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Taseko Mines' New Prosperity mine rejected

Published: 14:57 01 Nov 2013 EDT

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Shares of Taseko Mines (TSE:TKO) (NYSEMKT:TGB) got pounded on Friday after the government rejected its proposal to build a mine in B.C.'s interior Cariboo region, on grounds of "several significant adverse environmental effects."
In response to the decision, Taseko said it would review the 323-page federal panel report, which was handed over to the Environment Minister on Thursday.

"Taseko will challenge these findings as they contradict best practices in place around the world today and expert opinion and analysis," the company said in a statement.

Taseko is seeking approval for its New Prosperity Gold-Copper Project about 125 km southwest of Williams Lake, B.C., which would include an open pit mine as well as tailings and waste rock areas, an onsite mill, a 125-km power transmission line, an access road and a load-out facility. The entire mine site would span about 27 square kilometres in the Fish Creek watershed.

After a one-month public consultation during the summer, a Canadian Environmental Assessment Agency review panel expressed concerns with the project's impact on water quality and aquatic life at Fish Lake, infringements on aboriginal lands and the disruption to the local grizzly population.

"With any major project there will be different views and some trade-offs, but we are confident the federal government can and will approve this project," Taseko said on Friday.

This marks the second time that Taseko has been rejected in its attempt to kickstart New Prosperity. In January 2010, the B.C. government approved the project even though it had environmental concerns. But half a year later, the province changed its mind. In November 2010, the federal government agreed with B.C. panel's conclusions, but said Taseko could submit another proposal.

The biggest change in Taseko's revised plan was moving the tailings storage facility 2.5 kilometres north of Fish Lake and introducing a way to recirculate lake water.

The Vancouver-based company said on Friday it had concerns during the course of the environmental review about the fairness of the process.

Taseko's stock tanked 11% with an hour left in trading on Friday.

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