Red Chris gets green light from court

Canada's Federal Court of Appeal has set aside a lower court ruling and confirmed a federal environmental assessment of the Red Chris copper-gold project 18 kilometers, or about 11 miles, southeast of the village of Iskut, east of the Alaska Panhandle in Northwest British Columbia, according to project owner Imperial Metals Corp.

In September 2007, the Federal Court Trial Division of Canada ruled in favor of an application by MiningWatch Canada for judicial review of a federal environmental assessment of the Red Chris project completed under the Canadian Environmental Assessment Act. The lower court also set aside a federal screening report for the mine project issued in May 2006.

MiningWatch Canada, representing environmental, aboriginal and labor interests, argued that the assessment did not allow for enough public involvement. The organization said 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.

Regulatory discretion at issue

Imperial appealed the lower court ruling and was supported by federal government ministries.

At issue was the nature of the discretion of the responsible federal authorities to scope a project under Canadian law.

The Federal Court of Appeal concluded that Canada's federal officials have discretion to define and redefine the scope of a project for the purposes of tracking an environmental assessment.

Joan Kuyek of MiningWatch told reporters that the ruling is a huge disappointment and the approach the federal court took on the issue is appalling.

MiningWatch warns that the project would leave 183 million metric tons of tailings and 307 million metric tons of waste rock, and that acid drainage from the mine would likely require treatment for at least 200 years.

Imperial said the ruling by the appeals court validates the environmental assessment, completed in 2006 for bcMetals Corp., which found that open-pit development at Red Chris was unlikely to cause significant adverse environmental effects, Imperial said. The ruling also authorizes federal regulatory authorities to issue regulatory approvals for the Red Chris project to proceed.

The ruling clears the way for Imperial to proceed with development of the Red Chris Project, which it acquired in February 2007 when it purchased bcMetals for C$68.4 million after a protracted takeover battle with Taseko Mines Ltd.

Project still needs source of power

Imperial began work during the first quarter of 2008 on an exploration trail to the Red Chris deposit, which included construction of a bridge spanning Coyote Creek. The 15-kilometer, or 9.3-mile, exploration trail will be completed this summer, allowing drilling equipment to be driven to the site for completion of additional geotechnical and exploration drilling. Road access will result in lower cost drill programs and safer working conditions, as helicopter support will not be necessary, the company said.

Imperial, however, still has a major hurdle to clear before it can move ahead with development of Red Chris. The remote project needs an economical power source. Red Chris is one of a half-dozen mine projects that would benefit from construction of a proposed power transmission line through the region. The B.C. government cancelled plans last fall to build the transmission line after Teck Cominco Ltd. and NovaGold Resources Inc. backed away from immediate development of the Galore Project because of a sharp jump in capital costs. Community and industry officials recently resumed lobbying the provincial government to resurrect the power line project.

Imperial also owns 50 percent of the Huckleberry open-pit copper-molybdenum mine near Houston, B.C. and the Mount Polley open-pit copper-gold mine in central British Columbia as well as a gold property in southwest Nevada.