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  • Supporters Make Their Case, Challenge Critics Of Taseko Mines' BC Gold-Copper Proposal [Part 1]

    While Canadian environment minister Leona Aglukkaq ponders the fate of Taseko Mines' TSX:TKO $1.1-billion New Prosperity proposal, supporters came out in force at a December 10 Vancouver event. Presented by the B.C. Chamber of Commerce, a packed audience of 75 to 80 people included politicians, business people, a union representative, a mining engineer and others. Not invited, apparently, were opponents, among the strongest of whom include six regional native chiefs. But if the event was one-sided, it heard support from a range of perspectives. Among the backers was a Tsilhqot'in band member who challenged his community leaders to call a general assembly on the issue.

    The six opposing chiefs won't do that "because people are going to vote for the mine and they're scared that the chiefs are going to be proven wrong," said Ervin Charleyboy, a former Tsilhqot'in National Government chief himself. "I talk to a lot of young people out there and they're all for the mine. But they're scared to speak out because they will get intimidated, like they tried to do with me. But I'm not easily intimidated."

    An opponent of Taseko's original proposal for a gold-copper mine in B.C.'s Cariboo-Chilcotin region, Charleyboy eventually backed the revised New Prosperity proposal on becoming convinced that Fish Lake would be protected. Concern about the 118-hectare body of water, said to have social and spiritual importance to natives, was central to the federal rejection of Taseko's original proposal. Under that plan, the lake would have been drained for use as a tailings dump.

    With a $300-million revision, Taseko now proposes to save the lake by moving the tailings storage two kilometres away. Native opponents, however, maintain the new plan won't adequately protect the lake and regional watershed.

    Apart from criticizing local opponents, Charleyboy said the issue has been clouded by "too many outsiders [who] don't know what they're talking about."

    "We have nothing in the Chilcotin," he said. "We rely on the forest industry but that's going down fast because of the beetle epidemic…. To this day I'm supporting the New Prosperity mine because I want a future for my grandkids."

    Taseko has now taken its hoped-for mine through two federal environmental reviews. The original proposal passed the B.C. review. The second, revised plan would require an amended certificate from the province, should the feds approve it.

    But federal approval remains uncertain following a negative report by a review panel, which again largely concerned itself with Fish Lake. While the decision is up to Aglukkaq, Taseko argues that the review panel completely screwed up by studying a tailings storage model "completely different than the Taseko design." The company has asked a federal court to declare "that certain panel findings relating to seepage and water quality be set aside, and that the panel failed in certain respects to comply with principles of procedural fairness."

    Speaking at the event was a mining engineer who argued that Taseko's plan "will not only protect Fish Lake, but it will enhance the quality of the fish that reside in that lake." John Meech heads the University of B.C.'s Centre for Environmental Research in Minerals, Metals and Materials. He told the audience that the lake "will be protected during the mine operating phase and long-term into the future after closure. And I base my assessment on the design's seepage rates that are being predicted for the mine that match what happens at two other mines in the area, Gibraltar and Mt. Polley. And anyone who tells you the seepage rates are in error is not telling you the truth."

    Meech said sustainability will be further guarded through ongoing monitoring, review and adaptation. But while standards like these apply in Canada, they're not universal. "To not bring [New Prosperity] onstream means exporting serious pollution problems to the Third World, who do not practise the modern concepts of sustainable mining. We have an obligation in Canada and British Columbia to produce these materials, to meet the global demands and avoid the serious pollution and social issues that will ensue in developing countries should this production be shifted to those countries."

    Canadian mining has presented problems "in the past, but I emphasize the word 'past,'" Meech said. The redemption of B.C.'s historic Britannia mine site represents "how quickly we can restore a deteriorating environment at a mine."

    Returning to the subject of native opposition, B.C. mines minister Bill Bennett said, "I believe there's opportunity, if the federal government says yes to this project, for significantly more engagement with the first nations."

    The province's revenue-sharing policy "can make a difference," he added. "It has made a difference in the past. I can give you the names of mines in this province that when I was mines minister in 2005 to 2007, the first nations were vehemently opposed to and today they support." He said existing agreements provide bands with 37% of provincial royalties, as well as impact benefit agreements with the mining company.

    "We want this project to go ahead," Bennett proclaimed.

    But not some others, apparently.

    Bennett's appearance followed the previous day's B.C. Supreme Court decision that ruled BC Liberal cabinet ministers unfairly rejected another project, Pacific Booker Minerals' (NYSEMKT:PBM) proposed Morrison copper-gold-molybdenum mine. Responding to a question from, Bennett said his colleagues "made a decision not to grant the certificate on the basis of the evidence in front of them."

    When reminded that the evidence in front of them was a favourable environmental review, Bennett replied, "I'd love to talk to you about New Prosperity."

    Later this week he travels to Ottawa to meet with 12 B.C. MPs and four federal ministers. The environmental minister wasn't among those he named. Her decision is expected within the coming months. Should Aglukkaq come to a negative conclusion, the federal cabinet would have to back her rejection.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 11 3:44 PM | Link | Comment!
  • Pacific Booker Wins Court Case: British Columbia Ministers Must Reconsider Morrison Mine Rejection

    The British Columbia Supreme Court has quashed a B.C. government decision to reject Pacific Booker Minerals' (NYSEMKT:PBM) proposed Morrison copper-gold-molybdenum mine. Late December 9 the company reported that a 55-page court judgement released that afternoon stated the October 2012 decision by B.C.'s then-ministers of mines and environment "failed to comport with the requirements of procedural fairness."

    The ministers' decision followed a favourable environmental review which repeatedly stated that, with successful implementation of mitigation measures and conditions, the mine is "not likely to have significant adverse effects." The government, however, based its rationale on a "risk/benefit approach" that wasn't a requirement of the environmental review and speculated what might happen if the mitigation measures failed. In his advice to the cabinet minsters, the Environmental Assessment Office executive director also emphasized strong native opposition and a "moderate to strong prima facie case for aboriginal title."

    At the time Pacific Booker director Erik Tornquist told, "We're at a loss on how you can have a project with no significant environmental effects yet a certificate is denied."

    In a September 2012 statement by Gavin Dirom, the president/CEO of the Association for Mineral Exploration B.C. said the rejection "does not appear to represent a science-based decision-making process that was transparent, logical or clear. Going forward, for the sake of due process and in the spirit of not losing the opportunity to develop this copper-gold deposit, we are hopeful that the company, first nations, B.C. government and federal government can work together to resolve this matter in a timely and reasonable manner."

    Speaking to late afternoon December 9, Pacific Booker executive director John Plourde called the court ruling "very encouraging." He emphasized that the company doesn't have to go through another environmental review. But he declined to say more until the company had time to further study the court decision.

    "I don't have enough information yet," he said. "We just put this out because we have to put out a news release by law." He added that the documents will be posted on the company's website soon.

    As reported in Pacific Booker's news release, Justice Kenneth Affleck wrote:

    "The petitioner is entitled to a declaration that the executive director's referral of the application for a certificate to the ministers and the ministers' decision refusing to issue the certificate failed to comport with the requirements of procedural fairness. There will be an order in the nature of certiorari quashing and setting aside the ministers' decision and an order remitting the petitioner's application for a certificate to the ministers for reconsideration. The petitioner is entitled to costs."

    A new mines minister, Bill Bennett, was named in B.C.'s last round of cabinet appointments. Terry Lake, the environmental minister who took part in the decision to reject the Morrison proposal, remains in the same post.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Dec 10 2:20 PM | Link | Comment!
  • Beautiful, Brilliant, Bloodless: Exploration Gains Momentum As The World's Affluent Covet Canadian Diamonds

    The old saying aside, diamonds are not forever-not when existing supplies are depleting. So the search continues for new deposits. And it's in Canada, the country that transformed the international market with its high-quality, ethically produced stones, that much of the exploration takes place. Now the market might be facing another transformation, not from new supply in Canada but new demand in China and India.

    "Historically that's not where most of the diamonds have been sold," says Patrick Power, president of Arctic Star Exploration. "But they're opening up right now largely due to the efforts of De Beers. China and India have never been incorporated into any [forecast] number before."

    As luxury items-industrial diamonds play a negligible role in the market, Power says-the gems' value depends on the alliterative vagaries of colour, clarity, cut and carats. Esthetic values can be subjective, but a complete lack of colour generally gives a diamond the highest value. Clarity concerns the absence of imperfections. Cut involves the technical precision in faceting a stone's shape to enhance its colour and brilliance or "fire." Of course greater weight, measured in carats, also increases value.

    But the value of Canadian diamonds goes beyond the four Cs. Power puts it bluntly: "They're not blood diamonds. They're ethically mined. All parties participate in the wealth. So there's a premium paid for that," he explains.

    "Plus they're fantastic diamonds. De Beers' Victor mine in northern Ontario is producing stones that are $400-plus a carat. That's an amazing diamond. So we have quality plus branding. Canada was the first country ever to brand diamonds, with the polar bear diamond and the maple leaf diamond. Ekati and Diavik put micro-signatures on each diamond's girdle. That's Canadian. No one ever did that before."

    Supply/demand predictions can be troublesome. But the supply of diamonds above one carat (0.2 grams) marks the point "where they start to get scarce," Power says. "And if you want two, three, four carats of better-quality diamonds, you can tell your supply is dropping."

    Of course growing affluence in emerging markets, where De Beers has been peddling its opulence, would seem to enhance demand. As for the ultra-wealthy, they're paying record-breaking prices. In early November Christie's sold "the largest fancy vivid orange diamond ever offered at auction (14.82 carats)" for $35.5 million. The company had hoped for about $20 million.

    Just one day earlier, Sotheby's sold the 59.6-carat Pink Star for $83.2 million.

    But the excitement's not limited to the über rich. The people who search for the stones have a passion of their own. "What's really exciting for those of us exploring in the Northwest Territories is that the technology is changing for the first time in a long time. We can look again at ground that was previously explored and find new stuff," Power says.

    In particular, a helicopter-borne gravity gradiometry survey over Arctic Star's Redemption project in the Lac de Gras diamond fields found 32 anomalies, including some at the head of a glacial mineral train. The results, announced in October, could indicate the presence of kimberlite pipes among the more dense granitic rock.

    Developed by Lockheed Martin and BHP Billiton (NYSE:BHP) at least 15 years ago, the technology's been available to other companies for less than three years, Power explains. "It's now the third generation of that system. We're amazed at the high-quality data, as compared to the first generation when BHP flew Ekati way back when. Gravity is a very difficult, time-consuming and expensive thing to do on the ground. Surveys are traditionally small. But you can fly the entire area with this system. We're seeing things that we haven't seen before."

    An additional 350 till samples were collected, with results pending. Previous sampling has shown indicator minerals, some of which don't seem to have wandered far from their source. Some surface diamonds were also found. "In the Territories it's very unusual to find diamonds in till," Power says. "If you're looking for indicator minerals for diamonds, diamonds are the best indicator mineral there is."

    Arctic Star hopes to see drilling begin in March or April, funded and operated by North Arrow Minerals as part of its 55% earn-in. In early November North Arrow announced "Canada's newest diamond discovery" at its Pikoo project in Saskatchewan, where the company's earning 80% from Stornoway Diamond. Stornoway, in turn, has its Renaud project in Quebec scheduled for commercial production in June 2016.

    North Arrow traces its lineage back to Aber Resources of Diavik discovery fame. Aber branched off into Harry Winston, which became Dominion Diamond, now holding 40% of Diavik (with Rio Tinto NYE:RIO holding the rest) and 80% of Ekati (with Canadian diamond pioneers Chuck Fipke and Stewart Blusson each holding 10%), along with 58.8% of Ekati's Buffer zone. Arctic Star VP of exploration Buddy Doyle and director John Buckle played instrumental roles respectively in the Diavik and Ekati discoveries. North Arrow president/CEO Ken Armstrong "used to work for Buddy," Power says. "They're a very close-knit group of people who've gone through this experience before."

    Some of Canada's more recent diamond exploration news came on November 19, when Peregrine Diamonds announced the discovery of three additional kimberlite bodies at its Chidliak property on Baffin Island, bringing the project's total to 67. The company's waiting results from a 508-tonne bulk sample.

    One day earlier Kennady Diamonds reported drill results from its Kennady North project in the NWT's northeast. Twenty-one summer holes recovered 3,454 kilograms of kimberlite. The first 40% that was assayed shows a sample grade of 5.37 carats per tonne. The company has further geophysics and drilling scheduled for winter and spring, with an initial resource expected late next year.

    The same day, quoting numbers that would make many companies swoon, Mountain Province Diamonds announced a private placement increase from $25 million to $29.1 million. Proceeds are earmarked for Gahcho Kué, "the world's largest and richest new diamond development project." A 49%/51% JV with De Beers at Kennady Lake, the project is slated to begin production in December 2015. In addition to Victor, De Beers operates the NWT's Snap Lake underground mine.

    On November 12 Shore Gold updated its Star-Orion South diamond project in Saskatchewan, which undergoes environmental assessment work while the company seeks development financing.

    But, especially in the Northwest Territories, companies are striving to maintain supply more than expand it, Power argues. Existing mines, he says, are running out of ore. Meanwhile Canada has "a very unique diamond, it's got a great name, it's in demand around the world and we're running out of them. Ekati and Diavik have limited lives. They need new sources."

    Yet circumstances bode well. Back in the 1990s "everyone was learning what they were doing," he adds. "Some of the work was just atrocious. But the people who are up there now are really good diamond people. They're experienced, they've had success and there's new geophysical techniques coming into play right now that will help find new discoveries. It'll be exciting. It's an exploration space that's working well right now."

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Nov 28 2:32 PM | Link | Comment!
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