When I read the BFS release and noted that the federal environmental assessment application would not be submitted until quarter 3 of 2013, I was a bit concerned.

I work in a Canadian federal department that must routinely consider environmental screening implications for grants and contributions projects supported across a broad range of industry sectors (including mining).

I've experienced situations that have resulted in some extensive delays that have prevented projects from proceeding upwards of a year or more (much to the chagrin of proponents). Those were related to situations that primarily impacted wildlife habitat and waterways.

Since the overhaul of the Environmental Act last year (CEAA 2012 Act), the screening process has become must less stringent and our department has seen very few projects requiring EAs. However, the new regulations note that projects with screenings underway prior to introduction of the revised Act must adhere to the old Act regulations, which are far stricter, and cases requiring comprehensive screenings can be quite time-consuming.

Much preliminary environmental work has been undertaken on Schaft Creek, which is all available on CUUs website. This data seems to suggest mine development would have a minimal impact on wildlife and terrain in the immediate vicinity of the proposed mine site. This is also highlighted in CUU`s new presentation they have just developed. However, the documents on CUU's site do note that there are indeed impacted wildlife present, including fish in surrounding tributaries, which means there may likely be some mitigation measures required.

The copious amount of data collected by CUU indicates that the EA application will have thoroughly covered most, if not all, of the necessary requirements, including all supporting documentation needed to facilitate a fairly quick EA assessment turnaround.

The question remaining for me is which Act will the screening be considered under - old or new? This could make a significant difference in turnaround time.

Since work appears to have already been commenced under the provincial EA process, and there is an agreement with the feds that the provincial and federal screening process will be a coordinated partnership approach (as I understand it to be), then it’s unclear to me whether the federal process has therefore officially been commenced (old regulations?) or if it will not officially commence until quarter 3 with submission of the EA application mentioned in the BFS (new 2012 Act regulations?). I hope it is the latter.

This is a question that someone could ask at the show this weekend - which CEAA Act is/will Schaft Creek be considered under? It could make a significant difference in turnaround time.

Of course, if we are bought out soon, none of this will matter. It will be Teck`s issue to deal with. However, if we enter into a JV with Teck and are in this for a longer period, our deal could potentially be impacted. In fact, it may be that part of a new JV agreement with Teck will include CUU`s responsibility for pursuing the CEAA process (remember latest PP?) and the JV would include an ‘out’ clause for Teck in the case of a failed assessment - in which case the project is dead.

I worried about this latter point for some time, questioning why any company in its right mind would agree to buy out another prior to the results of a completed environmental assessment that could potentially kill the whole project...and if the CUU CEAA application won’t be submitted until this coming July-September, it could possibly be the same time 2014 before we have the results (especially if it’s being considered under the old regulations). I kept thinking “are we going to be in this that much longer? What if the results kill the project?”

That's why I participated in the December 24 conference call wherein I posed the question to Elmer. His response was that he was indeed aware of a handful of cases in which the process took that long (a year or so) but this was primarily due to internal federal staff shuffling and a new guy coming on to take over the responsibilities of the former, who would have to familiarize him/herself with the whole scenario etc.

I then posed the question to Elmer..."so in your opinion, is it unlikely that Teck or another company would buy out Schaft Creek prior to receipt of a completed CEAA screening?" Elmer's response was "No, I don't think that is necessarily the case....it depends on the over-all level of de-risking of the project."

I thought about that response for a long time because this is the one and only issue about the deal that I still wrestle with. The evidence suggests that the EA will be a straight-forward and fairly quick process, with a high probability of a fully-positive outcome (particularly under the new 2012 Act). The remaining question then is which Act will the screening be considered under?

I'm hoping someone at the conference this weekend will ask that question. If not, I will call or email the company.

Let me be crystal clear...I am a long with much to lose if this project goes sour...and in my opinion, it will only go sour if its killed by a negative EA outcome. That doesn't appear to be likely....but if Teck opts in instead of buying us out in the near term, and we enter into a JV, we could be impacted by the EA process. I feel that we need to know which CEAA Act the application is being considered under.

GLTA