Taseko takes a second swing at New Prosperity

Nearly two years after its initial environmental assessment was rejected, Vancouver-based Taseko Mines (TKO-T, TGB-X) is stepping up to the plate for a second attempt at permitting its US$1.1-billion New Prosperity copper-gold project, 120 km southwest of Williams Lake, B.C.

Taseko has run into staunch opposition from First Nations and environmental groups during its bid to put New Prosperity into production. And though Canada’s hybrid provincial-federal environmental review process is undergoing an overhaul under Prime Minister Stephen Harper, Taseko’s current review will fall under existing legislation — forcing the company to receive approval under the same rules that led to the rejection two years ago.

The heart of the debate revolves around Fish Lake, a site that holds spiritual significance to the Tsilhqot’in First Nation, and houses a large amount of rainbow trout. Taseko had originally planned to incorporate the lake into its mine plan. Though the B.C. provincial government approved the project, Taseko was later denied by the federal government, which invited the company to resubmit its proposal after addressing a number of environmental concerns.

Taseko announced on Sept. 20 that it had “formally submitted” a revamped environmental impact statement for New Prosperity to a three-member review panel. The crux of the revision was a US$300-million plan to salvage Fish Lake by moving New Prosperity’s tailings facility 2 km upstream.

According to a report, the company would work with the watershed’s drainage system to eliminate tailings seepage into the lake, with the constructed tailings pond and open pit acting as barriers against water flow. New Prosperity’s open pit would reach a diameter of 1.6 km and come within 500 metres of Fish Lake.

“We are confident that the New Prosperity [environmental assessment] represents a mine development plan that delivers considerable economic value to Canadians,” president and CEO Russell Hallbauer states, “while employing proven industry-leading engineering and environmental management techniques, for which the B.C. mining industry has become world renowned.”

Hallbauer references Taseko’s willingness to spend an additional US$300 million on the project to ensure the preservation of Fish Lake, as an indication of the company’s commitment to responsible development.

The debate has expanded to include questions about the jurisdiction of the environmental review panel. Taseko has voiced concerns surrounding First Nation spiritual and hereditary rights during the review process, stating the sole purpose of the panel is to determine the environmental impact of the project.

In a letter from the Canadian Environmental Assessment Agency (CEAA) on July 6, director Lisa Wells outlined components in Taseko’s draft environmental impact statement (EIS) that required updating. The company submitted its draft on June 8, and the CEAA’s letter discusses discrepancies with the original draft that required amendment before an official application was submitted.

According to the letter, “reviewers identified sections in the draft where information specified in [guidelines] is missing, presented in insufficient detail to enable determination of the potential environmental effects of the project, and/or presented using methodologies that would also preclude such a determination.”

CEAA forwarded 40 pages of revisions to Taseko, though the section pertaining to the watershed and tailings facility fall under Section 2.2.3 of the EIS.

“The government has sent us back their comments,” Hallbauer commented during Taseko’s second-quarter conference call on Aug. 9. “We believe that this will be a process that will be not a federal process, but will be completely covered by the provincial government in terms of the provincial environmental assessment process. The project at this juncture is meeting our expectations, and if all goes according to plan, I would expect we would be in the position to make a development decision sometime in mid-2013.”

Taseko’s shares have jumped 21%, or 58¢ since early August. Though there has been speculation that Taseko may fare better under the Harper government’s new single-level provincial review process, the water gets a touch murkier, considering the likelihood the province may be governed by the broadly pro-environmentalist New Democratic Party by the time a third review period rolls around.

The company’s shares have dropped 4%, or 13¢ since Sept. 21. Taseko shares closed at $3.15 at press time.