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The U.S. Army Corps of Engineers on Monday gave Northern Dynasty 90 days to explain how it would offset “unavoidable adverse impacts” to more than 3,200 acres (1,295 hectares) of wetlands were the mine to be developed.
Late on Monday, Alaska’s U.S. Senators Dan Sullivan and Lisa Murkowski, both Republicans, came out against the mine, saying it could cause significant damage to the state’s Bristol Bay region popular for fishing and hunting.
Murkowski is the powerful chair of the Senate Energy and Natural Resources Committee and her opposition is likely to carry weight across U.S. federal agencies.
Other prominent Republicans, including Donald Trump Jr., son of President Donald Trump and a keynote speaker on Monday at the Republican National Convention, have opposed the project, saying it would destroy areas where they enjoy fishing and hunting.
Northern Dynasty, in response to the Army Corps, said it plans to “preserve enough land so that multiples of the number of impacted wetland acres are preserved,” but its shares still fell more than 40% on Monday.
The potential cost of such a mitigation plan is unknown and thus concerning, Cantor Fitzgerald analyst Mike Kozak said in research note. “It will be exceptionally challenging to reach a compensation plan … that will satisfy all parties,” he said.
Cantor Fitzgerald put its price target and stock rating for the company under review, effectively saying it is not immediately clear how much the company is worth.
The Army Corps deadline likely means any final permit decision would come after the Nov. 3 U.S. presidential election. A victory by Democrat Joe Biden would likely to scuttle the entire project, TD Securities analyst Craig Hutchinson said.
Northern Dynasty did not immediately respond to a request for comment.
Doubts about the project have steadily risen in recent months. Morgan Stanley (N:MS), once one of the largest Northern Dynasty shareholders, sold most of its holdings two months ago, according to regulatory disclosures.
