Northern Dynasty Minerals Ltd 6-K, filed Nov 15, 2022

Northern Dynasty Minerals Ltd (NAK)

6-K 2022-11-15 For: 2022-11-10

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Added on April 11, 2026

About this 6-K

Northern Dynasty Minerals Ltd filed this 6-K on November 15, 2022.

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Exhibits		Description
99.1		Condensed Consolidated Interim Financial Statements for the Three and Nine Months Ended September 30, 2022
99.2		Management’s Discussion and Analysis for the Three and Nine Months Ended September 30, 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: November 15, 2022	By:	/s/ M Peters
	By:	Mark Peters
	Title:	Chief Financial Officer

Northern Dynasty Minerals Ltd.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited - Expressed in thousands of Canadian Dollars)

			September 30			December 31
	Notes		2022			2021

ASSETS

Non-current assets
Restricted Cash		5(b)	$	863		$	785
Mineral property, plant and equipment		3		130,230			134,339
Total non-current assets				131,093			135,124

Current assets
Amounts receivable and prepaid expenses		4		3,459			1,867
Cash and cash equivalents		5(a)		24,506			22,291
Total current assets				27,965			24,158

Total Assets			$	159,058		$	159,282

EQUITY

Capital and reserves
Share capital		6	$	700,278		$	700,278
Reserves		6		120,707			106,735
Deficit				(669,585	)		(651,520	)
Total equity				151,400			155,493

LIABILITIES

Non-current liabilities
Trade and other payables		8		1,386			1,365
Total non-current liabilities				1,386			1,365

Current liabilities
Payables to related parties		7		327			376
Trade and other payables		8		5,945			2,048
Total current liabilities				6,272			2,424

Total liabilities				7,658			3,789

Total Equity and Liabilities			$	159,058		$	159,282

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

Ronald W. Thiessen		Christian Milau
Director		Director

Northern Dynasty Minerals Ltd.
Condensed Consolidated Interim Statements of Comprehensive Loss
(Unaudited - Expressed in thousands of Canadian Dollars, except for share information)

			Three months ended September 30						Nine months ended September 30
	Notes		2022			2021			2022			2021

Expenses
Exploration and evaluation expenses		9,10	$	1,839		$	2,907		$	6,322		$	9,538
General and administrative expenses		9,10		2,132			2,405			6,742			7,347
Legal, accounting and audit				1,707			3,124			3,312			7,327
Share-based compensation		6(c),(d)		1,874			244			1,886			2,852
Loss from operating activities				7,552			8,680			18,262			27,064
Foreign exchange (income) loss				(71	)		21			(74	)		465
Interest income				(81	)		(52	)		(172	)		(137	)
Finance expense				16			17			50			49
Other income				–			–			–			(16	)
Gain on disposal of plant and equipment				(1	)		–			(1	)		–
Gain on modification of lease				–			–			–			(16	)
Net Loss			$	7,415		$	8,666		$	18,065		$	27,409

Other comprehensive loss
Items that may be subsequently reclassified to net loss
Foreign exchange translation difference		6(e)		(9,651	)		(3,040	)		(12,086	)		577
Other comprehensive (income) loss			$	(9,651	)	$	(3,040	)	$	(12,086	)	$	577

Total comprehensive (income) loss			$	(2,236	)	$	5,626		$	5,979		$	27,986

Basic and diluted loss per share		11	$	0.01		$	0.02		$	0.03		$	0.05

	Notes			Share capital				Reserves
								Equity -			Foreign
								settled			currency						Share
				Number of				share-based			translation			Investment			Purchase
				shares				compensation			reserve			revaluation			Warrants
				(note 6(a))		Amount		reserve			(note 6(e))			reserve			(note 6(b))			Deficit			Total equity

Balance at January 1, 2021					509,046,631	$	683,039	$	77,018		$	29,661		$	(17	)	$	2,583		$	(619,978	)	$	172,306
Shares issued upon exercise of options per option plan		6	(c)		5,084,000		2,592		–			–			–			–			–			2,592
Shares issued upon exercise of warrants and options not issued per option plan		6	(b)		14,398,352		9,345		–			–			–			–			–			9,345
Fair value allocated to shares issued on exercise of options and warrants					–		4,456		(2,153	)		–			–			(2,303	)		–			–
Shares issued, net of transactions costs					1,212,805		824		–			–			–			–			–			824
Share-based compensation		6	(c),(d)		–		–		2,852			–			–			–			–			2,852
Net loss					–		–		–			–			–			–			(27,409	)		(27,409	)
Other comprehensive loss net of tax					–		–		–			(577	)		–			–			–			(577	)
Total comprehensive loss																								(27,986	)

Balance at September 30, 2021					529,741,788	$	700,256	$	77,717		$	29,084		$	(17	)	$	280		$	(647,387	)	$	159,933

Balance at January 1, 2022					529,779,388	$	700,278	$	77,723		$	28,758		$	(17	)	$	271		$	(651,520	)	$	155,493
Share-based compensation		6	(c), (d)		–		–		1,886			–			–			–			–			1,886
Net loss					–		–		–			–			–			–			(18,065	)		(18,065	)
Other comprehensive income net of tax					–		–		–			12,086			–			–			–			12,086
Total comprehensive loss																								(5,979	)

Balance at September 30, 2022					529,779,388	$	700,278	$	79,609		$	40,844		$	(17	)	$	271		$	(669,585	)	$	151,400

	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. On May 25, 2022, the the EPA announced that it intends to advance its pre-emptive veto of the Pebble Project and issued a revised Proposed Determination. The revised Proposed Determination would establish a “defined area for prohibition” coextensive with the current mine plan footprint in which the EPA would prohibit the disposal of dredged or fill material for the Pebble Project. It would also establish a 309-square-mile “defined area for restriction”. Public comments on the revised Proposed Determination closed on September 6, 2022. On September 6, 2022, the EPA announced it was extending the time period for a decision on the the revised Proposed Determination until December 2, 2022. Future action by the EPA could negatively affect the ability of the Pebble Partnership to obtain required permitting and develop the Project, even if the appeal of the ROD is successful. 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”). 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 November 9, 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 expenses. 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 in 1 and 2, except as noted in 3 below:

	Critical accounting judgments

	1.	Mineral Property Interest – No Impairment Indicators

		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 September 30, 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.

	2.	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).

	3.	Royalty arrangement

		The Group employed judgement in assessing the appropriate accounting treatment for the transaction relating to a long-term royalty arrangement linked to production at the Pebble Project (note 3). The Group considered the substance of the agreement to determine whether the Group has disposed of an interest in the reserves and resources of the Pebble Project. This assessment considered the stage of development of the Pebble Project, the legal rights the counterparty has in the event of bankruptcy, as well as what the counterparty is entitled to and the associated risks and rewards attributable to them over the life of the mine at the Pebble Project.

(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:

*Nine months ended September 30, 2022*	Mineral Property interest ¹	Plant and equipment ²	Total
Cost
Balance December 31, 2021	$ 112,541	$ 2,412	$ 114,953
Additions	–	21	21
Disposal of plant and equipment	–	(8)	(8)
Disposal of mineral property interest ⁵	(15,463)	–	(15,471)
Ending balance	97,078	2,425	99,503

Accumulated depreciation
Balance December 31, 2021	–	(1,877)	(1,877)
Depreciation charge for the period ^{3, 4}	–	(175)	(175)
Derecognition on disposal of plant and equipment	–	8	8
Ending balance	–	(2,044)	(2,044)

Foreign currency translation difference
Balance December 31, 2021	21,079	184	21,263
Movement for period	11,453	55	11,508
Ending balance	32,532	239	32,771

Net carrying value – December 31, 2021	$ 133,620	$ 719	$ 134,339
Net carrying value – September 30, 2022	$ 129,610	$ 620	$ 130,230

	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, office equipment and yard storage. The following comprises ROU Assets:

*Nine months ended September 30, 2022*	Land and Buildings	Equipment	Total
Cost
Balance December 31, 2021	$ 1,014	$ 32	$ 1,046

Accumulated depreciation
Balance December 31, 2021	(370)	(20)	(390)
Depreciation charge for the period ^{3, 4}	(102)	(8)	(110)
Ending balance	(472)	(28)	(500)

Foreign currency translation difference
Balance December 31, 2021	(36)	(1)	(37)
Movement for period	49	–	49
Ending balance	13	(1)	12

Net carrying value – December 31, 2021	$ 608	$ 11	$ 619
Net carrying value – September 30, 2022	$ 555	$ 3	$ 558

	3.	For the three and nine months ended September 30, 2022 and 2021, total depreciation was $54 (2021 – $88) and $175 (2021 – $422), of which ROU Asset depreciation was $37 (2021 – $65) and $110 (2021 – $199), respectively.

	4.	ROU Asset depreciation of $26 (2021 – $53) and $77 (2021 - $166) is included in general and administrative expenses (note 9(b)) for the three and nine months ended September 30, 2022, respectively. The remainder is included in exploration and evaluation expenses.

	5.	On July 26, 2022, the Group announced that it had entered into an agreement (the “Agreement”) with an investor (the “Royalty Holder”) to receive up to US$60 million over the next two years, in return for the right to receive a portion of the future gold and silver production from the Pebble Project for the life of the mine (see further below). The Group received an initial non-refundable payment of US$12 million from the Royalty Holder concurrently with the execution of the Agreement.

		Per the terms of the Agreement, the Royalty Holder made the initial payment of US$12 million in exchange for the right to receive 2% of the payable gold production and 6% of the payable silver production from the Pebble Project, in each case after accounting for a notional payment by the Royalty Holder of US$1,500.00 per ounce of gold and US$10.00 per ounce of silver, respectively, for the life of the mine. If, in the future, spot prices exceed US$4,000.00 per ounce of gold or US$50.00 per ounce of silver, then the Group will share in 20% of the excess price for either metal. Additionally, the Company will retain a portion of the metal produced for recovery rates in excess of 60% for gold and 65% for silver, and so is incentivized to continually improve operations over the life of the mine. The Royalty Holder has the right to invest additional non-refundable funds, in US$12 million increments, to an aggregate total of US$60 million, within two years of the date of the Agreement, in return for the right to receive up to 10% of the payable gold and up to 30% of the payable silver (in each case, in the aggregate) on the same terms as the first tranche. The Royalty Holder is under no obligation to invest additional amounts to increase its interest in the gold and silver production from the Pebble Project The Company recognized the first tranche of US$12 million ($15.5 million) as a sale of mineral property interest and the consideration received has been recorded as a recovery of mineral property costs. Accordingly, no gain or loss was recognized on the transaction.

	Notes

	1.	At December 31, 2021, these costs were still to be allocated to shares sold under the At-the-Market (“ATM”) Agreement based on the dollar amount as a percentage of the total dollar amount available under the ATM Agreement. The Group expensed these costs on the basis that no further issuances occurred prior to the expiry of the base shelf prospectus, that supported the ATM offering.

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

5.	CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

(a)	Cash and cash equivalents

	At September 30, 2022, and December 31, 2021, the Group had only cash on hand which 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 and nine months ended September 30, 2022 the Group earned $3 (2021 – nominal) and $4 (2021 – nominal) income, respectively, which was re-invested.

6.	CAPITAL AND RESERVES

(a)	Authorized Share Capital

	At September 30, 2022 and 2021, authorized share capital consisted of an unlimited number of common shares (“shares”) with no par value, of which 529,779,388 (2021 – 529,741,788) 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 nine months ended September 30, 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)	(14,318,452)	(14,398,352)
Expired	–	(3,194,814)	(3,194,814)
Balance September 30, 2021	131,600	199,999	331,599
Exercised	(37,600)	–	(37,600)
Expired	–	(199,999)	(199,999)
Balance December 31, 2021 and September 30, 2022	94,000	–	94,000

	Weighted averages per option
		Cannon Point options 1	Total
September 30, 2022
Exercise price		$ 0.36	$ 0.36
Remaining life in years		1.00	1.00
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 and nine months ended September 30, 2022 and 2021:

Continuity of options	Number of options	Weighted average exercise price ($/option)
Balance January 1, 2021	28,481,500	1.20
Exercised	(5,084,000)	0.51
Expired	(2,572,000)	0.61
Balance September 30, 2021 and December 31, 2021	20,825,500	1.45
Expired	(4,386,000)	1.75
Granted ¹	11,254,000	0.41
Balance September 30, 2022	27,693,500	0.98

	Note

	1.	These were granted in the three and nine months ended September 30, 2022. The weighted average fair value was estimated at $0.29 per option, based on the Black-Scholes option pricing model using the following weighted average assumptions:

	Three and nine months
Assumptions	2022	2021
Risk-free interest rate	3.07%	–
Expected life	5.00 years	–
Expected volatility ¹	99.02%	–
Grant date share price	$0.39	–
Expected dividend yield	Nil	Nil

	Note:

	1.	Expected volatility is based on the historical and implied volatility of the Company’s share price on the TSX.

	September 30, 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)
0.41	11,254,000	5,627,000	4.88	–	–	–
0.76	3,300,000	3,300,000	0.86	3,300,000	3,300,000	1.61
0.99	6,368,500	6,368,500	1.99	6,368,500	6,368,500	2.74
1.75	–	–	–	4,386,000	4,386,000	0.57
2.01	6,696,000	6,696,000	2.80	6,696,000	6,696,000	3.55
2.34	75,000	75,000	0.83	75,000	75,000	1.58
Total	27,693,500	22,066,500		20,825,500	20,825,500

	The weighted average contractual life for options outstanding was 3.22 (December 31, 2021 – 2.36) years per option. The weighted average contractual life and exercise price for exercisable options as at September 30, 2022 was 2.80 (December 31, 2021 – 2.36) years and $1.12 (December 31, 2021 – $1.45) per option.

(d)	Deferred Share Units (“DSUs”)

	The following reconciles DSUs outstanding for the nine months ended September 30, 2022 and 2021:

Continuity of DSUs	Number of DSUs	Weighted average fair value ($/DSU)
Balance January 1, 2021 and September 30, 2021	458,129	0.69
Granted	19,582	0.60
Balance December 31, 2021	477,711	0.69
Granted ¹	43,074	0.41
Balance September 30, 2022	520,785	0.66

	Note

	1.	On grant date, the Group recognized share-based compensation of $18 (2021 – $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.

(e)	Foreign Currency Translation Reserve

Continuity	Total
Balance January 1, 2021	$ 29,661
Loss on translation of foreign subsidiaries	(577)
Balance September 30, 2021	29,084
Loss on translation of foreign subsidiaries	(326)
Balance December 31, 2021	28,758
Gain on translation of foreign subsidiaries	12,086
Balance September 30, 2022	$ 40,844

	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:

	September 30	December 31
Payables to related parties	2022	2021
Key management personnel (“KMP”)(a)	$ 52	$ 35
Hunter Dickinson Services Inc. (“HDSI”)(b)	275	341
Total payables to related parties	$ 327	$ 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 and nine months ended September 30, 2022 and 2021:

	Three months		Nine months
Transaction	2022	2021	2022	2021
Compensation
Amounts paid and payable to HDSI for services of KMP employed by HDSI ¹	$ 582	$ 740	$ 1,872	$ 2,255
Amounts paid and payable to KMP ²	485	474	1,462	2,176
	1,067	1,214	3,334	4,431
Share-based compensation ³	1,163	164	1,175	1,849
Total compensation	$ 2,230	$ 1,378	$ 4,509	$ 6,280

	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 and nine months ended September 30, 2022, SBC relates to share purchase options and DSUs issued and/or vesting during the period (notes 6(c)-(d)).

(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.

	Three months		Nine months
Transactions	2022	2021	2022	2021
Services rendered by HDSI:
Technical ¹
Engineering	$ 87	$ 200	$ 268	$ 603
Environmental	98	102	378	314
Socioeconomic	–	61	–	285
Other technical services	6	37	26	118
	191	400	672	1,320
General and administrative
Management, consulting, corporate communications, secretarial, financial and administration	532	731	1,653	2,248
Shareholder communication	178	188	557	562
	710	919	2,210	2,810

Total for services rendered	901	1,319	2,882	4,130

Reimbursement (refund) of third party expenses
Conferences and travel	10	8	98	26
Insurance	–	3	48	71
Office supplies and information technology ²	129	130	402	368
Total reimbursed	139	141	548	465

Total	$ 1,040	$ 1,460	$ 3,430	$ 4,595