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The Pebble Project: Economics & Employment

PEBBLE +PROJECT economics & employment PREPARED BY IHS GLOBAL INSIGHT THE PEBBLE DEPOSIT IS ONE OF COPPER THE MOST SIGNIFICANT COPPER MOLYBDENUM DISCOVERIES IN THE WORLD. GOLD The Pebble Project could provide major economic benefits to Alaska and the Lower 48 States by supporting roughly 15,000 high-paying jobs, boosting the economy and generating significant tax revenues. JOBS SUPPORTED The Pebble Project is a world-class deposit with the potential to employ generations of Alaskans across a wide range of industries. TOTAL 4,725 jobs 16,175 2,525 DİRECT TOTAL AK + DIRECT: Jobs with Pebble Project INDIRECT: Jobs with supplier industries INDUCED: Jobs supported in general economy LOWER 48 JOBS ALASKA 925 INDIRECT TOTAL 14,715 915 DIRECT 2,890 jobs 1275ED 1-5 YEARS TOTAL AK + 1,175 INDIRECT LOWER 48 JOBS CONSTRUCTION 5-29 YEARS BO0 CED TOTAL 16,650 PRODUCTION 30+ YEARS POTENTIAL SUBSEQUENT DEVELOPMENT PHASES 800 INDIRECT 1,050 DIRECT 2,750 jobs 900 INDUCED TOTAL AK + LOWER 48 JOBS LOWER 1-5 YEARS 5,200 INDUCED 6,250 INDIRECT TOTAL CONSTRUCTION 48 11,450 jobs 5-29 YEARS 5,450 INDUCED PRODUCTION 6,070 INDIRECT STATES 30+ YEARS 305 DIRECT TOTAL POTENTIAL SUBSEQUENT DEVELOPMENT PHASES 5,40 INDUCED ..... .. 11,825 jobs Building and operating The Pebble Project will require a broad supply chain, a network of professional and business services, and technical manufacturing in facilities that do not exist in Alaska. Many of these resources will be sourced from the Lower 48. 7,150 INDIRECT 350 DIRECT TOTAL 13,900 jobs AVERAGE ANNUAL INCOME Jobs supported by The Pebble Project could be among the best paid in the state. 80K 56% 72.5K HIGHER THAN AVERAGE 42% HIGHER THAN AVERAGE ANNUAL INCOME ANNUAL INCOME ALASKA 63.5K 24% THE PEBBLE PROJECT DIRECT, HIGHER THAN AVERAGE INDIRECT AND INDUCED EMPLOYMENT ANNUAL. INCOME average annual income IN ALASKA $51,000 (2012 data) 1-5 YEARS ... 5-29 YEARS 30+ YEARS POTENTIAL SUBSEQUENT DEVELOPMENT PHASES CONSTRUCTION PRODUCTION 66K 63.5K 38% 43% HIGHER THAN AVERAGE ANNUAL INCOME HIGHER THAN AVERAGE ANNUAL INCOME 59K 28% ..... LOWER average annual income IN LOWER 48 STATES $46,000 HIGHER THAN AVERAGE 48 ANNUAL INCOME STATES (2012 data THE PEBBLE PROJECT DIRECT, INDIRECT AND INDUCED EMPLOYMENT 1-5 YEARS 5-29 YEARS 30+ YEARS CONSTRUCTION PRODUCTION POTENTIAL SUBSEQUENT DEVELOPMENT PHASES ANNUAL CONTRIBUTIONS TO THE ALASKA & U.S. ECONOMY With residents holding at least 75% of the direct Alaska-based jobs supported by The Pebble Project, the economic benefits could potentially reach Alaskan families, businesses, suppliers and more. ALASKA 30+ YEARS POTENTIAL SUBSEQUENT DEVELOPMENT PHASES $2.14B - $2.36B 5-29 YEARS PRODUCTION annually $1.14B - $1.43B 1-5 YEARS CONSTRUCTION $400M IHS Global Inaight has forecast GDP contributions associated with future development of The Pebble Project by utilizing a range of long-term forecast metal commodity prices. 30+ YEARS POTENTIAL SUBSEQUENT DEVELOPMENT PHASES $1.52B LOWER 5-29 YEARS PRODUCTION annually 48 1-5 YEARS $1.29B CONSTRUCTION STATES $1.17B annually annually ANNUAL AND CUMULATIVE operation has the potential to more than double REVENUE During production, The Pebble Project as a single total state tax revenues received from the mining industry, which were $76M in 2012. ALASKA ANNUAL CUMULATIVE State Government Revenues (State Taxes + State Royalty Payments) $27M 1-5 YEARS $135M CONSTRUCTION $136M-$180M 5-29 YEARS PRODUCTION $3.4B-$4.5B 30+ YEARS $306M - $346M POTENTIAL SUBSEQUENT DEVELOPMENT PHASES $6.1B - $6.9B (Based on 20 year projection) Based on a range of commodity price estimates. Federal Government Revenues LOWER 1-5 YEARS $128M $640M 48 CONSTRUCTION STATES $176M 5-29 YEARS $4.4B PRODUCTION ANNUAL CUMULATIVE 30+ YEARS $200M POTENTIAL SUBSEQUENT DEVELOPMENT PHASES (Based on 20 year projection) $4.08 FEDERAL GOVERNMENT REVENUE GENERATED IN ALASKA ANNUAL CUMULATIVE $54M 1-5 YEARS $270M CONSTRUCTION $164M-$218M 5-29 YEARS $4.1B-$5.45B PRODUCTION 30+ YEARS $410M-$460M $8.2B-$9.2B POTENTIAL SUBSEQUENT DEVELOPMENT PHASES (Based on 20 year projection) TAX REVENUE CASE STUDY: LAKE & PENINSULA BOROUGH THE PEBBLE PROJECT COMMERCIAL FISHING INDUSTRY COULD PAY L& P BOROUGH ANNUAL TAX RECEIPTS OF contributes $29M $33M $1.5 MILLION TO TO $2 MILLION average during production in annual revenue ECONOMIC ACTIVIY FROM THE PEBBLE PROJECT COULD PROVIDE: More opportunities for higher education More affordable energy New schools, keep schools open More disposable income in the region Increased access to medical care Lower cost and more diversified foods/goods THE PEBBLE PROJECT TIMELINE 1-5 YEARS 5-29 YEARS 30+ YEARS PRODUCTION POTENTIAL SUBSEQUENT DEVELOPMENT PHASES CONSTRUCTION copper 150K - 300K metric tons First 25 YEARS 17% only 17% of The Pebbe Project's resources may be extracted. molybdenum 10M - 40M Ibs 2$ gold 400K - 900K oz %24 This means The 83% Pebble Project could possibly be contributing to Alaska's wealth well silver 1.25M - 2.25M oz into the future. Estimated annual production levels of The Pebble Project during production. Alaska could experience an increase in economic & employment activity driven by the infrastructure build-out and the preparation of the mine for resource extraction. POTENTIAL TO SUPPORT AT LEAST THREE ADDITIONAL 20-YEAR SUBSEQUENT DEVELOPMENT PHASES EXPAND U.S. COPPER PRODUCTION by 20% "Based on 2011 production level of 1.1 million metric tons U.S. IMPORTS 35-40% OF ITS COPPER FROM foreign sources. Source. U.S. Geological Survey THE PEBBLE PROJECT MINERAL DEPOSIT 55 billion Ibs (measured & indicated) COPPER 26 billion Ibs (inferred) 3.3 billion Ibs (measured & indicated) MOLYBDENUM 2.3 billion Ibs (inferred) 67 million oz (measured & indicated) GOLD 40 million oz (inferred) And commercially PALLADIUM significant amounts of SILVER RHENIUM The Pebble Project's $T,000,000,000+ projected annual operating budget These are benchmarks based on The Pebble Project's ongoing engineering plans. These metrics are projections for the construction, operating, and production schedules used to develop the economic contribution assessment. PEBBLE +PROJECT The Pebble Project' s economic and employment contributions have the potential to be felt across the U.S. The capital intensity requirements of developing and operating the Pebble Project, the ability to source inputs from many domestic sources, the coast-to-coast structure of the supply chain, and the high quality of jobs supported are reflective of this and could be a sustainable driver of economic prosperity in Alaska and the Lower 48 states. The IHS Global Insight study is based on a conceptual mine plan using an iteration of the ongoing engineering work undertaken by the Pebble Limited Partnership. The study estimated the state and national ecenemic benefits associated with a five-year construction phase, followed by a 25-year production phase, and the potential for three subsequent 20-year development phases. Currently, scientific studies and engineering work continue related to the deposit, and no final project design has been selected or approved at this time by the Pebble Partnership. The Economic and Employment Contributions of a Conceptual Pebble Mine to the Alaska and United States Economies Authors: Mahsen Bonakdarpour, Director, Economic Analysis and Planning, IHS Bob Flanagan, Director, Economic Analysis and Planning, IHS John Larson, Vice President, Public Sector, IHS John Mothersole, Senior Principal Economist, Pricing and Purchasing Service, IHS Brendan O'Neil, Managing Director, Public Sector, IHS Elizabeth Redman, Senior Consultant, Economic Strategy Solutions, IHS Contributors: Tabitha M. Bailey, Project Manager; Senior Associate, Public Sector, IHS www.pebblepartnership.com VISUAL CAPITALIST Educating a new generation of investors on resOurce investing and management VISUAL CAPITALIST www.visualcapitalist.com he %24

The Pebble Project: Economics & Employment

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The Pebble Project is one of the most significant copper discoveries in the world.

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