Feds accept Taseko’s New Prosperity for review

The federal government has agreed to take a second look at Taseko Mines‘ (TKO-T, TGB-X) gold-copper Prosperity project in central B.C., breathing new optimism into the beleaguered project.

The move comes after Taseko significantly revised its mine plan and rebranded the project “New Prosperity,” following the Federal Minister of the Environment’s rejection of the original proposal last November.

With the new description formally accepted, the Canadian Environmental Assessment Agency is committed to start an environmental assessment by Nov. 7, 2011, and has a year to submit a final report to the Federal Minister. 

The company maintains that  meaningful concessions in the new plan were made possible in part by high metal prices.

“Taseko has made significant efforts to address the concerns identified during the original federal review process,” Russell Hallbauer, president and CEO of Taseko, states. “In particular, the preservation of Fish Lake, which adds $300 million in capital and operating expense to the project, is a strong example of the company’s commitment to the success of New Prosperity and to the principles of sustainable mining.”

However, the Tsilhqot’in National Government, which strongly opposed the original mine, has continued to voice its deep opposition to any revised plan. 

The Tsilhqot’in government issued a press release on the day of federal review acceptance, calling for an end to the “costly and pointless Prosperity mine review.”

Tribal Chair of the Tsilhqot’in government, Chief Joe Alphonse, states that the review was a waste of money, and problems with the project haven’t been addressed.

“The fact remains that this bid, which was presented to the previous expert panel and deemed worse than the original plan, fails to address any of the environmentally scathing issues that led to the first proposal being rejected,” Alphonse states.

Nevertheless, investors were encouraged by the step, pushing Taseko’s share price up 56¢, or 17.3%, to $3.79 on over 2 million shares traded. The gains still only recoup August losses that saw the company’s share price drop from $4.25 in late July to a 52-week low of $3.20, just before the latest news.

The low came not long after the company released second quarter results that showed a $1.1-million net loss, compared with $44.8 million in net earnings for the same quarter in 2010. 

Adjusted net earnings, however, gave 2011’s second quarter a $7.3-million profit compared with a $0.8-million profit for the same quarter the year before, while operating profit dropped by about $1 million to $11.8 million for the quarter compared with last year.

Revenues come from the company’s 75%-owned Gibraltar copper-molybdenum mine in B.C. 

In the second quarter the mine produced 20 million lbs. copper, in-line with what was produced in the same quarter last year, while molybdenum production increased 39% on higher recoveries to reach 303,000 lbs.

Taseko recently committed $18 million to advance its Aley niobium project in northern B.C. to feasibility, and also awarded a $237-million contract as part of a major expansion of its Gibraltar mine.