NANA responds to Teck’s Superior Court filing regarding the Northwest Arctic Borough severance tax

Kotzebue, Alaska – Jan. 15, 2016 – Today, Teck Resources Limited (Teck) filed a complaint in the Superior Court for the State of Alaska over the Northwest Arctic Borough’s new severance tax that Teck states will more than triple its annual payments as of 2016. Teck stated that the tax will impact the competitiveness and longevity of the Red Dog Mine, putting jobs and economic activity at risk.

NANA is the landowner on which the mine is situated and is committed to engaging with both NAB and Teck to come to agreement on a reasonable PILT through structured mediation. We have contacted both organizations during the process to express NANA’s concerns and urge a collaborative approach. We understand the perspectives of both parties and we believe we can help provide a bridge to reach a long-term, or interim, agreement. We want to come together, in the spirit of cooperation, and resolve this issue through structured mediation.


FREQUENTLY ASKED QUESTIONS

WHAT HAPPENED?

On January 15, 2016, Teck Resources Limited (Teck) filed a complaint in the Superior Court for the State of Alaska over the Northwest Arctic Borough’s new municipal severance tax that Teck estimates will more than triple its annual payments as of 2016. Teck stated that the tax will impact the competitiveness and longevity of the Red Dog Mine, putting jobs and economic activity at risk.

WHAT IS NANA’S POSITION?

NANA is committed to engaging with NAB and Teck to come to agreement on a reasonable PILT through structured mediation. We have contacted both organizations during the process to express NANA’s concerns and urge a collaborative approach. We understand the perspectives of both parties and we believe we can help provide a bridge to reach a long-term, or interim, agreement. We want to come together, in the spirit of cooperation and resolve this issue through structured mediation.

DOES NANA HAVE ANY CONCERNS ABOUT THE SEVERANCE TAX?

NANA does have concerns about the severance tax in relation to Red Dog Mine’s current operational budget, NANA shareholder mining jobs and in‐region investment in future projects.

WHAT IS NANA’S CONCERN ABOUT THE MINE’S CURRENT BUDGET?

We are concerned the severance tax will negatively impact the current and future operating budgets for the mine by reducing the funds available for these projects. This could reduce the shareholder workforce and NANA company contracts at the mine.

WHAT IS THE POSSIBLE IMPACT ON JOBS?

We are concerned about jobs. A reduced operating budget for the mine will mean fewer jobs for NANA shareholders. Since 1989, NANA shareholders have received more than $469 million in wages by working at Red Dog. In 2015, approximately 603 NANA shareholders worked at the mine earning $39.3 million in wages.

WHAT ARE THE CONCERNS ABOUT FUTURE EXPLORATION?

We are concerned about the severance tax’s impact on current exploration projects and future investment in the region. We believe the tax endangers NANA and non‐NANA funded exploration projects by changing the economics. Future responsible development in the region is a key business strategy so NANA can continue to deliver cash benefits to shareholders. Having a stable, reasonable in‐region tax regime is critical.

Since mining began, NANA has retained approximately $480 million from the $1.3 billion it has received in net proceeds payments from the mine. NANA has distributed approximately $820 million to other regions and at-large shareholder via the 7 (i) sharing provisions of the Alaska Native Claims Settlement Act (ANCSA). Of the $480 million NANA has retained, the Corporation has distributed approximately $221 million in dividends to shareholders primarily from the net proceeds from Red Dog Mine.