First Quantum Minerals Ltd has entered into a framework agreement with Northern Dynasty Minerals Ltd which contemplates that an affiliate of the company will subsequently execute an option agreement with Northern Dynasty. Within five business days of the execution of the framework agreement, the affiliate of the company will make a payment of $37.5 million to Northern Dynasty. The Early Option Price Instalment will be applied solely for the purpose of progressing the permitting of the Pebble project.

The term of the option granted by the Option Agreement will be for a period of four years from the date of satisfaction of certain conditions precedent, with a right to extend the term of the option for a further period of two years. The option price for the initial four years is $150 million payable in equal tranches of $37.5 million, with the Early Option Price Instalment being credited against the Option Price. All of the Option Price will be applied to advancing the permitting process for development of the Pebble project. The Option Agreement will entitle the affiliate to earn a 50% interest in the Pebble Limited Partnership, which is the owner of the Pebble Project in Alaska by investing an additional total amount of $1.35 billion in the Pebble Limited Partnership. The entry by an affiliate of the company into the Option Agreement is contingent upon due diligence being completed to the satisfaction of the First Quatum, necessary regulatory approvals being obtained and the successful negotiation of the final form of the Option Agreement and associated commercial agreements. Finalization and execution of the Option Agreement and associated commercial agreements is expected to occur early in Q2 2018.

Philip Pascall, Chairman and CEO, commented: “The Option Agreement is an important opportunity to carry out a detailed assessment of the Pebble project which is widely acknowledged to be one of the outstanding unmined copper projects in the world, estimated to contain some 26 Mt of copper, 70 Moz of gold and 1.5 Mt of molybdenum in measured and indicated resources at a 0.3% Cu equivalent cut off. We are very aware of the environmental and social sensitivity of this project and will utilize the lengthy option period to apply our extensive project development and operating experience to ensure that this project can be developed with the support of stakeholders.

“Concurrently, our main objectives remain the successful delivery of our Cobre Panama project, management of our balance sheet and the provision of a return to shareholders outside of share appreciation.

“We believe a successful outcome to the permitting process for Pebble would deliver the potential for further growth in copper for First Quantum well into the future.”