November 1, 2013 / 4:08 PM / 4 years ago

UPDATE 1-Taseko Mines to challenge findings of environment threat

3 Min Read

(Adds CEO quote, share activity, government and aboriginal comment)

By Rod Nickel

Nov 1 (Reuters) - Taseko Mines Ltd said on Friday that it would challenge findings of a Canadian federal review panel that said the company's revised plan for a copper-gold mine in British Columbia posed significant threats to the environment.

Shares of Taseko were down 8.6 percent at C$2.34 in midday trading in Toronto, following the release of the panel's report late on Thursday.

The 323-page report cited risks from the proposed New Prosperity mine to water quality in an adjacent trout-bearing lake, as well as land and resources used for traditional purposes by certain aboriginal groups.

The grizzly bear population in south-central British Columbia will also suffer unless mitigation steps are taken, the three members of the panel said.

Vancouver-based Taseko said the findings contradicted expert opinions and best practices in place around the world.

"Taseko is committed to protecting Fish Lake, and fish habitat, and we strongly disagree with the panel's findings related to the potential impact on the water quality, fish and fish habitat of Fish Lake," Taseko Chief Executive Officer Russell Hallbauer said in a statement.

Hallbauer said the report mostly supported the company's position that there would not be significant adverse effects and said that the mine's social and economic benefits were "enormous."

But the Tsilhqot'in Nation, an aboriginal group located near the potential mine site, said the findings contained more concerns than a panel report three years ago about Taseko's earlier proposal.

"First Nations will be outraged if the federal government accepts this project after rejecting the first one," said Chief Joe Alphonse, tribal chair for the Tsilhqot'in National Government.

Taseko, a mid-sized copper producer, expects the project to create nearly 2,000 jobs and generate more than $1 billion in government revenue, the report said.

CIBC analyst Tom Meyer estimates the development of New Prosperity may cost C$1.8 billion ($1.73 billion), and the mine could produce 44,000 tonnes of copper as well as 206,100 ounces of gold a year.

The Canadian government is expected to decide within 120 days whether the open pit mine can go ahead, meaning a decision is likely by the end of February.

Environment Minister Leona Aglukkaq has received the panel's report, and the Canadian government will review it, said Amanda Gordon, the minister's spokeswoman.

($1=$1.04 Canadian)

Additional reporting by David Ljunggren in Ottawa; Editing by Gerald E. McCormick and Lisa Von Ahn

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