Taseko’s New Prosperity mine in BC could still be approved

6th November 2013 By: Henry Lazenby - Creamer Media Deputy Editor: North America

TORONTO (miningweekly.com) – In a surprising twist to the permitting saga surrounding base metals miner Taseko Mines’ proposed New Prosperity mine, in British Columbia, lead consulting engineer Knight Piesold has determined that it appeared that Natural Resources Canada (NRCan), and subsequently the federal review panel, had used the wrong design in their analysis of seepage rates from the tailings storage facility.

Taseko said the panel relied heavily on modelling undertaken by NRCan, which had indicated that there would be significant seepage from the tailings storage facility into Fish Lake. The panel's findings regarding the expected seepage, and the related impacts on Fish Lake, were integral to the panel's conclusion that the project was likely to cause significant adverse effects on fish and fish habitat, wetlands and aboriginal interest in the Fish Lake area.

The design proposed by Taseko for the tailings storage facility included a continuous low-permeability compact soil liner to restrict seepage losses. This was a common and acceptable practice for modern facilities that had been recently permitted and developed in British Columbia and elsewhere in the world.

The NRCan design, which was the basis of the federal review panel’s analysis, was completely different than the Taseko design, as NRCan had assumed that the low permeability basin liner was not included and that seepage would, therefore, readily leak into more pervious overburden and fractured bedrock.

"We believe this new information is material to the interests of the company and its shareholders," Taseko president and CEO Russell Hallbauer said on Tuesday.

The company said it had advised the Federal Minister of Environment Leona Aglukkaq that it intended to challenge certain aspects of the federal review panel's findings regarding the proposed project and requested that the Minister receive and consider additional information before making any determination of significant environmental effect under the Canadian Environmental Assessment Act of 2012.

Taseko would make the submission in the coming weeks.

Laurentian Bank Securities metals and mining analyst Christopher Chang said that, while this surprising twist offered hope of a potential positive New Prosperity permitting decision, he believed investors would likely remain on the sidelines until a decision was made by the federal Environment Ministry, given the uncertainty surrounding the additional information being presented by the base metals miner.

The analyst maintained a “buy” recommendation on the company’s stock and a $3.60 a share target price.

“Our buy rating is supported by the company’s impressive near-term production growth profile, leverage to copper prices, and well-insulated balance sheet,” he said in a note to clients.

On Friday, Taseko announced that it would challenge findings of the Canadian federal review panel, which had found that the company's revised plan for the copper/gold mine in British Columbia posed significant threats to the environment.

Environmental concerns were centred on Fish Lake, also called Teztan Biny, with its population of rainbow trout.

First Nations held that the proposed mine was so low grade, at a time when even major mining companies were suffering extreme setbacks, that it created serious doubt that the company could deliver the environmental mitigations being proposed, likened to putting Fish Lake on “life support” and making use of “unproven and expensive” water treatment over the long term.

Vancouver-based Taseko is the 75% owner and operator of the Gibraltar mine, the second-largest openpit copper/molybdenum mine in Canada.