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TABLE OF CONTENTS Jan 6 - 12, 2014 Volume 99 Number 47 - 0 comments

Pacific Booker's eye-opening victory in BC's Supreme Court

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By: Matthew Keevil
2014-01-01

VANCOUVER — The B.C. government’s rejection of junior Pacific Booker Minerals’ (TSXV: BKM; NYSE-MKT: PBM) environmental assessment (EA) certificate at its Morrison Lake copper–gold project, located 65 km north of Smithers, B.C., left many in the industry scratching their heads, and now the story has taken another odd turn.

On Dec. 11, the Supreme Court of British Columbia ruled it would set aside the original decision, and ordered the company’s application be remitted to the government for review.

Back in October 2012, the B.C. Minister of Energy & Mines and Minister of Environment — then Rich Coleman and Terry Lake — denied an EA certificate at Morrison due to the potentially negative effects on local salmon populations and water quality. Pacific Booker maintained that a report prepared by the Environmental Assessment Office (EAO) indicated that the project had “no significant adverse effects,” and petitioned that the Supreme Court challenge the ruling.

“The courts agreed that we got a clean environmental assessment. In the end the government introduced something that was not part of the Environmental Assessment Act,” director and chief operating officer Erik Tornquist says during a phone interview. “It’s a clear process, and we’ve seen these documents that originally recommended approving Morrison and they’ve been changed. They introduced some other factors in the decision, and I don’t understand how you can have a ‘yes’ one minute and a ‘no’ another minute.”

On Dec. 16 Pacific Booker released an affidavit that sheds light on the case. Tornquist reportedly received an anonymous envelope in mid-July that contained an apparent “early draft” of the recommendations of executive director Derek Sturko of the EAO in regards to Morrison. Tornquist claimed he had no idea who had sent the envelope, which was postmarked from Victoria.

Also included in the court’s case evidence was a copy of the earlier report, which contains two optional recommendations from Sturko. The first overtly recommends that Pacific Booker be granted an EA certificate, while the second acknowledges there will be “no potential for significant adverse effects,” but outlines other considerations for the Ministers.

“It’s definitely big news for our industry, because back when the government made its original ruling, it appeared that they were saying: ‘If you weren’t tied in with a major, there is no chance a junior company can make it on their own,’” Tornquist adds.

Justice Kenneth Affleck’s decision found that the administrative process followed during Morrison’s review — including the decision of the previous Minister of Environment and the previous Minister of Energy & Mines — “failed to comport with the requirements of procedural fairness.” In reaching this conclusion, Justice Affleck rejected arguments by the government’s lawyer that common law rules of procedural fairness do not apply to the EA process.

“It’s interesting, because the way it was explained to us was that if you made B.C. water quality guidelines, which we did, there would be no issue,” Tornquist says. “Two of our main points in the court case had to do with water quality and the environmental bond. First of all, you don’t slap down the full amount of the bond on day one. It’s progressive and depends on how much waste rock is generated. The bonding is supposed to be part of the permitting phase, and it shouldn’t have been figured out at this phase.”

One of the main issues discussed during Morrison’s review was the $300 million in reclamation, closure and environmental liabilities. Roughly 67% of that amount was attributed to the cost of backfill and waste-rock management. Though Pacific Booker acknowledged a “significant bond” would be required, it considered the bonding cost “part of doing business in a sustainable and environmentally protective manner.”

Tornquist says that Pacific Booker has yet to hear back from the B.C. government on the ruling, though the company notes that current Minister of Energy & Mines Bill Bennett has spoken out in support of Taseko Mines’ (TSX: TKO; NYSE-MKT: TGB) proposed New Prosperity copper–gold mine outside of Williams Lake, B.C.

At press time, the B.C. government had not returned requests for an interview.

The company’s most recent economic model at Morrison is a feasibility study from 2009. Tornquist comments that at the time of Morrison’s permit rejection, Pacific Booker was well into financing negotiations to raise the project’s US$517-million development costs. Proven and probable reserves at Morrison total 224 million tonnes grading 0.33% copper, 0.16 gram gold per tonne and 0.004% molybdenum.

Pacific Booker’s shares jumped up 63% over seven days of trading after its victory in the courtroom. The company gained $2.64 through Dec. 17, and closed at $6.83 per share at press time.

Pacific Booker has 12.4 million shares outstanding for an $84-million market capitalization.



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Companies in This Story

Pacific Booker Minerals Inc

Properties in This Story

Morrison Project




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