The Canadian government handed down a long-awaited decision Tuesday, saying it will not grant Taseko Mines Ltd. (TSX: T.TKO, Stock Forum) the authority to develop a British Columbia mine that would have resulted in the destruction of a nearby fresh water lake.
However, in a second ruling, Canadian Environment Minister Jim Prentice granted Thompson Creek Metals Co. (TSX: T.TCM, Stock Forum) the federal authorization to proceed with its Mount Milligan mine near Prince George, B.C.
The decision affecting Taseko’s Prosperity copper-gold mine comes after a Federal Review Panel ruled that the mine would have significant adverse environmental effects on fish and fish habitat in the Williams Lake area if it were to proceed as planned.
First Nations in B.C. were quick to applaud the decision, saying it will serve as a catalyst for reform and a new relationship between governments, the mining industry and First Nations.
“The federal government has honoured its Constitutional duty to protect First Nations rights and its responsibility to protect the environment,” said The Tsilhqot’in National Government (TNG) Tribal Chief Joe Alphonse.
“The government should be commended for recognizing that this project did not represent the best way to create jobs and economic growth,” he said.
Taseko expressed its disappointment, but said it would be in a better position to evaluate its options after having the opportunity to fully evaluate and understand the process, whereby the Federal Government came to that conclusion, contrary to the B.C. Provincial Government’s decision to support the project.
"We are extremely disappointed by this decision, not only for our shareholders but for the communities that were relying on the development of Prosperity to help offset the economic situation in the Cariboo-Chilcotin, said Taseko President and chief executive officer Russell Hallbauer.
“Our next steps will be discussions with both the Federal and Provincial Government's to look at options so that this mining project can move forward and meet the criteria that the Federal Government deem appropriate," Hallbauer said.
The Prosperity deposit is a gold-copper porphyry with a one billion tonne measured and indicated resource containing 5.3 billion pounds of copper and 13.3 million ounces of gold. However, the project was opposed by local Aboriginal groups because Taseko was planning to use a nearby fresh water lake as a dumping ground for mine waste.
If it had received the green light from Ottawa, Taseko was planning to build an $815 million open pit mine that was expected to produce 250,000 ounces of gold and 115 million pounds of copper annually over a projected 33-year lifespan.
Before the decision was announced, Taseko shares closed at $6.55, down 0.46%. Thompson Creek closed at $12.38, down 0.32%.