July 6, 2010 / 6:48 PM / 8 years ago

Taseko defends Canada mine plan; shares pare losses

* Says executive summary of panel report was poorly worded

* Shares pare losses, up 6 pct at C$3.52

By Euan Rocha

TORONTO, July 6 (Reuters) - Taseko Mines (TKO.TO) sharply criticized on Tuesday an environmental review of its plans for a copper-gold mine in British Columbia that raised doubts whether the project would get Canadian government approval and sent the company’s share price plunging.

The executive summary of the federal panel’s report noted that the project would hurt fish habitat and infringe on aboriginal rights. It spurred a 34 percent decline in Taseko’s share price over the past week as the market judged the project would not be approved.

“Frankly, the executive summary was rather poorly written and only focused on those components of the report that were negative and never gave the reader insight into the panel’s conclusions, or recommendations,” Chief Executive Russ Hallbauer told investors on a conference call.

“We are clearly disappointed that many people have misinterpreted the panel’s findings as a result of only reading a poorly written executive summary,” he added.

After Taseko’s defense of its project on Tuesday, shares of the Vancouver-based miner pared losses and were trading up 6 percent at C$3.52.

Taseko said that of the 24 potential environmental effects identified in the report’s conclusion, the panel found that only two would have a significant impact.

Hallbauer noted the findings of the federal review were nearly identical to the conclusions reached by the province of British Columbia’s environmental assessment process.

The provincial government has already granted environmental approval and a long-term renewable mining lease to the project, which is called Prosperity. The project requires federal approval to move forward, however.

The panel report and other reports on the project will be submitted for review by the federal cabinet in September.

“We expect the government of Canada to put this issue on the agenda early ... So we expect a decision by the federal government in late September, or early October,” Hallbauer said.


The company also criticized federal authorities for posting a notice last week stating that the panel report would be issued after market close on Friday July 2, ahead of a long weekend in the United States.

“Everyone knew that the panel report had to be issued, prior to close of business on Friday July 2. So we were a bit dismayed that a government agency would put something like that out, highlighting that the report would be out after market close,” Hallbauer said.

“We believe that put significant pressure on trading on the Amex exchange, by inferring that bad news comes at the end of the week. So trading was severely affected on Thursday July 1 in the U.S. by that announcement.”

The Toronto Stock Exchange was closed on Thursday for the Canada Day holiday.

Hallbauer also slammed the media for calling the project controversial.

“What should be controversial is the more than 10,000 jobs that have been lost in the forestry industry in the Cariboo (region of British Columbia). What should be controversial is the over 20 percent unemployment rate in the Cariboo,” he said.

Hallbauer said the project will create about 2,000 direct and indirect jobs without any government handouts.

“This project is not controversial, the process is,” Hallbauer said.

$1=$1.05 Canadian Reporting by Euan Rocha; editing by Peter Galloway

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