February 25, 2011 / 10:59 PM / 7 years ago

UPDATE 1-Yukon ruling hurts prospects of Carmacks project

* Court backs Yukon Water Board ruling on water use license

* Western Copper says will review its options

TORONTO, Feb 25 (Reuters) - Western Copper WRN.TO said on Friday the Yukon Supreme Court has ruled that the territory’s water board does have the authority to refuse a water use license, even if a mining project has been screened by the Yukon Environmental and Socio-Economic Assessment Board.

The court’s ruling will force Western Copper to go back to the drawing board, engage in discussions with regulators and resubmit a water use license application for its Carmacks copper project to the Yukon Water Board.

The Vancouver-based company had argued in its appeal to the court that the water board’s ruling on certain issues went beyond its jurisdiction and attempted to regulate areas already approved under the project’s mining license.

However, Justice R.S. Veale ruled that the water board does have the authority to rule on the project’s heap leach process, sludge management system and other matters.

“I find that the mandate, or jurisdiction of the water board must be based upon the very broad definitions of waste and water in the Waters Act,” Veale said in his ruling.

“In my view, the regulatory regime is working and there are valid reasons for the water board’s refusal to issue a license based on its concerns about the proposed use of water by Western Copper,” said Veale.

Carmacks is a small copper project that is expected to produce about 32 million pounds of copper per year, over its six-year mine life. Western Copper’s flagship asset is its Casino copper-gold project in the Yukon. [ID:nN08202859] [ID:nN16265491]

“We’ll review our options and move forward appropriately. Carmacks only represents a small portion of Western Copper’s assets,” Chief Executive Dale Corman said in a statement. (Reporting by Euan Rocha; editing by Rob Wilson)

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