The new Pebble East discovery is adjacent to, but deeper than, a shallow deposit the company has extensively explored, which it now calls Pebble West.

New rigs taken to the site this year are capable of drilling deeper test holes than in previous drilling, Jenkins said. A fifth rig will be used to drill wells related to environmental research.

Northern Dynasty will drill enough test holes to fully define the deeper deposit this year and will follow up with additional drilling in 2007 so that some of the Pebble East metal resources can be classed as “measured and indicated,” meaning there is a high degree of confidence in the estimates, Jenkins said.

Jenkins told the miners association that the company isn’t overly worried about current criticism of the big Pebble project, which would be one of the world’s largest mines if developed. He said he is concerned when opponents of the mine make statements that aren’t supported by facts.

“What we’re seeing now are skirmishes. The real debate will begin after we submit our applications for permits. We’re looking forward to that, because in the permit process people will be held accountable for what they say,” Jenkins said. “The certainty of due process during permitting is critical to us.”

Most of the criticism of the mine is coming from owners of sports fishing lodges and some communities in the region. Anchorage businessman Robert Gillam, who owns a lodge, is financing an advertising campaign and lobbying effort against the mine.

“We have deep pockets, too,” Jenkins said. “No amount of controversy is going to scare us away. We’re here to stay.”

At current market prices, the metals now estimated to be in the two Pebble deposits have a market value of $100 billion, he said.

Jenkins said one of the company’s major goals in 2006 is to attract partners into the venture. It has always been Northern Dynasty’s intent to form a consortium with major mining companies to develop Pebble.

If opponents to the mine hope they can scare away potential partners, the strategy isn’t working, Jenkins told the miners. Confidentiality agreements have been signed with 12 or 13 major mining companies who are potential partners. The agreements will give the companies access to proprietary information about Pebble.

Gov. Frank Murkowski has lent a hand to the project. On his recent trip to Europe, the governor met with senior officials of Rio Tinto Zinc in London, along with top officers in Hunter Dickinson Inc., Northern Dynasty’s parent company.

RTZ is one of the world’s largest mining companies and is the operator, through its subsidiary Kennecott Minerals, of the Greens Creek Mine near Juneau.

Jenkins said Pebble is now considered to be the world’s second-largest gold and copper porphyry deposit in terms of contained metal. It is estimated to contain 64 million ounces of gold, 47 billion pounds of copper and 1.89 billion pounds of molybdenum at a cutoff grade of 0.3 percent gold-copper equivalent for the measured and indicated. The inferred resources in the shallow Pebble West ore body and a cutoff grade of 0.6 percent gold-copper equivalent for the inferred resources in the deeper Pebble East. Jenkins said these estimates are likely to increase after this year’s drilling program.

About $20 million of the 2006 budget will be spent on drilling and $17 million is planned for environmental studies, Jenkins said. The company had spent $72 million by the end of 2005 and by the end of 2006 Northern Dynasty will have spent about $110 million, Jenkins said.

By the time permit applications are made to state and federal agencies the investment will likely increase to between $120 million to $150 million, he said.

Jenkins said the discovery of Pebble East has caused the company to rethink its initial concept of an open-pit mine and the new mining plan is still being developed. Several options are being considered, including a smaller surface mine at Pebble West, but the deeper Pebble East will have to involve some form of underground mining, Jenkins said.

Northern Dynasty has hired a consulting firm, SRK International, to examine the rock properties in Pebble East and recommend a suitable method of mining. At some point an exploration shaft will have to be built down into Pebble East so that a bulk ore sample can be obtained. That project alone could cost in the range of $150 million, Jenkins said.

Northern Dynasty’s estimates for overall capital costs won’t be fully defined until feasibility studies are completed, but it is expected that the mine will require an investment of $2 billion to $3 billion. About 2,000 people would be employed in construction and 1,000 employees would be needed for production.

Power requirements are estimated at 275 megawatts, and while the bulk of this would be for the mine, there would be enough power to also supply electricity to nearby communities, Jenkins said. The initial plan is for a submarine cable across Cook Inlet that would bring power from a new generation plant built on the Kenai Peninsula.

An 88-mile road would be constructed from the mine to a west Cook Inlet port site. It would be privately owned but the company would allow its use by local residents.

Northern Dynasty has worked to employ a number of residents of the region. Of 609 employees working on the project last year 457 were Alaska residents and 112 were hired from communities in the Bristol Bay region, according to information on the company’s Web site.

The company also contracted for consulting services with 45 Alaska firms in 2005 and for support services with Iliamna Pebble Development, a joint-venture of Iliamna Natives Ltd. and Chiulista Camp Services, a Calista Corp. subsidiary that also provides support at the Donlin Creek gold project near the Kuskokwim River.