First Quantum Minerals Ltd. announced it has entered into a framework agreement with Northern Dynasty Minerals Ltd. where a subsidiary would make a payment of US$37.5 million to Northern Dynasty to progress the permitting of the Pebble Project in Alaska.

The term of the option agreement will be for a period of four years, with a right to extend the term for a further two years. The option price for the initial four years is US$150 million, payable in equal tranches of US$37.5 million. The first installment will be applied to advancing the permitting process for development of the Pebble Project. The agreement will entitle the affiliate to earn a 50% interest in the Pebble Ltd. Partnership, which is the owner of the Pebble Project, by investing an additional total amount of US$1.35 billion in the partnership. The agreement is expected to be finalized in the second quarter of 2018.

“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 million metric tons (mt) of copper, 70 million ounces of gold and 1.5 million mt of molybdenum in measured and indicated resources at a 0.3% copper equivalent cut off,” said Philip Pascall, chairman and CEO. “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.”

Back in May, Northern Dynasty Minerals and the U.S. Environmental Protection Agency (EPA) reached a settlement agreement that allowed normal course permitting to proceed for the controversial Pebble Project. The current agreement settled a legal dispute that had been ongoing since 2014, when the EPA action effectively blocked further work on the permitting process.