessen and his colleagues even prepared a timetable of “project milestones” that fit neatly within the four years of Trump’s first term.

On the federal level, Northern Dynasty’s assumptions may prove valid. Republicans in Congress have long seen Pebble as a casualty of the E.P.A.’s regulatory overreach. Just last week, Representative Lamar Smith, the Republican chair of the House Science Committee, sent a letter to Scott Pruitt, the E.P.A.’s pro-industry new administrator, urging him to rescind the agency’s earlier attempts to block the mine. On Tuesday, President Trump signed an executive order revoking what he referred to as “the so-called Waters of the United States Rule”—a regulation instituted by President Barack Obama to protect rivers, streams, and wetlands from pollution—dismissing it as “a massive power grab” that targeted “our wonderful small farmers and small businesses.” According to a report in the Washington Post, the White House also plans to cut the E.P.A.’s budget by a quarter and lay off a fifth of its staff—all conceivably good news for Northern Dynasty.

And yet, in practical terms, Pebble’s path forward is no clearer now than it was on November 7th. The Trump Administration has made no public statements concerning the mine, nor has it had any direct contact with Northern Dynasty. “Over all, we have a certain degree of confidence,” the company’s head spokesman, Sean Magee, told me. “Until we have confirmation, that’s aspiration on our part, but we certainly conveyed it to the market.” Recently, however, some investors have begun to question both Northern Dynasty’s stock price and Pebble’s economic viability. On Valentine’s Day, Kerrisdale Capital Management, a New York-based hedge fund with a specialty in shorting companies it views as overvalued, released a bearish report. “We believe Northern Dynasty is worthless,” it read. “Though the legal and regulatory problems that will continue to plague the Pebble project even under a Trump presidency are enormous, the project’s Achilles’ heel is more fundamental: economics.”

There is, first of all, the problem of cash flow. In 2013, Northern Dynasty’s last major commercial partner, Anglo-American, backed out of the project, after investing more than half a billion dollars. Since then, Northern Dynasty has been on its own. The company has stayed ahead of insolvency by periodically selling shares and special warrants to investors, using the proceeds to pay lawyers and lobbyists to hobble the E.P.A. and keep the project alive. To make Pebble an actual mine now, the company will need, by its own estimate, some hundred and fifty million dollars for the permitting process alone. It will also require the institutional knowledge of a larger mining company, which means attracting another partner. And assuming it can do that, a number of other obstacles remain. The Kerrisdale report suggests, for instance, that the cost of meeting various logistical challenges—supplying the project’s enormous power needs; building a deep-water port, a pipeline, a haul road, and dams to hold back waste—may in fact be too high for Pebble’s relatively low-grade ore ever to be mined profitably. The report’s conclusion is damning: “Northern Dynasty has skillfully exploited the Trump narrative to reignite enthusiasm for a company that the market had left for dead. But ‘telling a good story’ is all Northern Dynasty has ever been good at.”

Northern Dynasty responded to the Kerrisdale report aggressively, accusing the firm of engaging in a “short and distort campaign”—that is, of giving Pebble an unfair drubbing merely to make more money from its failure. “The Company and its board have evaluated each of the Short Seller’s claims and believe they are unfounded, contain numerous errors and unsupported speculation, and demonstrate a lack of understanding of the Company’s business,” Northern Dynasty wrote in a statement. At least some investors, though, found Kerrisdale’s thesis more persuasive than Northern Dynasty’s rebuttal. Its stock fell by nearly a third on the day the report was issued. There have been some fluctuations since then, but the over-all trend has been downward, and for the past couple of weeks the stock has been trading at about half of its pre-Kerrisdale level. Meanwhile, law firms have piled on, announcing class-action suits—fourteen and counting—based on the report’s allegations that the company knowingly misled shareholders. (Northern Dynasty calls the suits baseless.)

Kerrisdale has stood by its assessment. “The more we dug into it, the more excited we got, because it seemed like this whole thing was just smoke and mirrors,” Sahm Adrangi, the fund’s founder, told me. And the response from Alaska, where Adrangi has never been, was overwhelmingly positive. “I don’t think we’ve ever received this much praise on a report,” he said. “We got a lot of e-mails telling us how beautiful Bristol Bay is and that we should come visit.” A couple of days after the report came out, Kerrisdale tweeted a note that it had received from a retired Bristol Bay fisherman. “You made my day, week, month, and year,” it reads. “You brought the light of truth to what has been a real clown show. And a dangerous one.”

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