It appears that Canadian copper and gold producer Northgate Minerals (NYSE:NXG) has run into an ambush by a combination of a joint federal-provincial panel and a couple of indigenous groups in British Columbia. The company therefore will have its work cut out for it in expanding its copper-gold mine in the northern part of the province.

Northgate had sought to expand its Kemess mine through the development of the Kemess North copper and gold deposit, which is located near its Kemess South mine. It claimed that the project would have resulted in a securing of the positions of the 475 workers at Kemess South during two years of construction and 11 years of mining.

Kemess North is located 430 kilometers northwest of Prince George, B.C. According to Northgate, it could contain in excess of four million ounces of gold.

But the apparent rub, and the reason the project was opposed actively by the indigenous Gitxsan and the Tse Keh Nay peoples, was the companies' desire to dispose of large amounts of tailings and waste rock into a local lake. Indeed, in a press release posted on the Tse Keh Nay website, Grand Chief Gordon Pierre said that the group "congratulates the panel members for their brave recommendation and calls upon both (provincial and federal) governments to follow the panel's lead to protect Amazay Lake."

The panel's recommendation is not binding, but clearly will be considered by politicians who will make the final call to allow or disallow the project. Indeed, the panel included 32 recommendations to mitigate damage in the event the project should be permitted to proceed.

All this occurs as Phoenix-based copper and gold producer Freeport McMoRan (NYSE:FCX) has seen its shares appreciate by 25% just during September, while Southern Copper (NYSE:PCU) is up 14%, and mining giants BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP) have climbed by 15% and 19%. Conversely, Northgate's shares have slipped by 4%.

So, the obvious message for my Foolish friends is that while mineral mining has been one of the hottest sectors around lately, unless and until it is permitted to develop Kemess North, Northgate is clearly not the way to participate in a mining sector boom.

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