Markets have not yet realized just how positive the news is for Northern Dynasty Minerals Ltd. (NAK) after Alaskan voters sided this week against a ballot measure that could have thrown the state’s regulatory system into upheaval, according to a financial analyst who calculates a huge upside to the company’s stock.

In a note published Thursday morning, Raymond James analyst Tom Meyer wrote:

We recommend buying Northern Dynasty shares. In our opinion the shares were oversold leading into the Ballot and still remain depressed following the defeat of Measure 4.

Ballot Measure No. 4 would have placed new restrictions on the ability of large mining projects to release harmful pollutants into streams used by salmon or humans. The hotly-contested fight was aimed at Northern Dynasty’s Pebble Project, a massive copper-gold deposit in southern Alaska’s richest salmon area.

Opponents of the initiative ultimately prevailed with 57% of the vote.

Mr. Meyer wrote:

With Measure 4 defeated we do not expect the opposition to the Pebble project to fall away but we do anticipate the market to view the news as evidence that a rational permitting process can begin in due course.

Noting that Pebble partner Anglo American plc (AAUK) is funding much of the cost of evaluating and building the mine, Mr. Meyer said the numbers suggest Northern Dynasty is severely undervalued.

He wrote:

Its shares trade at a P/NAV of 0.17 times versus the peer group of development companies at 0.66 times. We view the shares as a bargain at current levels.

Mr. Meyer has set a share target price of C$24 – a 260% premium over Wednesday’s close – with a “strong buy” rating.