(JUNEAU) Chieftain Metals’ recent announcement of the results of a review by IMC Group Consulting Limited of its January 2013 feasibility study for the proposed Tulsequah Chief mine ignores major risks and does not give a complete and accurate picture of the project. Serious risks and uncertainties such as opposition by the Taku River Tlingit First Nation, unresolved problems with concentrate sales, potentially expensive long-term environmental liabilities, uncertainties related to the ore deposit and project schedule, and ongoing violations of its waste discharge permit and the federal Fisheries Act are not discussed.
“This is the latest in a series of selective and self-serving disclosures from Chieftain that do not provide a complete and accurate picture to potential investors,” said Chris Zimmer of Rivers Without Borders. “IMC emphasized that timely completion of the access road is vital, yet there is no mention of the clear and strong opposition from the Taku River Tlingit First Nation to the road and mine. Other risks we highlighted in April such as a lack of identified smelters, high levels of contaminants in the concentrates and the cost of long-term water treatment aren’t even mentioned.”
- No mention is made of the November 18, 2012 Joint Clan Mandate from the Taku River Tlingit First Nation which“opposes the currently proposed Tulsequah Chief Project” and “is directing the TRTFN Leadership to act on this JCM Mandate and take all necessary steps to ensure that the Tulsequah Chief project, as currently proposed, is not developed on Taku River Tlingit Territory.”
- There is no admission that Chieftain is in violation of its waste discharge permit and the Fisheries Act, which could bring fines as high as $200,000 per day.
- There is no mention that Chieftain’s own feasibility study concluded, “If this [long-term] mitigation strategy is unsuccessful, there could be the need for the long‐term treatment of AMD [acid mine drainage] at this site.” An independent analysis of Chieftain’s January 2013 Feasibility Study commissioned by Rivers Without Borders in April found that long-term environmental costs could exceed $100 million.
- There is no mention of the lack of an identified smelting facility and the feasibility study’s findings that high contaminant levels mean the copper concentrates would be rejected by Chinese smelters, which suggest that marketing the concentrate might be questionable and at the very least difficult.
- There is no mention that Chieftain’s feasibility study relies on “probable” rather than more certain “proven” mineral reserves, which indicates less than a high degree of confidence in the economic viability of the ore deposit.
“Since Chieftain has not released the full IMC report, only summarizing it in a recent press release, it’s unknown if IMC identified risks that Chieftain has not disclosed or if IMC did not address the risks and uncertainties we found in our April analysis,” said Zimmer. “This is a recipe for another bankruptcy and continued acid mine drainage pollution of the region’s most productive salmon river.”
In June the Ontario Securities Commission issued a report highlighting flaws in mining companies’ public disclosures, particularly in areas of mineral estimate, costs, environmental and social issues, overall economic analysis and accounting of risks and uncertainties. In January the British Columbia Securities Commission also reported significant violations.
“Chieftain’s public statements are a poster child for recent reports by the Ontario and BC Securities Commissions that found significant problems with disclosures from mining companies, especially its refusal to acknowledge the opposition of the Taku River Tlingit, expensive long-term environmental liabilities and uncertainties such as a lack of smelters,” said Zimmer.
The extremely controversial Tulsequah Chief mine would be developed in northwest British Columbia in the Taku watershed very close to Alaska’s border. The Taku is one of North America’s premier salmon rivers.
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