VANCOUVER (CP) -- Imperial Metals Corp. [TSX:III] says an appeal court ruling has helped clear the way for its controversial Red Chris gold and copper mine in northern British Columbia, but warns the battle may not be over yet.
Vancouver-based Imperial said Monday the Federal Court of Appeal set aside a lower-court ruling and confirmed a federal environmental assessment of the Red Chris project, 18 kilometres southeast of the village of Iskut, east of the Alaska Panhandle.
The company said the appeal court dismissed an application by MiningWatch Canada, representing environmental, labour and aboriginal interests, for a judicial review of the federal assessment.
That assessment found in 2006 that the open-pit development was not likely to cause significant adverse environmental effects. This followed provincial environmental approval in 2005.
Last September the Federal Court trial division set aside the federal screening report, over the issue of the discretion of federal authorities to scope a project under the Canadian Environmental Assessment Act.
The company's appeal against this ruling was supported by federal government ministries and "essentially involved matters of statutory interpretation," Imperial Metals said.
The Federal Court of Appeal concluded that federal officials have discretion to define and redefine the scope of a project for the purposes of tracking an environmental assessment.
Imperial Metals said federal authorities "are now authorized to issue regulatory approvals for the Red Chris project to proceed," although the matter could still be appealed to the Supreme Court of Canada.
MiningWatch Canada argued the project has not received enough public consultation.
The group warns the project is being built in one of the few remaining wilderness regions of North America, in an area known as the Sacred Headwaters, where the Stikine, Nass, and Skeena salmon-bearing rivers meet.
The group said the project would leave 183 million tonnes of tailings and 307 million tonnes of waste rock, and that acid drainage from the mine would likely require treatment for at least 200 years.
Imperial took over Red Chris after buying bcMetals Corp. in February 2007 for C$68.4 million.
A 2004 feasibility study on the property indicates a 25-year mine life at 30,000 tonnes per day with reserves of 276 million tonnes grading 0.35% copper and 0.27 grams per tonne gold.
Imperial stock was up 62 cents or 7.9% at C$8.50 on the Toronto Stock Exchange Monday, with a 52-week high and low of C$19.37 and C$7.82.
Chris Thompson, an analyst at Haywood Securities, said while the latest ruling could be good news for the company, it still has to sort out a power source for the project.
The province cancelled plans to pour money into transmission lines in northwest B.C. after the Galore Creek project, a joint venture between Teck Cominco [TSX:TCK.B; NYSE:TCK] and NovaGold Resources [TSX:NG; AMEX:NG], was shelved last year due to soaring costs. Other mining projects are now in limbo when it comes to a power source for that part of the province.
Apart from the development-stage Red Chris property, Imperial holds a half-interest in the Huckleberry open-pit copper-molybdenum mine near Houston, B.C.
It also has the Mount Polley open-pit copper-gold mine in central B.C. and the exploration-stage Sterling gold property in southwest Nevada.
(c) The Canadian Press 2008
