In the last trading session, the stock price of Northern Dynasty Minerals Ltd (NYSEMKT:NAK) declined over 11% to close the day at $2.17. The decline came at a share volume of 13,000 compared to average share volume of 3.87 million.
On October 24, 2016, several analysts recommended shares of Northern Dynasty, as their best speculative pick. On that day, the stock was trading at $0.74, while as per the last close, the shares price is at $2.17. Although almost all the experts incorrectly predicted a Hillary victory, the notion was mainly that Mr. Obama’s exit from the White House together with the EPA overreach could result in the EPA anticipatory veto being removed. Lo and behold, a Trump win, unsurprisingly, was a better catalyst for administration to present its case of the illegal EPA actions. Regardless of getting Hillary’s victory wrong, the Northern Dynasty thesis has played well.
However, with almost 342 million fully diluted shares due, at over $2 per share, the company’s market cap now stands around $577 million. Depending on this valuation, the experts are suggesting it is wise for shareholders to take some money off the table. It is a bit surprising at how far shares have moved provided that Trump’s policies views and his EPA pick already well publicized. Also, a direct quote from Northern Dynasty President, made on December 21, 2016, indicates this news is priced in.
Ronald Thiessen, the CEO and President, stated that he projected the U.S. EPA to report in the first quarter of 2017. It will allow the application process advance for the controversial assignment. He said the firm has held dialogs with Trump’s transition team, counting Myron Ebell, who directs the EPA transition.
Finally, shareholders need to realize that the EPA anticipatory veto getting removed simply indicates that the firm can file for permits. It doesn’t indicate the assignment will be approved, it simply shows the permitting procedure can begin.