Taseko Mine's Minor Victory Won't Lead to New Prosperity

A tangential win in the courts still won't help the miner's case

Jul 8, 2014 at 2:15PM


Source: Taseko Mines

Taseko Mines (NYSEMKT:TGB) may have won a battle for its proposed New Prosperity mine in British Columbia, but it's still going to lose the war. 

A recent Supreme Court ruling delineated for the first time that Canada's aboriginal people have specific title to defined areas which gives them significant say in how the land can be developed, or whether it can be developed at all. As has been seen elsewhere around the world, indigenous populations are wielding significant clout when it comes to miners wanting to build or expand projects on the ancestral lands.

Barrick Gold (NYSE:ABX) was forced to put its plans on hold for a huge gold mine at Pascua-Lama in Chile because of opposition from local populations; Goldcorp (NYSE:GG) has faced an off-again, on-again situation at its Chilean El Morro gold project because of similar protests; and Cliffs Natural Resources (NYSE:CLF) has seen the flame die out for its Ring of Fire chromite project in Ontario due in part to First Nation opposition.

Yet Taseko cheered the court's ruling because it set definitive boundaries on where aboriginal title exists and it proclaimed "New Prosperity is the only proposed mine in BC that people know for sure is not in an area of aboriginal title." 

But don't think that paves the way for the miner to get the green light on construction. There remain significant hurdles and substantial opposition to the project on numerous other fronts that will likely still doom its viability.

For one, Canada's environmental authorities still maintain steadfast opposition to it going forward. Regardless that their objection was shown to be flawed and their decision based on incorrect data, a publicly shamed bureaucrat remains a formidable opponent and Taseko saw its appeal rejected on the same grounds it was originally rebuffed. The agency used someone else's mitigation plans, not Taseko's, in coming to its decision that a tailings pond, or a place where the detritus of the mined is stored, would wreak environmental havoc because of seepage despite Taseko specifically calling for the installation of a liner that would mitigate such an occurrence. No matter, the regulatory body ignored that point and essentially cut-and-pasted its rejection again.

Yet even if Taseko was to prevail in a court over the bizarre actions of the government agency, there were other equally prominent problems with Taseko's plans that on their own spell death for its passage. The Little Fish Lake body of water would be obliterated by the creation of the tailings pond -- with or without a liner -- and the local grizzly bear population would be substantially harmed by the mine's operation. The miner may actually be able to clear a few of the tick marks on the long list of objections to the New Prosperity mine, but there are others that carry equal weight that remain that suggest Taseko is waging an uphill battle.

And even if New Prosperity lies outside of any aboriginal borders, it doesn't mean the project has their support. The tribal chairman of the Tsilhqot'in nation was quoted as saying, "I think Taseko has a very twisted view of things. I think it's very, very irresponsible." 

Just because Taseko Mines won in court, doesn't mean it's winning in the court of public opinion. It can spin the decision as it sees fit, and its shares may have jumped 10% since the decision was handed down late last month, but those gains will likely evaporate as it becomes apparent there will be no new riches coming from New Prosperity. There's an animus against this project already built in and right or wrong it doesn't look like the miner can overcome them.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers