November 25, 2010 / 8:38 PM / in 7 years

Canada brushes off allegations of Taseko leaks

OTTAWA (Reuters) - The Conservative government brushed off allegations on Thursday that sensitive information about Taseko Mines Ltd was leaked nearly three weeks before Ottawa blocked the company’s centerpiece gold and copper project due to environmental concerns.

The Liberals -- who were badly damaged themselves by an insider trading scandal in 2005 when they were the government -- noted that Taseko shares dropped by as much as 32 percent in a matter of hours one day last month.

They charged that sensitive data had clearly been leaked about the Prosperity project.

But Environment Minister John Baird dismissed the charge as “pure speculation”, telling the House of Commons that a damning environmental assessment into the proposed mine was widely available at the time the shares plunged.

Ottawa said on November 2 that it would block the Prosperity mine on concerns about the damage it might cause to the pristine area where it would be located.

But 19 days before that Taseko shares plunged on the Toronto Stock exchange for no apparent reason.

“The point here is two weeks before the government decision was made public, clearly somebody had the information,” Mark Holland, the Liberal Party’s public safety and national security critic told Reuters.

“When you see ten times the normal trading volume happen in a matter of seconds and all kinds of market capitalization wiped out ... there’s something afoot,” Holland said.

British Columbia securities officials said in a statement they were investigating the stock movement after a referral made to them by the Investment Industry Regulatory Organization of Canada (IIROC), but could not be reached for comment.

The Prosperity property, located in a wilderness area about 125 km (78 miles) southwest of Prince George, British Columbia, is said to hold one of the world’s largest untapped reserves of gold and copper.

Taseko shares rose 1.53 percent to C$4.65 in Toronto on Thursday. On October 14, the stock touched a high of C$7.27 before plummeting.

Allegations of insider trading hurt the ruling Liberal Party in the runup to the January 2006 federal election, when police announced in December 2005 they were investigating the possible leak of a government decision not to tax income trusts.

The Conservatives gained the lead in opinion polls and went on the win the election.

($1=$1.01 Canadian)

Reporting by David Ljunggren in Ottawa and Pav Jordan in Toronto; editing by Rob Wilson

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