Web posted
Wednesday, May 25, 2005
Pebble stock downturn doesn't show progress
HAL SPENCE
Peninsula Clarion
In recent months, even as Northern Dynasty Mines was acquiring sole control over Pebble Mine claims previously held by partners and pushing forward with a project feasibility study, the price of stock in its publicly traded parent, Northern Dynasty Minerals Ltd., was dipping sharply.
In November 2004, shares sold for $6 on the American Stock Exchange (AMEX). On Thursday they were selling for $3.64.
However, that situation isn't unique to Northern Dynasty, said Shawn Wallace, director of investor relations for Hunter Dickinson Inc., manager of Northern Dynasty Minerals Ltd. The mining market worldwide is tough right now, and the action of even small investors can have a disproportionate effect on the market as a whole. That's why articles like that appearing in the online newsletter Resource Investor are problematic, Wallace said.
One of the myriad risks that mining investors face is that such cautionary articles could scare off would-be investors and influence stock prices to a greater degree than they should, he said. When the bulk of investors move as a herd, they almost always make the wrong decision, Wallace said.
"In a bullish market, people often overreact to good news and underreact to the downside," he said. "In today's climate, they can overreact to the risks. It's psychology."
Investment in mining worldwide has deteriorated in recent times, and like many other companies, Northern Dynasty has felt the pinch.
NDM, Wallace said, "has done nothing but make progress since its stock was higher, but that is not reflected in the price."
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