Northern Dynasty Minerals Ltd 6-K, filed May 16, 2022

Northern Dynasty Minerals Ltd (NAK)

6-K 2022-05-16 For: 2022-05-11

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Added on April 11, 2026

About this 6-K

Northern Dynasty Minerals Ltd filed this 6-K on May 16, 2022.

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Exhibits		Description
99.1		Condensed Consolidated Interim Financial Statements for the Three Months Ended March 31, 2022
99.2		Management’s Discussion and Analysis for the Three Months Ended March 31, 2022
99.3		Certification of Interim Filings – Full Certificate – CEO
99.4		Certification of Interim Filings – Full Certificate – CFO

	Northern Dynasty Minerals Ltd.
	(Registrant)

Date: May 16, 2022	By:	/s/ M Peters
	By:	Mark Peters
	Title:	Chief Financial Officer

			March 31			December 31
	Notes		2022			2021

ASSETS

Non-current assets
Restricted Cash		5(b)	$	777		$	785
Mineral property, plant and equipment		3		132,858			134,339
Total non-current assets				133,635			135,124

Current assets
Amounts receivable and prepaid expenses		4		1,416			1,867
Cash and cash equivalents		5(a)		17,925			22,291
Total current assets				19,341			24,158

Total Assets			$	152,976		$	159,282

EQUITY

Capital and reserves
Share capital		6	$	700,278		$	700,278
Reserves		6		105,316			106,735
Deficit				(655,982	)		(651,520	)
Total equity				149,612			155,493

LIABILITIES

Non-current liabilities
Trade and other payables		8		1,319			1,365
Total non-current liabilities				1,319			1,365

Current liabilities
Payables to related parties		7		508			376
Trade and other payables		8		1,537			2,048
Total current liabilities				2,045			2,424

Total liabilities				3,364			3,789

Total Equity and Liabilities			$	152,976		$	159,282

/s/ Ronald W. Thiessen		/s/ Christian Milau

Ronald W. Thiessen		Christian Milau
Director		Director

			Three months ended March 31
	Notes		2022			2021

Expenses
Exploration and evaluation expenses		9,10	$	2,301		$	3,286
General and administrative expenses		9,10		2,093			2,462
Legal, accounting and audit				84			2,287
Share-based compensation		6(c)-(d)		6			1,322
Loss from operating activities				4,484			9,357
Foreign exchange (income) loss				(3	)		197
Interest income				(36	)		(42	)
Finance expense				17			22
Other income				–			(15	)
Net Loss			$	4,462		$	9,519

Other comprehensive loss
Items that may be subsequently reclassified to net loss
Foreign exchange translation difference		6(e)		1,425			1,814
Other comprehensive loss			$	1,425		$	1,814

Total comprehensive loss			$	5,887		$	11,333

Basic and diluted loss per share		11	$	0.01		$	0.02

Balance at January 1, 2022		529,779,388	$	700,278	$	77,723	$	28,758		$	(17	)	$	271	$	(651,520	)	$	155,493
Share-based compensation	6(d)	–		–		6		–			–			–		–			6
Net loss		–		–		–		–			–			–		(4,462	)		(4,462	)
Other comprehensive loss net of tax		–		–		–		(1,425	)		–			–		–			(1,425	)
Total comprehensive loss																			(5,887	)

Balance at March 31, 2022		529,779,388	$	700,278	$	77,729	$	27,333		$	(17	)	$	271	$	(655,982	)	$	149,612

1.	NATURE AND CONTINUANCE OF OPERATIONS

	Northern Dynasty Minerals Ltd. (the “Company”) is incorporated under the laws of the Province of British Columbia, Canada, and its principal business activity is the exploration of mineral properties. The Company is listed on the Toronto Stock Exchange (“TSX”) under the symbol “NDM” and on the NYSE American Exchange (“NYSE American”) under the symbol “NAK”. The Company’s corporate office is located at 1040 West Georgia Street, 14^th floor, Vancouver, British Columbia.

	The condensed consolidated interim financial statements (“Financial Statements”) of the Company as at and for the three months ended March 31, 2022, include financial information for the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The Company is the ultimate parent. The Group’s core mineral property interest is the Pebble Copper-Gold-Molybdenum-Silver-Rhenium Project (the “Pebble Project”) located in Alaska, United States of America (“USA” or “US”). All US dollar amounts when presented are denoted “US$” and expressed in thousands, unless otherwise stated.

	The Group is in the process of exploring and developing the Pebble Project and has not yet determined whether the Pebble Project contains mineral reserves that are economically recoverable. The Group’s continuing operations and the underlying value and recoverability of the amounts shown for the Group’s mineral property interests is entirely dependent upon the existence of economically recoverable mineral reserves; the ability of the Group to obtain financing to complete the exploration and development of the Pebble Project; the Group obtaining the necessary permits to mine; and future profitable production or proceeds from the disposition of the Pebble Project.

	As of March 31, 2022, the Group had $17,925 (December 31 2021 – $22,291) in cash and cash equivalents for its operating requirements and working capital of $17,296 (December 31, 2021 – $21,734). These Financial Statements have been prepared on the basis of a going concern, which assumes that the Group will be able to raise sufficient funds to continue its exploration and development activities and satisfy its obligations as they come due. During the three months ended March 31, 2022 and 2021, the Group incurred a net loss of $4,462 and $9,519, respectively, and had a deficit of $655,982 as of March 31, 2022. The Group has prioritized the allocation of its financial resources to meet key corporate and Pebble Project expenditure requirements in the near term, including the funding of the appeal of the Record of Decision (the “ROD”) (discussed below) and class action litigation (note 13(a)). Additional financing will be needed to progress any material expenditures at the Pebble Project and for working capital. Additional financing may include any of or a combination of debt, equity and/or contributions from possible new Pebble Project participants. The Group currently has an At-the-Market Offering Agreement (“ATM Agreement”) in place, whereby the Group as at March 31, 2022, at its sole discretion, can sell through the agent, up to US$13.8 million in common shares during the term of the ATM Agreement. There can be no assurances that the Group will be successful in obtaining additional financing when required. If the Group is unable to raise the necessary capital resources and generate sufficient cash flows to meet obligations as they come due, the Group may, at some point, consider reducing or curtailing its operations. As such, there is material uncertainty that raises substantial doubt about the Group’s ability to continue as a going concern.

	These Financial Statements do not reflect adjustments to the carrying values and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern, and such adjustments could be material.

	The Group, through the Pebble Limited Partnership (“Pebble Partnership”), initiated federal and state permitting for the Pebble Project under the National Environmental Protection Act (“NEPA”) by filing documentation for a Clean Water Act (“CWA”) 404 permit with the US Army Corps of Engineers (“USACE”) in December 2017. The USACE published a draft Environmental Impact Statement (“EIS”) in February 2019 and completed a 120-day public comment period thereon on July 2, 2019. In late July 2019, the US Environmental Protection Agency (“EPA”) withdrew the determination initiated under Section 404(c) of the CWA in 2014 for the waters of Bristol Bay (“Proposed Determination”), which attempted to pre-emptively veto the Pebble Project before it received an objective, scientific regulatory review under NEPA. On July 24, 2020, the USACE published the final EIS. On November 25, 2020, the USACE issued a ROD rejecting the Pebble Partnership’s permit application, finding concerns with the proposed compensatory mitigation plan and determining the project would be contrary to the public interest. The ROD rejected the compensatory mitigation plan as “noncompliant” and determined the project would cause “significant degradation” and was contrary to the public interest. Based on this finding, the USACE rejected Pebble Partnership’s permit application under the CWA. On January 19, 2021, the Pebble Partnership submitted its request for appeal of the ROD with the USACE (the “RFA”). On February 24, 2021, the USACE notified the Pebble Partnership that the RFA is “complete and meets the criteria for appeal” and assigned a review officer (“RO”) to oversee the administrative appeal process at that time and has since assigned a new RO. While federal regulations suggest the appeal should conclude within 90 days, and no case extend beyond one year, the USACE also indicated that due to the complexity of issues and volume of materials associated with the Pebble Project case, the review will take additional time. In June 2021, the USACE completed the ‘administrative record’ for the appeal and provided a copy to the Pebble Partnership, following which the Pebble Partnership and its legal counsel reviewed the voluminous record for completeness and relevance to the USACE’s permitting decision, and its sufficiency to support a fair, transparent and efficient review. An appeal conference is currently scheduled for the summer of 2022. The timing for the final decision on the appeal remains uncertain.

	On October 29, 2021, the court granted the EPA’s motion for remand, and vacated the EPA’s 2019 withdrawal of the Proposed Determination decision, thus reinstating the Proposed Determination. The court declined to impose a schedule on the EPA’s proceedings on remand. The EPA subsequently extended the deadline either to withdraw the Proposed Determination or to prepare a Recommended Determination regarding the Pebble Project until May 31, 2022. The Group will continue to monitor these developments closely to determine the possible impacts to the project and permitting process, as it remains the Group’s position that the withdrawal of the preemptive veto by the EPA was sound and appropriate.

2.	SIGNIFICANT ACCOUNTING POLICIES

(a)	Statement of Compliance

	These Financial Statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee (“IFRIC”s). They do not include all of the information required by IFRS for complete annual financial statements, and should be read in conjunction with the Group’s consolidated financial statements as at and for the year ended December 31, 2021 (“2021 annual financial statements”).

	These Financial Statements were authorized for issue by the Audit and Risk Committee on May 11, 2022.

(b)	Use of Judgements and Estimates

	In preparing these Financial Statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. There was no change in the use of significant estimates and judgments during the current period as compared to those described in Note 2 in the 2021 annual financial statements, two of which are discussed below:

	Critical accounting judgments

	Mineral Property Interest

	The Group used judgement in concluding that no impairment indicators exist in relation to the Pebble Project, notwithstanding the receipt of the ROD denial of the permit for the Pebble Project, which would be considered an indicator under IFRS 6, Exploration for and Evaluation of Mineral Resources, for testing for impairment. Key to the Group’s judgement conclusion is that it has submitted an administrative appeal with the USACE, which is currently running its course, the Group will be pursuing other options available to it, and that as at March 31, 2022, and the date the Financial Statements were authorized for issuance, the Company’s market capitalization exceeded the carrying value of the Pebble Project and the Group’s net asset value.

	Going Concern

	The Group has employed judgement that going concern was an appropriate basis for the preparation of the Financial Statements, as the Group considered existing financial resources in determining that such financial resources are able to meet key corporate and Pebble Project expenditure requirements for at least the next twelve months (note 1).

(c)	Amendment Adopted by the Group

	Effective January 1, 2022, the Group adopted amendments to IAS 16, Property Plant and Equipment, which require the net proceeds from selling any items produced while bringing an item of property, plant and equipment (“PPE”) to the location and condition necessary for it to be capable of operating in the manner intended by management together with the cost of producing these items, to be recognized in profit and loss.

	The adoption of these amendments did not impact the Financial Statements.

3.	MINERAL PROPERTY, PLANT AND EQUIPMENT

	The Group’s exploration and evaluation assets are comprised of the following:

*Three months ended March 31, 2022*	Mineral Property interest ¹			Plant and equipment ²			Total
Cost
Balance December 31, 2021 and Ending balance	$	112,541		$	3,029		$	115,570

Accumulated depreciation
Balance December 31, 2021		–			(2,454	)		(2,454	)
Depreciation charge for the period ^{3, 4}		–			(60	)		(60	)
Ending balance		–			(2,514	)		(2,514	)

Foreign currency translation difference
Balance December 31, 2021		21,079			144			21,223
Movement for period		(1,415	)		(6	)		(1,421	)
Ending balance		19,664			138			19,802

Net carrying value – December 31, 2021	$	133,620		$	719		$	134,339
Net carrying value – March 31, 2022	$	132,205		$	653		$	132,858

	Notes to tables:

	1.	Comprises the Pebble Project, a contiguous block of 1,840 mineral claims covering approximately 274 square miles located in southwest Alaska, 17 miles (30 kilometers) from the villages of Iliamna and Newhalen, and approximately 200 miles (320 kilometers) southwest of the city of Anchorage.

	2.	Includes Right-of-use assets (“ROU Assets”), which relate to the use of office space, a copier, hangers, yard storage and one vehicle, which was disposed of in February 2021. The following comprises ROU Assets:

*Three months ended March 31, 2022*	Land and Buildings			Equipment			Total
Cost Balance December 31, 2021 and Ending balance	$	1,631		$	32		$	1,663

Accumulated depreciation
Balance December 31, 2021		(947	)		(20	)		(967	)
Depreciation charge for the period ^{3, 4}		(34	)		(2	)		(36	)
Ending balance		(981	)		(22	)		(1,003	)

Foreign currency translation difference
Balance December 31, 2021		(76	)		(1	)		(77	)
Movement for period		(6	)		–			(6	)
Ending balance		(82	)		(1	)		(83	)

Net carrying value – December 31, 2021	$	608		$	11		$	619
Net carrying value – March 31, 2022	$	568		$	9		$	577

	3.	For the three months ended March 31, 2021, total depreciation was $90 of which ROU Asset depreciation was $66.

	4.	ROU Asset depreciation of $25 (2021 – $55) is included in general and administrative expenses (note 9(b)) for the three months ended March 31, 2022. The remainder is included in exploration and evaluation expenses.

4.	AMOUNTS RECEIVABLE AND PREPAID EXPENSES

	Notes

	1.	These costs are allocated to equity based on the dollar amount issued as a percentage of the total amount available under the ATM Agreement.

	2.	Includes prepaid insurance, which is amortized over the insurance term.

5.	CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

(a)	Cash and cash equivalents

	The Group’s cash and cash equivalents at March 31, 2022 and December 31, 2021, consisted of cash on hand and was invested in business and savings accounts.

(b)	Restricted cash

	The Group has cash deposited with a United States financial institution that has been pledged as collateral to the surety provider for a US$2,000 surety bond that was placed with the Alaskan regulatory authorities for a performance guarantee related to any potential reclamation liability as a condition of the Miscellaneous Land Use Permit granted to the Pebble Partnership for its ongoing activities on the Pebble Project. The cash deposit will be released once any reclamation work required has been performed and assessed by the Alaskan regulatory authorities. The cash is invested in a money market fund. For the three months ended March 31, 2022 and 2021, nominal income was recognized, which was re-invested.

6.	CAPITAL AND RESERVES

(a)	Authorized Share Capital

	At March 31, 2022 and 2021, authorized share capital consisted of an unlimited number of common shares (“shares”) with no par value. At March 31, 2022, 529,779,388 (2021 – 512,790,198) shares were issued and fully paid.

(b)	Share Purchase Warrants and Options not Issued under the Group’s Incentive Plan

	The following reconciles outstanding warrants and non-employee options (options that were not issued under the Group’s incentive plan (see below)), each exercisable to acquire one share, for the three months ended March 31, 2022 and 2021 respectively:

Continuity	Cannon Point options ¹			Warrants ²			Total
Balance January 1, 2021		211,500			17,713,265			17,924,765
Exercised		(79,900	)		(614,667	)		(694,567	)
Balance March 31, 2021		131,600			17,098,598			17,230,198
Exercised		(37,600	)		(13,703,785	)		(13,741,385	)
Expired		–			(3,394,813	)		(3,394,813	)
Balance December 31, 2021 and March 31, 2022		94,000			–			94,000

	Weighted averages per option/warrant
	Cannon Point options		Warrants		Total
March 31, 2022
Exercise price	$	0.36		–	$	0.36
Remaining life in years		1.50		–		1.50
December 31, 2021
Exercise price	$	0.36		–	$	0.36
Remaining life in years		1.74		–		1.74

	Notes to tables:

	1.	The Group issued options in exchange for those which were outstanding in Cannon Point Resources Ltd. (“Cannon Point”) on the acquisition of the company in October 2015.

	2.	Warrants were issued pursuant to the June 2016 prospectus financing, July 2016 private placement and the 2019 non-revolving term loan credit facility agreement.

(c)	Share Purchase Option Compensation Plan

	The following reconciles the Group’s share purchase options (“options”) issued and outstanding pursuant to the Group’s incentive plan for the three months ended March 31, 2022 and 2021:

Continuity of options	Number of options			Weighted average exercise price ($/option)
Balance January 1, 2021		28,481,500			1.20
Exercised		(3,049,000	)		0.52
Balance March 31, 2021		25,432,500			1.29
Exercised		(2,035,000	)		0.49
Expired		(2,572,000	)		0.61
Balance December 31, 2021 and March 31, 2022		20,825,500			1.45

	For the three months ended March 31, 2022, the Group recognized $nil (2021 – $1,322) in share based compensation (“SBC”) as all options outstanding were fully vested.

	The following table summarizes information on options outstanding as at the reported dates:

		March 31, 2022						December 31, 2021
	Exercise prices ($)	Number of options outstanding		Number of options exercisable		Weighted Average Remaining contractual life (years)		Number of options outstanding		Number of options exercisable		Weighted Average Remaining contractual life (years)
	0.76		3,300,000		3,300,000		1.36		3,300,000		3,300,000		1.61
	0.99		6,368,500		6,368,500		2.50		6,368,500		6,368,500		2.74
	1.75		4,386,000		4,386,000		0.32		4,386,000		4,386,000		0.57
	2.01		6,696,000		6,696,000		3.30		6,696,000		6,696,000		3.55
	2.34		75,000		75,000		1.33		75,000		75,000		1.58
Total			20,825,500		20,825,500				20,825,500		20,825,500

	The weighted average contractual life for options outstanding, which were all exercisable, was 2.11 (December 31, 2021 – 2.36) years per option. The weighted average exercise price for exercisable options as at March 31, 2022 was $1.45 (December 31, 2021 – $1.45) per option.

(d)	Deferred Share Units (“DSUs”)

	The following reconciles DSUs outstanding for the three months ended March 31, 2022 and 2021:

Continuity of DSUs	Number of DSUs		Weighted average fair value ($/DSU)
Balance January 1, 2021 and March 31, 2021		458,129		0.69
Granted		19,582		0.60
Balance December 31, 2021		477,711		0.69
Granted¹		13,972		0.45
Balance March 31, 2022		491,683		0.68

	Note

	1.	On grant date, the Group recognized share-based compensation of $6 in the statement of loss, based on the aggregate market value of shares on grant date, with a corresponding increase in the equity-settled share payment reserve in equity.

Continuity
Balance January 1, 2021	$	29,661
Loss on translation of foreign subsidiaries		(1,814	)
Balance March 31, 2021		27,847
Gain on translation of foreign subsidiaries		911
Balance December 31, 2021		28,758
Loss on translation of foreign subsidiaries		(1,425	)
Balance March 31, 2022	$	27,333

	The foreign currency translation reserve represents accumulated exchange differences arising on the translation, into the Group’s presentation currency (the Canadian dollar), of the results of operations and net assets of the Group’s subsidiaries with a US dollar functional currency.

7.	RELATED PARTY BALANCES AND TRANSACTIONS

	The components of transactions to related parties is as follows:

	March 31		December 31
Payables to related parties	2022		2021
Key management personnel (“KMP”)(a)	$	62	$	35
Hunter Dickinson Services Inc. (“HDSI”)(b)		446		341
Total payables to related parties	$	508	$	376

	Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation. Details between the Group and other related parties are disclosed below.

(a)	Transactions and Balances with Key Management Personnel

	The aggregate value of transactions with KMP, being the Group’s directors, including Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Company Secretary and General Counsel, Executive Vice President (“EVP”)s, Environment and Sustainability and Corporate Development, Vice President (“VP”)s, Engineering, Investor Relations and Public Affairs (until August 31, 2021), and Pebble Partnership (“PLP”) senior management including the PLP CEO and Chair of Pebble Mines Corp (“PMC Chair”), Senior VP (“SVP”), Corporate Affairs (until May 21, 2021), SVP Engineering (until February 28, 2021), Senior VP, and Chief of Staff (until February 19, 2021), was as follows for the three months ended March 31, 2022 and 2021:

Transaction	2022		2021
Compensation
Amounts paid and payable to HDSI for services of KMP employed by HDSI ¹	$	654	$	748
Amounts paid and payable to KMP ²		461		1,060
		1,115		1,808
Share-based compensation ³		6		847
Total compensation	$	1,121	$	2,655

	Notes to table:

	1.	The Group’s CEO, CFO, Board Chair and senior management, other than disclosed in note 2 below, are employed by the Group through HDSI (refer (b)).

	2.	Represents short-term employee benefits, including director’s fees paid to the Group’s independent directors, and salaries paid and payable to the PLP senior management noted above. The SVP Engineering was employed by the Group through a wholly-owned US subsidiary of HDSI (“HDUS”) until the end of February 2021. The Group reimbursed HDUS for costs incurred.

	3.	For the three months ended March 31, 2022, SBC relates to DSUs issued (note 6(d)). In the comparative period, SBC relates to vesting of prior year option grants.

(b)	Transactions and Balances with other Related Parties

	HDSI is a private company that provides geological, engineering, environmental, corporate development, financial, administrative and management services to the Group and its subsidiaries at annually set rates pursuant to a management services agreement. The annually set rates also include a component of overhead costs such as office rent, information technology services and general administrative support services. HDSI also incurs third party costs on behalf of the Group, which are reimbursed by the Group at cost. Several directors and other key management personnel of HDSI, who are close business associates, are also key management personnel of the Group.

	For the three months ended March 31, 2022 and 2021, transactions with HDSI were as follows:

Transactions	2022		2021
Services rendered by HDSI:
Technical ¹
Engineering	$	113	$	230
Environmental		140		104
Socioeconomic		–		122
Other technical services		20		27
		273		483
General and administrative
Management, consulting, corporate communications, secretarial, financial and administration		558		732
Shareholder communication		190		190
		748		922

Total for services rendered		1,021		1,405

Reimbursement of third party expenses
Conferences and travel		41		10
Insurance		71		68
Office supplies and information technology ²		141		106
Total reimbursed		253		184

Total	$	1,274	$	1,589

	Notes to table

	1.	Included in exploration and evaluation expenses.

	2.	Includes payments made for the use of offices and shared space of $45 for the three months ended March 31, 2021 (2021 - $2). In April 2021, the Company signed an office use agreement effective May 1, 2021, for a five-year term ending April 29, 2026. As of March 31, 2022, the remaining undiscounted commitment was $408 (note 13(e)).

	Pursuant to an addendum to the management services agreement between HDSI and the Company, following a change of control, the Company is subject to termination payments if the management services agreement is terminated. The Company will be required to pay HDSI $2,800 and an aggregate amount equal to six months of annual salaries payable to certain individual service providers under the management services agreement and their respective employment agreements with HDSI.

	Notes to tables:

	1.	Includes fees due to legal counsel of US$635 payable on completion of a partnering transaction.

	2.	Lease liabilities relate to lease of offices, a copier and yard storage, which have remaining lease terms of 9 to 98 months and interest rates of 9.5% – 12% over the term of the leases. During the three months ended March 31, 2022, the Group recognized $17 (2021 - $22) in interest expense on lease liabilities.